<SUBMISSION>
<ACCESSION-NUMBER>0000905729-02-000052
<TYPE>10-K
<PUBLIC-DOCUMENT-COUNT>9
<PERIOD>20011231
<FILING-DATE>20020401
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CHOICEONE FINANCIAL SERVICES INC
<CIK>0000803164
<ASSIGNED-SIC>6022
<IRS-NUMBER>382659066
<STATE-OF-INCORPORATION>MI
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-K
<ACT>34
<FILE-NUMBER>000-19202
<FILM-NUMBER>02596969
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>109 E DIVISION
<STREET2>P O BOX 186
<CITY>SPARTA
<STATE>MI
<ZIP>49345-0186
<PHONE>6168877366
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>109 EAST DIVISION
<STREET2>P O BOX 186
<CITY>SPARTA
<STATE>MI
<ZIP>49345-0186
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>1ST COMMUNITY BANCORP INC
<DATE-CHANGED>19920703
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>choiceoneform10k032902.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>ChoiceOne Financial Services, Inc. Form 10-K *2001*</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">

<P ALIGN="CENTER"><B>Securities and Exchange Commission<BR>
Washington, D.C. 20549</P>

<P ALIGN="CENTER">FORM 10-K</P></B>

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<P><B>(X)</B></TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><B>Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></TD>
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<TR>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="94%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><FONT SIZE=2>For the fiscal year ended December 31, 2001</FONT></TD>
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<P>&nbsp;</TD>
<TD WIDTH="94%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="6%" VALIGN="TOP">
<P><B>(&nbsp;&nbsp;&nbsp;)</B></TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><B>Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of</B></TD>
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<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><B>1934</B></TD>
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<P>&nbsp;</TD>
<TD WIDTH="94%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P>&nbsp;</TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><FONT SIZE=2>For the transition period from__________________ to __________________</FONT></TD>
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<P ALIGN="CENTER"><B>Commission File Number: 1-9202</P>

<P ALIGN="CENTER">ChoiceOne Financial Services, Inc.</B><BR>

<FONT SIZE=2>(Exact Name of Registrant as Specified in its Charter)</FONT></P>

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<P>&nbsp;</TD>
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<P ALIGN="CENTER"><B>Michigan</B><BR>
<FONT SIZE=2>(State or Other Jurisdiction of<BR>
Incorporation or Organization)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
<P ALIGN="CENTER"><B>38-2659066</B><BR>
<FONT SIZE=2>(I.R.S. Employer Identification No.)</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="46%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
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<P>&nbsp;</TD>
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<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="46%" VALIGN="TOP">
<P ALIGN="CENTER"><B>109 East Division Street, Sparta, Michigan</B><BR>
<FONT SIZE=2>(Address of Principal Executive Offices)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
<P ALIGN="CENTER"><B>49345</B><BR>
<FONT SIZE=2>(Zip Code)</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<P ALIGN="CENTER"><B>(616) 887-7366</B><BR>
<FONT SIZE=2>(Registrant's Telephone Number, Including Area Code)</P>

<P ALIGN="CENTER">Securities Registered pursuant to Section 12(g) of the Securities Exchange Act of 1934:</FONT></P>

<P ALIGN="CENTER"><B>Common Stock</B><BR>
<FONT SIZE=2>(Title of Class)</P>

<P>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 reports), and (2) has been subject to such filing requirements for the past 90 days.<BR>
Yes <U>&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P>Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( )</P>

<P>As of February 28, 2002, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $21,139,000. This amount is based on the average of the bid and asked price of $14.38 per share for the registrant's stock as of such date.</P>

<P>As of February 28, 2002, the registrant had outstanding 1,470,028 shares of Common Stock.</P>

<P ALIGN="CENTER"><B>DOCUMENTS INCORPORATED BY REFERENCE</B></P>

<P>Part I, Item 1, and Part II, Items 5 through 8 incorporate by reference portions of the Registrant's Annual Report to Shareholders for the year ended December 31, 2001.</P>

<P>Part III, Items 10 through 13 incorporate by reference portions of the Registrant's Definitive Proxy Statement for the Registrant's Annual Meeting of Shareholders to be held April 29, 2002.</P>

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<P ALIGN="CENTER"><B>FORWARD-LOOKING STATEMENTS</B></P>

<P>This report and the documents incorporated into this report contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and about the Registrant itself. Words such as "anticipates," "believes," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "may," "could," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, the Registrant undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.</P>

<P>Risk factors include, but are not limited to, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national economy; and local and global uncertainties created by the terrorist acts of September 11 and the current war on terrorism. These are representative of the risk factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.</P>

<P ALIGN="CENTER"><U><B>PART I</B></U></P>

<P><B>Item 1. Business</B></P>

<P><U><B>General</B></U></P>

<P>ChoiceOne Financial Services, Inc. (the "Registrant") is a one-bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Registrant was incorporated on February 24, 1986. The Registrant was formed to create a bank holding company for the purpose of acquiring all of the capital stock of ChoiceOne Bank (formerly Sparta State Bank), which became a wholly owned subsidiary of the Registrant on April 6, 1987. The Registrant's only subsidiary and significant asset as of December 31, 2001, was ChoiceOne Bank (the "Bank"). Effective January 1, 1996, the Bank acquired all of the outstanding common stock of ChoiceOne Insurance Agencies, Inc. (formerly Bradford Insurance Centre, Ltd.), an independent insurance agency headquartered in Sparta, Michigan (the "Insurance Agency"). Effective August 1, 1997, the Bank acquired all of the outstanding common stock of ChoiceOne Travel, Inc. (formerly Alpine Travel, Inc.), a travel agency with one location in Comstock Park, Michigan (the "Travel Agency"). Effective April 1, 2001, the Travel Agency discontinued operations.  The Bank owns a 20% interest in a non-banking corporation, West Shore Computer Services, Inc., a data processing firm located in Scottville, Michigan.  During 2001, the Bank formed ChoiceOne Mortgage Company of Michigan which did not begin operations until January 2002.</P>

<P>The Registrant's business is primarily concentrated in a single industry segment - commercial banking. The Bank is a full-service banking institution that offers a variety of deposit, payment, credit and other financial services to all types of customers. These services include time, savings, and demand deposits, safe deposit services, and automated transaction machine services. Loans, both commercial and consumer, are extended primarily on a secured basis to corporations, partnerships and individuals. Commercial lending covers such categories as business, industry, agricultural, construction, inventory and real estate. The Bank's consumer loan and residential mortgage loan departments make direct loans to consumers and purchasers of residential property. No material part of the business of the Registrant or the Bank is dependent upon a single customer or very few customers, the loss of which would have a materially adverse effect on the Registrant.</P>

<P>The Bank's primary market area consists of portions of Kent, Muskegon, Newaygo and Ottawa counties in Michigan in the communities where the Bank's offices are located and the areas immediately surrounding these<BR>
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communities. Currently the Bank serves these markets through five full-service offices and one office with drive-up facilities only. The Registrant and the Bank have no foreign assets or income.</P>

<P>The principal source of revenue for the Registrant and the Bank is interest and fees on loans. On a consolidated basis, interest and fees on loans accounted for 81% of total revenues in 2001, 83% in 2000, and 82% in 1999. Interest on investment securities accounted for 5% of total revenues in 2001, 5% in 2000, and 6% in 1999.</P>

<P>The Consolidated Financial Statements incorporated by reference in Part II, Item 8 contain information concerning the financial position and results of operations of the Registrant.</P>

<BR>

<P><U><B>Competition</B></U></P>

<P>The business of banking is highly competitive. The Bank's competition primarily comes from other financial institutions located within Sparta, Michigan, and the Kent County, Michigan area. There are a number of larger commercial banks in the Bank's primary market area.</P>

<P>The Bank also competes with a large number of other financial institutions, such as savings and loan associations, insurance companies, consumer finance companies, credit unions and commercial finance and leasing companies for deposits, loans and service business. Money market mutual funds, brokerage houses and nonfinancial institutions provide many of the financial services offered by the Bank. Many of these competitors have substantially greater resources than the Bank. The principal methods of competition for financial services are price (the rates of interest charged for loans, the rates of interest paid for deposits and the fees charged for services) and the convenience and quality of services rendered to customers.</P>

<BR>

<P><U><B>Supervision and Regulation</B></U></P>

<P>Banks and bank holding companies are extensively regulated. The Registrant is subject to supervision and regulation by the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"). The Registrant's activities are generally limited to owning or controlling banks and engaging in such other activities as the Federal Reserve Board may determine to be closely related to banking. Prior approval of the Federal Reserve Board, and in some cases various other government agencies, is required for the Registrant to acquire control of any additional banks or other operating subsidiaries.</P>

<P>The Bank is chartered under state law and is subject to regulation by the Office of Financial and Insurance Services of the Michigan Department of Consumer and Industry Services. State banking laws place restrictions on various aspects of banking, including permitted activities, loan interest rates, branching, payment of dividends and capital and surplus requirements. The Bank is a member of the Federal Reserve System and is also subject to regulation by the Federal Reserve Board. The Bank's deposits are insured by the Federal Deposit Insurance Corporation (the "FDIC") to the extent provided by law. The Bank became a member of the Federal Home Loan Bank system in March 1993. This provides certain advantages to the Bank, including favorable borrowing rates for certain funds.</P>

<P>The Registrant is a legal entity separate and distinct from the Bank. There are legal limitations on the extent to which the Bank can lend or otherwise supply funds to the Registrant. In addition, payment of dividends to the Registrant by the Bank is subject to various state and federal regulatory limitations.</P>

<P>Under Federal Reserve Board policy, the Registrant is expected to act as a source of financial strength to the Bank and to commit resources to support it. Under federal law, the FDIC also has authority to impose special assessments on insured depository institutions to repay FDIC borrowings from the United States Treasury or other sources and to establish semiannual assessment rates on Bank Insurance Fund ("BIF") member banks to maintain the BIF at the designated reserve ratio required by law.</P>

<BR>
<CENTER>
3
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<P>The recapitalization of the Savings Association Insurance Fund ("SAIF") was accomplished through the enactment of The Deposit Insurance Funds Act of 1996.  This legislation authorized the Financing Corporation ("FICO") to impose periodic assessments on depository institutions that are members of the BIF, in addition to institutions that are members of the SAIF.  The purpose of these periodic assessments is to spread the cost of the interest payments on the outstanding FICO bonds over a larger number of institutions.  Until the change in the law, only SAIF member institutions bore the cost of funding these interest payments.</P>

<P>Banks are subject to a number of federal and state laws and regulations which have a material impact on their business. These include, among others, state usury laws, state laws relating to fiduciaries, the Truth in Lending Act, the Truth in Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Expedited Funds Availability Act, the Community Reinvestment Act, the Real Estate Settlement Procedures Act, electronic funds transfer laws, redlining laws, antitrust laws, environmental laws, money laundering laws and privacy laws. The instruments of monetary policy of authorities, such as the Federal Reserve Board, may influence the growth and distribution of bank loans, investments and deposits, and may also affect interest rates on loans and deposits. These policies may have a significant effect on the operating results of banks.</P>

<P>The Gramm-Leach-Bliley Act of 1999 (the "GLB Act") largely removed the restrictions that previously prevented affiliations among banks, securities firms, and insurance companies and provides for a system of functional regulation of the financial services industry. Among other provisions, the GLB Act:</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
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<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P><FONT SIZE=2>repeals the restrictions on banks affiliating with securities firms contained in the depression-era Glass-Steagall Act.</FONT></TD>
</TR>

<TR>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P><FONT SIZE=2>creates a new regulatory classification called a "financial holding company." A financial holding company may engage in a statutory list of financial activities, including insurance underwriting and agency activities, securities underwriting and brokerage activities, merchant banking, and insurance company portfolio investment activities. Other activities that are "complementary" to financial activities, a category to be further defined by regulation, are also authorized for financial holding companies.  The Registrant has not elected to be treated as a financial holding company, but may do so in the future.</FONT></TD>
</TR>

<TR>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P><FONT SIZE=2>provides a system of functional regulation under which, with certain exceptions, activities of banks as securities brokers and investment advisors to mutual funds are subject to regulation and supervision by the Securities and Exchange Commission, eliminating exemptions that banks previously enjoyed.  The effect of the laws is to &quot;pushout&quot; these activities into functionally regulated bank affiliates.</FONT></TD>
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<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

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<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P><FONT SIZE=2>reaffirms the traditional authority of states to regulate insurance companies and insurance agencies, but prohibits discrimination against bank affiliates that conduct those activities.</FONT></TD>
</TR>

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<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

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<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P><FONT SIZE=2>requires financial institutions to disclose their privacy policy to consumers and provides protections to consumers against the transfer and use of nonpublic personal information by financial institutions.</FONT></TD>
</TR>

<TR>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="88%" VALIGN="TOP">
<P><FONT SIZE=2>requires that agreements between banks and non-governmental entities in connection with the Community Reinvestment Act be disclosed to the public, and that community groups that receive funds from banks in excess of defined thresholds disclose how those funds are used.</FONT></TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Although the GLB Act repealed certain pre-existing statutory barriers to cross-industry affiliations and provides a structural framework for achieving the GLB Act's purposes, certain details of implementing the changes authorized by the GLB Act continue to be the subject of regulations to be adopted by the Federal Reserve Board, the Securities and Exchange Commission, and other federal agencies.</P>

<P>Bank holding companies may acquire banks and other bank holding companies located in any state in the United States without regard to geographic restrictions or reciprocity requirements imposed by state banking law. Banks may also establish interstate branch networks through acquisitions of and mergers with other banks. The<BR>
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establishment of <I>de novo</I> interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) is allowed only if specifically authorized by state law.</P>

<P>Michigan banking laws do not significantly restrict interstate banking. The Michigan Banking Code permits, in appropriate circumstances and with the approval of the Commissioner of the Office of Financial and Insurance Services, (1) acquisition of Michigan banks by FDIC-insured banks, savings banks or savings and loan associations located in other states, (2) sale by a Michigan bank of branches to an FDIC-insured bank, savings bank or savings and loan association located in a state in which a Michigan bank could purchase branches of the purchasing entity, (3) consolidation of Michigan banks and FDIC-insured banks, savings banks or savings and loan associations located in other states having laws permitting such consolidation, (4) establishment of branches in Michigan by FDIC-insured banks located in other states, the District of Columbia or U.S. territories or protectorates having laws permitting a Michigan bank to establish a branch in such jurisdiction, and (5) establishment by foreign banks of branches located in Michigan.</P>

<P><U><B>Effects of Compliance With Environmental Regulations</B></U></P>

<P>The nature of the business of the Bank is such that it holds title, on a temporary or permanent basis, to a number of parcels of real property. These include properties owned for branch offices and other business purposes as well as properties taken in or in lieu of foreclosure to satisfy loans in default. Under current state and federal laws, present and past owners of real property may be exposed to liability for the cost of clean up of environmental contamination on or originating from those properties, even if they are wholly innocent of the actions that caused the contamination. These liabilities can be material and can exceed the value of the contaminated property. Management is not presently aware of any instances where compliance with these provisions will have a material effect on the capital expenditures, earnings or competitive position of the Registrant or the Bank, or where compliance with these provisions will adversely affect a borrower's ability to comply with the terms of loan contracts.</P>

<BR>

<P><U><B>Employees</B></U></P>

<P>As of February 28, 2002, the Bank employed 74 full-time equivalent employees (FTE's); the Insurance Agency employed 17 FTE's. The Registrant's only employees as of the same date were its four executive officers (who are also employed by the Bank). The Registrant, Bank, and Insurance Agency believe their relations with their employees are good. </P>

<BR>

<P><U><B>Statistical Information</B></U></P>

<P>Additional statistical information describing the business of the Registrant appears on the following pages and in Management's Discussion and Analysis of Financial Condition and Results of Operations incorporated by reference in Item 7 of this report and in the Consolidated Financial Statements and the notes thereto incorporated by reference in Item 8 of this report.</P>

<P>The following statistical information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and notes thereto incorporated by reference in this report.</P>

<BR>

<P><U><B>Investment Portfolio</B></U></P>

<P>Presented below is the fair value of investment securities as of December 31, 2001 and 2000, a schedule of maturities of investment securities as of December 31, 2001, and the weighted average yields of investment securities as of December 31, 2001. Dollar amounts are presented in thousands.</FONT></P>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>5</FONT>
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<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="26%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=10>
<P ALIGN="CENTER"><FONT SIZE=2><U>Investment Securities maturing within:</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Less than<BR>
<U>1 Year</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><BR>
1 Year -<BR>
<U>5 Years</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><BR>
5 Years - <BR>
<U>10 Years</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><BR>
More than<BR>
<U>10 Years</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Fair Value<BR>
at Dec. 31,<BR>
<U>2001</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Fair Value<BR>
at Dec. 31,<BR>
<U>2000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>U.S. Treasuries and U.S.</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Government agencies</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,009</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,591</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,600</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>Obligations of states and</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;political subdivisions</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,025</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,526</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,531</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,409</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10,491</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,417</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>Corporate bonds</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,300</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,300</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Total debt securities</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,825</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,265</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,436</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,409</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,391</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,417</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>Mortgage-backed securities (1)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,544</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,116</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>Equity securities (2)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>330</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>Other securities (3)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,620</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,620</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Total securities</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,825</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,265</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,436</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,409</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20,885</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>14,153</FONT><HR SIZE="2"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="33%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2><U>Weighted average yields:</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>U.S. Treasuries and U.S.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Government agencies</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3.72</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3.83</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3.79</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Obligations of states and</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;political subdivisions (4)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7.12</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.12</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.93</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7.45</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.75</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Corporate bonds </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5.29</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5.29</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Mortgage-backed securities </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.19</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Equity securities</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7.96</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Other securities</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7.29</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2> (1)</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><FONT SIZE=2>Mortgage-backed securities are not due at a specific date.</FONT></TD>
</TR>

<TR>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><FONT SIZE=2>Equity securities are primarily corporate stocks and have no stated maturity.</FONT></TD>
</TR>

<TR>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><FONT SIZE=2>Other securities are Federal Reserve Bank and Federal Home Loan Bank stock and have no stated maturity.</FONT></TD>
</TR>

<TR>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><FONT SIZE=2>The yield is computed on a fully tax-equivalent basis at an incremental tax rate of 34%.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2>The Bank did not hold investment securities from any one issuer at December 31, 2001, which were greater than 10% of the Registrant's shareholders' equity, exclusive of U.S. Government and U.S. Government agency securities.</P>
<BR>

<P><FONT SIZE=2><U><B>Loan Portfolio</B></U></P>

<P>Information regarding the Bank's loan portfolio is presented below for each of the years listed as of December 31. Dollar amounts are presented in thousands.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="34%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>2001</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>1998</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>1997</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loan Components</U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;&nbsp;69,390</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;&nbsp;69,275</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;&nbsp;68,524</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;&nbsp;61,298</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;&nbsp;52,896</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate mortgage -- construction</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,345</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,555</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,399</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,122</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,499</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate mortgage -- residential</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>55,568</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>65,778</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>58,884</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>45,611</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>43,715</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Consumer</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>32,864</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>33,710</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>34,885</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>30,744</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>28,666</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans, gross</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$165,167</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$175,318</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$166,692</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$140,775</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$127,776</FONT><HR SIZE="2"></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2><U><B>Maturities and Sensitivities of Loans to Changes in Interest Rates</B></U></P>

<P>The following schedule presents the maturities of loans (excluding real estate mortgage and installment loans) as of December 31, 2001. Also presented are loans over one year in maturity (excluding real estate mortgage and</FONT></P>

<BR>
<BR>
<BR>
<CENTER>
6
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P><FONT SIZE=2>installment loans), classified according to the sensitivity to changes in interest rates as of December 31, 2001. Dollar amounts are presented in thousands.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="48%" VALIGN="BOTTOM">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Loan Type</U></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE=2><U>Less than<BR>
1 year </U></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1 year --<BR>
5 years</U></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE=2><U>More than<BR>
5 years</U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U><BR>
Total</U></FONT></TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$34,399</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$32,364</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;2,627</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$69,390</FONT></TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate - construction</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,345</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,345</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Totals</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$41,744</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$32,364</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;2,627</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$76,735</FONT><HR SIZE="2"></TD>
</TR>
</TABLE>

<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="48%" VALIGN="BOTTOM">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Loan Sensitivity to Changes in Interest Rates</U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>Less than<BR>
1 year</U></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1 year --<BR>
5 years</U></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE=2><U>More than<BR>
5 years</U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U><BR>
Total</U></FONT></TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans with fixed interest rates</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$19,803</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$24,386</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;1,898</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$46,087</FONT></TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans with floating or adjustable interest rates</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>21,941</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,978</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>729</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>30,648</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Totals</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$41,744</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$32,364</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$&nbsp;2,627</FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$76,735</FONT><HR SIZE="2"></TD>
</TR>
</TABLE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<P><FONT SIZE=2>Loan maturities are classified according to the contractual maturity date or the anticipated amortization period, whichever is appropriate. The anticipated amortization period is used in the case of loans where a balloon payment is due before the end of the loan's normal amortization period. At the time the balloon payment is due, the loan can either be rewritten or payment in full can be requested. The decision regarding whether the loan will be rewritten or a payment in full will be requested will be based upon the loan's payment history, the borrower's current financial condition, and other relevant factors.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2><U><B>Risk Elements</B></U></P>

<P>The following loans were classified as nonperforming as of December 31. Dollar amounts are presented in thousands:</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="50%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2001</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2000</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1999</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1998</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1997</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="50%" VALIGN="TOP">
<P><FONT SIZE=2>Loans accounted for on a non-accrual basis</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>855</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,019</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,322</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>489</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>753</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="50%" VALIGN="TOP">
<P><FONT SIZE=2>Accruing loans which are contractually past due 90<BR>
&nbsp;&nbsp;&nbsp;days or more as to principal or interest payments</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
1,316</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
1,503</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
667</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
419</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
195</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="50%" VALIGN="TOP">
<P><FONT SIZE=2>Loans defined as "troubled debt restructurings"</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>120</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>108</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>60</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>62</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>27</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="50%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Totals</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,291</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,630</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,049</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>970</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>975</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>A loan is placed on nonaccrual status at the point in time at which the collectibility of principal or interest is considered doubtful. The table below illustrates interest forgone and interest recorded on non-performing loans for the years presented. Dollar amounts are presented in thousands.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="61%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><U>2001</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><U>2000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><U>1999</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><U>1998</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><U>1997</U></FONT></TD>
</TR>

<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P><FONT SIZE=2>Interest on non-performing loans which would have<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;been earned had the loans been in an accrual or<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;performing status</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
$</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
80</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
$</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
51</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
$</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
214</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
$</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
103</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
$</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
<BR>
101</FONT></TD>
</TR>

<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P><FONT SIZE=2>Interest on non-performing loans that was actually<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;recorded when received</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
20</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
29</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
157</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
87</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
65</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>

<P><FONT SIZE=2><U><B>Potential Problem Loans</B></U></P>

<P>At December 31, 2001, there was $6,637,000 of loans not disclosed above where some concern existed as to the borrowers' ability to comply with original loan terms. A specific allocation of $274,000 from the allowance for<BR>
<BR>
<BR>
<CENTER>
7
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

loan losses had been provided for these loans as of December 31, 2001. However, the entire allowance for loan losses is also available for these potential problem loans.</P>

<P><U><B>Loan Concentrations</B></U></P>

<P>As of December 31, 2001, there was no concentration of loans exceeding 10% of total loans that is not otherwise disclosed as a category of loans in the loan portfolio listing in Note 4 to the Consolidated Financial Statements incorporated by reference in Item 8 of this report.</P>

<BR>

<P><U><B>Other Interest-Bearing Assets</B></U></P>

<P>As of December 31, 2001, there were no other interest-bearing assets that would be required to be disclosed if such assets were loans.</P>

<P><U><B>Summary of Loan Loss Experience</B></U></P>

<P>The following schedule presents a summary of activity in the allowance for loan losses for the periods shown and the percentage of net charge-offs during each period to average gross loans outstanding during the period. Dollar amounts are presented in thousands.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2001</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1999</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1998</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1997</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Balance at January 1</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$2,101</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$1,901</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$1,851</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$1,567</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$1,487</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Charge-offs:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Commercial</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>597</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>284</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>275</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>204</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>206</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Real estate - construction</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>109</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Real estate - mortgage</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>84</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Consumer</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>490</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>597</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>371</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>321</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>315</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Charge-offs</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,280</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>981</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>646</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>525</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>527</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Recoveries:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Commercial</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Real estate - construction</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Real estate - mortgage </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Consumer</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>141</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>98</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>62</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>76</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>55</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Recoveries</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>189</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>77</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>79</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>68</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Net charge-offs</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,091</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>881</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>569</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>446</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>459</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Additions charged to operations (1)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,003</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,075</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>625</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>730</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>539</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Balance at December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$2,013</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$2,101</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$1,907</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$1,851</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$1,567</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Ratio of net charge-offs during the period to<BR>
average loans outstanding during the period</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
0.63</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
0.50</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
0.38</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
0.33</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
0.39</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
%</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>Additions to the allowance for loan losses charged to operations during the periods shown were based on management's judgment after considering factors such as loan loss experience, evaluation of the loan portfolio, and prevailing and anticipated economic conditions. The evaluation of the loan portfolio is based upon various risk factors such as the financial condition of the borrower, the value of collateral and other </FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>8</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>considerations which, in the opinion of management, deserve current recognition in estimating possible loan losses.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2>The following schedule presents an allocation of the allowance for loan losses to the various loan categories as of the years ended December 31. Dollar amounts are presented in thousands.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2001</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1999</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1998</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1997</U></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loan category:</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>850</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>775</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>573</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>572</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>500</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate - construction</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>129</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>95</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate - mortgage</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>284</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>299</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>155</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>131</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>121</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Consumer</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>706</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>907</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>873</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>834</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>685</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Unallocated</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>44</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>86</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>211</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>306</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>255</FONT><HR SIZE="1"></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Total allowance</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,013</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,101</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,907</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,851</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,567</FONT><HR SIZE="2"></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2>The following schedule presents the stratification of the loan portfolio by the amount outstanding as a percentage of total loans for the respective years ended December 31.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2001</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2000</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1999</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1998</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1997</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="27%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loan category:</U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="27%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>42.49</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>39.63</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>40.84</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>43.54</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>41.40</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="27%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate - construction</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.50</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3.73</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2.62</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2.22</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.96</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="27%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate - mortgage</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>32.52</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>36.04</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>35.77</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>32.40</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>34.21</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="27%" VALIGN="TOP">
<P><FONT SIZE=2>Consumer</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20.49</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20.60</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20.77</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>21.84</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>22.43</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="27%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Total </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100.00</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100.00</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100.00</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100.00</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100.00</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The increase from 2000 to 2001 in the allowance for loan losses allocated to commercial loans was based upon increased net charge-offs experienced and increased level of substandard or watch credits. The increase in the allocation to construction real estate loans was due to increased charge-offs experienced in 2001 and a larger construction portfolio at year-end. The allocation to real estate mortgages was slightly lower in 2001 based upon reduced delinquencies and non-accrual term mortgages offset by increased charge-offs of wholesale mortgages in 2001. The allocation to consumer loans was reduced due to decreased net charge-offs in 2001 and lower delinquency rates within the portfolio, particularly indirect installment loans. </P>
<BR>

<P><U><B>Deposits</B></U></P>

<P>The following table illustrates the maturities of time certificates of deposit issued in denominations of $100,000 or more as of December 31, 2001. Dollar amounts are presented in thousands.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2><U>Maturing in less than<BR>
3 months</U></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2><U>Maturing in<BR>
3 to 6 months</U></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2><U>Maturing in<BR>
6 to 12 months</U></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2><U>Maturing in more<BR>
than 12 months</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE=2><U>Total</U></FONT></TD>
</TR>

<TR>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="21%" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;8,650</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;4,878</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;7,808</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;6,072</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;27,408</FONT></TD>
</TR>
</TABLE>

<BR>

<P><FONT SIZE=2><U><B>Return on Equity and Assets</B></U></P>

<P>The following schedule presents the ratios indicated for the years ended December 31, 2001, 2000, and 1999, respectively.</FONT></P>

<BR>
<CENTER>
<FONT SIZE=2>9</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="64%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2001</U>&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>2000</U>&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><U>1999</U>&nbsp;&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="64%" VALIGN="TOP">
<P><FONT SIZE=2>Return on assets (net income divided by average total assets)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0.73%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0.77%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.10%</FONT></TD>
</TR>

<TR>
<TD WIDTH="64%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="64%" VALIGN="TOP">
<P><FONT SIZE=2>Return on equity (net income divided by average equity)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.07%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.79%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.78%</FONT></TD>
</TR>

<TR>
<TD WIDTH="64%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="64%" VALIGN="TOP">
<P><FONT SIZE=2>Dividend payout ratio (dividends declared per share divided<BR>
&nbsp;&nbsp;&nbsp;by net income per share)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
68.24%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
64.29%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
46.57%</FONT></TD>
</TR>

<TR>
<TD WIDTH="64%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="64%" VALIGN="TOP">
<P><FONT SIZE=2>Equity to assets ratio (average equity divided by average total assets)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9.24%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.74%</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.75%</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2><U><B>Short-Term Borrowings</B></U></P>

<P>There were no categories of short-term borrowings whose average balance outstanding exceeded 30% of shareholders' equity in 2001, or 2000.</P>
<BR>

<P><B>Item 2. Properties</B></P>

<P>The offices of the Bank and Insurance Agency as of February 28, 2002, were as follows:</P>

<P>Registrant's, Bank's and Insurance Agency's main office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109 East Division, Sparta, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office is owned by the Bank and comprises 24,000 square feet.</P>

<P>Bank's branch office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;416 and 440 West Division, Sparta, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office is owned by the Bank and comprises 7,000 square feet.</P>

<P>Bank's branch office and Insurance Agency's branch office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4170 Seventeen Mile Road, Cedar Springs, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office is owned by the Bank. Office comprises 3,000 square feet, of which 2,250 feet are occupied by the<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank and 750 feet are occupied by the Insurance Agency.</P>

<P>Bank's branch office and Insurance Agency's branch office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4949 Plainfield Avenue NE, Grand Rapids, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office is leased by the Bank and the Insurance Agency. Approximately 3,000 square feet is occupied by the<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank and 3,000 feet is occupied by the Insurance Agency.</P>

<P>Bank's branch office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;565 South State Street, Sparta, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office is leased by the Bank and comprises approximately 300 square feet.</P>

<P>Bank's branch office <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5228 Alpine Avenue NW, Comstock Park, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office is leased by the Bank. Approximately 1,600 square feet is occupied by the Bank.</P>

<P>The Registrant operates its business at the main office of the Bank. No properties were owned by the Registrant as of February 28, 2002. The Registrant, Bank, and Insurance Agency believe that their offices are suitable and adequate for their future needs and are in good condition. The Registrant's management believes all offices are adequately covered by property insurance.</P>

<BR>
<BR>
<CENTER>
10
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P><B>Item 3. Legal Proceedings</B></P>

<P>There are no material pending legal proceedings to which the Registrant or the Bank is a party or to which any of their property is subject, except for proceedings which arose in the ordinary course of business. In the opinion of management, pending legal proceedings will not have a material effect on the consolidated financial condition of the Registrant.</P>
<BR>

<P><B>Item 4. Submission of Matters to a Vote of Security Holders</B></P>

<P>There were no matters submitted to a vote of security holders during the quarter ended December 31, 2001.</P>

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<CENTER>
11
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<BR>

<P ALIGN="CENTER"><U><B>PART II</B></U></P>
<BR>

<P><B>Item 5.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Market for Registrant's Common Equity and Related Stockholder Matters</B></P>

<P>The information under the caption "Common Stock Information" on page 2 of the Registrant's Annual Report to Shareholders for the year ended December 31, 2001, is incorporated herein by reference.</P>

<P>On October 17, 2001, the Registrant issued 981 shares of common stock to its directors pursuant to Directors' Stock Purchase Plan for an aggregate cash price of $14,000. The Registrant relied on the exemption contained in Section 4(6) of the Securities Act of 1933 in connection with these sales.</P>
<BR>

<P><B>Item 6.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Selected Financial Data</B></P>

<P>The information under the caption "Financial Highlights" on page 3 of the Registrant's Annual Report to Shareholders for the year ended December 31, 2001, is incorporated herein by reference.</P>

<BR>

<P><B>Item 7.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Management's Discussion and Analysis of Financial Condition and Results of Operations</B></P>

<P>The information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," including all subheadings, on pages 24 through 31, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2001, is incorporated herein by reference.</P>

<BR>

<P><B>Item 7A.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Quantitative and Qualitative Disclosures About Market Risk</B></P>

<P>The information under the subheading "Liquidity and Interest Rate Risk" under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 30 through 31, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2001 is incorporated herein by reference.</P>

<BR>

<P><B>Item 8.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Financial Statements and Supplementary Data</B></P>

<P>The Consolidated Financial Statements, Notes to Consolidated Financial Statements, and Independent Auditors' Report on pages 4 through 23, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2001 are incorporated herein by reference.</P>
<BR>

<P><B>Item 9.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Changes in and Disagreements with Accountants on Accounting and<BR>
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; Financial Disclosure</B></P>

<P>Not applicable.</P>

<BR>
<CENTER>
12
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><U><B>PART III</B></U></P>

<BR>

<P><B>Item 10.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Directors and Executive Officers of the Registrant</B></P>

<P>The information under the captions "ChoiceOne's Board of Directors and Executive Officers" and "Related Matters -- Section 16(a) Beneficial Ownership Reporting Compliance" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2002, is incorporated herein by reference.</P>

<BR>

<P><B>Item 11.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Executive Compensation</B></P>

<P>The information under the captions "Executive Compensation" and "ChoiceOne's Board of Directors and Executive Officers -- Compensation of Directors" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2002, is incorporated herein by reference.</P>

<BR>

<P><B>Item 12.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Security Ownership of Certain Beneficial Owners and Management</B></P>

<P>The information under the caption "Ownership of ChoiceOne Common Stock" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2002, is incorporated herein by reference.</P>

<BR>

<P><B>Item 13.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Certain Relationships and Related Transactions</B></P>

<P>The information under the caption "Related Matters -- Certain Relationships and Related Transactions" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2002, is incorporated herein by reference.</P>

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13
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<P ALIGN="CENTER"><U><B>PART IV</B></U></P>

<BR>
<BR>

<P><B>Item 14.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Exhibits, Financial Statement Schedules, and Reports on Form 8-K</B></FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>(a)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2><U>Financial</U> <U>Statements</U>. The following financial statements and independent auditors' report are filed as part of this report:</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Balance Sheets at December 31, 2001 and 2000.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Income for the years ended December 31, 2001, 2000, and 1999.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statement of Changes in Shareholders' Equity for the years ended December 31, 2001,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2000, and 1999.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000, and 1999.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes to Consolidated Financial Statements.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independent Auditors' Report dated March 7, 2002.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>The consolidated financial statements, notes to consolidated financial statements and independent auditors' report listed above are incorporated by reference in Item 8 of this report from the Registrant's Annual Report to Shareholders for the year ended December 31, 2001.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2><U>Financial</U> <U>Statement</U> <U>Schedules</U>. None.</FONT></TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2><U>Exhibits</U>. The following exhibits are filed as part of this report:</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="30%" VALIGN="TOP">
<P><FONT SIZE=2><U>Exhibit</U></FONT></TD>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2><U>Document</U></FONT></TD>
</TR>
</TABLE>

<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>3.1</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Amended and Restated Articles of Incorporation of the Registrant. Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended June 30, 2000. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>3.2</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Bylaws of the Registrant as currently in effect and any amendments thereto. Previously filed as an exhibit to the Registrant's Form 10-QSB Quarterly Report for the quarter ended September 30, 1998. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>4</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Advances, Pledge and Security Agreement between ChoiceOne Bank and the Federal Home Loan Bank of Indianapolis. </FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>10.1</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Agreement with James A. Bosserd. Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended March 31, 2001. Here incorporated by reference.(1)</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>10.2</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Amended and Restated Executive Stock Incentive Plan. (1) Previously filed as an appendix to the Registrant's Definitive Proxy Statement with respect to its Annual Meeting of Shareholders held on April 27, 2000. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>10.3</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Directors' Stock Purchase Plan. (1) Previously filed as Exhibit 10.1 to the Registrant's Form 10-QSB Quarterly Report for the quarter ended September 30, 1998. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>13</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Annual Report to Shareholders for the year ended December 31, 2001.</FONT></TD>
</TR>
</TABLE>

<BR>
<CENTER>
<FONT SIZE=2>14</FONT>
</CENTER>
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<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>21</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Subsidiaries of the Registrant.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>23</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Consent of Independent Auditors.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>24</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Power of Attorney.</FONT></TD>
</TR>
</TABLE>

<P><FONT SIZE=2><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </U></FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="87%" VALIGN="TOP">
<P><FONT SIZE=2>This agreement is a management contract or compensation plan or arrangement to be filed as an exhibit to this Form 10-K.</FONT></TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Copies of any exhibits will be furnished to shareholders upon written request. Requests should be directed to Tom Lampen, Treasurer, ChoiceOne Financial Services, Inc., 109 East Division, Sparta, Michigan 49345.</P>

<BR>

<P>(b)&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <U>Reports</U> <U>on</U> <U>Form</U> <U>8-K</U></P>

<P>No reports on Form 8-K were filed during the year ended December 31, 2001.</P>

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<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<BR>
<CENTER>
15
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<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER">SIGNATURES</P>

<P>Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.<BR>
<P ALIGN="CENTER">ChoiceOne Financial Services, Inc.</FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="29%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="50%" VALIGN="TOP">
<P><FONT SIZE=2>By /s/ James A. Bosserd<HR SIZE="1" WIDTH="70%" ALIGN="LEFT">
James A. Bosserd<BR>
President and Chief Executive Officer</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 22, 2002</FONT></TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.</FONT></P>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ James A. Bosserd</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP" ROWSPAN=2>
<P><FONT SIZE=2>President and Chief Executive<BR>
&nbsp;&nbsp;&nbsp;Officer (Principal Executive Officer)</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 22, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>James A. Bosserd</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Thomas L. Lampen</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP" ROWSPAN=2>
<P><FONT SIZE=2>Treasurer (Principal Financial<BR>
&nbsp;&nbsp;&nbsp;and Accounting Officer)</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 20, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Thomas L. Lampen</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Jon E. Pike</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP" ROWSPAN=2>
<P><FONT SIZE=2>Chairman of the Board<BR>
&nbsp;&nbsp;&nbsp;and Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 20, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Jon E. Pike</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Linda R. Pitsch</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Secretary and Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 20, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Linda R. Pitsch</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Frank G. Berris</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 20, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Frank G. Berris</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Lawrence D. Bradford</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 25, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Lawrence D. Bradford</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ William F. Cutler, Jr.</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 20, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>William F. Cutler, Jr.</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Lewis G. Emmons</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 20, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Lewis G. Emmons</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Stuart Goodfellow</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 20, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Stuart Goodfellow</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Paul L. Johnson</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 27, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Paul L. Johnson</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Bruce A. Johnson</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 29, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Bruce A. Johnson</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>/s/ Andrew W. Zamaira*</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 22, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Andrew W. Zamaira</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>*By</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>/s/ Thomas L. Lampen</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>March 29, 2002</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thomas L. Lampen<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attorney-in-Fact</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<BR>

<BR>
<CENTER>
<FONT SIZE=2>16
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER">EXHIBIT INDEX</FONT></P>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="30%" VALIGN="TOP">
<P><FONT SIZE=2><U>Exhibit</U></FONT></TD>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2><U>Document</U></FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>3.1</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Amended and Restated Articles of Incorporation of the Registrant. Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended June 30, 2000. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>3.2</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Bylaws of the Registrant as currently in effect and any amendments thereto. Previously filed as an exhibit to the Registrant's Form 10-QSB Quarterly Report for the quarter ended September 30, 1998. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>4</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Advances, Pledge and Security Agreement between ChoiceOne Bank and the Federal Home Loan Bank of Indianapolis. </FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>10.1</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Agreement with James A. Brosserd. Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended March 31, 2001. Here incorporated by reference.(1)</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>10.2</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Amended and Restated Executive Stock Incentive Plan. (1) Previously filed as an appendix to the Registrant's Definitive Proxy Statement with respect to its Annual Meeting of Shareholders held on April 27, 2000. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>10.3</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Directors' Stock Purchase Plan. (1) Previously filed as Exhibit 10.1 to the Registrant's Form 10-QSB Quarterly Report for the quarter ended September 30, 1998. Here incorporated by reference.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>13</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Annual Report to Shareholders for the year ended December 31, 2001.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>21</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Subsidiaries of the Registrant.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>23</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Consent of Independent Auditors.</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>24</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<P><FONT SIZE=2>Power of Attorney.</FONT></TD>
</TR>
</TABLE>

<P><FONT SIZE=2><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </U></FONT></P>

<BR>

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<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="87%" VALIGN="TOP">
<P><FONT SIZE=2>This agreement is a management contract or compensation plan or arrangement to be filed as an exhibit to this Form 10-K.</FONT></TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<BR>
<CENTER>
<FONT SIZE=2>17</FONT>
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<BR>


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<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>choiceex4.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>ChoiceOne Financial Services, Inc. Exhibit 4 to Form 10-K</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">

<P ALIGN="CENTER"><FONT SIZE=2><B>EXHIBIT 4</P></B></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
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<TD WIDTH="81%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>[Federal<BR>
Home Loan<BR>
Bank Logo]</FONT></TD>
</TR>
</TABLE>

<P><FONT SIZE=2><U><B>ADVANCES, PLEDGE, AND SECURITY AGREEMENT</B></U></P>

<P>This Advances, Pledge, and Security Agreement (the "Advances Agreement"), dated as of this <U>21<SUP>st</U></SUP> day of <U>December 21</U>, 20<U>01</U>, is between <U>ChoiceOne Bank</U> with its principal place of business at <U>Sparta Michigan</U> (the "Member") and the Federal Home Loan Bank of Indianapolis, with its principal place of business at 8250 Woodfield Crossing Boulevard, Indianapolis, Indiana 46240, and mailing address at P. O. Box 60, Indianapolis, Indiana 46206 (the "Bank").</P>

<P><B>WHEREAS</B>, the Bank, subject to the provisions of the Federal Home Loan Bank Act ("Bank Act"), the Rules and Regulations of the Federal Housing Finance Board or its legal successor ("FHFB Regulations"), the policies of the FHFB and the Bank's Credit Policies (as hereinafter defined) is authorized to make available Advances and Other Credit Products to its members; and</P>

<P><B>WHEREAS</B>, Member desires from time to time to apply for such Advances and Other Credit Products that may be available to it; and</P>

<P><B>WHEREAS</B>, the Bank requires that such Advances and Other Credit Products provided by the Bank be secured pursuant to this Advances Agreement, and Member agrees to provide such security as requested by the Bank by the means set forth in this Advances Agreement.</P>

<P><B>NOW THEREFORE</B>, intending to be legally bound, the Member and the Bank agree as follows:</P></FONT>

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<P><FONT SIZE=2><B>1.&nbsp;&nbsp;&nbsp;General.</P>
<P>Section 1.01.&nbsp;&nbsp;Definitions.</B></P>

<P>As used herein, the following terms shall have the following meanings:</P>

<P><B>"Advances"</B> means any and all loans or other extensions of credit now or hereafter granted by the Bank to the Member, including all loans or extensions of credit by the Bank to the Member prior to the date hereof.</P>

<P><B>"Advice of Credit"</B> means one or more written confirmations to be executed by the Member and the Bank specifying the type or category of advance made, the terms of repayment, the interest rate (which may be fixed or variable), and any other pertinent terms and conditions, which shall evidence an advance.</P>

<P><B>"Application for Advance"</B> means one or more written</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">
<P><FONT SIZE=2>or telephonic requests for an advance, in such form or forms as shall be specified by the Bank from time to time, and which if executed by the Bank shall evidence an Advance.</P>

<P><B>"Bank Deposits"</B> shall mean all deposit accounts maintained by the Member with the Bank (excluding safekeeping accounts expressly held for the benefit of a third-party), all money, cash and checks, drafts, notices, bills, bills of exchange and bonds deposited therein or credited thereto, including any increases, renewals, extensions, substitutions and replacements, whether or not such instruments have been posted to any such deposit account, and all statements, certificates, passbooks and instruments representing any such deposit account.</P>

<P><B>"Capital Stock"</B> means all of the capital stock of the Bank owned by the Member, and all payments which have been or hereafter are made on account of subscriptions to, and all unpaid dividends on, such Capital Stock.</FONT></TD>
</TR>
</TABLE>

<P></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
<TD WIDTH="34%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Page 1 of 16</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">April 1994</FONT></TD>
</TR>
</TABLE>

<BR>
<CENTER>

</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
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<TD WIDTH="50%" VALIGN="TOP">
<P><FONT SIZE=2><B>"Collateral"</B> means all assets of the Member of any kind or nature whatsoever, whether tangible or intangible, including without limitation, all Capital Stock, Bank Deposits, Mortgage Collateral, Securities Collateral, and Other Collateral, all cash and cash equivalents, all insurance proceeds, all tax refunds, all proceeds of any of the foregoing, and all collections on any and all of the foregoing, which are now or hereafter pledged to the Bank pursuant to Section 3.01 hereof. It also means, including without limitation, any of the foregoing which have previously been assigned, transferred or pledged to the Bank by the Member as collateral for loans or other extensions of credit prior to the date hereof, all of such assets in which a security interest is granted pursuant to the terms hereof or in which a security interest is hereafter assigned, transferred, granted, or pledged pursuant to the terms hereof.</P>

<P><B>"Collateral Policy"</B> shall mean the Bank's Collateral Policy as stated in the Credit Policy Manual, policy statement or operating circulars of the Bank, as in effect from time to time.</P>

<P><B>"Collateral Requirement"</B> means such aggregate Market Value (or unpaid principal balance) of Eligible Collateral as is specified in the Bank's Collateral Policy or as may be otherwise specified in writing by the Bank from time to time as being the collateral maintenance level the Member must maintain hereunder. The Bank may increase or decrease the Collateral Requirement at any time for, including without limitation, specific collateral listings, physical possession requirements, and where applicable, blanket collateral requirements.</P>

<P><B>"Credit Policies"</B> shall mean the Bank's Credit Policy Manual, policy statements, or operating circulars relating to Advances and Other Credit Products offered by the Bank, all as in effect from time to time.</P>

<P><B>"Eligible Collateral"</B> means Collateral other than Capital Stock which: (I) meets the definition of Eligible Collateral under the Bank's Collateral Policy, including without limitation one-to-four family whole mortgage loans, government and agency securities, private mortgage-backed securities, arid Bank Deposits; (II) is owned by the Member free and clear of any liens, encumbrances or other interests other than the assignment to the Bank hereunder; (III) has not been in default within the most recent 12-month period provided that in the case of Mortgage Collateral, mortgage payments that are overdue by more than sixty (60) days shall not be included within Eligible Collateral; (IV) in the case of Mortgage Collateral, relates to residential real property which is</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">
<P><FONT SIZE=2>covered by fire, hazard, and where applicable, flood insurance in an amount at least sufficient to discharge the mortgage loan in full in case of loss and as to which all real estate taxes are current; and (V) in the case of Mortgage Collateral, does not secure an indebtedness on which any director, officer, employee, attorney or agent of the Member or of any Federal Home Loan Bank is personally liable. The Bank may change the definition of Eligible Collateral from time to time, and the Bank's determination of Eligible Collateral shall be conclusive.</P>

<P><B>"Indebtedness"</B> means all obligations, liabilities or indebtedness of the Member to the Bank, due or to become due, direct or indirect, absolute or contingent, joint or several, now existing or hereafter at any time created, arising or incurred under this Advances Agreement, or any Advice of Credit, Application for Advance, Other, Credit Product Agreements, Advances, Other Credit Products, Bank Deposits, including any overdrafts or other charges in connection therewith. Indebtedness also means any obligations for any other services (including without limitation, safekeeping, operating and other correspondence services) provided by the Bank, including any applications, commitments, other agreements or documents relating to the foregoing, any amendments to any of the foregoing agreements or documents and any obligations under indemnification provisions in any such agreements or documents, and any renewal, extension or substitution of any such obligations, liabilities and indebtedness, including attorneys' fees of the Bank in that collection thereof and the enforcement of any remedies with respect to any Collateral.</P>

<P><B>"Market Value"</B> means the market value of Collateral determined in a manner as specified by the Bank from time to time. The Bank may change the method of determining Market Value at any time which shall be consistently applied to substantially all borrowers. The Bank's determination of Market Value shall be conclusive.</P>

<P><B>"Mortgage Collateral"</B> means whole mortgage loans, Mortgage Documents and all security agreements, guaranties, insurance policies, certificates, binders, commitments or reports relating thereto, including title insurance, private mortgage insurance and hazard and liability insurance, surveys, bonds, participations, purchase commitments, hedge contracts or other agreements to purchase, guaranty or insure any mortgage loans or securities to be issued by the Member. Mortgage Collateral also means any other agreement, instrument or document pertaining to, affecting or obtained by the Member in connection with the loans covered by the Mortgage</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
<TD WIDTH="34%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Page 2 of 16</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">April 1994</FONT></TD>
</TR>
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<P><FONT SIZE=2>Documents, financing statements perfecting the Member's security interest in any of the foregoing, certificates, evidences of recordation, applications, underwriting materials, appraisals, notices, opinions of counsel, loan servicing data, files, correspondence, computer programs, tapes, discs, cards, account records and all other electronically stored or written records or materials relating to the loans covered by the Mortgage Documents, including any and all rights, claims, and choses in action against or with respect to any person or entity which has provided services to the Member in connection with any other Mortgage Collateral, including without limitation, surveyors, appraisers, environmental engineers, environmental assessment firms, contractors, and architects. Unless otherwise authorized by the Bank, Mortgage Collateral shall not include mortgage securities or loan participations.</P>

<P><B>"Mortgage Documents"</B> means mortgages, deeds of trust or other security deeds in land and interests in real property and the improvements and fixtures located thereon (herein "mortgages") and all notes, bonds or other instruments evidencing loans secured thereby (herein "mortgage notes") and any endorsement and assignments thereof to the Member.</P>

<P><B>"Other Collateral"</B> means such items of tangible and intangible property, other than Capital Stock, Bank Deposits, Mortgage Collateral, and Securities Collateral, which are offered as collateral by the Member to the Bank and which the Bank in its discretion expressly accepts by written notice delivered to the Member as collateral for Advances and Other Credit Products.</P>

<P><B>"Other Credit Product Agreement"</B> means a writing or electronic transmission in such form as shall be specified by the Bank, executed by the Bank and the Member and setting forth the obligations of the Bank and Member, including without limitation, any Affordable Housing Program transaction, any service confirmation, service contract, reimbursement agreement, interest rate swap agreement, transaction, confirmation, applications, notices, advice or other instruments between the Bank and the Member.</P>

<P><B>"Other Credit Products"</B> means any and all commitments or obligations under which the Bank agrees to make Advances to the Member or payments on behalf of or for the account of the Member, including without limitation, letters of credit, guarantees, demand or CMS account transactions, NOW account processing, deposit overdrafts, item processing services, coin and currency services, safekeeping services (including security lend-</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">
<P><FONT SIZE=2>ing programs), Affordable Housing Program transactions, correspondent banking service debits or services charges, or other arrangements intended to facilitate transactions between or among the Bank, the Member and third parties, or under which the Bank enters into a credit or financial accommodation agreement or other arrangement with the Member, including without limitation, repurchase agreements and interest rate exchange transactions (such as interest rate swap agreements, cap, collar and floor agreements) and such other products or services as may be offered by the Bank from time to time pursuant to its Credit Policies and irrespective of whether the Bank's obligation is contingent or conditional.</P>

<P><B>"Outstanding Commitments"</B> means, at any point in time, the maximum aggregate principal amount of Advances or payments which the Bank may be obligated to make to the Member (or other parties) under Advance Applications or Other Credit Product Agreements then in effect.</P>

<P><B>"Securities Collateral"</B> means all securities or certificates evidencing a direct or indirect interest in a loan or a group of loans secured by mortgages, including without limitation, mortgage-backed securities, collateralized mortgage obligations and real estate mortgage investment conduits, including Federal Home Loan Mortgage Corporation mortgage participation certificates, Federal National Mortgage Association mortgage pass- through mortgage-backed certificates and Government National Mortgage Association modified pass-through mortgage-backed certificates, and all Mortgage Documents and items of Mortgage Collateral owned or otherwise acquired by the Member relating to the loans underlying such securities or certificates; consolidated obligations of the Federal Home Loan Bank System; obligations of or guaranteed by the United States; and obligations of or guaranteed by agencies or instrumentalities of the United States.</P>

<P><B>2.&nbsp;&nbsp;&nbsp;Advances Documentation.</P>

<P>Section 2.01.&nbsp;&nbsp;Application for Advances.</B></P>

<P>The Member may apply for Advances or commitments by completing and submitting an Application for Advance or requesting Other Credit Product services. The preceding sentence notwithstanding, the Bank may in its discretion make an Advance, make a commitment, or deliver Other Credit Products to the Member pursuant to the Bank Act, FHFB Regulations, Credit Policies, and other Bank procedures in effect from time to time, and by either (1) the receipt of an oral or written application which is executed</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
<TD WIDTH="34%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Page 3 of 16</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">April 1994</FONT></TD>
</TR>
</TABLE>

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<P><FONT SIZE=2>by the Bank without change, or (II) in the case of an application received, completed or modified by the Bank pursuant to a telephonic or other unsigned communication by the Member, by an Advice of Credit writing generated by the Bank. The Member shall be estopped from asserting any claim or defense with respect to the terms applicable to an Advance, commitment, or Other Credit Product entered into pursuant to a telephone application or other unsigned communication unless, within two (2) business days of receipt of the Bank's advice, the Member delivers to the Bank a written notice specifying the disputed term(s) or conditions. The Bank shall have the absolute right to rely upon the procedures established hereby or pursuant to the terms hereof and shall have no liability to the Member for any actions taken or omitted to be taken in connection with such procedures. The Member agrees that it will hold the Bank and each of its employees, officers, directors, agents, and representatives harmless from any loss, liability or damage which the Member may suffer, including without limitation, lost profits and attorneys' fees and disbursements, arising out of or in connection with such procedures, absent fraud, willful misconduct, or recklessness on the part of the Bank.</P>

<P><B>Section 2.02.&nbsp;&nbsp;Bank's Receipt of Written Confirmations and Findings.</B></P>

<P>Within five (5) business days of receipt, Member agrees to execute and return any Advice of Credit, confirmation, or Other Credit Product Agreement to the Bank. Upon request of the Bank, the Member shall sign and deliver to the Bank a promissory note or notes in such form as the Bank may reasonably require evidencing any Advance. Unless otherwise requested by the Member and approved by the Bank, each Advance shall be funded by crediting the Member's CMS account(s) with the Bank.</P>

<P><B>Section 2.03.&nbsp;&nbsp;Interest Computations and Repayment of Advances and Other Credit Products.</B></P>

<P>The Member agrees to repay each Advance or Other Credit Product in accordance with this Advances Agreement and the terms and conditions of the Advice of Credit or Other Credit Product Agreement. Each Advance, Advice of Credit, Application for Advance, Other Credit Product and Other Credit Product Agreement shall be subject to the terms of the Credit Policies and applicable laws, regulations, and limitations, all as in effect from time to time, including the Bank Act, the FHFB Regulations and the statements of policy and guidelines of the FHFB, which shall be deemed to be incorporated by reference into this Advances Agreement. Unless otherwise speci-</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
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<P><FONT SIZE=2>fied in the Bank's Credit Policies or as may be otherwise specified in writing by the Bank from time to time, interest shall be paid at the time of each payment of all of the principal of each Advance on the amount of principal so repaid, and shall be paid on the fifteenth (15th) day of each month (or the Bank's next business day if the Bank is not open for business on the fifteenth (15th)) on the daily outstanding principal amount of each Advance since the previous interest payment date (other than principal amounts which have been repaid in full since such interest payment date), in each case at the rate applicable to such Advance as stated in the related Advice of Credit. The Member shall pay to the Bank, immediately and without demand, interest on any past due amount owing on any Advance or Other Credit Product at the rate in effect and being charged by the Bank from time to time on defaults. The default rate on past due payments of principal and interest may, at the option of the Bank, be at a rate of five percent (5%) per annum in addition to the then highest current rate being charged by the Bank for advances, not to exceed the highest legal interest rate allowed under Indiana law. The Member shall maintain in the Member's CMS account with the Bank an amount at least equal to the amounts then currently due and payable to the Bank on outstanding Advances and Other Credit Products. The Member hereby authorizes the Bank to debit the Member's CMS account with the Bank for all amounts due and payable on any Advance or Other Credit Product and for all other amounts due and payable hereunder. In the event that the amount in the Member's CMS account is, at any time, insufficient to pay such due and payable amounts, the Bank may without notice to the Member apply any Bank Deposits then in the possession of the Bank to the payment of such due and payable amounts.</P>

<P><B>Section 2.04.&nbsp;&nbsp;Payment of Prepayment Charges.</B></P>

<P>Any prepayment fees or charges for which provision is made, whether under the Advice of Credit, Other Credit Product Agreement, or otherwise, shall be payable at the time of any voluntary or involuntary payment of the principal of such Advance or Other Credit Product prior to the originally scheduled maturity thereof, including without limitation, payments that are made as a part of a liquidation of the Member or that become due as a result of an acceleration pursuant to Section 4.01 hereof, and whether such payment is made by the Member, by a conservator, receiver, liquidator or trustee of or for the Member, or by any successor to or any assignee of the Member. The method of computation for the prepayment fee, unless expressly provided for in the applicable credit documentation, is set forth in the Credit Policies of the</FONT></TD>
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<P><FONT SIZE=2>Bank and may be subject to change from time to time with advance notice to the Member.<BR>
<B>Section 2.05.&nbsp;&nbsp;Right of Bank to Make Payments with Respect to Outstanding Commitments.</B></P>

<P>In the event that there are one or more Outstanding Commitments at the time of an Event of Default under Section 4.01 hereof, the Bank may, at its option, make any payments due thereunder from time to time by crediting a special account with the Bank over which the Bank has sole dominion and control. Amounts credited to such special accounts shall be deemed to have satisfied the Bank's obligations under the Outstanding Commitments. When all such obligations have been satisfied, the Bank shall disburse the balance, if any, in such account first to the satisfaction of any amounts then due and owing by the Member to the Bank and then to the Member or its successors in interest. Payments made pursuant to this section shall be payable on demand and shall bear interest at the rate specified for each applicable Advance (or if such rate is not specified, at the rate in effect and being charged by the Bank from time to time on variable rate advances), and shall include applicable prepayment fees.</P>

<P>The Bank shall not fund outstanding commitments previously made to the Member whose access to advances is restricted by its primary federal regulator. In addition, the Bank shall not fund outstanding commitments previously made to the Member whose access to advances is subsequently restricted because it does not have positive tangible capital or if the Bank deems itself insecure for any reason as determined by the Bank in its sole discretion. The Bank shall not honor any outstanding commitments to the Member if the Member is a savings association that fails to maintain its status as a Qualified Thrift Lender as such rule is defined under the applicable federal law and federal regulations as may be in effect from time to time.</P>

<P><B>3.&nbsp;&nbsp;&nbsp;Security Agreement.</P>

<P>Section 3.01.&nbsp;&nbsp;Creation of Security Interest.</B></P>

<P>As security for all Indebtedness, including without limitation, all Advances and Other Credit Products, the Member hereby assigns, transfers, and pledges to the Bank and grants to the Bank a security interest in all Collateral, now or hereafter owned by the Member, and all proceeds thereof, provided, however, that Collateral that is encumbered or disposed of by the Member in conformity with the requirements of Section 3.03(a) hereof shall not be subject to the security interest created hereunder. Without !imitation of the foregoing, all tangible and intangible</FONT></TD>
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<P><FONT SIZE=2>property heretofore assigned, transferred or pledged by the Member to the Bank as Collateral for Advances and Other Credit Products prior to the date hereof is hereby assigned, transferred and pledged to Bank as Collateral hereunder.</P>

<P><B>Section 3.02.&nbsp;&nbsp;Member's Representations and Warranties Concerning Collateral.</B></P>

<P>The Member represents and warrants to the Bank, as of the date hereof and as of the date of all future Advances or Other Credit Products secured hereunder, the following:</P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member owns and has marketable title to the Collateral and has the right and authority to grant a security interest in the Collateral and to subject all of the Collateral to this Advances Agreement;</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information contained in any certification, status report, schedule, or other information given from time to time by the Member as to each item of Collateral is true, accurate and complete in all material respects;</P>

<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member maintains Eligible Collateral which has a Market Value (or unpaid principal balance) that is at least equal to the then current Collateral Requirement and which meets the standards and requirements from time to time established by the Bank's Collateral Policy, the Bank Act and the FHFB Regulations, and all other applicable laws and regulations;</P>

<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member has not conveyed or otherwise created, and there does not otherwise exist, any participation interest or other direct, indirect, legal, or beneficial interest in any Collateral pledged under Sections 3.01, 3.03(a), and 3.04 on the part of any person or entity other than the Bank and the Member;</P>

<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as may be approved in writing by the Bank, no account debtor or other obligor owing any obligation to the Member with respect to any item of Mortgage Collateral or Other Collateral has or will have any defenses, offsetting claims, or other rights affecting the right of the Member or the Bank to enforce such mortgage, mortgage note or promissory obligation, and no defaults (or conditions that, with the passage of time or the giving of notice or both, would constitute a default) exist under any such writings; and</P>

<P>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No part of any real property or interest in real property that is the subject of Collateral contains or is subject to the effects of toxins or hazardous materials or</FONT></TD>
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<P><FONT SIZE=2>other hazardous substances (including those defined in any applicable state or local law; or applicable federal law, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 USC 9601 et seq.; the Hazardous Materials Transportation Act, 49 USC 1801 et seq.; the Resource Conservation and Recovery Act, 42 USC 6901 et seq.; and in the regulations adopted and publications promulgated pursuant to said laws), the presence of which could subject the Bank to any liability under applicable state or Federal law or local ordinance either at any time that such property is pledged to the Bank or upon the enforcement by the Bank of its security interest therein.</P>

<P><B>Section 3.03.&nbsp;&nbsp;Collateral Maintenance Requirement For Blanket Liens and Specific Listings.</B></P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member shall at all times maintain an amount of Eligible Collateral which has a Market Value (or unpaid principal balance, if so required by the Bank) that is at least equal to the then current Collateral Requirement. The Member shall not assign, pledge, transfer, create any security interest in, sell, or otherwise dispose of any Collateral if (I) such Collateral is held by or on behalf of the Bank pursuant to Section 3.04 hereof, (II) such Collateral has been provided in a specific listing of Eligible Collateral pursuant to Section 3.03(e), (III) the Bank has otherwise perfected its security interest in such Collateral, or (IV) at the time of or immediately after such action, Member is not or would not be in compliance with the collateral maintenance requirements of the first sentence of this Section 3.03(a) or is or would be otherwise in default under this Advances Agreement. So long as Member is not in default under this Agreement, Member shall be at liberty to sell, use, commingle, and dispose of the Collateral or the proceeds of such Collateral without being required to account for the proceeds or replace the Collateral, subject only to its obligation to maintain the Collateral as herein provided.</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Collateral shall be held by the Member in trust for the benefit of the Bank and subject to the Bank's direction and control, will not be commingled with assets of the Member which are not Collateral, and will be physically safeguarded by the Member in accordance with usual, customary and prudent commercial practices but in any event with not less than the same degree of care which the Member uses in physically safeguarding its other property and assets of like kind and nature. Without limitation of the foregoing, Member shall take all action necessary or desirable to protect and preserve the Collateral and the Bank's interest therein, including without limitization, 'he maintaining of insurance on property secur-</FONT></TD>
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<P><FONT SIZE=2>ing mortgages constituting Collateral (such policies and certificates of insurance or guaranty relating to such mortgages are herein called "insurance"), the collection of payments under all mortgages and under all insurance, and otherwise assuring that the loans comprising the Mortgage Collateral are serviced in accordance with the standards of a reasonable and prudent mortgagee. The Member (or its agent), acting on behalf of the Bank, shall collect all payments when due on all Collateral. If the Bank requires under Section 3.12, the Member shall hold such collections separate from its other monies and apply them to the reduction of Indebtedness as it becomes due; otherwise, the Member shall be entitled to use and dispose of all such collections in the ordinary course of its business and in compliance with all laws, rules, and regulations.</P>

<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any Collateral that was Eligible Collateral ceases to be Eligible Collateral the Member shall promptly notify the Bank in writing of that fact and, if so requested by the Bank, of the reason that the Collateral has ceased to be Eligible Collateral. The Member shall promptly specify, or deliver, as the case may be, other Eligible Collateral having at least the same Market Value as the Collateral so requested to be withdrawn.</P>

<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bank may review the form and sufficiency of all documents pertaining to the Collateral. Such documents must be satisfactory to the Bank and, if not, such Collateral may not be acceptable as Eligible Collateral or may have a Market Value applied thereto that is less than the Market Value otherwise applicable under the Bank's Collateral Policy, or as the Bank may specify. The Bank may require that the Member make any or all documents pertaining to the Collateral available to the Bank for its inspection and approval.</P>

<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If so requested by the Bank, Member agrees to (I) provide a specific listing of the Eligible Collateral to Bank, (II) physically segregate Mortgage Documents and Other Collateral which are a part of such specified Collateral from all other property of the Member in a manner satisfactory to the Bank, and/or (III) hold each Mortgage Document which is a part of Mortgage Collateral in a separate file folder with each file folder clearly labeled with the loan identification number and the name of the borrowers). Immediately upon the written request of the Bank, the Member further agrees to clearly and legibly mark or stamp each Mortgage Document and each file folder containing Mortgage Documents with the following statement (or a substantially similar statement which has been approved in writing by the Bank): "The Mortgage/ Deed Of Trust And Note Relating To This Loan Have</FONT></TD>
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<P><FONT SIZE=2>Been Assigned To And Represent Collateral Of The Federal Home Loan Bank Of Indianapolis And Its Successors And Assigns" and such other statement as may be required by the Bank from time to time.</P>
<P><B>Section 3.04.&nbsp;&nbsp;Delivery of Collateral; Physical Possession Requirements.</B></P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At anytime upon the Bank's oral or written request, or at any time that the Member becomes subject to any mandatory collateral delivery requirements pursuant to the Collateral Policy or that may be otherwise established in writing by the Bank, the Member shall promptly on a schedule acceptable to the Bank deliver to the Bank, or to a custodian designated by the Bank, all Collateral including such Eligible Collateral as may be necessary so that the Market Value of Eligible Collateral held by the Bank, or such custodian, meets or exceeds the Collateral Requirement at all times, and take any and all other action as may be specified by the Bank to further evidence the perfection of the Bank's security interest in the Collateral and to otherwise effectuate the transactions contemplated hereby, including the signature and filing of financing statements. Collateral delivered to the Bank shall be endorsed or assigned in recordable form by the Member to the Bank as directed by the Bank. With respect to Mortgage Collateral that is to be delivered hereunder, the Member shall deliver the Mortgage Documents with necessary endorsements and assignments relating thereto unless otherwise directed by the Bank. Concurrently with the initial delivery of Collateral and at such other times as provided in the Collateral Policy or as the Bank may otherwise request, the Member will deliver to the Bank a status report and accompanying schedules, all in form and substance satisfactory to the Bank and dated as of the then most recent valuation date, describing the Collateral held by the Bank or its custodian.</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member authorizes the Bank to execute and file one or more financing statements, this Agreement, and any other documents, instruments, or statements of any kind on its behalf and without the signature of the Member in those public offices deemed necessary by the Bank in its sole discretion to perfect and continue the perfection of its security interest in the Collateral and to protect, defend and further assure the grant, validity and perfection thereof. In addition, the Member will, at its expense, deliver or cause to be delivered such other documents as the Bank may request to secure the indebtedness referred to herein or to further perfect, protect, and defend the security interest granted herein.</P>

<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to uncertificated securities pledged to</FONT></TD>
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<P><FONT SIZE=2>the Bank as Securities Collateral or Other Collateral hereunder, the delivery requirements contained in this Advances Agreement shall be satisfied by the transfer of such securities to the Bank, such transfer to be effected in such manner and to be evidenced by such documents as shall be specified by the Bank.</P>

<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member agrees to pay to the Bank such reasonable fees and charges as may be assessed by the Bank to cover the Bank's overhead and other costs relating to the receipt, holding, redelivery and reassignment of Collateral and to reimburse the Bank. upon request for all recording fees and advances incurred or made by the Bank in connection therewith (including the reasonable compensation and the expenses and disbursements of any custodian that may be appointed by the Bank hereunder, and the agents and legal counsel of the Bank and of such custodian).</P>

<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member shall, upon request of the Bank, immediately take such other actions as the Bank shall deem necessary or appropriate to perfect the Bank's security interest in the Collateral or otherwise to obtain, preserve, protect, enforce or collect the Collateral.</P>

<P><B>Section 3.05.&nbsp;&nbsp;Withdrawal or Reassignment of Collateral.</B></P>

<P>Upon receipt by the Bank of writings in form and substance satisfactory to the Bank constituting (I) a request from the Member for the withdrawal or reassignment of Collateral which has been delivered pursuant to Section 3.04 hereof, or as to which the Bank has otherwise perfected its security interest, and (II) a detailed listing of the Collateral to be withdrawn or reassigned, provided that the Bank's valuation of such delivered Collateral confirms that the Member's Collateral Requirement will be satisfied other such withdrawal or reassignment, then the Bank shall redeliver or reassign to the Member the Collateral specified in Member's request. Notwithstanding anything to the contrary herein contained, while an Event of Default hereunder shall have occurred and be continuing, or at any time that the Bank in good faith deems itself insecure, the Member may not obtain any such withdrawal or reassignment. Further, Member agrees for specific listings provided under section 3.03(e) to follow the withdrawal procedures provided for under this Section 3.05 or as otherwise specified by the Bank.</P>

<P><B>Section 3.06.&nbsp;&nbsp;Additional Collateral.</B></P>

<P>The Bank may at any time require the Member to maintain and deliver to the Bank additional Collateral over that</FONT></TD>
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<P><FONT SIZE=2>amount of Eligible Collateral required to meet the Member's Collateral Requirement or substitutions of Collateral. The Member expressly agrees to maintain and deliver such additional Collateral or substitutions of Collateral as the Bank shall require.</P>

<P><B>Section 3.07.&nbsp;&nbsp;Reports; Collateral Audit; Access.</B></P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the Collateral Policy and at such other times as the Bank may request, the Member shall furnish to the Bank, in a format satisfactory to the Bank, a report so that the Bank may verify that the Member maintains Eligible Collateral with a Market Value (or unpaid principal balance, if so required by the Bank) sufficient to meet the Collateral Requirement. If the Market Value or unpaid principal balance of Eligible Collateral owned by the Member, free and clear of any liens or encumbrances, shall at any time fall below the Collateral Requirement, the Member shall immediately notify the Bank.</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member shall provide annually an audit report prepared by the Member's external independent auditor in accordance with generally accepted auditing standards (and in a format acceptable to the Bank) certifying that the Member owns, free and clear of any lien or encumbrances (except for Bank's), Eligible Collateral with a Market Value (or unpaid principal balance, if so required by the Bank) at least equal to the Collateral Requirement, and deliver such report to the Bank within ninety (90) days of each fiscal year-end of the Member, including an explanation for any exceptions or qualifications in the report or any failure to obtain such report. The Bank reserves the right to waive the audit report requirement if Member's Collateral is in the physical possession of the Bank or in the Bank's sole discretion based on particular circumstances.</P>

<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member agrees that the Bank shall have access at all reasonable times to the Collateral in the Member's possession or control and to the Member's books and records of account relating to such Collateral. The Member shall permit the Bank to examine, inspect, audit and take copies or make extracts from its books and records and to discuss its affairs with its independent auditor (or other representative) as often as the Bank may reasonably request.</P>

<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member agrees that examination reports prepared by local, state or federal authorities may be furnished by such authorities to the Bank upon its request, and by this Agreement, the Member authorizes and directs such authorities to deliver such reports to the Bank</FONT></TD>
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<P><FONT SIZE=2>and waives any objections or restrictions thereto which it may lawfully waive. Member agrees that upon request of the Bank, it will take any and all steps necessary to assist the Bank in obtaining such reports from such authorities. The Bank agrees that to the extent such reports or the information contained therein are confidential, the Bank will use the same degree of care in keeping such reports confidential as it applies to the Bank's own confidential information and will not knowingly disclose any confidential information contained therein unless required to do so by law, rules, regulations, or judicial or regulatory process applicable to the Bank.</P>

<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If requested by the Bank, the Member shall furnish to the Bank a written report covering such matters regarding
the Collateral as the Bank may require, including listing of mortgages, securities, and unpaid principal balances thereof, and certifications concerning the status of payments on mortgages and of taxes and insurance on property securing mortgages.</P>

<P>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member agrees to promptly report to the Bank any event which reduces the principal balance of any mortgage or security by ten percent (10%) or more, whether by prepayment, foreclosure sale, property- casualty insurance or guaranty payment or otherwise.</P>

<P>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Collateral and the satisfaction by the Member of the Collateral Requirement shall be subject to audit and verification by or on behalf of the Bank. Such audits and verifications may occur without notice during the Member's normal business hours or upon reasonable notice at such other times as the Bank may reasonably request. The Member shall provide to the representatives or agents of the Bank for purposes of such audits and verifications, access to all books and records related to transactions whether made or contemplated under this Agreement. Further, Member shall provide adequate working facilities, at Member's expense for the Bank to conduct such audits or verifications. The Member agrees to pay to the Bank such reasonable fees and charges as may be assessed by the Bank to cover overhead and other costs relating to such audit and verification. The Member further agrees that it will prepare and deliver promptly upon request of the Bank inquiries to Member's outside auditors, outside counsel, customers (including depositors or borrowers), and any other person that the Bank may reasonably request, to provide such information to the Bank as it may reasonably request in connection with such audit and verification.</P>

<P><B>Section 3.08.&nbsp;&nbsp;Additional Documentation and Status Reports.</B></FONT></TD>
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<P><FONT SIZE=2>The Member shall at its expense make, execute, record and deliver to the Bank such financing statements, assignments, listings, powers, notices and other documents with respect to the Collateral and the Bank's security interest therein as directed by the Bank and in form and substance satisfactory to the Bank. Upon request, Member agrees to give Bank verbal or written reports concerning the financial condition or status of any regulatory action maintained against the Member, its holding company, or any affiliated entity or affiliated person.</P>

<P><B>Section 3.09.&nbsp;&nbsp;Bank's Responsibilities as to Collateral.</B></P>

<P>The Bank's duty as to the Collateral shall be solely to use reasonable care in the custody and preservation of the Collateral in its possession, which shall not include any steps necessary to preserve rights against prior parties nor the duty to send notices, perform services, or take any action in connection with the management of the Collateral. The Bank shall not have any responsibility or liability for the form, sufficiency, correctness, genuineness or legal effect of any instrument or document constituting a part of the Collateral, or any signature thereon or the description or misdescription, or value of property represented, or purported to be represented, by any such document or instrument. The Member agrees that any and all Collateral may be removed by the Bank from the state or location where situated, and may there be dealt with by the Bank as provided in this Advances Agreement.</P>

<P><B>Section 3.10.&nbsp;&nbsp;Bank's Rights as to Collateral; Power of Attorney.</B></P>

<P>At any time or times, at the expense of the Member, the Bank may, at its discretion, before or after the occurrence of an Event of Default as defined in Section 4.01 hereof, in its own name or in the name of its nominee or of the Member, do any or all things and take any and all actions that are pertinent to the protection of the Bank's interests hereunder and which are lawful under the laws of the State of Indiana, or the laws of any jurisdiction under which the Bank may be exercising its rights hereunder, including the following:</P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Terminate any consent given hereunder;</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With advance notice to Member (or its legal successor), notify obligors on any Collateral to make payments thereon directly to the Bank;</FONT></TD>
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<P><FONT SIZE=2>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Endorse any Collateral in the Member's name:</P>

<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enter into any extension, compromise, settlement, or other agreement relating to or affecting any Collateral;</P>

<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Take any action the Member is required to take or which is otherwise necessary to: (i) sign and record a financing statement or otherwise perfect a security interest in any or all of the Collateral; or (ii) obtain, preserve, protect, enforce or collect the Collateral;</P>

<P>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Take control of any funds or other proceeds generated by the Collateral and use the same to reduce Indebtedness as it becomes due; and</P>

<P>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cause the Collateral to be transferred to its name or the name of its nominee.</P>

<P>The Member hereby appoints the Bank as its true and lawful attorney, with full power of substitution, for and on behalf of the Member and in its name, place and stead, to prepare, execute and record endorsements and assignments to the Bank of all or any item of Collateral, giving or granting to the Bank, as such attorney, full power and authority to do or perform every lawful act necessary or proper in connection therewith as fully as the Member might or could do. The Member hereby ratifies and confirms all that the Bank shall lawfully do or cause to be done by virtue of this special power of attorney. This special power of attorney is granted for a period commencing on the date hereof and continuing until the discharge of all Indebtedness and all obligations of the Member hereunder regardless of any default by the Member, is coupled with an interest and is irrevocable for the period granted.</P>

<P><B>Section 3.11.&nbsp;&nbsp;Subordination of Other Loans to Mortgage Collateral.</B></P>

<P>The Member hereby agrees that all mortgage notes which are part of the Mortgage Collateral and any notes secured by personal property ("personalty notes") which may become part of the Other Collateral shall have priority in right and remedy over any claims, however evidenced, for other loans, whether made before or after the date of such mortgage or personalty notes which are secured by the mortgages or security agreements securing such mortgage or personalty notes but are not part of the Collateral, and shall be satisfied out of the property covered by such mortgages or security agreements before recourse to such property may be obtained for the repayment of such other loans. To this end, the Member hereby subordinates the lien of such mortgages and</FONT></TD>
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<P><FONT SIZE=2>security agreements with respect to such other loans to the lien of such mortgages and security agreements with respect to such mortgage and personalty notes. The Member further agrees to retain possession of any promissory notes evidencing such other loans and not to pledge, assign or transfer the same, except that the same may be pledged to the Bank as part of the Collateral. The Member, for itself and for any other person or entity claiming by or through the Member, waives any and all rights which it or such other person or entity may have to require the Bank to marshal the assets of the Member or to otherwise prioritize or sequence any class or category of Collateral with respect to which the Bank may pursue its rights and remedies.</P>

<P><B>Section 3.12.&nbsp;&nbsp;Proceeds of Collateral.</B></P>

<P>The Member shall collect all payments when due on ail Collateral. If the Bank so requires, the Member, as the Bank's agent, shall hold such collections separate from its other monies in one or more designated cash collateral accounts maintained at the Bank and apply them to the reduction of Indebtedness as it becomes due; otherwise, the Member shall be entitled to use and dispose of all such collections in the ordinary course of its business and in compliance with all laws, rules, and regulations.</P>

<P><B>4.&nbsp;&nbsp;&nbsp;Default; Remedies.</P>

<P>Section 4.01.&nbsp;&nbsp;Events of Default; Acceleration.</B></P>

<P>In the event of the occurrence of any of the following events or conditions of default ("Event of Default"), the Bank may at its option, by a notice to the Member, declare all Indebtedness and accrued interest thereon, including any prepayment fees (including without limitation, those fees charged pursuant to Section 2.03 and 2.04), or charges which are payable in connection with the payment prior to the originally scheduled maturity of any Indebtedness, to be immediately due and payable without presentment, demand, protest or any further notice:</P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure of the Member to pay when due any interest on, or principal of, any Advance or any amount payable in connection with any Other Credit Product; or</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure of the Member to timely perform any promise or obligation or to satisfy any condition or liability contained herein, in an Application for advance, Advice of Credit, or in any Other Credit Product Agreement to which the Member and the Bank are parties; or</P>

<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any representation, statement, or warranty made</FONT></TD>
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<P><FONT SIZE=2>or furnished in any manner to the Bank by or on behalf of the Member in connection with any Advance or Other Credit Product or any certification of the Market Value (or unpaid principal balance, if so required by the Bank) of Eligible Collateral shall have been false or misleading in any material respect when made or furnished; or</P>

<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure of the Member to maintain Eligible Collateral which has a Market Value (or unpaid principal balance, if so required by the Bank) that is at least equal to the then current Collateral Requirement under the applicable blanket lien/specific listing requirements of Section 3.03 or physical possession requirements of Section 3.04, free of any encumbrances or claims as required herein; or</P>

<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issuance of any tax levy, seizure, attachment, garnishment, levy of execution, or other process with respect to the Collateral; or</P>

<P>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any failure to pay or suspension of payment by the Member to any creditor of sums due or the occurrence of any event which results in another creditor having the right to accelerate the maturity of any indebtedness of the Member under any security agreement, indenture, loan agreement, or comparable undertaking; or</P>

<P>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Application for or appointment of a conservator, receiver, or trustee for the Member or of any affiliate or subsidiary of the Member or the Member's properly, entry of a judgment or decree adjudicating the Member or any affiliate or subsidiary of Member insolvent or bankrupt. or an assignment by the Member or any affiliate or subsidiary of the Member for the benefit of creditors; or</P>

<P>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale by the Member of all or a material part of the Member's assets or the taking of any other action by the Member to liquidate or dissolve; or</P>

<P>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination of the Member's membership in the Bank. or the Member ceasing to be a type of financial institution that is eligible under the Bank Act to borrow or apply for membership in the Bank; or </P>

<P>(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Merger, consolidation or other combination of the Member with an entity which is not a member of the Bank if the nonmember entity is the surviving entity; or</P>

<P>(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to Advances made pursuant to Section 11(g)(4) of the Bank Act (12 USC 1431(g)), if the creditor liabilities of the Member, excepting liabilities to the Bank, are increased in any manner to an amount exceeding five percent (5%) of the Member's net assets; or</FONT></TD>
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<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>Page 10 of 16</FONT></TD>
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<FONT SIZE=2><P ALIGN="RIGHT">April 1994</FONT></TD>
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<P><FONT SIZE=2>(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Member threatens or initiates legal action to challenge an otherwise legally enforceable provision under this Advances Agreement in an attempt to make the Bank insecure under this Advances Agreement; or</P>

<P>(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bank in good faith determines that a material adverse change has occurred in the financial condition of the Member (including its holding company or other affiliates), or the Member fails to comply with the Bank's Credit Policies or other applicable policies including the requirement of creditworthiness as determined by the Bank at its sole discretion.</P>

<P><B>Section 4.02.&nbsp;&nbsp;Remedies; Set Off; Specific Performance.</B></P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence of any Event of Default, the Bank shall have all of the rights and remedies provided by applicable law, which shall include, but not be limited to, all of the remedies of a secured party under the Uniform Commercial Code as in effect in the State of Indiana, Section 10 of the Bank Act (12 USC 1430), and other applicable federal law. In addition, the Bank may take immediate possession of any of the Collateral or any part thereof wherever the same may be found without judicial process. The Bank may require the Member to assemble the Collateral and make it available to the Bank at a place designated by the Bank which is reasonably convenient to both parties. The Bank may sell, assign and deliver the Collateral or any part thereof at public or private sale for such price as the Bank deems appropriate without any liability for any loss due to decrease in the market value of the Collateral during the period held. The Bank shall have the right to purchase all or part of the Collateral at such sale. If the Collateral includes insurance or securities which will be redeemed by the issuer upon surrender, or any accounts or deposits in the possession of the Bank, the Bank may realize upon such Collateral without notice to the Member. If any notification of intended disposition of any of the Collateral is required by applicable law, such notification shall be deemed reasonable and properly given if mailed, postage prepaid, at least five (5) days before any such disposition to the address of the Member appearing on the records of the Bank. The proceeds of any sale shall be applied in the order that the Bank, in its sole discretion, may choose. The Member agrees to pay all the costs and expenses of the Bank in the collection of the Indebtedness and enforcement of the Bank's rights and remedies in case of default, including, without limitation, reasonable attorneys' fees. The Bank shall, to the extent required by law, apply any surplus after (I) payment of the Indebtedness, (II) provision for repayment to the Bank of any amounts to be paid or advanced under</FONT></TD>
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<P><FONT SIZE=2>Outstanding Commitments, and (III) all costs of collection and enforcement, to third parties claiming a secondary or other security interest in the Collateral, with any remaining surplus paid to the Member. The Member shall be liable to the Bank for any deficiency remaining.</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Indebtedness, accrued interest thereon and other amounts or charges owing by the Member shall have become due and payable (by acceleration or otherwise), the Bank shall have the right, at any time or from time to time to the fullest extent permitted by law, in addition to all other rights and remedies available to it, without prior notice to the Member, to set off against and to appropriate and apply to such due and payable amounts any debt owing to, and any other funds held in any manner for the account of, the Member by the Bank, including without limitation, all Bank Deposits now or hereafter maintained by the Member with the Bank. Such right shall exist whether or not such debt owing to, or funds held for the account of, the Member is matured by its terms or is accelerated by the Bank, and regardless of the existence or adequacy of any collateral, guaranty or any other security, right or remedy available to the Bank. The Member hereby consents to and confirms the foregoing arrangements and confirms the Bank's rights of banker's lien and set off. Nothing in this Advances Agreement shall be deemed a waiver or prohibition of or restriction on the Bank's rights of banker's lien or set off.</P>

<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member acknowledges that the breach by the Member of the provisions of this Agreement and in particular Section 3.04 hereof would cause irreparable injury to the Bank and that remedies at law for any such breach will be inadequate, and consents and agrees that the Bank shall be entitled, without the necessity of proof of actual damage, to specific performance of the terms of this Agreement and to injunctive relief in any proceedings which may be brought to enforce the provisions of this Agreement. The Member waives the right to assert the defense that such breach or violation can be compensated adequately in damages in an action of law.</P>

<P><B>5.&nbsp;&nbsp;&nbsp;Miscellaneous.</P>

<P>Section 5.01.&nbsp;&nbsp;General Representations, QTL Reporting, Warranties and Indemnifications by the Member.</B></P>

<P>The Member hereby represents and warrants that, as of the date hereof and the date of each Advance or Other Credit Product hereunder:</P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member, if a savings association, will truly and accurately represent and warrant its status as a Qualified</FONT></TD>
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<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>Page 11 of 16</FONT></TD>
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<P><FONT SIZE=2>Thrift Lender ("QTL") as defined by applicable federal law on any Application for Advance or Other Credit Product Agreement between Member and the Bank. If the Member is a savings association and it fails the QTL test as set forth by the Office of Thrift Supervision Regulations now in effect or as amended, and becomes ineligible under applicable federal law for Bank advances, the savings association Member shall immediately provide the Bank with written notification of its ineligibility for bank advances. If a non-QTL member, the Member warrants that Advances made under Section 1 0(a) of the Bank Act (12 USC 1430(a)), shall be for the purposes of housing finance.</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member will truly and accurately represent and warrant the purpose of any Advance or Other Credit Product on any Application for Advance or Other Credit Product Agreement between Member and the Bank.</P>

<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member will promptly furnish any financial, collateral or other information requested by the Bank in connection with any Advance or Other Credit Product.</P>

<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member is not, and neither the execution of nor the performance of any transactions or obligations of the Member under any Advice of Credit, Application for Advance, Other Credit Product Agreement or this Advances Agreement shall, with the passage of time, the giving of notice or otherwise, cause the Member to be: (I) in violation of its charter or articles of incorporation, bylaws, the Bank Act, the FHFB Regulations, any other law or administrative regulation, agreement, or any court decree; or (II) in default or in breach of any indenture, contract, or other instrument or agreement to which the Member is a party or by which it or any of its property is bound or any default under, breach of, or failure to comply with any judgment, order, decree, regulatory directive, or other process of any court or agency having jurisdiction of or which is binding upon the Member.</P>

<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member is not in default under any Advice of Credit or Other Credit Product Agreement with the Bank.</P>

<P>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member has full power and authority and has received all corporate and governmental authorizations and approvals (including without limitation, those required under the Bank Act and the FHFB Regulations) as may be required to enter into and perform its obligations under any Advice of Credit, Application for Advance, Other Credit Product Agreement or this Advances Agreement, and to obtain Advances and Other Credit Products.</P>

<P>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information given by the Member in any writing</FONT></TD>
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<P><FONT SIZE=2>provided, electronic transmission or in any oral statement made, in connection with any Application for Advance or Other Credit Product Agreement, is at all relevant times true, accurate and complete in all material respects.</P>

<P>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member will at all times maintain and accurately reflect the terms of this Advances Agreement (including the Bank's security interest in the Collateral) and all Advances and Other Credit Products hereunder on its books and records. including evidence of necessary authorizations to effectuate transactions under this Agreement.</P>

<P>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Member and its successors and assigns (collectively referred to in this Section 5.01(i) as "Member") shall indemnify and hold the Bank harmless from and against any and all costs, claims, expenses, damages, and liabilities with respect to any action which may be instituted by any person or entity against the Bank as a result of any transaction, including without limitation, Bank credit extensions, services, and Other Credit Products contemplated by this Advances Agreement or action or nonaction arising from this Advances Agreement, except where the same results solely from the recklessness or willful misconduct of the Bank. In addition, the Member shall indemnify and hold the Bank harmless from and against any and all costs, claims, expenses, damages, and liabilities resulting in any way from the presence or effects of any toxic or hazardous substances or materials in, on, or under any real property or interest in real property that is subject to or included in the Collateral. The Member also agrees to reimburse the Bank for such reasonable fees and charges as may be assessed by the Bank to cover overhead and other cost, including reasonable attorneys' fees, incurred either under this indemnification provision or in the administration of this Advances Agreement, any Advice of Credit or Other Credit Product Agreement.</P>

<P><B>Section 5.02.&nbsp;&nbsp;Assignment.</B></P>

<P>The Bank may assign or negotiate to any other Federal Home Loan Bank or to any other person or entity, with or without recourse, any Indebtedness of the Member or participations therein, and the Bank may assign or transfer all or any part of the Bank's right, title, and interest in and to this Advances Agreement and may assign and deliver the whole or any part of the Collateral to the transferee, which shall succeed to all the powers and rights and duties of the Bank in respect thereof, and the Bank shall thereafter be forever relieved and fully discharged from any liability or responsibility with respect to the transferred Collateral. The Member may not assign</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>Page 12 of 16</FONT></TD>
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<P><FONT SIZE=2>or transfer any of its rights or obligations hereunder (by operation of law, the appointment of a receivership, or otherwise) without the express prior written consent of the Bank.</P>

<P><B>Section 5.03.&nbsp;&nbsp;Discretion of Bank to Grant or Deny Advances and Other Credit Products.</B></P>

<P>Nothing contained herein or in any documents or oral representations describing or setting forth the Bank's credit programs or Credit Policies shall be construed as an agreement or commitment on the part of the Bank to grant Advances or extend Other Credit Products hereunder, the right and power of the Bank in its discretion to either grant or deny any Advance or Other Credit Product requested hereunder being expressly reserved.</P>

<P><B>Section 5.04.&nbsp;&nbsp;Amendment; Waivers.</B></P>

<P>No modification, amendment or waiver of any provision of this Advances Agreement or consent to any departure therefrom shall be effective unless executed by the party against whom such change is asserted and shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Member in any case shall entitle the Member to any other or further notice or demand in the same, or similar or other circumstances. Any forbearance, failure or delay by the Bank in exercising any right, power or remedy hereunder shall not be deemed to be a waiver thereof, and any single or partial exercise by the Bank of any right, power or remedy hereunder shall not preclude the further exercise thereof. Every right, power and remedy of the Bank shall continue in full force and effect until specifically waived by the Bank in writing.</P>

<P><B>Section 5.05.&nbsp;&nbsp;Jurisdiction; Legal Fees.</B></P>

<P>In any action or proceeding brought by the Bank or the Member in order to enforce any right or remedy under this Advances Agreement, the parties hereby consent to, and agree that they will submit to, the jurisdiction of the United States District Court for the Southern District of Indiana or, if such action or proceeding may not be brought in federal court, the jurisdiction of the courts of the State of Indiana located in Marion County. The Member agrees that, if any action or proceeding is brought by the Member seeking to obtain any legal or equitable relief against the Bank tinder or arising out of this Advances Agreement or any transaction contemplated hereby, and such relief is not granted by the final decision, after any and all appeals, of a court of competent jurisdiction, the Member shall promptly pay upon demand all attorneys' fees and other</FONT></TD>
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<P><FONT SIZE=2>costs incurred by the Bank in connection therewith. Further, the Member agrees that if any action or proceeding is brought by the Bank in connection with the successful enforcement of any of the Bank's rights or remedies hereunder or otherwise or if the services of legal counsel are required in connection with the administration of the credit facilities contemplated hereby, the Member shall pay promptly upon demand all attorneys' fees and other costs incurred by the Bank in connection therewith.</P>

<P><B>Section 5.06.&nbsp;&nbsp;Waiver of Jury Trial.</B></P>

<P>To the extent allowed by law, the Member hereby waives the right to a jury trial in any action or proceeding brought by or against the Member regarding this Agreement, the Collateral, Other Credit Products, or the credit facilities contemplated hereby.</P>

<P><B>Section 5.07.&nbsp;&nbsp;Notices.</B></P>

<P>Except as provided in the last sentence of this Section 5.07, any written notice, advice, request, consent or direction given, made or withdrawn pursuant to this Agreement shall be either in writing or transmitted electronically and reproduced mechanically by the addressee and shall be given by first class mail, postage prepaid, or by telecopy or other facsimile transmission, or by private courier or delivery service. Except for notices made under Section 4.02, all non-oral notices shall be deemed given when actually received at the principal office of the Bank or the Member, as appropriate. All notices shall be designated to the attention of an office or section of the Bank or of the Member if the Bank or the Member has made a request for the notice to be so addressed. Any notice by the Bank to the Member pursuant to Sections 2.01, 3.03, 3.04 or 3.05 hereof may be oral and shall be deemed to have been duly given to and received by the Member at the time of the oral communication.</P>

<P><B>Section 5.08.&nbsp;&nbsp;Signatures of Member; Acceptance by Bank.</B></P>

<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Advances Agreement, documents shall be deemed signed by the Member when a signature of an authorized signatory or an authorized facsimile thereof appears on the document. The Bank may rely on any signature or facsimile thereof which reasonably appears to the Bank to be the signature of an authorized person, including signatures appearing on documents transmitted electronically to and reproduced mechanically at the Bank. The Secretary, the Cashier, the Assistant Secretaries, or the Assistant Cashiers of the Member shall from time to time certify to the Bank on</FONT></TD>
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<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>Page 13 of 16</FONT></TD>
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<P><FONT SIZE=2>forms provided by the Bank the names and titles of the persons authorized to apply on behalf of the Member to the Bank for Advances and Other Credit Products. Such certifications are incorporated herein and made a part of this Advances Agreement and shall continue in effect until expressly revoked by the Member notwithstanding that subsequent certifications may authorize additional persons to act for and on behalf of Member.</P>

<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall only be binding upon the Bank when accepted and executed by the Bank by two duly authorized officers and shall be deemed accepted by and delivered to the Bank at its home office in Indianapolis, Indiana.</P>

<P><B>Section 5.09.&nbsp;&nbsp;Applicable Law; Severability.</B></P>

<P>In addition to the terms and conditions specifically set forth herein and in any Advice of Credit or Other Credit Product Agreement between the Bank and the Member, this Advances Agreement and all Advances and Other Credit Products extended hereunder shall be governed by the statutory and common law of the United States and, to the extent federal law incorporates or defers to state law, the laws (exclusive of the choice of law provisions) of the State of Indiana, including the Uniform Commercial Code as in effect in the State of Indiana. In the event that any portion of this Advances Agreement conflicts with applicable law or the Credit Policies, such conflict shall not affect other provisions of this Advances Agreement which can be given effect without the conflicting provisions, and to this end the provisions of this Advances Agreement are declared to be severable.</P>

<P><B>Section 5.10.&nbsp;&nbsp;Interest Rate Limitations.</B></P>

<P>Notwithstanding anything contained herein to the contrary, the obligation of the Member to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Bank to the extent that its receipt thereof would not be permissible under the law or laws applicable to the Bank limiting rates of interest which may be charged or collected by the Bank. Any such payments of interest which are not made as a result of the limitation referred to in the preceding sentence shall be made by the Member to the Bank on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Bank limiting rates of interest which may be charged or collected by the Bank.</P>

<P><B>Section 5.11.&nbsp;&nbsp;Successors and Assigns.</B></FONT></TD>
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<P><FONT SIZE=2>This Advances Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Member and the Bank, provided that the Member may not assign any of its rights or obligations hereunder (by operation of law, the appointment of a receivership, or other) without the prior written consent of the Bank. The Bank may sell, transfer or assign or grant participations in Advances or Other Credit Products.</P>

<P><B>Section 5.12.&nbsp;&nbsp;Remedies Cumulative.</B></P>

<P>All rights and remedies provided herein or otherwise at law or in equity shall be cumulative, and are in addition to, and not exclusive of, any rights or remedies provided by law, including without limitation, the rights and remedies of a secured party under federal law and the Uniform Commercial Code as it is in effect from time to time in Indiana, including the right of the Bank to retain the Collateral in satisfaction of the Indebtedness. The exercise of one or more thereof shall not preclude, or be deemed an election of remedies against, any other remedy, right or privilege contained herein or provided to the Bank by law, rule, or regulation or at equity.</P>

<P><B>Section 5.13.&nbsp;&nbsp;Records of Bank Presumed Accurate.</B></P>

<P>The books and records of the Bank with respect 'to the Indebtedness, the Member's accounts or any other obligations of the Member hereunder or otherwise owing to the Bank shall be presumed to be accurate, complete. and binding upon the Member, absent fraud or willful misconduct on the part of the Bank with respect to such account or obligation.</P>

<P><B>Section 5.14.&nbsp;&nbsp;Entire Agreement.</B></P>

<P>This Advances Agreement and the other documents referenced herein relating to Advances and Other Credit Products embody the entire Agreement and understanding between the parties hereto relating to the subject matter hereof. This Advances Agreement amends, restates and supersedes all prior agreements between such parties which relate to such subject matter, and all Advances and Other Credit Products made by the Bank to the Member prior to the execution of this Advances Agreement shall be governed by the terms of this Advances Agreement and not by the terms of the prior agreement. The Agreement and the other documents contemplated hereby or delivered in connection herewith shall be construed consistently with each other in order to best effectuate the intent of the Member and the Bank in entering into the relationships contemplated by all these agreements. The agreements referenced herein consti-</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>Page 14 of 16</FONT></TD>
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<P><FONT SIZE=2>tute the sole and entire agreement of the parties and no statement or promise has been made with respect to the subject matter of these agreements other than as expressed herein. In the event of a conflict between the</FONT></TD>
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<P><FONT SIZE=2>terms of this Agreement and any of the other such documents, the provisions of this Agreement shall control, except with respect to any note, whose respective terms shall control.</P>

<P><B>IN WITNESS WHEREOF</B>, the Member and the Bank have caused this Advances Agreement to be signed in their names by their duly authorized officers as of the date first above mentioned.</FONT></TD>
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<P><FONT SIZE=2>ChoiceOne Bank</FONT><HR SIZE="1"></TD>
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<P><FONT SIZE=2>FEDERAL HOME LOAN BANK OF INDIANAPOLIS</FONT></TD>
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<P><FONT SIZE=2>(Full Name of Member)</FONT></TD>
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<P><FONT SIZE=2>By:</FONT></TD>
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<P><FONT SIZE=2>/s/ Linda Pitsch</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>/s/ Cindy Konich</FONT><HR SIZE="1"></TD>
</TR>
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>Its:</FONT></TD>
<TD WIDTH="42%" VALIGN="TOP">
<P><FONT SIZE=2>Sr Vice President &amp; Cashier</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>Its:</FONT></TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Cindy Konich, Vice President</FONT><HR SIZE="1"></TD>
</TR>
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="42%" VALIGN="TOP">
<P><FONT SIZE=2>/s/ Thomas Lampen</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>/s/ Tim Zapf</FONT><HR SIZE="1"></TD>
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<P>&nbsp;</TD>
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<P>&nbsp;</TD>
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<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>Its:</FONT></TD>
<TD WIDTH="42%" VALIGN="TOP">
<P><FONT SIZE=2>VP &amp; CFO</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>Its:</FONT></TD>
<TD WIDTH="44%" VALIGN="TOP">
<P><FONT SIZE=2>Tim Zapf, Vice President</FONT><HR SIZE="1"></TD>
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<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>Page 15 of 16</FONT></TD>
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<FONT SIZE=2><P ALIGN="RIGHT">April 1994</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2><B><U>FEDERAL HOME LOAN BANK OF INDIANAPOLIS</U></B></P>

<P ALIGN="CENTER"><B>MEMBER ACKNOWLEDGEMENT<BR>
AND NOTARIZATION</B></P>
<BR>

<P>State of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Michigan&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </U>)<BR>
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; SS:<BR>
County of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kent&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </U>)</P>
<BR>

<P>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;  On this <U>21<SUP>st</U></SUP> day of <U>December</U>, 20<U>01</U>, before me personally came <U>Linda Pitsch</U> and <U>Thomas Lampen</U>, to me known, who, being by me duly sworn, did depose and state that they are the <U>Sr. Vice President &amp; Cashier</U> and <U>Vice President CFO</U> of said Member; and that they signed their names thereto by order of the Board of Directors or other governing body of said Member and that said <U>Linda Pitsch</U> and <U>Thomas Lampen</U> are duly authorized and acknowledge the execution of said instrument to be the voluntary act and deed of said Member.</FONT></P>
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<P><FONT SIZE=2><BR>
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/s/ Linda S. Peck</FONT><HR SIZE="1"></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT"><BR>
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(SEAL)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP">
<P><FONT SIZE=2>LINDA S. PECK, NOTARY PUBLIC<BR>
KENT COUNTY, STATE OF MICHIGAN<BR>
MY COMMISSION EXPIRES ON 3/27/02</FONT><HR SIZE="1"></TD>
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<P><FONT SIZE=2>Notary Public Signature</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Linda S. Peck</FONT><HR SIZE="1"></TD>
<TD WIDTH="20%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR>
<TD WIDTH="39%" VALIGN="TOP">
<P><FONT SIZE=2>Printed Name</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="23%" VALIGN="TOP">
<P><FONT SIZE=2>My Commission Expires:</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>3-27-02</FONT><HR SIZE="1"></TD>
<TD WIDTH="51%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="23%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="26%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="51%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="23%" VALIGN="TOP">
<P><FONT SIZE=2>My County of Residence:</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Kent</FONT><HR SIZE="1"></TD>
<TD WIDTH="51%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P><FONT SIZE=2>Form APSP-A-Standard</FONT></TD>
<TD WIDTH="34%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Page 16 of 16</FONT></TD>
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<FONT SIZE=2><P ALIGN="RIGHT">April 1994</FONT></TD>
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<P ALIGN="CENTER"><B>EXHIBIT 13</B></P>
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<P ALIGN="CENTER"><IMG SRC="image44.gif" WIDTH=334 HEIGHT=207></P>
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<P ALIGN="CENTER"><FONT SIZE=4><B>CHOICEONE FINANCIAL SERVICES, INC.</B></FONT></P>
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<FONT SIZE=4>
<P ALIGN="CENTER"><B>2001</P>

<P ALIGN="CENTER">ANNUAL REPORT TO SHAREHOLDERS</B></P>
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<P ALIGN="CENTER"><B>CHOICEONE FINANCIAL SERVICES, INC.</B></P>

<P ALIGN="CENTER">2001 Annual Report to Shareholders</P>
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<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
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<TD WIDTH="95%" VALIGN="TOP">
<P><B>Contents</B><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;<HR SIZE="1"></TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>To Our Shareholders</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">1</TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>ChoiceOne Financial Services, Inc.</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">1</TD>
</TR>

<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>Common Stock Information</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">2</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>Financial Highlights</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">3</TD>
</TR>

<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>Consolidated Financial Statements</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">4</TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P>Notes to Consolidated Financial Statements</TD>
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<P ALIGN="RIGHT">8</TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P>&nbsp;</TD>
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<P>Independent Auditors' Report</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">23</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>Management's Discussion and Analysis of Financial Condition and Results of Operations</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">24</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>Corporate and Shareholder Information</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">32</TD>
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<TR>
<TD WIDTH="95%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TD WIDTH="95%" VALIGN="TOP">
<P>Directors and Officers</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT">33</TD>
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<FONT SIZE=2>(i)</FONT>
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<P ALIGN="CENTER"><B>TO OUR SHAREHOLDERS</B></P>

<FONT SIZE=2>
<P>This 2001 Annual Report to Shareholders contains our audited financial statements, detailed financial review and all of the information that regulations of the Securities and Exchange Commission (the "SEC") require to be presented in annual reports to shareholders. For legal purposes, this is the ChoiceOne Financial Services, Inc. 2001 Annual Report to Shareholders. Although attached to our proxy statement, this report is not part of our proxy statement, is not considered to be soliciting material and is not considered to be filed with the SEC except to the extent that it is expressly incorporated by reference in a document filed with the SEC. Shareholders who would like to receive even more detailed information than that contained in this 2001 Annual Report to Shareholders are invited to request our Annual Report on Form 10-K.</P>

<P><B>Our Annual Report on Form 10-K for the year ended December 31, 2001, including the financial statements and financial statement schedules, will be provided to any shareholder, without charge, upon written request to Mr. Thomas Lampen, Treasurer, ChoiceOne Financial Services, Inc., 109 East Division Street, Sparta, Michigan 49345.</B></P>
<BR>

<P ALIGN="CENTER"><B>CHOICEONE FINANCIAL SERVICES, INC.</B></P>

<P>ChoiceOne Financial Services, Inc. is a single-bank holding company. Its principal banking subsidiary, ChoiceOne Bank (Sparta, Michigan) primarily serves communities in portions of Kent, Muskegon, Newaygo, and Ottawa counties in Michigan where the Bank's offices are located and the areas immediately surrounding those communities. Currently the Bank serves those markets through five full-service offices and one drive-up facility. ChoiceOne Insurance Agencies, Inc. is a wholly-owned subsidiary of ChoiceOne Bank and sells insurance and investment products. ChoiceOne Mortgage Company of Michigan, a wholly-owned subsidiary of ChoiceOne Bank, was formed on January 1, 2002.</P>

<P>ChoiceOne's business is primarily concentrated in a single industry segment - commercial banking. ChoiceOne Bank is a full-service banking institution that offers a variety of deposit, payment, credit and other financial services to all types of customers. These services include time, savings, and demand deposits, safe deposit services, and automated transaction machine services. Loans, both commercial and consumer, are extended primarily on a secured basis to corporations, partnerships and individuals. Commercial lending covers such categories as business, industry, agricultural, construction, inventory and real estate. ChoiceOne Bank's consumer loan and residential mortgage loan departments make direct loans to consumers and purchasers of residential property.</P>

<P>The principal source of revenue for ChoiceOne is interest and fees on loans. On a consolidated basis, interest and fees on loans accounted for 81% of total revenues in 2001, 83% in 2000, and 82% in 1999. Interest on investment securities accounted for 5% of total revenues in 2001, 5% in 2000, and 6% in 1999.</P>
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<P ALIGN="CENTER"><B>COMMON STOCK INFORMATION</B></P>

<P>ChoiceOne's shares are traded in the over-the-counter market by several brokers. There is no well established public trading market for the shares, trading activity is infrequent, and price information is not regularly published.</P>

<P>The range of high and low bid information for shares of common stock for each quarterly period during the past two years is as follows:</P>
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<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
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<TD WIDTH="25%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="25%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>Low</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>High</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Low</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>High</FONT><HR SIZE="1"></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="25%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P><FONT SIZE=2>First Quarter</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$ 11</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$ 13</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$ 18</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$ 22</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="25%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P><FONT SIZE=2>Second Quarter</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>13</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>14</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="25%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P><FONT SIZE=2>Third Quarter</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>13</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>14</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P><FONT SIZE=2>Fourth Quarter</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>13</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>14</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
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<FONT SIZE=2>
<P>The above market prices have been adjusted where necessary to reflect the stock dividend declared in 2001 and the stock split declared in 2000. The prices listed above are over-the-counter market quotations reported to ChoiceOne by its market makers listed in this annual report. The over-the-counter market quotations reflect inter-dealer prices without retail markup, markdown or commission and may not necessarily represent actual transactions.</P>

<P>As of February 14, 2002, there were 1,468,706 shares of ChoiceOne Financial Services, Inc., common stock issued and outstanding. These shares were held of record by 694 shareholders.</P>

<P>The following table summarizes cash dividends paid per share of common stock during 2001 and 2000:</P>
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<TD WIDTH="24%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="24%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P><FONT SIZE=2>First Quarter</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>$ 0.17&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$ 0.16&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P>&nbsp;</TD>
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<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P><FONT SIZE=2>Second Quarter</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>0.17</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>0.17</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="24%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P><FONT SIZE=2>Third Quarter</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>0.17</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>0.17</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P>&nbsp;</TD>
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<TR>
<TD WIDTH="24%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P><FONT SIZE=2>Fourth Quarter</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>0.17</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>0.17</FONT><HR SIZE="1"></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="24%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Totals</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>$ 0.68&nbsp;&nbsp;&nbsp;</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$ 0.67&nbsp;&nbsp;&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>The above dividend per share amounts have been adjusted where necessary to reflect the stock dividend declared in 2001 and the stock split declared in 2000. ChoiceOne's principal source of funds to pay cash dividends is the earnings and dividends paid by ChoiceOne Bank. ChoiceOne Bank is restricted in its ability to pay cash dividends under current regulations (see Note 16 to the Consolidated Financial Statements). Based on information presently available, management expects ChoiceOne to declare and pay regular quarterly cash dividends in 2002.</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
2
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>FINANCIAL HIGHLIGHTS</B><BR>
ChoiceOne Financial Services, Inc.</P>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1998</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1997</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2><B>For the year (dollars in thousands)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Net interest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,603</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,032</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,699</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,207</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,315</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Provision for loan losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,003</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,075</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>625</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>730</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>539</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Noninterest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,646</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,354</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,984</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,993</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,769</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Noninterest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,198</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,111</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,219</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,675</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,176</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Income before income taxes</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,048</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,200</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,839</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,795</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,369</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Income tax expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>590</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>674</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>887</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>873</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>632</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,922</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,737</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Cash dividends paid</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>995</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>981</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>909</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>846</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>783</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2><B>Per share*</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Basic and diluted earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1.00</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.05</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.34</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.30</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.17</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Cash dividends</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>0.68</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0.67</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0.63</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0.57</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0.52</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Shareholders' equity (at year end)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>12.45</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12.09</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.62</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.11</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10.50</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2><B>Average for the year (dollars in thousands)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>15,959</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>14,413</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18,062</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20,912</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>22,157</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Gross loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>172,018</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>172,762</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>149,402</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>133,279</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>118,369</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>135,996</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>133,144</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>123,006</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>113,970</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100,815</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>39,189</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>36,786</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>28,019</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>26,016</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>25,425</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Shareholders' equity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,058</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,366</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,572</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,001</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>14,998</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>200,555</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>197,751</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>177,279</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>163,257</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>148,652</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2><B>At year end (dollars in thousands)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>20,885</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>14,153</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,126</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20,171</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>19,842</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Gross loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>165,823</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>175,776</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>167,980</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>140,775</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>127,776</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>135,975</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>137,704</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>127,553</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>122,332</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>107,492</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35,125</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>36,207</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>36,999</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>26,650</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>26,114</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Shareholders' equity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,273</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,589</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,888</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,141</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,537</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>197,791</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>201,194</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>193,107</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>170,602</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>156,329</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2><B>Selected financial ratios (in percentages)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Return on average assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>0.73</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0.77</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.10</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.18</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.17</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Return on average shareholders' equity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>8.07</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.79</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.78</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12.01</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.58</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Cash dividend payout</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>68.24</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>64.29</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>46.57</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>44.02</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>45.08</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Shareholders' equity to assets (at year end)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>9.24</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.74</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.75</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9.46</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9.94</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P>*&nbsp;&nbsp;Per share amounts are retroactively adjusted for the effect of stock dividends and stock splits.</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
3
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>CONSOLIDATED BALANCE SHEETS</B><BR>
ChoiceOne Financial Services, Inc.</P>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2>December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2><B>Assets</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and due from banks</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,931,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,896,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities available for sale</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,265,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,533,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank and Federal Reserve Bank stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,620,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,620,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans held for sale</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>656,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>458,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans, net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>163,154,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>173,217,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premises and equipment, net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,061,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,365,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,104,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,105,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>197,791,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>201,194,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2><B>Liabilities</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits - noninterest bearing</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>16,011,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>13,155,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits - interest bearing</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>119,964,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>124,549,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase agreements</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,002,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,899,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal funds purchased</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,900,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,650,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35,125,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>36,207,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mandatory redeemable shares under Employee Stock Ownership Plan, at fair value</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>20,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,496,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,139,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>179,518,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>183,605,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2><B>Shareholders' Equity</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock; shares authorized: 100,000; shares outstanding: none</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Common stock and paid-in capital, no par value; shares authorized: 4,000,000; <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding: 1,467,706 in 2001 and 1,385,609 in 2000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
14,475,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
13,317,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated shares held by 401(k) and Employee Stock Ownership Plan</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(64,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(82,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,680,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,222,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>182,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>132,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,273,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,589,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="70%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>197,791,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>201,194,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=2>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<P>See accompanying notes to consolidated financial statements.</P>
<BR>
<BR>
<BR>
<BR>
<CENTER>
4
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>CONSOLIDATED STATEMENTS OF INCOME</B><BR>
ChoiceOne Financial Services, Inc.</P>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=8>
<P ALIGN="CENTER"><FONT SIZE=2>Years ended December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Interest income</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Loans, including fees</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>15,191,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,050,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>13,698,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxable</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>441,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>474,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>609,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nontaxable</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>419,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>396,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>385,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>70,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>16,121,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,922,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>14,693,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Interest expense</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,851,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,048,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,853,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Federal funds purchased and repurchase agreements</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>159,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>440,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>376,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,495,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,387,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,734,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Other</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>13,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>31,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>8,518,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,890,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,994,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Net interest income</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,603,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,032,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,699,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Provision for loan losses</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,003,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,075,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>625,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Net interest income after provision for loan losses</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>6,600,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,957,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,074,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Noninterest income</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Customer service fees</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>724,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>611,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>588,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Gain on sales of securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>9,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Insurance commission income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,237,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,325,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,020,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Gain on sales of loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>385,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>97,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>155,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Other income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>291,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>321,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>217,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,646,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,354,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,984,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Noninterest expense</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Salaries and benefits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,522,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,414,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,099,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Occupancy</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,297,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,270,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,069,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Professional services</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>372,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>301,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>203,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Printing and postage</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>294,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>298,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>275,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Data processing</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>188,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>184,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>185,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Advertising and promotional</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>181,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>153,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>200,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Other expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,344,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,491,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,188,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,198,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,111,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,219,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Income before income tax</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,048,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,200,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,839,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Income tax expense</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>590,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>674,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>887,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Net income</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><B>Basic earnings per common share and earnings per</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;<B>common share assuming dilution</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1.00</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.05</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.34</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=2>
<BR>
<BR>
<BR>

<P>See accompanying notes to consolidated financial statements.</P>
<BR>
<BR>
<BR>
<CENTER>
5
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY</B><BR>
ChoiceOne Financial Services, Inc.</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1>Common<BR>
Stock and<BR>
Paid-in<BR>
Capital</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1><BR>
<BR>
Unallocated<BR>
Shares</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1><BR>
<BR>
Retained<BR>
Earnings</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1>Accumulated<BR>
Other<BR>
Comprehensive<BR>
Income (Loss)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1><BR>
<BR>
<BR>
Total</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>Balance, January 1, 1999</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>11,824,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>4,070,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>247,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>16,141,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Comprehensive income:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,952,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,952,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized gain (loss)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(300,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(300,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total comprehensive income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,652,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;5% stock dividend in June 1999</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,430,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(1,436,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(6,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;6,307 shares of stock repurchased</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(131,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(131,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;7,142 shares of stock issued for employee<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;benefit plans and directors' compensation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
141,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
141,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Cash dividends ($0.63 per share)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(909,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(909,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>Balance, December 31, 1999</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>13,264,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>3,677,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(53,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>16,888,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Comprehensive income:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,526,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,526,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized gain (loss)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>185,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>185,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total comprehensive income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,711,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Fractional shares paid on five-for-four stock<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;split in May 2000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(4,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(4,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;5,369 shares of stock repurchased</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(92,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(92,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;7,810 shares of stock issued for employee<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;benefit plans, directors' compensation,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and dividend reinvestment</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</P>
<P ALIGN="RIGHT">157,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</P>
<P ALIGN="RIGHT">--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</P>
<P ALIGN="RIGHT">--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</P>
<P ALIGN="RIGHT">--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</P>
<P ALIGN="RIGHT">157,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;4,856 shares of stock purchased by<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee Stock Ownership Plan</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(91,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(91,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;485 shares committed to be released<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;under Employee Stock Ownership Plan</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(2,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
9,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
7,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Change in common shares subject to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;repurchase</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(6,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(6,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Cash dividends ($0.67 per share)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(981,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(981,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>Balance, December 31, 2000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>13,317,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(82,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>4,222,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>132,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>17,589,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Comprehensive income:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,458,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,458,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized gain</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>50,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>50,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total comprehensive income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,508,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;5% stock dividend in June 2001</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,002,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(1,005,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(3,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;332 shares of stock repurchased</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(5,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(5,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;12,677 shares of stock issued for employee<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;benefit plans, directors' compensation,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and dividend reinvestment</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
179,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
179,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;972 shares committed to be released<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;under Employee Stock Ownership Plan</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(4,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
18,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
14,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Change in common shares subject to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;repurchase</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(14,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
(14,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Cash dividends ($0.68 per share)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(995,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(995,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=1><B>Balance, December 31, 2001</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>14,475,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>(64,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B>)</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>3,680,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>182,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>18,273,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>See accompanying notes to consolidated financial statements.</P>
<BR>
<BR>
<CENTER>
6
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP" COLSPAN=8>
<P ALIGN="CENTER"><FONT SIZE=2>Years ended December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Cash flows from operating activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Adjustments to reconcile net income to net cash from <BR>
operating activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>692,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>650,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>513,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>178,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>168,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>73,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,003,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,075,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>625,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sales of securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(9,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(4,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sales of loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(385,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(97,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(155,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans originated for sale</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(27,953,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(11,779,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(7,289,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from loan sales</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>28,240,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,865,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,490,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest receivable and other assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>23,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(265,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(435,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable and other liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(656,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>22,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>354,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash from operating activities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,591,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,165,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,124,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Cash flows from investing activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Securities available for sale:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(9,741,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,115,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,890,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales proceeds</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,998,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>274,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,035,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,324,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,085,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Net change in loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>8,862,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(8,677,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(27,753,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Purchase of insurance agency</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(40,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(28,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(74,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Premises and equipment expenditures, net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(388,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,101,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,341,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash from (used in) investing activities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,726,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(8,597,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(24,699,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Cash flows from financing activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Net change in deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(1,729,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10,151,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,221,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Net change in repurchase agreements</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>103,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>922,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>667,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Net change in federal funds purchased</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(750,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(2,900,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,550,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Proceeds from Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>9,750,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,000,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,500,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Payments on Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(10,832,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(5,839,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(7,515,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Issuance of common stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>179,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>157,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>141,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Repurchase of common stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(5,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(176,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(131,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Cash dividends and fractional shares from stock dividends and splits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(998,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(985,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(915,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash from (used in) financing activities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(4,282,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,330,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20,518,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Net change in cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>898,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,057,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Beginning cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,896,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,998,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,055,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Ending cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,931,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,896,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,998,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Cash paid for interest</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>8,708,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,800,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,942,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Cash paid for income taxes</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>460,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>862,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>925,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Loans transferred to other real estate</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>855,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>241,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>During 1999, $270,000 of loans were transferred from loans held for sale to portfolio loans.</P>

<P>See accompanying notes to consolidated financial statements.</P>
<BR>
<BR>
<CENTER>
7
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Note 1 - Summary of Significant Accounting Policies</P>

<P>Principles of Consolidation</B><BR>
The consolidated financial statements include ChoiceOne Financial Services, Inc., its wholly-owned subsidiary, ChoiceOne Bank, and ChoiceOne Bank's wholly-owned subsidiaries, ChoiceOne Insurance Agencies, Inc., and ChoiceOne Travel, Inc. (together referred to as "ChoiceOne"). Intercompany transactions and balances have been eliminated in consolidation.</P>

<P><B>Nature of Operations</B><BR>
ChoiceOne Bank (the "Bank") is a full-service community bank that offers commercial, consumer, and real estate loans as well as both traditional deposit and alternative investment products to both commercial and consumer clients in portions of Kent, Muskegon, Newaygo, and Ottawa counties in Michigan. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and real estate. Commercial loans are expected to be repaid from the cash flows from operations of businesses. Real estate loans are secured by both residential and commercial real estate.</P>

<P>ChoiceOne Insurance Agencies, Inc. (the "Insurance Agency") is a wholly-owned subsidiary of the Bank. The Insurance Agency sells a full line of insurance policies such as life, health, property and casualty for both commercial and consumer clients. The Insurance Agency also offers investment products such as annuities and mutual funds. ChoiceOne Travel, Inc. (the "Travel Agency") was acquired by the Bank effective August 1, 1997. The Travel Agency sold travel-related products such as airline tickets and trips. The Travel Agency was closed by ChoiceOne on April 1, 2001.</P>

<P>Together, the Bank, the Insurance Agency, and the Travel Agency account for substantially all of ChoiceOne's assets, revenues and operating income.</P>

<P><B>Use of Estimates</B><BR>
To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, ChoiceOne's 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. Actual results may differ from these estimates. Estimates associated with the allowance for loan losses and fair values of certain financial instruments are particularly susceptible to change.</P>

<P><B>Cash and Cash Equivalents</B><BR>
Cash and cash equivalents are defined to include cash on hand, demand deposits with other banks, and federal funds sold. Cash flows are reported on a net basis for customer loan and deposit transactions, deposits with other financial institutions, and short-term borrowings with terms of 90 days or less.</P>

<P><B>Securities</B><BR>
Securities are classified as available for sale when they might be sold before maturity. Securities classified as available for sale are carried at fair value, with unrealized holding gains and losses reported separately in other comprehensive income and shareholders' equity, net of tax effect. Realized gains or losses are based on specific identification of amortized cost. Securities are written down to fair value when a decline in fair value is not considered to be temporary. Interest income includes amortization of purchase premium or discount. Other securities, such as Federal Reserve Bank stock or Federal Home Loan Bank stock, are carried at cost.</P>

<P><B>Loans</B><BR>
Loans are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. Loans held for sale are reported at the lower of cost or market, on an aggregate basis. When loans are sold, they are removed from the loan balance if the tests for loan sales are met. If the accounting tests for loan sales are not met, sales of loans are accounted for as secured loan borrowings.</P>

<P><B>Loan Income</B><BR>
Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the estimated loan term. Interest on loans is accrued based upon the principal balance outstanding. The accrual of interest is discontinued at the point in time at which the collectibility of principal or interest is considered doubtful. Payments received on such loans are reported as interest recoveries, principal reductions or both. Each loan is evaluated on its own merits; therefore, loans are not automatically classified as non-accrual based upon standardized criteria.</P>
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8
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</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Allowance for Loan Losses</B><BR>
The allowance for loan losses is a valuation allowance for probable credit losses. The allowance is 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.</P>

<P>Loans are evaluated for impairment when payments are delayed or when it is probable that all principal and interest amounts will not be collected according to the original terms of the loan. Impairment is evaluated in total for smaller-balance loans of similar nature. Construction real estate mortgages, residential real estate mortgages, and consumer loans have been classified in this category. Impairment is evaluated on an individual loan basis for commercial and agricultural loans. If a loan is considered impaired, a portion of the allowance for loan losses is allocated to the loan so that it 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.</P>

<P><B>Premises and Equipment</B><BR>
Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over the assets' useful lives on the straight-line method. Long-term assets are reviewed for impairment when events indicate their carrying amounts may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at discounted amounts.</P>

<P><B>Other Real Estate Owned</B><BR>
Real estate properties acquired in collection of a loan are recorded at the lower of cost or market value at acquisition. Any reduction to fair value from the carrying value of the related loan is accounted for as a loan loss. 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 other expenses.</P>

<P><B>Goodwill</B><BR>
Goodwill has resulted from the purchase of insurance and travel subsidiaries. The original balance of goodwill as of the purchase date represented the difference between the fair value of assets purchased and the amount paid for the assets. Goodwill is amortized into expense on either a straight-line or an accelerated basis over the estimated period of benefit. Goodwill is periodically reviewed for impairment. If impairment is indicated, the balance is adjusted to the discounted amount.</P>

<P><B>Loan Servicing Rights</B><BR>
Servicing rights represent the allocated value of servicing rights on loans sold with servicing retained. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, as to geographic and prepayment characteristics. Any impairment of a grouping is reported as a valuation allowance.</P>

<P><B>Repurchase Agreements</B><BR>
Substantially all repurchase agreement liabilities represent amounts advanced by deposit clients that are not covered by federal deposit insurance and are secured by securities owned by ChoiceOne.</P>

<P><B>Benefit Plans</B><BR>
Incentive compensation plans pay bonuses based on departmental or group performance in addition to equity goals set by the Board of Directors. The Bank's 401(k) savings and retirement plan allows participant contributions of up to 15% of compensation. Contributions to the 401(k) savings and retirement plan by the Bank are discretionary. The Bank provides certain health insurance benefits to retired employees. These postretirement benefits are accrued during the years in which the employee provides services.</P>

<P>The Bank's 401(k) savings and retirement plan includes an employee stock ownership plan (the "ESOP"). The cost of shares issued to the ESOP but not yet allocated to participants is presented as a reduction of shareholders' equity. Compensation expense is recorded based on the market price of the shares as they are committed to be released for allocation to participant accounts. The difference between the market price and the cost of shares committed to be released is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings while dividends on unallocated ESOP shares are reflected as a reduction of debt and accrued interest. Upon distribution of shares to a participant, the participant has the right to require ChoiceOne to purchase shares at their fair value in accordance with the terms and conditions of the ESOP. As such, these shares are not classified in shareholders' equity as permanent equity.</P>
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9
</CENTER>
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<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Stock Based Compensation</B><BR>
Expense for employee compensation under ChoiceOne's stock option plan is reported if options are granted below market price at the grant date. Pro forma disclosures of net income and earnings per share are shown using the fair value method to measure expense for options using an option pricing model.</P>

<P><B>Income Taxes</B><BR>
Income tax expense is the sum of the current year income tax due 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.</P>

<P><B>Off-Balance Sheet Financial Instruments</B><BR>
Off-balance sheet financial instruments represent credit instruments, such as loan commitments, lines of credit, and standby letters of credit. The face amount of credit instruments represents the exposure to loss assuming the customer borrows the funds and the collateral or ability to repay is worthless.</P>

<P><B>Lease Commitments</B><BR>
Expense is recognized as payments are made on operating leases. Leasing arrangements are typically for 5 years and contain renewal options.</P>

<P><B>Loss Contingencies</B><BR>
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.</P>

<P><B>Stock Dividends</B><BR>
Dividends issued in stock are reported by transferring the market value of the stock issued from retained earnings to common stock and additional paid-in capital. Fractional shares are paid in cash for all stock dividends.</P>

<P><B>Dividend Restrictions</B><BR>
Banking regulations require the maintenance of certain capital levels and may limit the amount of dividends which may be paid by the Bank to ChoiceOne or by ChoiceOne to its shareholders.</P>

<P><B>Earnings Per Share</B><BR>
Earnings per common share ("EPS") is based on weighted-average common shares outstanding. The weighted average number of shares used in the computation of basic and diluted earnings per common share include the shares allocated to the ESOP in 2001 and 2000. Diluted EPS further assumes issue of any dilutive potential common shares. EPS has been restated for stock dividends and splits.</P>

<P><B>Fair Value of Financial Instruments</B><BR>
Fair values of financial instruments are estimated using relevant market information and other assumptions, which are more fully documented in Note 17 to the financial statements. 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.</P>

<P><B>Comprehensive Income</B><BR>
Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes the net change in unrealized appreciation (depreciation) on securities available for sale, net of tax, which is also recognized as a separate component of shareholders' equity.</P>

<P><B>Industry Segments</B><BR>
Internal financial information is primarily reported and aggregated in two lines of business: banking and insurance. The majority of ChoiceOne's income and assets are obtained from banking.</P>
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10
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<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Reclassifications</B><BR>
Certain amounts presented in prior year consolidated financial statements have been reclassified to conform to the current presentation.</P>

<P><B>New Accounting Pronouncements</B><BR>
A new accounting standard requires all business combinations to be recorded using the purchase method of accounting for any transaction initiated after June 30, 2001. Under the purchase method of accounting, all identifiable tangible and intangible assets and liabilities of the acquired company must be recorded at fair value at the date of acquisition, and the excess of the cost over the fair value of net assets purchased is recorded as goodwill. Identifiable intangible assets must be separated from goodwill. Identifiable intangible assets with finite useful lives will be amortized under the new standard, whereas goodwill, both amounts previously recorded and future amounts purchased, will cease being amortized starting in 2002. Annual impairment testing will be required for goodwill with impairment being recorded if the carrying amount of goodwill exceeds its implied fair value. Implementation of this standard on January 1, 2002 is not expected to have a material effect on ChoiceOne's consolidated financial statements.</P>
<BR>

<P><B>Note 2 - Acquisition of Subsidiaries</B></P>

<P>Effective September 1, 1999, the Insurance Agency purchased InsuranceSource, Inc., an insurance agency located in Grand Rapids, Michigan. The transaction was accounted for as a purchase. Cash and a note payable were paid for all of the outstanding shares of InsuranceSource, Inc. Payments totaling $142,000 have been paid through December 31, 2001. The note payable includes payments due in 2002 and 2003. The amount of the payments will be based on the retained business of InsuranceSource, Inc. The amount of the remaining payments could cause an increase or decrease in goodwill originating from the purchase. The results from the operations of InsuranceSource, Inc. have had an immaterial impact on the consolidated financial statements.</P>
<BR>

<P><B>Note 3 - Restricted Cash</P></B>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="74%" VALIGN="TOP">
<P><FONT SIZE=2><U>Restrictions on Cash Balances</U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="74%" VALIGN="TOP">
<P><FONT SIZE=2>Actual amount of cash subject to restrictions for reserve requirements at December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>895,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>742,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P><B>Note 4 - Securities</B></P>

<P>Information regarding securities available for sale at December 31 follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=11>
<P ALIGN="CENTER"><FONT SIZE=2><B>December 31, 2001</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Amortized<BR>
Cost</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Gross<BR>
Unrealized<BR>
Gains</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Gross<BR>
Unrealized<BR>
Losses</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Fair<BR>
Value</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>U.S. Treasuries and U.S. Government agencies</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,591,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(8,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,600,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>States and municipalities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10,288,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>248,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(46,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>10,490,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>Mortgage-backed securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,509,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>40,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(5,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,544,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>Corporate securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,602,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>42,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(13,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,631,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,990,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>347,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(72,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,265,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=11>
<P ALIGN="CENTER"><FONT SIZE=2>December 31, 2000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Amortized<BR>
Cost</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;<HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Gross<BR>
Unrealized<BR>
Gains</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;<HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Gross<BR>
Unrealized<BR>
Losses</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;<HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Fair<BR>
Value</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>States and municipalities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,269,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>167,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(19,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,417,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>Mortgage-backed securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,066,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,116,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,335,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>217,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(19,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,533,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=2>
<BR>
<CENTER>
11
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>Other securities consisted of the following as of December 31:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>Federal Reserve Bank stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>256,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>256,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>Federal Home Loan Bank stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,364,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,364,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,620,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,620,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Contractual maturities of securities available for sale at December 31, 2001, follow:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Amortized<BR>
Cost</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Fair<BR>
Value</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>Due within one year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,018,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,034,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>Due after one year through five years</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,368,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,418,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>Due after five years through ten years</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,425,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,530,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>Due after ten years</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,369,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,409,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total debt securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,180,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,391,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>Mortgage-backed securities not due at a specific date</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,509,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,544,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>Equity securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>301,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>330,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="67%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,990,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18,265,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2><P>Information regarding sales of available for sale securities follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Proceeds from sales of securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,998,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>274,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Gross realized gains</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>9,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Gross realized losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2><P>Various securities were pledged as collateral for securities sold under agreements to repurchase. The balance of the repurchase agreements was less than the collateral balance as of the end of the years presented. The fair value of securities pledged as collateral at December 31 was as follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Securities sold under agreements to repurchase</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,350,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,539,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P><B>Note 5- Loans</B></P>

<P>Loan information at December 31 follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loan Components</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>69,390,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>69,275,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate mortgage - construction</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,345,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,555,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate mortgage - residential</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>55,568,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>65,778,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Consumer</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>32,864,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>33,710,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans, gross</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>165,167,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>175,318,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Allowance for loan losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(2,013,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(2,101,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans, net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>163,154,000 </B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>173,217,000 </FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>12</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loans Held for Sale</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP"><P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP"><P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP"><P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP"><P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP"><P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>458,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate mortgage - residential</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>56,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Consumer</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>600,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans, net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>656,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>458,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loans Serviced for Others</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>6,923,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,208,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate mortgage - residential</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>38,700,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>35,387,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans serviced for others</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>45,623,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>41,595,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loan Servicing Rights</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Beginning of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>146,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>193,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Originations</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>117,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>19,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Amortization</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(88,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(66,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>End of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>175,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>146,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loans to Related Parties</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Beginning of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,316,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,220,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>New loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,398,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,050,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Repayments</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(2,836,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(949,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Other changes</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(24,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(5,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>End of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,854,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,316,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Loans Pledged for Borrowings</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial loans pledged for line of credit with Federal Reserve Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>62,193,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>59,497,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Commercial loans pledged for secured loan borrowings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>145,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>170,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Real estate mortgages pledged for Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>49,080,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>57,129,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>111,418,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>116,796,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Other Real Estate Owned</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Beginning of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>139,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Additions</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>860,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>241,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Sales</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(149,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>Write-downs</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(140,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(117,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>End of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>710,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>139,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P><B>Note 6 - Allowance for Loan Losses</B></P>

<P>Activity in the allowance for loan losses was as follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="49%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="49%" VALIGN="TOP">
<P><FONT SIZE=2>Beginning of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,101,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,907,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,851,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="49%" VALIGN="TOP">
<P><FONT SIZE=2>Provision charged to expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,003,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,075,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>625,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="49%" VALIGN="TOP">
<P><FONT SIZE=2>Recoveries credited to the allowance</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>189,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>100,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>77,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="49%" VALIGN="TOP">
<P><FONT SIZE=2>Loans charged off</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(1,280,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(981,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(646,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="49%" VALIGN="TOP">
<P><FONT SIZE=2>End of year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,013,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,101,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,907,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>13</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>Information regarding impaired loans as of and for the year ended December 31 follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Loans with no allowance allocated at year end</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>718,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>289,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>463,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Loans with allowance allocated at year end</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>153,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>635,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>366,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Amount of allowance for loan losses allocated at year end</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>53,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>189,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>148,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Average balance during the year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,382,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,070,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,238,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Interest income recognized thereon</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>45,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>79,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>69,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Cash-basis interest income recognized</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>43,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>71,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>59,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P><B>Note 7 - Premises and Equipment</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Land and land improvements</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>750,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>750,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Leasehold improvements</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>648,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>636,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Buildings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,209,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,204,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Furniture, Equipment &amp; Software</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,674,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,526,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Construction in progress</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>9,282,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,116,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Accumulated depreciation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(4,221,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(3,751,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>Premises and equipment, net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,061,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,365,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Depreciation expense was $692,000, $650,000, and $513,000 for 2001, 2000, and 1999, respectively.</P>
<BR>

<P><B>Note 8 - Deposits</B></P>

<P>Deposit information as of December 31 follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Certificates of deposit issued in denominations of $100,000 or more</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>27,408,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>31,483,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Related party deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,791,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,603,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>Scheduled maturities of certificates of deposit:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2002</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>58,514,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2003</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>10,776,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2004</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,068,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2005</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,577,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,627,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="68%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>77,562,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>The Bank had brokered certificates of deposit totaling $11,112,000 at December 31, 2001 compared to $22,738,000 at December 31, 2000. The average interest rate on these certificates of deposit was 5.68% with maturities ranging from 2002 to 2005 as of December 31, 2001.</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
14
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Note 9 - Income Taxes</B></P>

<P>Information as of December 31 and for the year follows:</P>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2><U>Provision for Income Taxes</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>Current federal income tax expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>589,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>716,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>895,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>Deferred federal income tax expense (benefit)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(42,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(8,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>590,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>674,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>887,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2><U>Reconciliation of Income Tax Provision to Statutory Rate</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>Income tax computed at statutory federal rate of 34%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>696,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>748,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>965,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>Tax exempt interest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(155,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(144,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(140,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>Nondeductible interest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>31,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>27,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>24,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>Other items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>43,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>38,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="54%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>590,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>674,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>887,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2><U>Components of Deferred Tax Assets and Liabilities</U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>Deferred tax assets:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for loan losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>457,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>522,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred loan costs</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>93,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>95,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Postretirement benefits obligation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>52,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>56,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred compensation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>42,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>143,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>38,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>780,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>753,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>Deferred tax liabilities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>215,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>202,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized appreciation on securities available for sale</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>94,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>68,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan servicing rights</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>59,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>26,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>394,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>340,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="69%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax asset</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>386,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>413,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>A valuation allowance related to deferred taxes is recognized when it is considered more likely than not that part or all of the deferred tax benefits will not be realized. Management has determined that no such allowance was required at December 31, 2001 and 2000.</P>
<BR>

<P><B>Note 10 - Employee Benefit Plans</B></P>

<P>Information below relates to the Company's expense towards the Bank's 401(k) savings plan and the incentive based compensation program.</P>

<U>Employee Benefit Plan Expenses</U><BR>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="58%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="58%" VALIGN="TOP">
<P><FONT SIZE=2>401(k) savings plan</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>14,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="58%" VALIGN="TOP">
<P><FONT SIZE=2>Incentive bonus plan</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>41,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>98,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>145,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>The Company did not record an expense in 2000 or 1999 for the 401(k) savings plan due to available funds remaining after the curtailment of the Bank's pension plan in 1997. The Company contribution to the plan was made using these funds.</P>
<BR>
<BR>
<BR>
<CENTER>
15
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>An employee stock ownership plan (the "ESOP") was established for the benefit of substantially all employees. In 2000, the ESOP borrowed $91,000 from the Bank and used the funds to acquire 3,700 shares of ChoiceOne common stock at $24.50 per share. The five-for-four stock split paid in May 2000 and stock dividend in May 2001 caused the number of shares held by the ESOP to increase to 4,856 shares and the price per share to decrease from $24.50 to $18.67 per share.</P>

<P>Shares issued to the ESOP are committed to be released based on the number of unallocated shares held immediately before release for the current year multiplied by a fraction. The numerator of the fraction is the amount of principal and interest paid. The denominator of the fraction is the sum of the numerator plus the principal and interest to be paid for all future periods. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from ChoiceOne's contributions to the ESOP and earnings on ESOP assets. Principal and interest payments are scheduled to occur in semi-annual amounts of $11,000 over a five-year period. The balance of the loan was $68,000 at December 31, 2001. An employee becomes fully vested upon completion of six years of qualifying service. Upon withdrawal from the Plan, participants are entitled to a distribution in cash or ChoiceOne stock, or both.</P>

<P>In 2001, 994 shares of stock with an average fair value of $14.25 per share were committed to be released. These shares will be distributed to ESOP participants in early 2002. Total ChoiceOne stock held by the ESOP at December 31, 2001 was 4,856 shares, of which 1,457 shares were allocated to participants and 3,399 shares were unallocated. The fair value of unallocated shares at December 31, 2001 was $48,000.</P>

<P>In 2000, 486 shares of stock with an average fair value of $15.24 per share were committed to be released. These shares were distributed to ESOP participants in 2001. Total ChoiceOne stock held by the ESOP at December 31, 2000 was 4,856 shares, of which 486 shares were allocated to participants and 4,370 shares were unallocated. The fair value of unallocated shares at December 31, 2000 was $59,000.</P>

<P><U>Postretirement Benefits Plan</U><BR>
Information regarding the postretirement benefits plan as of December 31 and for the year follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Accumulated benefit obligation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>115,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>112,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>139,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Accrued benefit cost</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>154,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>155,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>154,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Postretirement benefit expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(1,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Employer contributions</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>15,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Participant contributions</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>34,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>28,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>26,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Benefits paid</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>50,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>45,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>42,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="53%" VALIGN="TOP">
<P><FONT SIZE=2>Actuarial assumption - discount rate on benefit obligation</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>8</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2><B>%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>The trend for annual increases in health care costs was assumed to be 11.5% for the year beginning January 1, 2002, dropping to 5.5% for 2006 and each year thereafter. The effect of a 1% increase or decrease in the assumed health care cost trend rate would have an immaterial impact on the combined service and interest cost components of net periodic postretirement health care benefits cost and the accumulated benefit obligation for health care benefits.</P>
<BR>

<P><B>Note 11 - Stock Options</B></P>

<P>The following pro forma information presents net income and earnings per share for 2001, 2000 and 1999 had the fair value method been used to measure compensation cost for stock option plans. No compensation cost was recognized for stock options in 2001, 2000 and 1999.</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P><FONT SIZE=2>Net income as reported</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P><FONT SIZE=2>Pro forma net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,453,000</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,518,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,945,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P><FONT SIZE=2>Basic earnings per common share and diluted earnings per common share</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as reported</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1.00</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.05</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.34</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P><FONT SIZE=2>Pro forma basic earnings per common share and diluted earnings per</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="63%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;common share</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1.00</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.05</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.33</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>16</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>In future years, the pro forma effect of not applying the fair value method may increase if additional options are granted.</P>

<P>ChoiceOne's stock option plan is used to reward key employees and provide them with an additional equity interest in ChoiceOne. Options were issued in 1997 for 10-year periods with vesting occurring over a four year period. No options were granted in 1999, 2000, or 2001. At December 31, 2001, a total of 100,411 shares were authorized for stock option grants, of which 85,941 were available for future grants. Information about option grants follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Number<BR>
of options</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Weighted-average<BR>
exercise price</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Weighted-average<BR>
fair value of grants</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="48%" VALIGN="TOP">
<P><FONT SIZE=2>Options outstanding and exercisable at end of 2001</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>14,470</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$13.82</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$0.49</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P><B>Note 12 - Repurchase Agreements</B></P>

<P>Repurchase agreements are advances by customers that are not covered by federal deposit insurance. This obligation of ChoiceOne is secured by bank-owned securities held in safekeeping at a correspondent bank. The balances at December 31 are as follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P><FONT SIZE=2>Outstanding balance at December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,002,000</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,899,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P><FONT SIZE=2>Average interest rate at December 3</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2.01</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P><FONT SIZE=2><B>%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.20</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P><FONT SIZE=2>Average balance during the year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,744,000</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,706,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P><FONT SIZE=2>Average interest rate during the yea</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3.14</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P><FONT SIZE=2><B>%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.44</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="61%" VALIGN="TOP">
<P><FONT SIZE=2>Maximum month end balance during the year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>6,243,000</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,992,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P><B>Note 13 - Federal Home Loan Bank Advances</B></P>

<P>Advances from the Federal Home Loan Bank have fixed interest rates ranging from 4.47% to 7.25% with an average interest rate of 6.15%. Maturities as of December 31, 2001 ranged from January 2002 to April 2005. Advances were secured by specific mortgage loans with a carrying value of approximately $49,080,000 at December 31, 2001. Penalties are charged on advances that are paid prior to maturity; however, no advances were paid prior to maturity in 2001 or 2000.</P>

<P>The scheduled maturities of advances from the Federal Home Loan Bank at December 31, 2001 are as follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="87%" VALIGN="TOP">
<P><FONT SIZE=2>2002</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,833,000</FONT></TD>
</TR>

<TR>
<TD WIDTH="87%" VALIGN="TOP">
<P><FONT SIZE=2>2003</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,792,000</FONT></TD>
</TR>

<TR>
<TD WIDTH="87%" VALIGN="TOP">
<P><FONT SIZE=2>2004</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,500,000</FONT></TD>
</TR>

<TR>
<TD WIDTH="87%" VALIGN="TOP">
<P><FONT SIZE=2>2005</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,000,000</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="87%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>35,125,000</FONT><HR SIZE="2"></TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P><B>Note 14 - Shareholders' Equity and Earnings Per Share</B></P>

<P>Information regarding shareholders' equity as of December 31 and for the year follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2><U>Common Stock</U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Shares authorized</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,000,000</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,000,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,000,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Shares outstanding</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,467,706</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,455,375</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,452,138</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Issued during the year</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>81,967</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>299,282</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>76,023</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Repurchased during the year</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>332</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,369</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,307</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Shares of common stock issued for the purposes of stock dividends and stock splits totaled 69,290 in 2001, 291,472 in 2000, and 68,881 in 1999. Shares in the above table have been adjusted for stock dividends and splits.</P>
<BR>
<BR>
<CENTER>
17
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>The factors used in the earnings per share computation follow:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><U>Basic</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Weighted average common shares outstanding</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,292</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,451,309</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,453,634</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Basic earnings per common share</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1.00</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.05</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.34</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2><U>Diluted</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Weighted average common shares outstanding</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,292</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,451,309</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,453,634</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Plus dilutive effect of assumed exercises of stock options</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>112</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,612</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,938</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Average shares and dilutive potential common shares</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,404</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,453,921</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,456,572</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="52%" VALIGN="TOP">
<P><FONT SIZE=2>Diluted earnings per common share</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1.00</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.05</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.34</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Weighted average common shares outstanding for purposes of computing earnings per share have been adjusted for stock dividends and stock splits.</P>
<BR>

<P><B>Note 15 - Other Comprehensive Income</B></P>

<P>Other comprehensive income components and related taxes follow:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P><FONT SIZE=2>Unrealized holding gains and losses on available for sale securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>86,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>279,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(459,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P><FONT SIZE=2>Reclassification adjustments for gains included in net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(9,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(4,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P><FONT SIZE=2>Net unrealized gains and losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>77,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>279,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(455,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P><FONT SIZE=2>Tax effect</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(27,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(94,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>155,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="60%" VALIGN="TOP">
<P><FONT SIZE=2>Total other comprehensive income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>50,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>185,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(300,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P><B>Note 16 - Condensed Financial Statements of Parent Company</P>

<P ALIGN="CENTER">Condensed Balance Sheets</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="27%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2>December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>Assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>38,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>219,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities available for sale</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>188,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in ChoiceOne Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,090,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,373,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,317,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,600,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>Liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mandatory redeemable shares under Employee Stock Ownership Plan, at fair value</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>20,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>24,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>44,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>Shareholders' equity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,273,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,589,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="71%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,317,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,600,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>18</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P ALIGN="CENTER"><B>Condensed Statements of Income</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP" COLSPAN=8>
<P ALIGN="CENTER"><FONT SIZE=2>Years Ended December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Dividends from ChoiceOne Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>830,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,018,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>797,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Dividends from investment securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Total dividend income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>835,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,018,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>797,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Other expenses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>72,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>82,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>58,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Income before income tax and equity in undistributed net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;income of subsidiary</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>763,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>936,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>739,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Income tax benefit</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>23,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>29,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Income before equity in undistributed net income of subsidiary</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>786,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>965,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>759,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Equity in undistributed net income of subsidiary</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>672,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>561,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,193,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="56%" VALIGN="TOP">
<P><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P ALIGN="CENTER"><B>Condensed Statements of Cash Flows</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=8>
<P ALIGN="CENTER"><FONT SIZE=2>Years Ended December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Cash flows from operating activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash from operating<BR>
&nbsp;&nbsp;&nbsp;&nbsp;activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in undistributed net income of subsidiary</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(672,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(561,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,193,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in other assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(1,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>8,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(9,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>14,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash from operating activities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>793,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>958,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>772,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Cash flows from investing activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Purchase of investment securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(150,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(150,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>--</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Cash flows from financing activities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Issuance of stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>179,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>157,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>141,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Dividends paid</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(998,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(985,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(915,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Repurchase of stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(5,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(176,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(131,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(824,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,004,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(905,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Net change in cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(181,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(46,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(133,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Beginning cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>219,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>265,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>398,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Ending cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>38,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>219,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>265,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="59%" VALIGN="TOP">
<P><FONT SIZE=2>Amount of dividends that could be paid from ChoiceOne Bank<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;without regulatory approval</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
6,372,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>19</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Note 17 - Financial Instruments</B></P>

<P>Financial instruments as of December 31 were as follows:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Carrying<BR>
Amount</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Estimated<BR>
Fair<BR>
Value</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Carrying<BR>
Amount</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
<BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Estimated<BR>
Fair<BR>
Value</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>Assets:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,931,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,931,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,896,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,896,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities available for sale</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,265,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>18,265,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,533,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11,533,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,620,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,620,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,620,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,620,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans held for sale</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>656,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>656,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>458,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>479,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans, net</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>163,154,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>166,688,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>173,217,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>171,903,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>Liabilities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand, savings and money market&nbsp;deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>58,413,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>58,413,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>48,738,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>48,738,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>77,562,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>79,438,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>88,966,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>89,177,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal funds purchased</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,900,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,900,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,650,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,650,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase agreements</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,002,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,002,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,899,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,899,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="41%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FHLB advances and long-term debt</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35,125,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35,979,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>36,377,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>36,035,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>The estimated fair values approximate the carrying amounts for all assets and liabilities except those described later in this paragraph. The estimated fair value for securities is based on quoted market values for the individual securities or for equivalent securities. The estimated fair value for loans is based on the rates charged at December 31 for new loans with similar maturities, applied until the loan is assumed to reprice or be paid. The estimated fair value for time deposits and long-term debt is based on the rates paid at December 31 for new deposits or new long-term debt, applied until maturity. The estimated fair value for other financial instruments and off-balance-sheet loan commitments are considered nominal.</P>
<BR>

<P><B>Note 18 - Off-Balance-Sheet Activities</B></P>

<P>Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customers' financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
20
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>The contractual amount of financial instruments with off-balance-sheet risk was as follows at December 31:</P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="27%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Fixed<BR>
Rate</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Variable<BR>
Rate</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Fixed<BR>
Rate</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Variable<BR>
Rate</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="40%" VALIGN="TOP">
<P><FONT SIZE=2>Unused lines of credit and letters of credit</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,131,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>14,504,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5,753,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18,474,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="40%" VALIGN="TOP">
<P><FONT SIZE=2>Commitments to fund loans (at market rates)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,817,000</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,460,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,470,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,007,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Commitments to fund loans are generally made for periods of 60 days or less. The fixed rate loan commitments have interest rates ranging from 5.50% to 7.75% and maturities ranging from 3 years to 30 years.</P>
<BR>

<P><B>Note 19 - Regulatory Capital</B></P>

<P>ChoiceOne Financial Services, Inc. and ChoiceOne Bank are 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.</P>

<P>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 only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as are asset growth and expansion, and plans for capital restoration are required. Both ChoiceOne and the Bank met the requirements to be considered well capitalized as of December 31, 2001 and 2000. Actual capital levels (in thousands) and minimum required levels (in thousands) were as follows:</P>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="34%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
<BR>
<BR>
<BR>
Actual</FONT><HR SIZE="1"></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2><BR>
<BR>
Minimum Required<BR>
for Capital<BR>
Adequacy Purposes</FONT><HR SIZE="1"></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><FONT SIZE=2>Minimum Required<BR>
to be Well<BR>
Capitalized Under<BR>
Prompt Corrective<BR>
Action Regulations</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Amount</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Ratio</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Amount</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Ratio</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Amount</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Ratio</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2><U>December 31, 2001</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Total capital (to risk weighted assets)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>19,674</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12.9</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12,164</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,205</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>19,510</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12.9</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12,143</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,179</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Tier 1 capital (to risk weighted assets)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,775</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.7</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,082</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,123</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,611</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.6</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,072</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,107</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Tier 1 capital (to average assets)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,775</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.9</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,970</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,963</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,611</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.8</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,970</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,963</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2><U>December 31, 2000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Total capital (to risk weighted assets)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18,980</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12.5</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12,147</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,184</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18,755</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12.4</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12,147</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>15,183</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>10.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Tier 1 capital (to risk weighted assets)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,057</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.2</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,074</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,110</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,864</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>11.1</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6,073</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,110</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>Tier 1 capital (to average assets)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>17,057</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.5</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,990</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,988</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="34%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>16,864</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8.4</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,990</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>9,988</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>5.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>21</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Note 20 - Quarterly Financial Data (Unaudited)</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<P ALIGN="CENTER"><FONT SIZE=2>Earnings Per Share</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Interest<BR>
Income</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Net Interest<BR>
Income</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Net<BR>
Income</FONT><HR SIZE="1"></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><BR>
Basic</FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>Fully<BR>
Diluted</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<B><P><FONT SIZE=2><U>2001</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><B>First Quarter</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,215,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,902,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>425,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>$&nbsp;&nbsp;0.30</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>$&nbsp;&nbsp;0.30</B></FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><B>Second Quarter</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,073,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,876,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>281,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;0.19</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;0.19</B></FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><B>Third Quarter</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>4,036,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,920,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>351,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;0.24</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;0.24</B></FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><B>Fourth Quarter</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,797,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,905,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>401,000</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;0.27</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;0.27</B></FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><U>2000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>First Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,060,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,982,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>483,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;0.33</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;0.33</FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Second Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,178,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,996,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>483,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.33</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.33</FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Third Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,324,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,048,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>487,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.33</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.33</FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Fourth Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>4,360,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,006,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>73,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.05</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.05</FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><U>1999</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>First Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,441,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,779,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>459,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;0.31</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>$&nbsp;&nbsp;0.31</FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Second Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,559,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,912,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>497,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.34</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.34</FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Third Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,739,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,990,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>487,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.33</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.33</FONT></TD>
</TR>

<TR>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2>Fourth Quarter</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>3,954,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,018,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>509,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.35</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;0.35</FONT></TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>The decrease in ChoiceOne's interest income during 2001 was due to the decline in general market interest rates experienced during the year. A larger decline in interest rates earned on assets than occurred in interest rates paid on deposits and other funding sources caused net interest income to be lower in 2001 than in 2000. Fluctuations in the quarterly provision for loan losses also affected the quarterly comparisons between 2001 and 2000. The provision for loan losses was $197,000 higher in 2000 than in 2001.</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
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<BR>
<BR>
<BR>
<BR>
<CENTER>
22
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<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>INDEPENDENT AUDITORS' REPORT</B></P>
<BR>

<P ALIGN="CENTER"><IMG SRC="image45.gif" WIDTH=392 HEIGHT=171></P>
<BR>
<BR>
<BR>

<FONT SIZE=2>
<P>To the Shareholders and Board of Directors<BR>
of ChoiceOne Financial Services, Inc., Sparta, Michigan</P>

<P>We have audited the accompanying consolidated balance sheets of ChoiceOne Financial Services, Inc. as of December 31, 2001 and 2000, 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, 2001. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.</P>

<P>We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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.</P>

<P>In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ChoiceOne Financial Services, Inc. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America.</P>
<BR>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="43%" VALIGN="TOP">
<P><FONT SIZE=2>/s/ Crowe, Chizek and Company LLP<BR>
Crowe, Chizek and Company LLP</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P>Grand Rapids, Michigan<BR>
March 7, 2002</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
23
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>The following discussion is designed to provide a review of the consolidated financial condition and results of operations of ChoiceOne Financial Services, Inc. ("ChoiceOne"), and its wholly-owned subsidiaries, ChoiceOne Bank (the "Bank"), ChoiceOne Insurance Agencies, Inc. (the "Insurance Agency"), and ChoiceOne Travel, Inc. (the "Travel Agency"). This discussion should be read in conjunction with the consolidated financial statements and related footnotes. Effective April 1, 2001, the Registrant's management closed ChoiceOne Travel, Inc. The effect of the closing of the Travel Agency and its operations had an immaterial impact on the December 31, 2001 consolidated financial statements.</P>
<BR>

<P ALIGN="CENTER"><B>FORWARD-LOOKING STATEMENTS</B></P>

<P>This discussion and other sections of this annual report contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and about ChoiceOne itself. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "may," "could," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, ChoiceOne undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.</P>

<P>Risk factors include, but are not limited to, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national economy; and local and global uncertainties created by the terrorist acts of September 11 and the current war on terrorism. These are representative of the risk factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.</P>

<P ALIGN="CENTER"><B>RESULTS OF OPERATIONS</B></P>

<P><U>Summary</U><BR>
Net income for 2001 was $1,458,000, which represented a $68,000 or 4% decrease from 2000. The decrease in net income was caused by a substantially reduced net interest income, partially offset by higher noninterest income for the year. Net interest income dropped significantly as interest-earning assets repriced downward faster than interest-bearing deposits. The provision for loan losses recorded during 2001 was slightly less than that provided in 2000. Increased mortgage refinancing activity boosted gains received upon the sale of real estate mortgages into the secondary market. More deposit service charges in 2001 helped offset reduced insurance and travel agency commissions. Noninterest expense was limited to a small increase over 2000 due to reduced charge-offs of bad checks offset by higher legal, consulting and advertising expenses for the year.</P>
<BR>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="52%" VALIGN="TOP" COLSPAN=8>
<P ALIGN="CENTER"><FONT SIZE=2>Year ended December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P><FONT SIZE=2>Net interest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,603,000</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>8,032,000</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>7,699,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P><FONT SIZE=2>Provision for loan losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(1,003,000</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1,075,000</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(625,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P><FONT SIZE=2>Noninterest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>2,646,000</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,354,000</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,984,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P><FONT SIZE=2>Noninterest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(7,198,000</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(7,111,000</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(6,219,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P><FONT SIZE=2>Income tax expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(590,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(674,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(887,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
</TR>

<TR>
<TD WIDTH="46%" VALIGN="TOP">
<P><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,458,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,526,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,952,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Net income for 2000 decreased $426,000 or 22% over 1999 primarily due to a higher provision for loan losses and higher noninterest expense, partially offset by growth in net interest income and noninterest income. The increase in the provision for loan losses was due to a higher level of loan charge-offs experienced in the year 2000 and management's desire to increase the level of the allowance for loan losses based upon risk factors and loan growth. The increase in noninterest expense resulted from higher charge-offs of bad checks, higher depreciation expense from remodeling of the Bank's main and branch offices, and general growth in other</P>
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<BR>
<BR>
<CENTER>
24
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<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>expenses. The growth in net interest income was caused by growth in the Bank's loan portfolio. The higher level of noninterest income in 2000 was primarily due to ChoiceOne's purchase of the InsuranceSource, Inc. insurance agency on September 1, 1999.</P>
<BR>

<P><U>Return on Average Assets and Average Shareholders' Equity</U><BR>
The return on average assets and return on average shareholders' equity are key performance indicators that measure how effectively ChoiceOne is using its assets and its shareholders' invested capital. ChoiceOne's return on average assets for 2001 was 0.73%, compared to 0.77% for 2000, and 1.10% for 1999. The return on average shareholders' equity was 8.07% in 2001, compared to 8.79% in 2000, and 11.78% in 1999.</P>
<BR>

<P><U>Dividends</U><BR>
ChoiceOne paid cash dividends in 2001 of $995,000, or $0.68 per share, which represent the twentieth consecutive year that ChoiceOne has increased cash dividends paid to shareholders. Total cash dividends paid in 2001 represented a $14,000 or 1% increase over 2000. The cash dividend payout percentage (total cash dividends divided by net income) was 68% in 2001, compared to 64% in 2000. In addition to the cash dividends paid, ChoiceOne paid a 5% stock dividend in 2001 and a five-for-four stock split in 2000. Cash dividends per share have been adjusted for the stock dividends and stock split.</P>

<P>Cash dividends paid to shareholders in 1999, 2000 and 2001 were consistent with management's objectives regarding the capital structure of ChoiceOne. Management expects to continue cash dividend payments to shareholders relative to the financial performance of ChoiceOne. However, management will not raise dividends above a level that it considers to be reasonable and prudent.</P>

<P>ChoiceOne's principal source of funds to pay cash dividends is the earnings of the Bank. The availability of these earnings is dependent upon the capital needs, regulatory constraints and other factors involving the Bank. Regulatory constraints include the maintenance of minimum capital ratios and limits based on net income and retained earnings of the Bank for the past three years. Based on projected earnings for the Bank, management currently expects ChoiceOne to pay regular quarterly cash dividends to its shareholders in 2002.</P>
<BR>

<P><U>Net Interest Income</U><BR>
As shown in Tables 1 and 2, tax-equivalent net interest income decreased $433,000 in 2001 compared to 2000. This is largely attributable to the tremendous cuts in short-term interest rates during 2001 and the Bank's loans repricing much faster than its deposits and other funding sources. The Federal Reserve Bank trimmed the discount rate a record 11 times during 2001 causing the prime rate to drop 475 basis points from December 31, 2000. </P>

<P>The average balance of loans in 2001 remained relatively consistent with the average in 2000. However, the interest rate cuts greatly reduced the yield on all types of loans originated in 2001 as well as floating rate commercial loans indexed to the prime rate. This caused interest income from loans to fall $859,000 in 2001 compared to 2000. Slightly lower yields on new taxable investment securities purchased caused interest income to drop $33,000 from 2000. However, a substantial balance in federal funds sold caused interest income from other interest bearing assets to rise $68,000 in 2001 versus 2000.</P>

<P>Lower rates paid on interest bearing demand deposits more than offset the $3.0 million growth in average balances to reduce interest expense $145,000 in 2001 versus 2000. Higher rate time deposits either matured or repriced downward in the latter half of 2001 as interest expense was $47,000 less in 2001 than 2000. Average advances from the Federal Home Loan Bank increased $2.4 million, offset by reduced rates which caused interest expense to increase $108,000 in 2001 over 2000. Other interest-bearing liabilities (primarily federal funds purchased) dropped $2.9 million to also help reduce interest expense by $284,000.</P>

<P>As shown in Table 1, tax-equivalent net interest income as a percentage of earning assets decreased to 4.12%, which represents a decrease of 31 basis points from 2000. The rate earned on interest-earning assets tumbled 59 basis points from 9.21% in 2000 to 8.62% in 2001. The rate paid on interest-bearing liabilities was 5.13% for 2001, a decline of 31 basis points from 5.44% in 2000. In 2000, tax-equivalent net interest income as a percentage of earning assets decreased 29 basis points to 4.43%. The rate earned on interest-earning assets increased 31 basis points from 8.90% in 1999 to 9.21% in 2000. The rate paid on interest-bearing liabilities increased 58 basis points from 4.86% in 1999 to 5.44% in 2000. </P>
<BR>
<BR>
<BR>
<CENTER>
25
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>As illustrated in Table 2, tax-equivalent net interest income increased $339,000 in 2000 compared to 1999. Interest income grew due to additional loan growth during 2000. However, changes in interest rates had a much greater negative impact in 2000 than in 1999. The increase in net margin due to asset and liability growth was $642,000 in 2000, offset by a reduction in margin of $303,000 due to a higher cost of funds.</P>

<P><B>Table 1 - Average Balances and Tax-Equivalent Interest Rates</B></P>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=3>
<P ALIGN="CENTER"><FONT SIZE=1>Year ended December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=3>
<P ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=3>
<P ALIGN="CENTER"><FONT SIZE=1>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=3>
<P ALIGN="CENTER"><FONT SIZE=1>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1><B>Average<BR>
Balance</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1><B><BR>
Interest</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1><B><BR>
Rate</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1>Average<BR>
Balance</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1><BR>
Interest</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1><BR>
Rate</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1>Average<BR>
Balance</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1><BR>
Interest</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=1><BR>
Rate</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>Assets</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Loans (1) (2)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$&nbsp;172,018</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$&nbsp;15,191</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>8.83</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B>%</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;171,620</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;16,066</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>9.36</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;149,329</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;13,714</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>9.18</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Taxable securities (3)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>7,319</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>441</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>6.03</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>6,507</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>474</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>7.26</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>10,112</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>609</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>6.03</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Nontaxable securities (1) (3)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>8,640</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>635</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>7.35</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>7,907</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>600</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>7.52</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>7,959</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>583</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>7.45</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>1,651</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>70</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>4.24</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>87</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>2</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>2.30</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>86</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1.28</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-earning assets</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>189,628</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>16,337</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>8.62</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>186,121</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>17,142</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>9.21</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>167,486</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>14,907</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>8.90</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Noninterest-earning assets (4)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>10,927</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>11,576</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>9,793</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$&nbsp;200,555</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;197,697</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;177,279</FONT><HR SIZE="2"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>Liabilities and Shareholders' Equity<BR>
&nbsp;&nbsp;&nbsp;Interest-bearing</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;transaction accounts</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$&nbsp;&nbsp;29,338</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>780</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>2.66</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B>%</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;&nbsp;26,384</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>925</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>3.51</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;&nbsp;25,755</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>779</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>3.02</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Savings deposits</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>7,954</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>90</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>1.13</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>7,879</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>94</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1.19</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>8,422</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>99</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1.18</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Time deposits</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>84,280</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>4,982</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>5.91</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>84,406</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>5,029</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>5.96</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>73,535</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>3,975</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>5.41</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;FHLB advances</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>39,189</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>2,495</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>6.37</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>36,786</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>2,387</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>6.49</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>28,019</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,734</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>6.19</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>5,192</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>171</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>3.29</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>8,056</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>455</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>5.65</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>8,070</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>407</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>5.04</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing liabilities</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>165,953</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>8,518</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>5.13</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>163,511</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>8,890</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>5.44</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>143,801</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>6,994</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>4.86</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Demand deposits</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>14,424</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>14,466</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>15,294</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Other noninterest-bearing<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liabilities</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<B>3,215</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
2,354</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
1,612</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Shareholders' equity</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>18,058</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>17,366</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>16,572</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shareholders' equity</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<B>$&nbsp;200,555</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
$&nbsp;197,697</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
$&nbsp;177,279</FONT><HR SIZE="2"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>Net interest income<BR>
&nbsp;&nbsp;&nbsp;(tax-equivalent basis) -<BR>
&nbsp;&nbsp;&nbsp;interest spread</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
<B>7,819</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B><BR>
<BR>
3.48</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B><BR>
<BR>
%</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
8,252</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
3.77</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
7,913</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
4.04</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT><HR SIZE="2"></TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>Tax-equivalent adjustment (1)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>(216)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(220)</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>(214)</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>Net interest income</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$&nbsp;&nbsp;7,603</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;&nbsp;8,032</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$&nbsp;&nbsp;7,699</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=1>Net interest income as a<BR>
&nbsp;&nbsp;&nbsp;percentage of earning assets<BR>
&nbsp;&nbsp;&nbsp;(tax-equivalent basis)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B><BR>
<BR>
4.12</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B><BR>
<BR>
%</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
4.43</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
4.72</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT><HR SIZE="2"></TD>
</TR>

<TR>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;<HR SIZE="1"></TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>Interest on nontaxable securities and loans has been adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets. The adjustment uses an incremental tax rate of 34% for the years presented.</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>Interest on loans included net origination fees charged on loans of approximately $801,000, $662,000, and $643,000 in 2001, 2000, and 1999, respectively.</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>The average balance includes the effect of unrealized gains or losses on securities, while the average rate was computed on the average amortized cost of the securities.</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>Noninterest-earning assets include loans on a nonaccrual status which averaged approximately $1,090,000, $1,087,000, and $910,000 in 2001, 2000, and 1999, respectively.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<CENTER>
<FONT SIZE=2>26</FONT>
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Table 2 - Changes in Tax-Equivalent Net Interest Income</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=17>
<P ALIGN="CENTER"><FONT SIZE=2>Year ended December 31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=8>
<P ALIGN="CENTER"><FONT SIZE=2><B>2001 Over 2000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=8>
<P ALIGN="CENTER"><FONT SIZE=2>2000 Over 1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>Total</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>Volume</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>Rate</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Total</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Volume</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>Rate</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=17>
<P ALIGN="CENTER"><FONT SIZE=2>(Dollars in Thousands)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Increase (decrease) in interest income (1)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Loans (2)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(875</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(51</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(824</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,352</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,077</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>275</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Taxable securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(33</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>62</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(95</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(136</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(244</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>108</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Nontaxable securities (2)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>56</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(21</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>68</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>36</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>32</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>0</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in tax-equivalent income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(805</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>103</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(908</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>2,235</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,845</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>390</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>Increase (decrease) in interest expense (1)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Interest-bearing transaction accounts</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(145</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>110</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(255</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>146</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>127</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Savings deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(4</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(5</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(5</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(6</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Time deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(47</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(7</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(40</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,054</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>625</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>429</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>108</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>156</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(48</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>653</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>566</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>87</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(284</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(187</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(97</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>48</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>(1</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>)</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>49</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in interest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(372</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>72</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(444</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,896</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1,203</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>693</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in tax-equivalent<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;net interest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
(433</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B><BR>
)</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
31</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
(464</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B><BR>
)</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT><HR SIZE="2"></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
339</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT><HR SIZE="2"></TD>
<TD WIDTH="8%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
642</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
$</FONT><HR SIZE="2"></TD>
<TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><BR>
(303</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
)</FONT><HR SIZE="2"></TD>
</TR>

<TR>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;<HR SIZE="1"></TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>The volume variance is computed as the change in volume (average balance) multiplied by the previous year's interest rate. The rate variance is computed as the change in interest rate multiplied by the previous year's volume (average balance). The change in interest due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>Interest on nontaxable securities and loans has been adjusted to a fully tax-equivalent basis using an incremental tax rate of 34% for the years presented.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>

<FONT SIZE=2>
<P>Management anticipates that net interest income may increase in 2002 due to the repricing of time deposits and advances from the Federal Home Loan Bank. Management does not anticipate additional prime lending rate decreases in 2002, and predicts the Federal Reserve Bank will shift its monetary policy from contraction to expansion. Management anticipates that future loan growth may exceed ChoiceOne's availability of local deposits. If this occurs, additional funding from Federal Home Loan Bank advances, brokered time deposits, and other non-local sources may be used. Interest rates associated with these types of funding compared to certain lower-cost local deposits are typically higher and would compress the Bank's net interest margin earned on asset growth. </P>
<BR>

<P><U>Allowance and Provision For Loan Losses</U><BR>
Information regarding the allowance and provision for loan losses can be found in Table 3 and in Note 6 to the Consolidated Financial Statements. As indicated in Table 3, the provision for loan losses was slightly lower in 2001 than in 2000. ChoiceOne's management believed that the balance in the allowance for loan losses needed to be increased as of the end of 2000 to recognize the higher level of risk in the loan portfolio. </P>

<P>Net charge-offs by loan category are shown in Table 3. Commercial loan net charge-offs increased substantially in 2001 compared to the prior year. Mortgage loan net charge-offs also increased; however, consumer loan net charge-offs decreased in 2001 over 2000. Approximately 56% of the consumer loans charged off were indirect auto loans. Approximately 27% of the commercial loans charged off were loans from a factored receivable finance program.  Approximately 35% of the mortgage loans charged off were wholesale mortgages purchased from a correspondent originator. The ratio of net charge-offs as a percentage of loans increased from 0.51% in 2000 to 0.63% in 2001; however, the allowance as a percentage of total loans is slightly higher at 1.21% at the end of 2001, compared to 1.20% at the end of 2000.</P>
<BR>
<CENTER>
27
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Table 3 - Provision and Allowance For Loan Losses</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1>2000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1>1999</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1>1998</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=1>1997</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>Provision for loan losses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>1,003,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,075,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>625,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>730,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>539,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>Net charge-offs:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Commercial loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>554,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>282,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>260,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>201,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>193,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Real estate mortgage - construction</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>188,000</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>--</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>6,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Consumer</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>349,000</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>499,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>309,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>245,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>260,000</FONT><HR SIZE="1"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>1,091,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>881,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>569,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>446,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>459,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>Allowance for loan losses at year end</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>2,013,000</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>2,101,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,907,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,851,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>$</FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1,567,000</FONT><HR SIZE="2"></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>Allowance for loan losses as a percentage of:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Total loans as of year end</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B>1.21</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B>%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1.20</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1.14</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1.31</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>1.23</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1>%</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;&nbsp;&nbsp;Nonaccrual loans, accrual loans past due 90<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;days or more and troubled debt<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;restructurings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B><BR>
<BR>
105</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B><BR>
<BR>
%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
75</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
93</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
184</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
<BR>
130</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
<BR>
%</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>Ratio of net charge-offs to average total loans<BR>
&nbsp;&nbsp;&nbsp;outstanding during the year</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B><BR>
0.63</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B><BR>
%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
0.51</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
0.38</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
0.33</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
0.39</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=1>Loan recoveries as a percentage of prior year's<BR>
&nbsp;&nbsp;&nbsp;charge-offs</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><B><BR>
19</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><B><BR>
%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
16</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
15</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
15</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=1><BR>
32</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P><FONT SIZE=1><BR>
%</FONT></TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Based on the current state of the economy and a recent review of the loan portfolio, management believes that the allowance for loan losses as of December 31, 2001, is adequate to absorb probable losses. Management is aware that continued growth in the loan portfolio may impact future loan charge-offs. However, management has made certain changes that it believes may positively impact the level of net loan charge-offs. Charge-offs of indirect auto loans decreased from $354,000 in 2000 to $275,000 in 2001, as a result of tightened credit standards put into place in early 2000. ChoiceOne discontinued its purchase of sub-prime residential mortgages in 2000; however, $3.9 million of these loans remain in the portfolio as of December 31, 2001. Management will continues to monitor the nonperforming loans, delinquent loans, and the local economy during 2002 in order to determine the adequacy of the allowance for loan losses.</P>
<BR>

<P><U>Noninterest Income</U><BR>
Noninterest income increased $292,000 or 12% in 2001 compared to a $370,000 or 19% increase in 2000. Gains from the sale of loans jumped $288,000 in 2001 compared to 2000. The Bank's mortgage operations processed a record volume of new and refinanced loans due to relatively low interest rates. Higher service charges on deposit accounts contributed an additional $113,000 in fee income for 2001. Commissions from the Insurance Agency dropped $88,000 in 2001 versus 2000 due to the loss of two agents at the Grand Rapids office. Commissions from the Travel Agency dropped $35,000 in 2001 versus 2000, primarily due to the reduced staffing and subsequent closure effective April 1, 2001.</P>

<P>Insurance commission income accounted for $305,000 of the income growth in 2000. This was primarily attributable to a full year of operations of the InsuranceSource, Inc. agency in 2000 compared to a partial year in 1999. The InsuranceSource, Inc. agency was purchased on September 1, 1999 and the results of its operations have been included in ChoiceOne's financial statements since that date. </P>

<P>ChoiceOne's management anticipates that noninterest income will grow slightly in 2002, due to the implementation of new deposit service charge programs, offset by reduced insurance commissions and reduced mortgage refinancing activity. </P>

<P><U>Noninterest Expense</U><BR>
Total noninterest expense grew $87,000 or 1% in 2001 compared to a $892,000 or 14% increase in 2000. Higher salaries, legal fees, consulting fees, advertising expenses, and expenses incurred on foreclosed real estate were offset by a large reduction in bad checks and uncollectible items being charged off. Tight expense control of other overhead items limited the increase from 2000.</P>
<BR>
<CENTER>
28
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>Salaries and benefits expense increased $108,000 in 2001 compared to $315,000 in 2000. This was due to annual raises and the addition of new staff including the Bank's President. Occupancy expense grew a modest $27,000 or 2% in 2001 compared to an increase of $201,000 or 19% in 2000. Depreciation expense stabilized after remodeling of the Bank's main office and additions to certain branch offices were completed in 2000. Professional services increased $71,000 or 24% due to added legal fees on uncollectible or problem loans and higher consulting fees to various contractors. Data processing and printing and postage remained relatively consistent from 2000 to 2001; however, the Bank expensed slightly more on its advertising and marketing programs in 2001 compared to 2000. Other noninterest expense decreased $147,000 or 10% in 2001 after increasing $303,000 or 26% in 2000. The primary reason for this decrease was a reduction of $174,000 in bad check charges, offset by higher expenses on foreclosed real estate. Approximately $215,000 of the increase in 2000 was related to bad check charges and expenses related to loan charge-offs and uncollectible accounts. </P>

<P>Management anticipates that noninterest expense will grow slightly in 2002, due to legal fees caused by the amount of other real estate owned and other nonperforming loans, offset by reduced consulting fees. </P>
<BR>

<P ALIGN="CENTER"><B>FINANCIAL CONDITION</B></P>

<P><U>Investment Securities</U><BR>
The investment security portfolio increased $6.7 million or 48% in 2001 compared to a decline of $1 million or 6% in 2000. The Bank purchased more investments to improve liquidity and reduce the amount of federal funds sold. Management moved to a new investment advisor during the year and along with the new advisor adopted a comprehensive Investment Policy in October 2001. The Bank's Investment Committee continues to monitor the investment securities portfolio and plans to purchase securities when deemed prudent. Certain securities are also used as collateral for repurchase agreements and management plans to continue this practice in 2002 as a low-cost source of funding. Investment securities also serve as a source of liquidity for deposit needs.</P>
<BR>

<P><U>Loans</U><BR>
The total loan portfolio balance declined $10.0 million or 6% in 2001 compared to an increase of $7.8 million or 5% in 2000. The refinancing of mortgage loans and subsequent sale of these loans to the secondary market is the primary factor for the reduction. Commercial and consumer loans remained relatively stable during 2001. Demand for these types of loans has reduced due to many uncertainties regarding the local economy and national economy. </P>

<P>Management believes that future growth in commercial and consumer loans will be a challenge in 2002. Competition within rates and terms will continue to affect ChoiceOne's ability to grow the loan portfolio. Management also predicts that the refinancing boom of mortgage loans will slow down in the first half of 2002 and has begun to hold some conforming mortgages in the portfolio versus selling them to investors in the secondary market.</P>
<BR>

<P><U>Deposits</U><BR>
Total deposits decreased $1.7 million or 1% in 2001 compared to an increase of $10.2 million or 8% in 2000. Interest-bearing demand deposits have increased $6.9 million and noninterest-bearing demand deposits have increased $2.9 million in 2001. A significant portion of these new deposits was attributable to the acquisition of several new deposit clients. This growth was more than offset by $11.6 million of brokered time deposits that matured in 2001. The decrease in brokered time deposits reflects management's desire to replace its maturing wholesale funding with retail deposits. </P>

<P>Management is focused upon retaining existing local deposits in 2002 in an attempt to keep lower-cost retail deposits. Also, management plans to aggressively seek new deposits through a comprehensive marketing and sales plan. ChoiceOne may also use brokered time deposits in 2002 if local deposit growth is not sufficient to fund expected loan growth.</P>

<P><U>Federal Home Loan Bank Advances</U><BR>
Advances from the Federal Home Loan Bank decreased by $1.1 million in 2001 compared to a decrease of $0.8 million in 2000. The Bank has several long-term fixed-rate advances with maturities ranging from 2002 to 2005 and plans to replace these borrowings with local deposits. The Bank cannot retire the advances without incurring significant prepayment penalties.</P>
<BR>
<BR>
<CENTER>
29
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P>ChoiceOne pledged certain residential real estate mortgages as collateral for these advances during 2000 and 2001. ChoiceOne plans to use FHLB advances in 2002 to fund expected loan growth to the extent allowed by available collateral, if needed.</P>
<BR>

<P><U>Shareholders' Equity</U><BR>
ChoiceOne's shareholders' equity increased $684,000 in 2001 compared to an increase of $701,000 in 2000. Equity in both 2000 and 2001 had experienced increases due to the retention of earnings. The net dollar difference between the issuance and repurchase of common stock was $171,000 in 2001 compared to $61,000 in 2000. ChoiceOne repurchased 322 shares of its common stock in 2001 compared to 5,113 shares in 2000. Management has used and intends to continue to use the repurchased stock for employee benefit plans, stock dividends, and other purposes. ChoiceOne's management anticipates that it will continue to repurchase shares of its common stock in 2002. ChoiceOne's 401(k) and employee stock ownership plan also purchased 4,856 shares of ChoiceOne's stock in 2000. Management anticipates that the stock purchased by the 401(k) and employee stock ownership plan will be used as part of ChoiceOne's retirement contributions in future years.</P>

<P>Note 19 to the Consolidated Financial Statements presents regulatory capital information as of the end of 2001 and 2000. ChoiceOne's capital ratios increased slightly from December 31, 2000 to December 31, 2001. If opportunities for prudent asset growth present themselves in 2002, ChoiceOne's management may grow assets to a greater extent than shareholders' equity. This may cause capital to decrease as a percentage of assets. However, ChoiceOne's management and its Board of Directors do not desire to decrease capital below those levels necessary to be considered well capitalized.</P>

<P><U>Liquidity and Interest Rate Risk</U><BR>
ChoiceOne's primary market risk exposure occurs in the form of interest rate risk. Liquidity risk also can have an impact but to a lesser extent. ChoiceOne's business is transacted in U.S. dollars with no foreign exchange risk exposure. Agricultural loans comprise a small portion of ChoiceOne's total assets. Management believes that ChoiceOne's exposure to changes in commodity prices is insignificant.</P>

<P>Liquidity risk deals with ChoiceOne's ability to meet its cash flow requirements. These requirements include depositors desiring to withdraw funds and borrowers seeking credit. Relatively short-term liquid funds exist in the form of lines of credit to purchase federal funds at four of the Bank's correspondent banks. At December 31, 2001, the total amount of federal funds that were available for purchase from the Bank's correspondent banks was $14.2 million while the Bank's federal funds purchased balance was $2.9 million. The Bank also has a line of credit with the Federal Reserve Bank of Chicago for $62 million secured by ChoiceOne's commercial loans, which is designed to be used for nonrecurring short-term liquidity needs. Longer-term liquidity needs may be met through local deposit growth, maturities of securities, normal loan repayments, advances from the Federal Home Loan Bank, brokered time deposits, and income retention. Approximately $4.3 million of additional Federal Home Loan Bank advances were available at the end of 2001 based on ChoiceOne's mortgage loan collateral pledged to the Federal Home Loan Bank. The acquisition of brokered time deposits are not limited as long as ChoiceOne's capital to assets percentage is considered to be "well capitalized."</P>

<P>Interest rate risk is related to liquidity because each is affected by maturing assets and sources of funds. ChoiceOne's Asset/Liability Management Committee (the "ALCO") attempts to stabilize the interest rate spread and avoid possible adverse effects when unusual or rapid changes in interest rates occur. The ALCO uses a simulation model to measure its interest rate risk. The model incorporates changes in interest rates on rate-sensitive assets and liabilities. The degree of rate sensitivity is affected by prepayment assumptions that exist in the assets and liabilities. One method the ALCO uses of measuring interest rate sensitivity is the ratio of rate-sensitive assets to rate-sensitive liabilities. An asset or liability is considered to be rate-sensitive if it matures or otherwise reprices within a given time frame. Table 4 documents the maturity or repricing schedule for ChoiceOne's rate-sensitive assets and liabilities for selected time periods.</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<CENTER>
30
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<FONT SIZE=2>
<P><B>Table 4 - Maturities and Repricing Schedule</B></P></FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=13>
<P ALIGN="CENTER"><FONT SIZE=2><B>December 31, 2001</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>0-3<BR>
Months</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>3-12<BR>
Months</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>1-5<BR>
Years</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2><B>Over<BR>
5 Years</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2><B><BR>
Total</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2><B>Assets</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>56,033</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>30,776</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>73,586</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,428</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>165,823</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxable securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>496</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,215</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>6,256</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>3,067</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>11,034</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nontaxable securities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>153</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>726</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>1,891</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,081</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>9,851</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rate-sensitive assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>56,682</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>32,717</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>81,733</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>15,576</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>186,708</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2><B>Liabilities</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>34,592</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>34,592</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Savings deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,810</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>7,810</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>20,350</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>38,164</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>19,048</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>77,562</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>5,513</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>12,321</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>17,291</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>35,125</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase agreements and federal<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;funds purchased</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
6,902</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
--</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
--</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
--</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><BR>
&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B><BR>
6,902</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rate-sensitive liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>75,167</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>50,485</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>36,339</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>--</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="1"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>161,991</B></FONT><HR SIZE="1"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rate-sensitive assets less rate-<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sensitive liabilities:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset (liability) gap for the period</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(18,485</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(17,768</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>45,394</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>15,576</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="7%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>24,717</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="38%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cumulative asset (liability) gap</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(18,485</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>(36,253</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P><FONT SIZE=2><B>)</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>9,141</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT><HR SIZE="2"></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>$</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="9%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2><B>24,717</B></FONT><HR SIZE="2"></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="7%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>One method the ALCO uses to measure interest rate sensitivity is the one year repricing gap. ChoiceOne's ratio of rate-sensitive assets to rate-sensitive liabilities that matured or repriced within a one-year time frame was 71% as of December 31, 2001, compared to 66% as of December 31, 2000, and 67% as of December 31, 1999. It is the ALCO's and management's goal to have the rate-sensitive assets to rate-sensitive liabilities ratio in a range of 80% to 120% at the one-year maturity or repricing point. Management believes that the ratio at the end of the years presented was low for two reasons. First, all interest-bearing demand and savings deposits have been classified in the 0 to 3 month repricing category. While these deposits can reprice within this time frame, management has some control over the timing or extent of the change in interest rates on these deposits. Second, the growth in assets in 2000 and 2001 was funded to a large extent by short-term deposits. The ALCO plans to continue to review the ratio of rate-sensitive assets to rate-sensitive liabilities in 2002. As interest rates change during 2002, the ALCO will attempt to position its asset and liabilities maturities to maximize net interest income.</P>

<P>Another method the ALCO uses to monitor its interest rate sensitivity is to subject rate-sensitive assets and liabilities to interest rate shocks. ChoiceOne used its simulation model to subject its assets and liabilities to an immediate 200 basis point increase and decrease in interest rates. The maturities of loans and mortgage-backed securities were affected by prepayment assumptions. Maturities for interest-bearing core deposits were based on their opportunity for repricing rather than an estimate of the period over which they would be outstanding. The maturities of Federal Home Loan Bank advances were based on their contractual maturity dates. In the case of variable rate assets and liabilities, ChoiceOne used their repricing dates to determine their value. The simulation model measures the effect of the interest rate shock on both net income and shareholders' equity. ChoiceOne's Interest Rate Risk Policy states that the changes in interest rates cannot cause net income to increase or decrease more than 10% and cannot cause the value of shareholders' equity to increase or decrease more than 2% of total assets. A hypothetical 200 basis point interest rate shock as of December 31, 2001, would have caused net income to increase 10% if rates increased and to decrease 16% if rates decreased. While ChoiceOne's rate shock for decreasing interest rates exceeds the policy limit as of December 31, 2001, management believes the likelihood of such a scenerio in the current interest rate environment is remote. The shock computation caused an insignificant change in the value of shareholders' equity at December 31, 2001. The ALCO plans to continue to monitor the effect of changes in interest rates on both net income and shareholders' equity and will make changes in asset and liability maturities as it believes necessary.</P>
<BR>
<BR>
<BR>
<CENTER>
31
</CENTER>
<HR SIZE="4" NOSHADE>
<BR>
</FONT>

<P ALIGN="CENTER"><B>CORPORATE AND SHAREHOLDER INFORMATION</B><BR>
ChoiceOne Financial Services, Inc.</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="36%" VALIGN="TOP">
<P><FONT SIZE=2><B>Corporate Headquarters</B><BR>
ChoiceOne Financial Services, Inc.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109 East Division Street<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sparta, Michigan 49345<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Phone:&nbsp;&nbsp;(616) 887-7366<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fax:&nbsp;&nbsp;&nbsp;&nbsp;(616) 887-5566<BR>
<BR>
<BR>
<B>Market Makers in ChoiceOne Financial<BR>
Services, Inc. Stock</B><BR>
<BR>
Kent King Securities<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (616) 459-3317</P>

<P>Morgan Stanley Dean Witter<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (616) 454-8998<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (800) 788-9640<BR>
<BR>
Raymond James &amp; Associates, Inc.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(616) 456-8691<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(800) 553-2249<BR>
<BR>
Stifel Nicolaus &amp; Company, Inc.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(616) 942-1717<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(800) 676-0477<BR>
<BR>
Tucker Anthony<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids, Michigan<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(616) 742-3910<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(888) 848-3910<BR>
<BR>
<BR>
<B>Stock Registrar and Transfer Agent</B><BR>
Registrar and Transfer Company<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10 Commerce Drive<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cranford, New Jersey 07016<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(800) 866-1340<BR>
<BR>
<BR>
<B>Annual Meeting</B><BR>
The annual meeting of shareholders of<BR>
ChoiceOne Financial Services, Inc., will<BR>
be held at 7:40 p.m. local time on Monday,<BR>
April 29, 2002, at Ridgeview Elementary School in Sparta, Michigan.<BR>
<BR>
</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><B>Subsidiary Information<BR>
<BR>
<U>ChoiceOne Bank</U></B><BR>
Main Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109 East Division Street<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sparta, Michigan 49345<BR>
<BR>
Appletree Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;416 West Division Street<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sparta, Michigan 49345<BR>
<BR>
Cedar Springs Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4170 Seventeen Mile Road<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cedar Springs, Michigan 49319<BR>
<BR>
Plainfield Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4949 Plainfield Avenue NE<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids, Michigan 49505<BR>
<BR>
Sparta Great Day Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;565 South State Street<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sparta, Michigan 49345<BR>
<BR>
Alpine Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5528 Alpine Avenue NW<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comstock Park, Michigan 49321<BR>
<BR>
ChoiceOne Bank is a member of the<BR>
Federal Deposit Insurance Corporation<BR>
and is an Equal Opportunity and<BR>
Housing Lender.</P>
<BR>
<BR>
</FONT>
<P ALIGN="CENTER"><IMG SRC="image46.gif" WIDTH=92 HEIGHT=77></P>
<P><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P><FONT SIZE=2><B><BR>
<BR>
<U>ChoiceOne Insurance Agencies, Inc.</U></B><BR>
Sparta Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109 East Division Street<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sparta, Michigan 49345<BR>
<BR>
Cedar Springs Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4170 Seventeen Mile Road<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cedar Springs, Michigan 49319<BR>
<BR>
Plainfield Office<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4949 Plainfield Avenue NE<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids, Michigan 49505</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<HR SIZE="4" NOSHADE>
<BR>

<P ALIGN="CENTER"><B>DIRECTORS AND OFFICERS</B><BR>
ChoiceOne Financial Services, Inc.</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="36%" VALIGN="TOP">
<P><FONT SIZE=2><B>Directors</B><BR>
<I>ChoiceOne Financial Services, Inc.</I><BR>
<BR>
<B>Frank G. Berris<BR>
&nbsp;&nbsp;&nbsp;</B>President and Chief Executive Officer,<BR>
<B>&nbsp;&nbsp;&nbsp;</B>American Gas &amp; Oil Co., Inc.<BR>
&nbsp;&nbsp;&nbsp;(Distributor of Petroleum Products)<BR>
<BR>
<B>James A. Bosserd<BR>
&nbsp;&nbsp;&nbsp;</B>President and Chief Executive Officer,<BR>
<B>&nbsp;&nbsp;&nbsp;</B>ChoiceOne Financial Services, Inc. and<BR>
<B>&nbsp;&nbsp;&nbsp;</B>ChoiceOne Bank<BR>
<BR>
<B>Lawrence D. Bradford<BR>
&nbsp;&nbsp;&nbsp;</B>Former President, ChoiceOne<BR>
<B>&nbsp;&nbsp;&nbsp;</B>Insurance Agencies, Inc.<BR>
<BR>
<B>William F. Cutler, Jr.<BR>
&nbsp;&nbsp;&nbsp;</B>Former Vice President, H. H. Cutler Co. <BR>
<B>&nbsp;&nbsp;&nbsp;</B>(Apparel Manufacturer)<BR>
<BR>
<B>Lewis G. Emmons<BR>
&nbsp;&nbsp;&nbsp;</B>President, Emmons Development;<BR>
<B>&nbsp;&nbsp;&nbsp;</B>President, Brat Development <BR>
&nbsp;&nbsp;&nbsp;(Real Estate Development)<BR>
<BR>
<B>Stuart Goodfellow<BR>
&nbsp;&nbsp;&nbsp;</B>Owner, Goodfellow Vending Services<BR>
&nbsp;&nbsp;&nbsp;(Vending Company) and Goodfellow<BR>
&nbsp;&nbsp;&nbsp;Blueberry Farms<BR>
<BR>
<B>Bruce A. Johnson<BR>
&nbsp;&nbsp;&nbsp;</B>Vice President and Chief Financial Officer,<BR>
<B>&nbsp;&nbsp;&nbsp;</B>Spartan Distributors, Inc.<BR>
&nbsp;&nbsp;&nbsp;(Lawn, Garden, Turf and Irrigation<BR>
&nbsp;&nbsp;&nbsp;Equipment and Materials)<BR>
<BR>
<B>Paul L. Johnson<BR>
&nbsp;&nbsp;&nbsp;</B>President, Falcon Resources, Inc.<BR>
&nbsp;&nbsp;&nbsp;(Automotive and Furniture Design)<BR>
<BR>
<B>Jon E. Pike<BR>
&nbsp;&nbsp;&nbsp;</B>C.P.A., Chairman, Beene Garter LLP<BR>
&nbsp;&nbsp;&nbsp;(Certified Public Accountants)<BR>
<BR>
<B>Linda R. Pitsch<BR>
&nbsp;&nbsp;&nbsp;</B>Secretary, ChoiceOne Financial Services,<BR>
<B>&nbsp;&nbsp;&nbsp;</B>Inc.; Senior Vice President and Cashier,<BR>
<B>&nbsp;&nbsp;&nbsp;</B>ChoiceOne Bank<BR>
<BR>
<B>Andrew W. Zamiara, R.Ph.<BR>
&nbsp;&nbsp;&nbsp;</B>President and Manager, Momber<BR>
<B>&nbsp;&nbsp;&nbsp;</B>Pharmacy and Momber<B>&nbsp;</B>Hallmark<BR>
<BR>
<B>Officers</B><BR>
<I>ChoiceOne Financial Services, Inc.</I><BR>
<BR>
<B>Jon E. Pike<BR>
&nbsp;&nbsp;&nbsp;</B>Chairman of the Board<BR>
<BR>
<B>James A. Bosserd<BR>
&nbsp;&nbsp;&nbsp;</B>President and Chief Executive Officer<BR>
<BR>
<B>Linda R. Pitsch<BR>
&nbsp;&nbsp;&nbsp;</B>Secretary<BR>
<BR>
<B>Tom Lampen<BR>
&nbsp;&nbsp;&nbsp;</B>Treasurer</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<P><FONT SIZE=2><B>Officers</B><BR>
<I>Subsidiary - ChoiceOne Bank</I><BR>
<BR>
<B>Jon E. Pike<BR>
&nbsp;&nbsp;&nbsp;</B>Chairman of the Board<BR>
<BR>
<B>James A. Bosserd<BR>
&nbsp;&nbsp;&nbsp;</B>President and Chief Executive Officer<BR>
<BR>
<B>Lou Knooihuizen<BR>
&nbsp;&nbsp;&nbsp;</B>Senior Vice President - Senior Loan<BR>
<B>&nbsp;&nbsp;&nbsp;</B>Officer<BR>
<BR>
<B>Linda R. Pitsch<BR>
&nbsp;&nbsp;&nbsp;</B>Senior Vice President - Cashier<BR>
<BR>
<B>Lee A. Braford<BR>
&nbsp;&nbsp;&nbsp;</B>Vice President - Consumer Loans<BR>
<BR>
<B>Mary J. Johnson<BR>
&nbsp;&nbsp;&nbsp;</B>Vice President - Human Resources/<BR>
<B>&nbsp;&nbsp;&nbsp;</B>Internal Audit<BR>
<BR>
<B>Linda G. Kinney<BR>
&nbsp;&nbsp;&nbsp;</B>Vice President - Retail Sales Manager<BR>
<BR>
<B>Tom Lampen<BR>
&nbsp;&nbsp;&nbsp;</B>Vice President - Chief Financial<BR>
<B>&nbsp;&nbsp;&nbsp;</B>Officer<BR>
<BR>
<B>Karen M. Stein</B><BR>
&nbsp;&nbsp;&nbsp;Vice President - Mortgage Loans<BR>
<BR>
<B>Edward D. Berry</B><BR>
&nbsp;&nbsp;&nbsp;Assistant Vice President - <BR>
&nbsp;&nbsp;&nbsp;Commercial Loans<BR>
<BR>
<B>Michael F. Feighan</B><BR>
&nbsp;&nbsp;&nbsp;Assistant Vice President - <BR>
&nbsp;&nbsp;&nbsp;Controller<BR>
<BR>
<B>Dean A. Hanson</B><BR>
&nbsp;&nbsp;&nbsp;Assistant Vice President - <BR>
&nbsp;&nbsp;&nbsp;Commercial Loans<BR>
<BR>
<B>Jason J. Herbig</B><BR>
&nbsp;&nbsp;&nbsp;Assistant Vice President - Management<BR>
&nbsp;&nbsp;&nbsp;Information Systems/Network Officer<BR>
<BR>
<B>Scott A. Moore</B><BR>
&nbsp;&nbsp;&nbsp;Cedar Springs Office Sales Manager<BR>
<BR>
<B>Matthew D. Tolsma</B><BR>
&nbsp;&nbsp;&nbsp;Alpine and Plainfield Offices Sales<BR>
&nbsp;&nbsp;&nbsp;Manager</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<P><FONT SIZE=2><B>Officers</B><BR>
<I>Subsidiary - ChoiceOne Insurance<BR>
Agencies, Inc.</I><BR>
<BR>
<B>James A. Bosserd<BR>
&nbsp;&nbsp;&nbsp;</B>President<BR>
<BR>
<B>Kelly J. Potes</B><BR>
&nbsp;&nbsp;&nbsp;Senior Vice President - <BR>
&nbsp;&nbsp;&nbsp;General Manager<BR>
<BR>
<B>Jeffrey S. Bradford, CIC</B><BR>
&nbsp;&nbsp;&nbsp;Vice President<BR>
<BR>
<B>Dana L. Quick</B><BR>
&nbsp;&nbsp;&nbsp;Assistant Vice President - <BR>
&nbsp;&nbsp;&nbsp;ChoiceOne Investment Services<BR>
<BR>
<B>Linda R. Pitsch<BR>
&nbsp;&nbsp;&nbsp;</B>Secretary<BR>
<BR>
<B>Tom Lampen<BR>
&nbsp;&nbsp;&nbsp;</B>Treasurer</FONT></TD>
</TR>
</TABLE>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>choex21.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>ChoiceOne Exhibit 21 to Form 10-K *2001*</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">
<BR>

<P ALIGN="CENTER"><FONT SIZE=2><B>EXHIBIT 21</B></P>
<BR>

<P ALIGN="CENTER"><U>SUBSIDIARIES OF THE REGISTRANT</U></P>

<BR>
<BR>

<P>The following lists the subsidiaries of the Registrant and the state or jurisdiction of incorporation.</P>


<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2><U>Name and Address of Subsidiary</U></FONT></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P><FONT SIZE=2><U>Incorporated</U></FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="29%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>1.</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>ChoiceOne Bank<BR>
109 East Division<BR>
Sparta, Michigan 49345</FONT></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P><FONT SIZE=2>Michigan</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="29%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>2.</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>ChoiceOne Insurance Agencies, Inc.(1)<BR>
109 East Division<BR>
Sparta, Michigan 49345</FONT></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P><FONT SIZE=2>Michigan</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="29%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>3.</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>ChoiceOne Travel, Inc.(1)(2)<BR>
5228 Alpine Avenue NW<BR>
Comstock Park, Michigan 49544</FONT></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P><FONT SIZE=2>Michigan</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="29%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>4.</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>ChoiceOne Mortgage Company of Michigan(1)<BR>
109 E. Division<BR>
Sparta, Michigan 49345</FONT></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P><FONT SIZE=2>Michigan</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="29%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>5.</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<P><FONT SIZE=2>West Shore Computer Services, Inc.(3)<BR>
111 North Main Street<BR>
Scottville, Michigan 49454</FONT></TD>
<TD WIDTH="29%" VALIGN="TOP">
<P><FONT SIZE=2>Michigan</FONT></TD>
</TR>
</TABLE>

<P><FONT SIZE=2><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </U></FONT></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>These are wholly-owned subsidiaries of ChoiceOne Bank.</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>The operations of ChoiceOne Travel were closed on April 1, 2001. The corporation remains inactive.</FONT></TD>
</TR>

<TR>
<TD WIDTH="5%" VALIGN="TOP">
<P><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<P><FONT SIZE=2>ChoiceOne Bank owns a 20% interest in West Shore Computer Services, Inc.</FONT></TD>
</TR>
</TABLE>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>choiceex23.htm
<TEXT>
<HTML>
<HEAD>
<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>ChoiceOne Exhibit 23 to Form 10-K *2001*</TITLE>
<META NAME="Template" CONTENT="C:\Program Files\Microsoft Office\Office\html.dot">
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">

<FONT SIZE=2>
<P ALIGN="CENTER"><B>EXHIBIT 23</B></P>
<BR>

<P ALIGN="CENTER"><U>CONSENT OF INDEPENDENT ACCOUNTANTS</U></P>
<BR>
<BR>

<P>We consent to the incorporation by reference in the Registration Statement of ChoiceOne Financial Services, Inc. on Form S-3 (Registration No. 333-44336) of our report dated March 7, 2002 on the 2001 consolidated financial statements of ChoiceOne Financial Services, Inc., which report is included in the 2001 Annual Report on Form 10-K of ChoiceOne Financial Services, Inc.</P>
<BR>
<BR>
<BR>
</FONT>
<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="51%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="49%" VALIGN="TOP">
<P><FONT SIZE=2>/s/ Crowe, Chizek and Company LLP<BR>
Crowe, Chizek and Company LLP</FONT></TD>
</TR>
</TABLE>
<BR>

<FONT SIZE=2>
<P>Grand Rapids, Michigan<BR>
March 29, 2002</P>
</FONT>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>7
<FILENAME>choex24.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>ChoiceOne Financial Corporation Exhibit 24</TITLE>
</HEAD>
<BODY>

<FONT SIZE=2>
<P ALIGN="CENTER"><B>EXHIBIT 24</B></P>

<P ALIGN="CENTER"><U>LIMITED POWER OF ATTORNEY</U></P>

<P>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint JON E. PIKE, JAMES A. BOSSERD, LINDA R. PITSCH and THOMAS LAMPEN, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2001, and any amendments to that report, and to file it with the Securities and Exchange Commission.  Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.</P>

<P>&nbsp;</P>
</FONT>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">
<P><FONT SIZE=2>Dated:</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP">
<P><FONT SIZE=2><U>1-15</U>, 2002</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<P><FONT SIZE=2>/s/Andrew Zamiara</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>(signature)</FONT></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<P><FONT SIZE=2>Andrew Zamiara</FONT><HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">&nbsp;<HR SIZE="1"></TD>
</TR>

<TR>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE=2>(type or print name)</FONT></TD>
</TR>
</TABLE>


</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>9
<FILENAME>image44.gif
<TEXT>
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`
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`
end

</TEXT>
</DOCUMENT>
</SUBMISSION>
