MVB FINANCIAL CORP (Form: SB-2, Received: 12/02/2004 10:56:40)

Directors

Age as of
Sept 30, 2004

Director and/or
Officer Since*

Principal Occupation During the Last Five Years

Delbert L. Phillips

2245 Maple Drive

Fairmont, WV 26554

Senior Vice President, Senior Lending Officer – The Monongahela Valley Bank, Inc.; Member of Board of Directors of MVB

Eric L. Tichenor

512 Black Cherry Drive

Fairmont, WV 26554

Vice President and Cashier – The Monongahela Valley Bank, Inc.; Member of Board of Directors of MVB

As filed with the Securities and Exchange Commission on December 2, 2004.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM SB-2

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

(Amendment No. )

MVB FINANCIAL CORP.

(Name of small business issuer in its charter)

West Virginia

6712

20-0034461

(State or jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer Identification

Number)

301 Virginia Avenue

Fairmont, West Virginia 26554-2777

(304) 363-4800

(Address and telephone number of principal executive offices)

__________________________________________________________________

(Address of principal place of business or intended principal place of business)

James R. Martin

President and Chief Executive Officer

MVB Financial Corp.

301 Virginia Avenue

Fairmont, West Virginia 26554-2777

(304) 363-4800 (304) 366-8600 Fax

Copies to:

Charles D. Dunbar, Esq.

Elizabeth Osenton Lord, Esq.

Jackson Kelly PLLC

1600 Laidley Tower

P.O. Box 553

Charleston, West Virginia 25322

(304) 340-1000 (Telephone) (304) 340-1080 (Fax)

Approximate date of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

CALCULATION OF REGISTRATION FEE



Title of each Class of Securities to be Registered	Number of Shares to be Registered (1)	Proposed Maximum Offering Price per Share	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Common Stock, $1.00 par value	286,000	$14.00	$4,004,000.00	$508.00

(1)	Estimated solely for purposes of calculating the registration fee.

PROSPECTUS

Up to 286,000 Shares

MVB FINANCIAL CORP.

301 Virginia Avenue

Fairmont, West Virginia 26554-2777

(304) 363-4800

Common Stock

MVB Financial Corp. is offering up to 286,000 shares of its common stock. Prior to the offering, there has been no public market for the common stock, and at least initially, we do not expect one to develop.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The shares of MVB Financial Corp. common stock are not savings accounts, deposits or other bank obligations, and neither the FDIC nor any other governmental agency insures these securities.

Shares of MVB Financial Corp. involve risk. See “ Risk Factors ” on page 3.


	Price		Estimated Expense Of Offering ¹		Estimated Proceeds To Bank
Per Share:	$	14.00	$	.20	$	13.80
Offering Total:	$	4,004,000.00	$	57,200.00	$	3,946,800.00

MVB Financial Corp. will offer the shares of its common stock to the public primarily through sales made by its directors, consultants, officers, and employees, on a best-efforts basis. These individuals will use personal contact, telephone, mail or other media to solicit subscriptions. No bank director, consultant, officer or employee will receive any additional compensation for assisting with the sale of the bank’s common stock. The expenses of the offering are estimated to be $57,200.00, including legal, accounting, printing and postage expenses. The bank reserves the right to issue shares through sales made by brokers or dealers in securities, in which case expenses may exceed the amounts listed above.

TABLE OF CONTENTS


Summary		1
Selected Financial Data		2
Risk Factors		3
Terms of Offering		4
Use of Proceeds		5
Market Price and Dividend Data		5
Description of Business		6
Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Future Outlook		29
Management		30
Description of MVB Financial’s Common Stock		36
Plan of Distribution		38
Legal Matters		38
Experts		38
Where You Can Find Additional Information		38
Financial Statements		F1

SPECIAL CAUTIONARY NOTE

REGARDING FORWARD-LOOKING STATEMENTS

When used in this prospectus, in The Monongahela Valley Bank, Inc.’s (the “bank”) or MVB Financial Corp.’s press releases or other public or shareholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “are expected to,” “estimate,” “is anticipated,” “project,” “will continue,” “will likely result,” “plans to” or similar expressions are intended to identify “forward-looking statements.” These types of statements are subject to risks and uncertainties, including changes in economic conditions in the bank’s market area, changes in policies by regulatory agencies, fluctuation in interest rates, demand for loans in the bank’s market area, and competition that could cause actual results to differ materially from what the bank or MVB Financial have presently anticipated or projected. The bank and MVB Financial wish to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. The bank and MVB Financial wish to advise readers that factors addressed within this prospectus would affect the bank’s financial performance and could cause the bank’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The factors we list in the section “Risk Factors” provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.

Where any forward-looking statement includes a statement of the assumptions or bases underlying the forward-looking statement, the bank and MVB Financial caution that assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material. We cannot assure you that any statement of expectation or belief in any forward-looking statement will result, or be achieved or accomplished.

SUMMARY

You should read this summary together with the more detailed information, including our financial statements and related notes, appearing elsewhere in this prospectus. In this prospectus, we use “MVB Financial” or the “Company” to refer to MVB Financial Corp. and the “bank” or “MVB” to refer to The Monongahela Valley Bank, Inc.

MVB Financial

MVB Financial is a West Virginia state-chartered bank holding company and intends to form two second-tier holding companies, MVB Marion, Inc. and MVB Harrison, Inc. MVB Financial anticipates that each will own common stock of The Monongahela Valley Bank, Inc.

MVB

MVB was incorporated October 30, 1997 and opened for business on January 4, 1999 under the laws of the State of West Virginia. MVB’s deposits are insured by the FDIC. MVB engages in general banking business within its primary market area of Marion County, West Virginia. Its extended market is the adjacent Counties of Harrison, Monongalia and Taylor Counties, West Virginia. The main office is located at 301 Virginia Avenue, Fairmont, West Virginia. As of December 31, 2003, MVB had total assets of $94.9 million, loans of $62.6 million, deposits of $75.3 million and shareholders’ equity of $7.82 million, compared to $81.0, $48.0, and $64.9 and $7.3 as of December 31, 2002, respectively. By September 30, 2004, total assets had grown to $105.3 million while loans were $75.6 million and deposits were $85.0 million. Shareholders’ equity approximated $8.2 million at this same date.

The Offering


Amount:		Up to 286,000 Shares
Type:		Common Stock
Price:		$14.00 Per Share

Third Quarter 2004

During the third quarter of 2004, several items of significance have occurred. These items are described on page 29 in the Future Outlook section following Management’s Discussion and Analysis.

Use of Proceeds

MVB Financial will use the proceeds of this offering to support the growth of the bank and to increase and acquire market share, particularly in the Harrison County area of West Virginia.

The management and directors of MVB Financial and the bank believe that the establishment of a presence in Harrison County, West Virginia would present an opportunity to expand further into Harrison County, West Virginia. MVB Financial intends to use the proceeds of this offering to fund this expansion into Harrison County by establishing a presence there.

MVB Financial intends to form two second-tier bank holding companies – MVB Marion, Inc. and MVB Harrison, Inc. Each of these second-tier holding companies will own the shares of The Monongahela Valley Bank, Inc. The bank will utilize the funds raised in this offering to establish a physical presence, which may include opening a branch in Harrison County, West Virginia. Directors from the Harrison County area will serve on the MVB Harrison, Inc. board of directors. The board of directors of MVB Marion, Inc. will consist of the current members of MVB/ Financial’s board of directors.

Future Outlook

MVB has enjoyed a strong growth in the market it serves. Total assets are $11.3 million higher at September 30, 2004, compared to the same date in 2003. Generally, this asset growth was the result of a $11.8 million increase in deposits for the same period of time. More significant was the increase of nearly $17.3 million, or 30%, increase in loans since September 30, 2003. MVB Financial believes it will continue to capture Marion County market share and expects to expand into the growing Harrison County, West Virginia market with an emphasis on personal customer service with high quality products and technology.

SELECTED FINANCIAL DATA

The following table summarizes the financial data for our business. The September 30, 2004 information below has been derived from MVB Financial’s Consolidated Financial Statements. Information for all other periods is from MVB’s Financial Statements.

(Dollars in Thousands, except Ratios and Per Share Data)


	September 30,						December 31,
	2004			2003			2003			2002			2001
	(Unaudited)
Operating Data
For the period ended:
Total interest income	$	4,068		$	3,570		$	4,852		$	4,227		$	3,893
Total interest expense		1,154			1,307			1,702			1,852			2,195
Net interest income		2,914			2,263			3,150			2,375			1,698
Provision for loan losses		192			161			223			225			166
Other income		509			351			598			458			391
Other expense		1,985			1,712			2,348			2,033			1,712
Net income		736			549			781			400			147
Balance Sheet Data
At period end: Total assets	$	105,342		$	93,989		$	94,931		$	80,977		$	65,325
Investment securities		22,455			26,586			25,073			22,335			18,121
Gross loans		75,573			58,273			62,615			48,032			35,075
Total deposits		84,988			73,197			75,338			64,904			49,710
Stockholders’ equity		8,622			7,563			7,828			7,340			4,798
Average Balance Sheet Data
Total assets	$	100,572		$	90,780		$	91,981		$	74,597		$	59,425
Investment securities		23,511			25,024			25,220			18,794			14,773
Gross loans		67,935			53,425			55,301			42,152			30,560
Total deposits		80,199			70,426			71,657			58,294			44,924
Stockholders’ equity		8,206			7,525			7,576			5,380			4,761
Significant Ratios
Net income to:
Average total assets		98	%		.81	%		.85	%		.54	%		.25	%
Average stockholders’ equity		11.96			8.67			10.31			7.44			3.09
Average stockholders’ equity to average total assets		8.16			8.29			8.24			7.21			8.01
Average gross loans to average deposits		84.71			75.86			77.20			72.31			68.00
Risk-based capital ratios:
Tier 1 Capital		11.33	%		12.24	%		11.98	%		13.98	%		12.31	%
Total Capital		12.42			13.29			13.03			14.96			13.25
Leverage Ratio		8.28			8.03			8.21			8.95			7.14
Per Share Data
Net income:
Basic		.99			.74		$	1.10		$	.70		$	.27
Fully Diluted		.94			.71			1.06			.68			.27
Cash dividends paid		N/A			N/A			N/A			N/A			N/A
Book value at end of period		11.68			10.95			11.04			10.37			8.75
Weighted average shares outstanding:
Basic		743,060			743,060			708,025			571,068			543,677
Fully Diluted		779,570			770,353			735,318			589,138			552,525

RISK FACTORS

Prospective investors, prior to making an investment decision, should consider carefully, in addition to the other information contained in this prospectus (including the financial statements and notes thereto), the following factors. This prospectus contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. Our actual results could differ materially. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, as well as those discussed elsewhere in this prospectus.

You may have difficulty selling your shares of MVB Financial.

Because no public market exists for the holding company’s common stock, you may have difficulty selling your shares. We cannot predict when, if ever, we could meet the listing qualifications of the Nasdaq Stock Market’s National Market Tier or when we may trade on the Nasdaq Bulletin Board. We cannot assure you that there will be an active public market for the shares in the near future.

The banking business is very competitive.

The banking business is generally a highly competitive business. As of June 30, 2004, the most recent period for which information is available, there were 4 other banks in MVB’s market area. The total Marion County commercial bank deposits, which includes a total of 18 banking offices, as of June 30, 2004, were in excess of $584 million. At this same date MVB had a 14% share of the Marion County commercial bank deposits while being open only 4½ years. The First Exchange Bank of Mannington and MVB represent Marion County’s only locally owned banks, as the other existing commercial banks have their parent-company headquarters in Wheeling, West Virginia (WesBanco), Charlotte, North Carolina (BB&T), and Columbus, Ohio (Huntington National Bank).

For most of the services which MVB provides, there is also competition from financial institutions other than commercial banks. For instance, Fairmont Federal Credit Union with five offices in Marion County, Marion County School Employees Federal Credit Union, United Federal Credit Union, and U. S. Employees Credit Union compete for deposits and loans in Marion County. There are also various issuers of commercial paper and money market funds that actively compete for funds and for various types of loans. Further, there are three offices of the national brokerage concern, Edward Jones in our market area. In addition, some traditional banking services or competing services are offered by insurance companies, investment counseling firms and other business firms and individuals. Many of MVB’s competitors have significantly greater financial and marketing resources than MVB has.

The existence of larger financial institutions in Fairmont, and Marion Counties, West Virginia, some of which are owned by larger regional or national companies, influence the competition in MVB’s market area. The principal competitive factors in the market for deposits and loans are interest rates, either paid on deposits or charged on loans. West Virginia law allows statewide branch banking which provides increased opportunities for MVB, but it also increases the potential competition for MVB in its service area. In addition, in 1994, Congress passed the Riegle-Neal Interstate Banking and Branching Efficiency Act. Under this Act, absent contrary action by a state’s legislature, interstate branch banking was allowed to occur after June 1, 1997. States are permitted to elect to participate to a variety of degrees in interstate banking or states may elect to “opt out.” In 1996, the West Virginia Legislature elected to “opt in.” Accordingly, out-of-state banks may form de novo banks or may acquire existing branches of West Virginia banks on a reciprocal basis.

In the future, the bank’s lending limit could create a competitive disadvantage for the bank.

In the future, the bank may not be able to attract larger volume customers because the size of loans that the bank can offer to potential customers is less than the size of the loans that many of the bank’s larger competitors can offer. Accordingly, the bank may lose customers seeking large loans to BB&T, WesBanco and Huntington National Bank. We anticipate that our lending limit will continue to increase proportionately with the bank’s growth in earnings and as a result of the stock sale described herein; however, we cannot guarantee that the bank can successfully attract or maintain larger customers.

The bank engages in commercial and consumer lending activities which are riskier than residential real estate lending.

MVB makes loans that involve a greater degree of risk than loans involving residential real estate lending. Commercial business loans may involve greater risks than other types of lending because they are often made based on

varying forms of collateral, and repayment of these loans often depends on the success of the commercial venture. Consumer loans may involve greater risk because adverse changes in borrowers’ incomes and employment after funding of the loans may impact their abilities to repay the loans.

The bank’s loan portfolio at September 30, 2004, consists of the following:


Type of Loan	Percentage of Portfolio
Residential Real Estate Loans	31.1	%
Commercial Loans, principally real estate secured	47.3	%
Consumer Loans	21.6	%

The bank has limited control over its profitability because the bank cannot control the various factors that can cause fluctuations in interest rates.

Aside from credit risk, the most significant risk resulting from MVB’s normal course of business, extending loans and accepting deposits, is interest rate risk. If market interest rate fluctuations cause MVB’s cost of funds to increase faster than the yield of its interest-earning assets, then its net interest income will be reduced. MVB’s results of operations depend to a large extent on the level of net interest income, which is the difference between income from interest-earning assets, such as loans and investment securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Interest rates are highly sensitive to many factors that are beyond the bank’s control, including general economic conditions and the policies of various governmental and regulatory authorities.

To effectively evaluate the results from the Interest Rate Sensitive model used to simulate various interest rate scenarios, the bank’s Asset/Liability Committee has determined that for an immediate change, either an increase or decrease of 1 percent in interest rates, the net interest income over the next one year period should not vary more than 10 percent from that projected by the model under current interest rates and 15% over a two-year period. The range for an immediate two percent change in interest rates, an increase or decrease, is 15% over one year and 25% in year 2. MVB is in compliance with this policy as of June 30, 2004. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Funding Sources.”

The bank’s success depends on the bank’s management team.

The departure of one or more of the bank’s officers or other key personnel could adversely affect the bank’s operations and financial position. The bank’s management makes most decisions that involve the bank’s operations.

TERMS OF THE OFFERING

MVB Financial is offering up to 286,000 shares of common stock at a cash price of $14.00 per share. Each investor must execute a subscription agreement and deliver $14.00 for each share the investor wishes to acquire. Checks must be made payable to “MVB Financial Corp.” Subject to the provisions below, each investor must purchase a minimum of 100 shares and may purchase no more than 5% of the offering (i.e., 14,300 shares). Notwithstanding the foregoing, existing shareholders may purchase fewer than 100 shares, if their percentage of outstanding shares prior to the offering times the number of shares offered would be less than 100, up to a maximum of 5% discussed above. At the board’s discretion, MVB Financial may waive the maximum amount of shares that may be purchased. Further, MVB Financial reserves the right to cancel or modify subscriptions, in whole or in part, for any reason. The company also reserves the right to reject any and all subscriptions and to determine the order in which it will accept subscriptions. The full subscription price per share must be paid at the time an investor subscribes for shares, unless the company agrees to other arrangements concerning the time and place of full payment.

USE OF PROCEEDS

MVB Financial will use the proceeds of this offering to:

•

Expand into the Harrison County, West Virginia market and support the growth of the bank in its current market area;

•

Increase the lending capacity of the bank on an individual and aggregate basis;

•

Fund construction of a Harrison County branch of The Monongahela Valley Bank, Inc.

•

Increase the branding awareness of the MVB name; and

•

General corporate purposes

CAPITALIZATION

(Unaudited)

September 30, 2004

The following table sets forth our actual capitalization as of September 30, 2004, and December 31, 2003.


	Sept 30, 2004			Dec 31, 2003
	(in thousands)
	(Unaudited)
Stockholders equity:
Common Stock, $1.00 per value, 4,000,000 shares authorized; 743,060 and 708,025 issued and outstanding at September 30, 2004 and December 31, 2003, respectively	$	743		$	708
Additional paid-in capital		6,975			6,537
Treasury stock		(9	)		0
Retained earnings		1,005			742
Accumulated other comprehensive income <loss>		(92	)		(159	)

Total Capitalization	$	8,622		$	7,828

MARKET PRICE AND DIVIDEND DATA

The company’s common stock is not traded on any stock exchange or over the counter. Shares of the company’s common stock are occasionally bought and sold by private individuals, firms or corporations, and the company may not have knowledge of the purchase price or the terms of the purchase. Trading of shares of the company’s common stock is very limited. Because of its fairly recent formation, the company has not paid cash dividends. On June 1, 2001, the company issued stock in connection with a 5% stock dividend. An additional 5% stock dividend was issued August 15, 2004.

MVB Financial’s common stock is owned, of record, by approximately 815 shareholders.

MVB Financial’s stockholders are entitled to receive dividends when and as declared by their respective boards of directors, subject to various regulatory restrictions. Dividends of the bank are subject to the restrictions contained in W.Va. code § 31A-4-25. That statute provides that not less than one-tenth part of the net profits of the preceding half-year (in the case of quarterly or semi-annual dividends) or the preceding two consecutive half-year periods (in the case of annual dividends) must be carried to a bank’s surplus fund until the surplus fund equals the amount of its capital stock. The prior approval of the West Virginia Commissioner of Banking is required if the total of all dividends declared by a state bank in any calendar year will exceed the bank’s net profits for that year combined with its retained net profits for the preceding two years. The statute defines “net profits” as the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets after deducting all current operating expenses, actual losses and all federal and state taxes.

Quarterly Market Price Information

2004 ^(a)

2003

2002

2001

Estimated
Market Value
Per Share

Estimated
Market Value
Per share

High

Low

High

Low

High

Low

High

Low

First Quarter

12.38

11.90

11.80

10.47

9.87

Second Quarter

12.86

12.38

11.90

10.47

9.97

Third Quarter

13.50

^(b)

13.50

^(b)

12.38

10.47

Fourth Quarter

—

12.38

10.47

+	Information from June 30, 2004 through June 1, 2001 is adjusted for a 5% stock dividend as of August 15, 2004 to holders of record July 1, 2004.

++	Information prior to June 1, 2001, is adjusted for the 5% stock dividend noted above and a 5% stock dividend paid June 1, 2001.

^(a)	prior to January 1, 2004, prices reflect trades in the bank’s stock. Effective January 1, 2004 and following, prices reflect trades in MVB Financial stock.

^(b)	through August 31, 2004

Table of Equity Compensation Plan Information


Plan Category	Number of securities to be issued upon exercise of outstanding options warrants and rights		Weighted-average exercise price of outstanding options warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)			(c)
Equity compensation plans approved by security holders	40,829	*	$	10.14	*	14,296	*

*	adjusted for stock dividends effective June 1, 2001 and August 15, 2004

Directors of MVB Financial and MVB executive officers own or may acquire 288,411 shares of common stock or 37.74% of the related shares.

DESCRIPTION OF BUSINESS

You should read the following description of our business in conjunction with the information included elsewhere in this prospectus. This description contains certain forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from the results discussed in the forward-looking statements as a result of certain of the factors set forth in “Risk Factors” and elsewhere in this prospectus.

MVB Financial is a West Virginia state-chartered bank holding company, which was chartered May 29, 2003 and acquired MVB on January 1, 2004. Its wholly owned subsidiary, MVB, opened for business on January 4, 1999. MVB’s deposits are insured by the FDIC. MVB engages in general banking business within its primary market area of Marion County, West Virginia. Its extended market is the adjacent counties of Harrison, Monongalia and Taylor, all in West Virginia. The main office is located at 301 Virginia Avenue, Fairmont, West Virginia. As of December 31, 2003, MVB had total assets of $94.9 million, loans of $62.6 million, deposits of $75.3 million and shareholders’ equity of $7.82 million, compared to $81.0, $48.0, $64.9 and $7.3 as of December 31, 2002, respectively. By September 2004, total assets were $105.3 million, while loans were $75.6 million and deposits were $85.0 million. Shareholders equity approximated $8.6 million at this same date.

Recent Additions

To date, MVB Financial’s only acquisition has been MVB.

Banking Services

MVB provides individuals, businesses and local governments with a broad range of loan products, including personal lines of credit, commercial, real estate, and installment loans and deposit products, including checking, savings, NOW and money market accounts, certificates of deposit, and individual retirement accounts. MVB currently does not provide trust services. MVB also offers non-deposit investment products through an association with a broker dealer.

The FDIC insures all deposit accounts up to the maximum allowed by law (generally $100,000 per depositor, subject to aggregation rules). MVB solicits these accounts from individuals, businesses, associations, organizations and government authorities.

MVB also offers commercial and personal loans. Commercial loans include both secured and unsecured loans for working capital and purchase of equipment and machinery. Consumer loans include secured and unsecured loans for financing automobiles, home improvements, education and personal investments. MVB also originates mortgage loans as well as commercial and residential construction loans.

The principal economic risk associated with each of the categories of anticipated loans is the creditworthiness of MVB’s borrowers. With any loan category, the level of risk increases or decreases depending on economic conditions prevailing from time to time. Unsecured loans in all categories have a higher risk than secured loans.

MVB makes a substantial portion of its loans to working individuals, small businesses and professional persons. These types of loans should provide opportunities to establish long-term relationships but may also be credits that are less able to withstand unforeseen economic, competitive and financial conditions than more substantial borrowers. The risk associated with real estate loans and installment loans to individuals varies based on employment levels, fluctuations in value of residential real estate and other conditions that affect the ability of customers to repay indebtedness. The risk associated with commercial loans varies based upon the strength and activity of the local economics of MVB’s market areas. The risk associated with real estate construction loans varies based upon supply and demand for the type of real estate under construction. Further, real estate construction loans are subject to special risks due to conditions beyond a borrower’s control, including cost overruns, adverse weather, labor strikes, unavailability of materials and inability to obtain governmental approvals.

MVB’s loan underwriting criteria have been developed and are formulated in its written credit policy. The credit policy is a comprehensive lending policy, which includes underwriting standards for all categories of loans MVB offers. MVB’s lending policy includes provisions that promote a diversified loan portfolio to reduce MVB’s vulnerability to risks associated with any specific category of loans.

MVB’s lending activities are subject to a variety of lending limits imposed by federal and state law. While differing limits apply in certain circumstances based on the type of loan or the nature of the borrower (including the borrower’s relationship to MVB), in general MVB is subject to a loan-to-one borrower limit of an amount equal to (i) 15% of MVB’s unimpaired capital and surplus in the case of loans which are not fully secured by readily marketable collateral, or (ii) 25% of the unimpaired capital and surplus if the excess over 15% is fully secured by readily marketable collateral. Unless MVB sells participations in its loans to other financial institutions, MVB cannot meet all lending needs of loan customers requiring aggregate extensions of credit above these limits. Additionally, MVB may voluntarily choose to impose a policy limit on loans to a single borrower that is less than the legal limit.

MVB may not make any extension of credit to any director, executive officer, or principal shareholder of MVB, or to any related interest of such person, unless the Board of Directors or a committee thereof approves the extension of credit, and MVB makes the loan on terms no more favorable to such person than would be available to a person not affiliated with MVB.

Properties

The bank’s main office is currently housed in a banking facility located at 301 Virginia Avenue, Fairmont, West Virginia, at the intersection of Third Street and Virginia Avenue on a parcel of real estate containing approximately 42,000 square feet, which the bank owns. The parcel fronts on Virginia Avenue and is totally

accessible to Third and Fourth Streets to the north and south, respectively, from Virginia Avenue. This location is in the heart of downtown Fairmont with easy access to nearly any other part of town.

The facility, built for the bank in 1998, is constructed of brick and frame components. The main floor covers 7,000 square feet. The second floor area approximates 3,000 square feet of office space, which was finished in 2001. The facility is equipped with five inside teller windows and five outside drive-in lanes, one of which is served by an ATM. An after-hours night deposit is also available. Off-street parking is available for approximately 50 cars. A large vault is also an integral part of the building.

A second office is inside the Shop-N-Save Supermarket in the Middletown Mall. The mall is in the town of White Hall, West Virginia, adjacent to Fairmont, West Virginia. The White Hall area of Marion County is developing rapidly, especially in the area of technology related business organizations. In addition, the Middletown Mall and the surrounding land is currently being redeveloped with new tenants and facilities. The mall owners have a business plan that should continue to attract additional development and economic activity.

The facility, which is leased from the supermarket, approximates 600 square feet, which includes four teller stations and two offices. A night deposit and safe deposit boxes compliment the normal supermarket bank product offerings. This facility opened May 8, 2000.

As described elsewhere herein, MVB is in the process of establishing a full service facility in Bridgeport, Harrison County, West Virginia. The real estate will be leased for a period of twenty years at a monthly rental of $3,000 per month from an unaffiliated party. At the conclusion of the twenty year term, MVB has the right to purchase the property for a predetermined price. Should the property not be purchased, the lease contains a provision for two additional rental periods of ten years each.

Permitted Non-Banking Activities

The Federal Reserve permits bank holding companies to engage in non-banking activities closely related to banking or managing or controlling banks. MVB Financial presently does not engage in, nor does it have any immediate plans to engage in, any non-banking activities bank holding companies are permitted to perform.

A notice of proposed non-banking activities must be furnished to the Federal Reserve and the West Virginia Board of Banking and Financial Institutions before MVB Financial engages in such activities, and an application must be made to the Federal Reserve and Banking Board concerning acquisitions by MVB Financial of corporations engaging in those activities. In addition, the Federal Reserve may, by order issued on a case-by-case basis, approve additional non-banking activities.

Market Area

MVB’s primary market area is Marion County, West Virginia, which includes a total of 18 banking facilities, including MVB’s two locations. Its extended market is the adjacent Counties of Harrison, Monongalia and Taylor Counties, West Virginia. MVB Financial is located on the south side of Third Street at Virginia Avenue in Fairmont, West Virginia, with a branch in the growing eastern section of Marion County.

United States Census Bureau data indicates that the Fairmont and Marion County, West Virginia populations have had somewhat different trends from 1980 to 2000. The population of Fairmont has fluctuated from 23,863 in 1980; 20,210 in 1990 and 21,678 in 2000, or a net decline of 2,185 or 9.2 %. Marion County increased its population from 1980 to 1990, 55,789 to 57,249, and decreased to 56,598 in 2000. These charges resulted in a net increase of 1.45 %. The Marion County population includes that of Fairmont. The result is that over the last 20 years, there has not been any significant change in population.

Unemployment in Marion County has improved compared to that of the State of West Virginia from November 1995 through June 2004, the latest date for which information is available. As of June 2004, the overall state rate was 5.4% compared to 5.6% for Marion County. During the same period of time, the Marion County unemployment rate has decreased from 8.9% to 5.6%, while the West Virginia rate declined from 7.5% to 5.4%. Of the four adjacent Counties, Marion’s unemployment rate is better than one and worse than three. The rates for Marion County in West Virginia are lower than one year ago when the rates were 6.6% and 6.3%, respectively. Future direction of unemployment will likely be driven by what occurs economically on the national level. History

seems to indicate that when the national and West Virginia economies improve, Marion County lags such improvement, and when the national and state economies falter, Marion County lags in deterioration.

Competition

The banking business is a highly competitive business. As of June 30, 2004, the latest period for which information is available, there were 4 other banks in MVB’s market area. The total Marion County commercial bank deposits, which include a total of 18 banking offices, as of June 30, 2004, were in excess of $584 million. At this same date MVB had a 14% share of the Marion County commercial bank deposits while being open only 5½ years. The First Exchange Bank of Mannington and MVB are Marion County’s only locally owned banks, as the other commercial banks have their parent-company headquarters in Wheeling, West Virginia (WesBanco), Charlotte, North Carolina (BB&T), and Columbus, Ohio (Huntington National Bank).

As of June 30, 2004, the bank deposits were $875 in Harrison County. Harrison County hosts a total of 31 banking offices, and as of June 30, 2004, MVB had no share of the Harrison County commercial bank deposits.

For most services which MVB provides, there is also competition from financial institutions other than commercial banks. Fairmont Federal Credit Union with five offices in Marion County, Marion County School Employees Federal Credit Union, United Federal Credit Union, and U. S. Employees Credit Union provide competition for loans and deposits. There are also various issuers of commercial paper and money market funds that actively compete for funds and for various types of loans. Further, there are three offices of the National Brokerage concern, Edward Jones. In addition, some traditional banking services or competing services are offered by insurance companies, investment counseling firms and other business firms and individuals. Many of MVB’s competitors have significantly greater financial and marketing resources than MVB.

The existence of larger financial institutions in Fairmont, Marion County, Clarksburg and Harrison County, West Virginia, some of which are owned by larger regional or national companies, influence the competition in MVB’s market area. The principal competitive factors in the market for deposits and loans are interest rates, either paid on deposits or charged on loans. West Virginia law allows statewide branch banking which provides increased opportunities for MVB, but it also increases the potential competition for MVB in its service area. In addition, in 1994, Congress passed the Riegle-Neal Interstate Banking and Branching Efficiency Act. Under this Act, absent contrary action by a state’s legislature, interstate branch banking may occur. States are permitted to elect to participate to a variety of degrees in interstate banking or states may elect to “opt out.” In 1996, the West Virginia Legislature elected to “opt in” effective May 31, 1997. Accordingly, out-of-state banks may form de novo banks or may acquire existing branches of West Virginia banks on a reciprocal basis.

Employees

MVB had 33 full-time and nine part-time employees on September 30, 2004. Four of the full-time employees and three of the part-time employees work at our branch office.

Legal Proceedings

MVB Financial is not involved in any legal proceeding. It’s wholly-owned subsidiary, MVB, is involved in routine legal actions, which are incidental to its business of commercial banking. There are no material amounts involved in these routine legal actions.

Supervision and Regulation

MVB Financial is regulated by the Federal Reserve Bank under the Bank Holding Company Act of 1956, as amended. MVB and virtually all aspects of its operations are subject to supervision, regulation and examination by the West Virginia Commissioner of Banking and the Federal Deposit Insurance Corporation (FDIC). A summary of some of the major regulatory issues follow. The summary is not exhaustive, and reference is made to applicable statutes and regulations for more detailed information regarding supervision and regulation of entities such as MVB Financial and MVB. Statutes, regulations and regulatory policies of the federal and West Virginia governments and their agencies are subject to change and it is impossible to predict the effects that any such changes may have upon MVB and its operations.

The following is a summary of certain statutes and regulations affecting MVB Financial and MVB and is qualified in its entirety by reference to such statutes and regulations:

Bank Holding Company Regulation . MVB Financial is a bank holding company under the Bank Holding Company Act of 1956, which restricts the activities of MVB Financial and any acquisition by MVB Financial of voting stock or assets of any bank, savings association or other company. MVB Financial is subject to the reporting requirements of, and examination and regulation by, the Federal Reserve Board. MVB Financial’s subsidiary bank is subject to restrictions imposed by the Federal Reserve Act on transactions with affiliates, including any loans or extensions of credit to MVB Financial or its subsidiaries, investments in the stock or other securities thereof and the taking of such stock or securities as collateral for loans to any borrower; the issuance of guarantees, acceptances or letters of credit on behalf of MVB Financial and its subsidiary; purchases or sales of securities or other assets; and the payment of money or furnishing of services to MVB Financial and other subsidiaries. MVB Financial is prohibited from acquiring direct or indirect control of more than 5% of any class of voting stock or substantially all of the assets of any bank holding company without the prior approval of the Federal Reserve Board. MVB Financial and its subsidiary are prohibited from engaging in certain tying arrangements in connection with extensions of credit and/or the provision of other property or services to a customer by MVB Financial or its subsidiary.

The Gramm-Leach-Bliley Act (also known as the Financial Services Modernization Act of 1999) permits bank holding companies to become financial holding companies. This allows them to affiliate with securities firms and insurance companies and to engage in other activities that are financial in nature. A bank holding company may become a financial holding company if each of its subsidiary banks is well capitalized, is well managed and has at least a satisfactory rating under the Community Reinvestment Act. No regulatory approval is required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve Board.

The Financial Services Modernization Act defines “financial in nature” to include: securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking activities; and activities that the Federal Reserve Board has determined to be closely related to banking. A bank also may engage, subject to limitations on investment, in activities that are financial in nature, other than insurance underwriting, insurance company portfolio investment, real estate development and real estate investment, through a financial subsidiary of the bank, if the bank is well-capitalized, well-managed and has at least a satisfactory Community Reinvestment Act rating.

Banking Subsidiary Regulation . The bank was chartered as a state bank and is regulated by the West Virginia Division of Banking and the Federal Deposit Insurance Corporation. Deposits of MVB are insured by the FDIC to the extent permissible under the law.

Federal Deposit Insurance Corporation

The FDIC insures the deposits of the bank, and the bank is subject to the applicable provisions of the Federal Deposit Insurance Act. The FDIC may terminate a bank’s deposit insurance upon finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the bank’s regulatory agency.

Capital Requirements

The FDIC has issued risk-based capital guidelines for banking organizations, such as the bank. The guidelines establish a systematic analytical framework that makes regulatory capital requirements more sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures into explicit account in assessing capital adequacy, and minimizes disincentives to holding liquid, low-risk assets. The risk-based ratio is determined by allocating assets and specified off-balance sheet commitments into four weighted categories, with higher levels of capital being required for categories perceived as representing greater risk.

Generally, under the applicable guidelines, the financial institution’s capital is divided into two tiers. “Tier 1,” or core capital, includes common equity, non-cumulative perpetual preferred stock (excluding auction rate issues) and perpetual preferred stock (excluding auction rate issues) and minority interests in equity accounts or consolidated subsidiaries, less goodwill and, with few exceptions, all other intangible assets. Additional elements of

“Tier 2,” or supplementary capital, includes, among other items, cumulative and limited-life preferred stock, hybrid capital instruments, mandatory convertible securities, qualifying subordinated debt, and the allowance for loan losses, subject to certain limitations, less required deductions. “Total capital” is the sum of Tier 1 and Tier 2 capital.

Financial institutions are required to maintain a risk-based ratio of 8%, of which 4% must be Tier 1 capital. The appropriate regulatory authority may set higher capital requirements when an institution’s particular circumstances warrant.

Banks are subject to “leverage ratio” guidelines involving a numerator defined as Tier 1 capital and a denominator defined as adjusted total assets (as defined by regulation). The bank regulatory agencies have established a 3% minimum Tier 1 leverage ratio applicable only to banks meeting certain specified criteria, including excellent assets quality, high liquidity, low interest rate exposure and the highest regulatory rating. Institutions not meeting these criteria are expected to maintain a ratio which exceeds the 3% minimum, by at least 100 to 200 basis points.

The guidelines also provide that financial institutions experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels, without significant reliance on intangible assets.

The bank currently exceeds all required capital ratios. Failure to meet applicable capital guidelines could subject the financial institution to a variety of enforcement remedies available to the federal regulatory authorities, including limitations on the ability to pay dividends, the issuance by the regulatory authority of a capital directive to increase capital and the termination of deposit insurance by the FDIC as well as to the measures described under the “Federal Deposit Insurance Corporation Improvement Act of 1991” as applicable to “undercapitalized” institutions.

“Undercapitalized” institutions are subject to growth limitations and are required to submit a capital restoration plan. If an “undercapitalized” institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. “Significantly undercapitalized” institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets and a cessation of receipt of deposits from correspondence banks. “Critically undercapitalized” institutions may not, beginning 60 days after becoming “critically undercapitalized,” make any payment of principal or interest on their subordinated debt. In addition, “critically undercapitalized” institutions are subject to appointment of a receiver or conservator.


Ratio	Minimum Well- Capitalized Ratio		MVB Ratio, Sept. 30, 2004		MVB Ratio, Sept. 30, 2003
Total risk-based capital ratio	10.0	%	12.42	%	13.29	%
Tier 1 risk-based capital ratio	6.00	%	11.23	%	12.24	%
Tier 1 leverage ratio	5.00	%	8.28	%	8.03	%

Federal and State Laws

The bank is subject to regulatory oversight under various consumer protection and fair lending laws. These laws govern, among other things, truth-in-lending disclosure, equal credit opportunity, fair credit reporting and community reinvestment. Failure to abide by federal laws and regulations governing community reinvestment could limit the ability of a bank to open a new branch or engage in a merger transaction. Community reinvestment regulations evaluate how well and to what extent a bank lends and invests in its designated service area, with particular emphasis on low-to-moderate income communities and borrowers in such areas.

Monetary Policy and Economic Conditions

The business of financial institutions is affected not only by general economic conditions, but also by the policies of various governmental regulatory agencies, including the Federal Reserve Board. The Federal Reserve Board regulates money and credit conditions and interest rates to influence general economic conditions primarily through open market operations in U.S. government securities, changes in the discount rate on bank borrowings and changes in the reserve requirements against depository institutions’ deposits. These policies and regulations significantly affect the overall growth and distribution of loans, investments and deposits, and the interest rates charged on loans, as well as the interest rates paid on deposits and accounts.

The monetary policies of the Federal Reserve Board have had a significant effect on the operating results of financial institutions in the past and are expected to continue to have significant effects in the future. In view of the changing conditions in the economy and the money markets and the activities of monetary and fiscal authorities, MVB cannot definitely predict future changes in interest rates, credit availability or deposit levels.

Effect of Environmental Regulation

The bank’s primary exposure to environmental risk is through lending activities. In cases when management believes environmental risk potentially exists, the bank mitigates its environmental risk exposures by requiring environmental site assessments at the time of loan origination. Commercial real estate parcels that pose higher than normal potential for environmental impact, because of present and past uses of the subject property and adjacent sites normally are required to be environmentally evaluated. Environmental assessments are typically required prior to any foreclosure activity involving non-residential real estate collateral.

Management reviews residential real estate loans with inherent environmental risk on an individual basis and makes decisions based on the dollar amount of the loan.

MVB anticipates no material effect on anticipated capital expenditures, earnings or competitive position as a result of compliance with federal, state or local environmental protection laws or regulations.

International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (USA Patriot Act)

The International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (the “Patriot Act”) was adopted in response to the September 11, 2001 terrorist attacks. The Patriot Act provides law enforcement with greater powers to investigate terrorism and prevent future terrorist acts. Among the broad-reaching provisions contained in the Patriot Act are several designed to deter terrorists’ ability to launder money in the United States and provide law enforcement with additional powers to investigate how terrorists and terrorist organizations are financed. The Patriot Act creates additional requirements for banks, which were already subject to similar regulations. The Patriot Act authorizes the Secretary of the Treasury to require financial institutions to take certain “special measures” when the Secretary suspects that certain transactions or accounts are related to money laundering. These special measures may be ordered when the Secretary suspects that a jurisdiction outside of the United States, a financial institution operating outside of the United States, a class of transactions involving a jurisdiction outside of the United States or certain types of accounts are of “primary money laundering concern.” The special measures include the following: (a) require financial institutions to keep records and report on the transactions or accounts at issue; (b) require financial institutions to obtain and retain information related to the beneficial ownership of any account opened or maintained by foreign persons; (c) require financial institutions to identify each customer who is permitted to use a payable-through or correspondent account and obtain certain information from each customer permitted to use the account; and (d) prohibit or impose conditions on the opening or maintaining of correspondent or payable-through accounts.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion contains statements that refer to future expectations, contain projections of the results of operations or of financial condition, or state other information that is “forward-looking.” “Forward-looking” statements are easily identified by the use of words such as “could,” “anticipate,” “estimate,” “believe,” and similar words that refer to a future outlook. There is always a degree of uncertainty associated with “forward-looking” statements. MVB Financial’s management believes that the expectations reflected in such statements are based upon reasonable assumptions and on the facts and circumstances existing at the time of these disclosures. Actual results could differ significantly from those anticipated.

Many factors could cause MVB Financial’s actual results to differ materially from the results contemplated by the forward-looking statements. Some factors, which could negatively affect the results, include:

•

General economic conditions, either nationally or within MVB Financial’s markets, could be less favorable than expected;

•

Changes in market interest rates could affect interest margins and profitability;

•

Competitive pressures could be greater than anticipated;

•

Legal or accounting changes could affect MVB Financial’s results;

•

Adverse changes could occur in the securities and investments markets; and

•

Those risk factors on page 3 of this prospectus.

In Management’s Discussion and Analysis we review and explain the general financial condition and the results of operations for MVB Financial and its subsidiary. We have designed this discussion to assist you in understanding the significant changes in MVB Financial’s financial condition and results of operations. We have used accounting principles generally accepted in the United States to prepare the accompanying consolidated financial statements.

For years prior to 2004, Conley CPA Group, PLLC were responsible for both the internal audit function and for auditing the financial statements. Their independent audit report is included in this prospectus. As a result of The Sarbanes Oxley Act of 2002, the internal and external audit functions must be completed by two different independent accountants. Conley CPA Group, PLLC will continue to perform the semi-annual internal audits. Brown Edwards & Company, L.L.P. will conduct the 2004 examination of their financial statements of MVB Financial and subsidiary.

Statistical Financial Information Regarding MVB Financial

The following September 30, 2004 comparative information below has been derived from MVB Financial Consolidated Financial Statements. Information for all other periods is from MVB’s Financial Statement.


(Dollars in Thousands, except Ratios and Per Share Data)	Nine-months ended September 30						Years ended December 31
	2004			2003			2003			2002
	(Unaudited)
Operating Data
For the period ended:
Total interest income	$	4,068		$	3,570		$	4,852		$	4,227
Total interest expense		1,154			1,307			1,702			1,852
Net interest income		2,914			2,263			3,150			2,375
Provision for loan losses		192			161			223			225
Other income		509			351			598			458
Other expense		1,985			1,712			2,348			2,033
Net income (loss)		736			549			781			400
Balance Sheet Data
At period end:
Total assets	$	105,342		$	93,989		$	94,931		$	80,977
Investment securities		22,455			26,586			25,073			22,335
Gross loans		75,573			58,273			62,615			48,032
Total deposits		84,988			73,197			75,338			64,904
Stockholders’ equity		8,622			7,563			7,828			7,340
Average Balance Sheet Data
Total assets	$	100,572		$	90,780		$	91,981		$	74,597
Investment securities		23,511			25,024			25,220			18,794
Gross loans		67,935			53,425			55,301			42,152
Total deposits		80,199			70,426			76,895			63,310
Stockholders’ equity		8,206			7,525			7,576			5,380
Significant Ratios
Net income to:
Average total assets		.98	%		.81	%		.85	%		.54	%
Average stockholders’ equity		11.96			8.67			10.31			7.44
Average stockholders’ equity to average total assets		8.16			8.29			8.24			7.21
Average gross loans to average deposits		84.71			75.86			77.20			72.31
Leverage ratio		8.28			8.03			8.21			8.95
Risk-based capital ratios:
Tier 1 Capital		11.33			12.24			11.98			13.98
Total Capital		12.42			13.29			13.03			14.96
Per Share Data
Net income:
Basic	$	.99		$	.74		$	1.10		$	.70
Diluted		.94			.71			1.06			.68
Cash dividends paid		N/A			N/A			N/A			N/A
Book value at end of period		11.68			10.95			11.04			10.37
Weighted-average shares outstanding
Basic		743,060			743,060			708,025			571,068
Diluted		779,570			770,353			735,318			589,138

Monongahela Valley Bank

Average Balances and Analysis of Net Interest Income:


	Nine Months Ended September 2004							Nine Months Ended September 2003
(Dollars in thousands)	Average Balance			Income/ Expense		Average Yield/ Rate		Average Balance			Income/ Expense		Average Yield/ Rate
Securities ⁽¹⁾ :	$	23,511		$	619	3.51	%	$	25,024		$	579	3.09	%
Loans ^{(2) (3) (4)}
Commercial		34,205			1,653	6.44	%		24,586			1,252	6.79	%
Real estate		20,870			958	6.12	%		17,643			881	6.66	%
Consumer		12,860			798	8.27	%		11,196			770	9.17	%
Allowance for loan losses		(749	)						(578	)

Net Loans		67,186			3,409	6.77	%		52,847			2,903	7.32	%
Short-term investments:
Interest-bearing deposits		3,941			40	1.35	%		6,671			80	1.60	%
Federal funds sold		148			1	0.90	%		1,043			8	1.02	%

Total		4,089			41	1.34	%		7,714			88	1.52	%

Total earning assets		94,786			4,069	5.72	%		85,585			3,570	5.56	%
Other assets		5,786							5,195

Total assets	$	100,572						$	90,780

Interest-bearing deposits:
Savings	$	26,770			182	0.91	%	$	24,102			230	1.27	%
Demand		7,471			28	0.50	%		6,064			27	0.59	%
Time		37,395			796	2.84	%		33,232			866	3.47	%

Total		71,636			1,006	1.87	%		63,398			1,123	2.36	%
Borrowings		11,893			148	1.66	%		12,469			184	1.97	%

Total interest bearing liabilities		83,529			1,154	1.84	%		75,867			1,307	2.30	%
Noninterest-bearing demand deposits		8,563							7,028
Other liabilities		274							360

Total liabilities		92,366							83,255
Stockholders’ equity		8,206							7,525

Total liabilities and stockholders’ equity	$	100,572						$	90,780

Interest rate spread				$	2,915	3.88	%				$	2,263	3.26	%

Interest income/earning assets						5.72	%						5.56	%
Interest expense/earning assets						1.62	%						2.04	%

Net yield on earning assets (net interest margin)						4.10	%						3.53	%

⁽¹⁾	Average balances of investment securities based on carrying value.

⁽²⁾	Loan fees included in interest income through September 2004 were $230 and $188 in 2003.

⁽³⁾	For 2004 and 2003 income is computed on a fully tax-equivalent basis assuming tax rates of 40% and 34%.

Monongahela Valley Bank

Average Balances and Analysis of Net Interest Income:


	2003							2002
(Dollars in thousands)	Average Balance			Income/ Expense		Average Yield/ Rate		Average Balance			Income/ Expense		Average Yield/ Rate
Securities ⁽¹⁾ :	$	25,220		$	802	3.18	%	$	18,794		$	897	4.77	%
Loans ^{(2) (3)}
Commercial		25,684			1,722	6.70	%		18,459			1,293	7.00	%
Real estate		18,083			1,190	6.58	%		14,401			1,013	7.03	%
Consumer		11,534			1,034	8.96	%		9,292			834	8.98	%
Allowance for loan losses		(600	)						(445	)

Net Loans		54,701			3,946	7.21	%		41,707			3,140	7.53	%
Short-term investments:
Interest-bearing deposits		5,835			94	1.61	%		8,272			173	2.09	%
Federal funds sold		957			10	1.04	%		1,032			16	1.55	%

Total		6,792			104	1.53	%		9,304			189	2.03	%

Total earning assets		86,713			4,852	5.60	%		69,805			4,226	6.05	%
Other assets		5,268							4,792

Total assets	$	91,981						$	74,597

Interest-bearing deposits:
Savings	$	24,638			296	1.20	%	$	21,135			443	2.10	%
Demand		6,226			35	0.56	%		4,938			35	0.71	%
Time		33,614			1,127	3.35	%		26,659			1,159	4.35	%

Total		64,478			1,458	2.26	%		52,732			1,637	3.10	%
Borrowings		12,417			244	1.97	%		10,578			214	2.02	%

Total interest bearing liabilities		76,895			1,702	2.21	%		63,310			1,851	2.92	%
Noninterest-bearing demand deposits		7,178							5,562
Other liabilities		332							345

Total liabilities		84,405							69,217
Stockholders’ equity		7,576							5,380

Total liabilities and stockholders’ equity	$	91,981						$	74,597

Interest rate spread				$	3,150	3.38	%				$	2,375	3.13	%

Interest income/earning assets						5.60	%						6.05	%
Interest expense/earning assets						1.96	%						2.65	%

Net yield on earning assets (net interest margin)						3.63	%						3.40	%

⁽¹⁾	Average balances of investment securities based on carrying value.

⁽²⁾	Loan fees included in interest income for 2003 were $243 and $148 in 2002.

⁽³⁾	For 2003 and 2002 income is computed on a fully tax-equivalent basis assuming a tax rate of 34% and 30%.

Monongahela Valley Bank

Rate/Volume Analysis of Changes in Interest Income and Expense:


(Dollars in thousands)	2003 vs. 2002 Increase (Decrease) Due to change in:
(Dollars in thousands)	Volume ⁽¹⁾			Rate ⁽¹⁾			Net
Interest earning assets:
Loan portfolio:
Commercial	$	487		-$	58		$	429
Real Estate		246			(69	)		177
Consumer		201			(1	)		200

Net loans	$	934		-$	128		$	806
Securities		255			(350	)		(95	)
Federal funds sold and other		(44	)		(42	)		(86	)

Total interest-earning assets	$	1,145		-$	520		$	625

Interest-bearing liabilities:
Savings deposits	$	13		-$	23		-$	10
Interest-bearing demand deposits		60			(197	)		(137	)
Time deposits		266			(298	)		(32	)
Borrowings		36			(6	)		30

Total interest-bearing liabilities	$	375		-$	524		-$	149

Net interest income	$	770		$	4		$	774


	September 30, 2004 vs. September 30, 2003 Increase (Decrease) Due to change in:
(Dollars in thousands)	Volume ⁽¹⁾			Rate ⁽¹⁾			Net
Interest earning assets:
Loan portfolio:
Commercial	$	624		-$	223		$	401
Real Estate		203			(126	)		77
Consumer		144			(116	)		28

Net loans	$	971		-$	465		$	506
Securities		(49	)		89			40
Federal funds sold and other		(48	)		1			(47	)

Total interest-earning assets	$	874		-$	375		$	499

Interest-bearing liabilities:
Savings deposits	$	31		-$	79		-$	48
Interest-bearing demand deposits		8			(7	)		1
Time deposits		134			(204	)		(70	)
Borrowings		(11	)		(25	)		(36	)

Total interest-bearing liabilities	$	162		-$	315		-$	153

Net interest income	$	712		-$	60		$	652

⁽¹⁾	The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

Contractual maturities at December 31, 2003


(Dollars in thousands)	U. S. Government Agencies			Municipal securities			Other securities			Total securities
Within one year
Amortized cost	$	5,139		$	260		$	1,017		$	6,416
Fair value	$	5,110		$	261		$	966		$	6,337
Yield		2.65	%		2.64	%		3.50	%		2.79	%
1 to 5 years
Amortized cost		9,026			222			1,199			10,447
Fair value		8,999			222			1,222			10,443
Yield		3.36	%		2.64	%		4.38	%		3.47	%
5 to 10 years
Amortized cost		7,325			644			—			7,969
Fair value		7,215			634			—			7,849
Yield		4.51	%		4.66	%		0.00	%		4.52	%
Over 10 years
Amortized cost		1			—			443			444
Fair value		1			—			443			444
Yield		4.25	%		0.00	%		1.25	%		1.25	%

Total amortized cost	$	21,491		$	1,126		$	2,659		$	25,276
Total fair value	$	21,325		$	1,117		$	2,631		$	25,073
Total yield		3.61	%		3.79	%		3.63	%		3.68	%

Contractual maturities at December 31, 2002


(Dollars in thousands)	U. S. Government Agencies			Municipal securities			Other securities			Total securities
Within one year
Amortized cost	$	7,950		$	—		$	254		$	8,204
Fair value	$	8,055		$	—		$	261		$	8,316
Yield		3.73	%		0.00	%		4.93	%		3.77	%
1 to 5 years
Amortized cost		9,274			—			1,490			10,764
Fair value		9,451			—			1,501			10,952
Yield		4.30	%		0.00	%		4.86	%		4.38	%
5 to 10 years
Amortized cost		2,150			—			—			2,150
Fair value		2,163			—			—			2,163
Yield		4.92	%		0.00	%		0.00	%		4.92	%
Over 10 years
Amortized cost		655			—			264			919
Fair value		653			—			264			917
Yield		6.51	%		0.00	%		3.25	%		5.56	%

Total amortized cost	$	20,029		$	—		$	2,008		$	22,037
Total fair value	$	20,322		$	—		$	2,026		$	22,348
Total yield		4.21	%		0.00	%		4.66	%		4.25	%

The yields on tax exempt obligations have been computed on a tax equivalent basis.

Introduction

The following discussion and analysis of the Consolidated Financial Statements of MVB Financial or MVB is presented to provide insight into management’s assessment of the financial results and operations of MVB Financial. MVB is the sole operating subsidiary of MVB Financial and all comments, unless otherwise noted, are related to the bank. You should read this discussion and analysis in conjunction with the audited Financial Statements and interim Unaudited Consolidated Financial Statements and footnotes and the ratios and statistics contained elsewhere in this Form SB-2.

Application of Critical Accounting Policies

MVB Financial and MVB’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources, when available. When third-party information is not available, valuation adjustments are estimated in good faith by management primarily through the use of internal forecasting techniques.

The most significant accounting policies followed by the bank are presented in Note 1 to the audited annual financial statements. These policies, along with the disclosures presented in the other financial statement notes and in management’s discussion and analysis of operations, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for loan losses to be the accounting area that requires the most subjective or complex judgments, and as such could be most subject to revision as new information becomes available.

The allowance for loan losses represents management’s estimate of probable credit losses inherent in the loan portfolio. Determining the amount of the allowance for loan losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the amount and timing of homogeneous loans based on historical loss experience and consideration of current economic trends and conditions, all of which may be susceptible to significant change. The loan portfolio also represents the largest asset type in the balance sheet. Note 1 to the financial statements describes the methodology used to determine the allowance for loan losses and a discussion of the factors driving changes in the amount of the allowance for loan losses is included in the Allowance for Loan Losses section of this financial review.

Summary Financial Results

The bank began operations on January 4, 1999, with the goal of providing community banking to the Marion County, West Virginia market area. By the end of the fifth year of operations December 31, 2003, MVB had reached nearly $95 million in total assets.

MVB earned $781,000 in 2003 compared to $400,000 in 2002. The earnings equated to a return on average assets of .85% and a return on average equity of 10.31%, compared to prior year results of .54% and 7.44%, respectively. Basic earnings per share was $1.10 in 2003 compared to $.70 in 2002. Diluted earnings per share was $1.06 in 2003 compared to $.68 in 2002.

While operating in a challenging interest rate environment, the bank achieved a 5.60% yield on earning assets in 2003 compared to 6.05% in 2002. Despite being located in a very competitive market, loans increased to $62.6 million at December 31, 2003, from $48.0 million at December 31, 2002. The bank has minimal delinquency and no non-accrual loans or other non-performing, classified or renegotiated loans or non-performing assets at December 31, 2003.

Deposits increased to $75.3 million at December 31, 2003, from $64.9 million at December 31, 2002, due to our continual increase in market penetration in the Marion County market. MVB offers an uncomplicated product mix accompanied by a simple fee structure that continues to attract customers at a steady pace. The overall cost of funds for the bank was 1.96% in 2003 compared to 2.65% in 2002. This cost of funds, combined with the earning asset yield, resulted in a net interest margin of 3.63% in 2003 compared to 3.40% in 2002.

The bank maintained a high-quality, short-term investment portfolio during 2003 to provide liquidity in the balance sheet, to fund loan growth, and to pledge against customers accounts. U.S. government agency securities comprised the majority of the bank’s investment portfolio at December 31, 2003 and 2002.

Interest Income and Expense

Net interest income is the amount by which interest income on earning assets exceeds interest expense incurred on interest-bearing liabilities. Interest-earning assets include loans and investment securities. Interest-bearing liabilities include interest-bearing deposits, borrowed funds such as sweep accounts and repurchase agreements and advances from the Federal Home Loan Bank of Pittsburgh. Net interest income remains the primary source of revenue for MVB. Net interest income is impacted by changes in market interest rates, as well as the mix of interest-earning assets and interest-bearing liabilities. Net interest income is also impacted favorably by increases in non-interest bearing demand deposit balances and equity.

Net interest margin is calculated by dividing net interest income by average interest-earning assets and serves as a measurement of the net revenue stream generated by MVB’s balance sheet. As noted above, the net interest margin was 3.63% in 2003 compared to 3.40% in 2002. The net interest margin has grown significantly as a result in the reallocation of assets from investments to loans. To the extent the MVB market area permits, this reallocation will continue. Management’s estimate of the impact of future changes in market interest rates is shown in the section captioned “Interest Rate Risk.”

During 2003, net interest income increased by $750,000 or 31.6% to $3.15 million in 2003 from $2.475 million in 2002. This increase is largely due to the growth in average earning assets, primarily $13.15 million in loans. Average total earning assets were $86.7 million in 2003 compared to $69.8 million in 2002. Average total loans grew to $55.3 million in 2003 from $42.2 million in 2002. Primarily as a result of this growth, total interest income increased by $625,000, or 14.8%, to $4.9 million in 2003 from $4.2 million in 2002. Average interest-bearing liabilities, mainly deposits, likewise increased in 2003 by $13.6 million. Average interest-bearing deposits grew to $64.5 million in 2003 from $52.7 million in 2002. Even though average interest-bearing liabilities increased $13.6 million, total interest expense decreased by $179,000 as a result of a nearly 85 basis point decline in interest cost from 2002 to 2003. Interest expense on deposits for 2003 approximated $1.5 million versus $1.6 million in 2002.

Despite the growth in the volume of earning assets during 2003, the yield on earning assets decreased to 5.60% in 2003 from 6.05% in 2002. This decline was due to the lower interest rate environment as the yield on net loans decreased to 7.21% in 2003, compared to 7.53% in 2002. In addition, MVB’s investment portfolio yield declined significantly during 2003 to 3.18% from 4.77% in 2002 due to the declining interest rate environment in 2003 and 2002 and the short-term nature of the portfolio. This maturity structure is designed to provide funding for loan growth and liquidity needs.

The cost of interest-bearing liabilities decreased to 2.17% in 2003 from 2.67% in 2002. This decline is primarily a result of the lower interest rates paid on deposit products.

Provision for Loan Losses

MVB’s provision for loan losses for 2003 and 2002 were approximately equal, $223,000 in 2003 versus $225,000 in 2002. While outstanding loans increased during 2003, net charge-offs significantly decreased, $37,000 in 2003 compared to $77,000 in 2002.

Being a reasonably new institution, MVB completed its fifth year of operation at the close of 2003, determining the appropriate level of the Allowance for Loan Losses (ALL) requires considerable management judgement. In exercising this judgement, management considers numerous internal and external factors including, but not limited to, portfolio growth, national and local economic condition, trends in the markets served and guidance from the bank’s primary regulators. Management seeks to produce an ALL that is appropriate in the circumstances and that complies with applicable accounting and regulatory standards. Further discussion can be found later in this discussion under “Allowance for Loan Losses.”

Non-Interest Income

Fees related to deposit accounts and cash management accounts represent the significant portion of the bank’s primary non-interest income. The total of non-interest income for 2003 was $597,000 versus $458,000 in 2002. This increase in non-interest income related principally to an increase in deposit account activity and security gains.

Service charges on deposit accounts increased from $243,000 in 2002 to $322,000 in 2003, an increase of 32%. Generally, this increase is the result of increased deposit account activity and an allowable overdraft program, which was implemented July 1, 2003. This program has been very successful and well received by the customers.

Security gains recognized during 2003 totaled $83,000 versus $7,000 in 2002. The bank does not routinely sell securities from the portfolio. During 2003, there was an opportunities to recognize some gains and increase the portfolio yield without significant extension risk. The transactions were executed.

The bank is constantly searching for new non-interest income opportunities that enhance income and provide customer benefits.

Non-Interest Expense

Non-interest Expense was nearly $2.35 million in 2003 versus $2.03 in 2002. Approximately 50 percent of non-interest expense for both years related to personnel costs. Personnel is the lifeblood of every service organization, which is why personnel cost is such a significant part of the expenditure mix. This increase in personnel cost from $1.02 million to $1.14 million represents both salary adjustments for existing staff as well as the addition of 5 staff members, including a commercial lender and a mortgage loan originator. The results of both of these individuals is reflected in the increase in loans over these periods.

Data processing comprised approximately 15.5% of total non-interest expense during these two years, growing from $313,000 in 2002 to $361,000 in 2003. This increase is the result of increasing account and transaction volumes from one year to the next and the conversion to image item processing during 2003. This began MVB’s preparation for “Check 21”, which will become a reality at the end of October 2004.

Legal and accounting fees and shareholder related expenses increased approximately $25,000 in 2003 over 2002 as a result of the formation of MVB Financial.

Income Taxes

Being a reasonably new institution, as described earlier, MVB experienced operating losses in the first two years (1999 and 2000). For Federal income taxes, these operating loss carryforwards were fully used in 2002. Thus the effective tax rate was 30% in 2002, compared to 34% in 2003. For State of West Virginia purposes, the operating loss carryforwards were fully used in 2003.

Return on Equity

MVB’s return on average stockholders’ equity (“ROE”) was 10.31 in 2003, compared to 7.44% in 2002. These improving returns also reflect MVB’s transition from a start-up institution to a more mature banking organization.

The bank is considered well-capitalized under regulatory and industry standards of risk-based capital. See Note 12 of Notes to the audited financial statements included in this prospectus and in the Section titled “Capital Requirements” contained herein.

Overview of Statement of Condition

The MVB balance sheet changed in only a few areas from 2002 to 2003. These differences related principally to a $10.4 million increase in deposits from $64.9 million at December 31, 2002 to $75.3 million by year-end 2003 and $14.6 million increase in gross loans outstanding for these same dates. Loans grew from $48.0 million at year-end 2002 to $62.6 million by December 31, 2003. These areas of growth continue to evidence MVB’s ongoing penetration of the Marion County banking market.

Cash and Cash Equivalents

MVB’s cash and cash equivalents totaled $3.7 million at December 31, 2003, compared to $4.7 million at December 31, 2002, a decrease of $1 million. This decrease resulted from an increase in outstanding loans in 2003 due to continued loan growth in the Marion County market.

Management believes the current balance of cash and cash equivalents adequately serves MVB’s liquidity and performance needs. Total cash and cash equivalents fluctuate on a daily basis due to transactions in process and other liquidity demands. Management believes the liquidity needs of MVB are satisfied by the current balance of cash and cash equivalents, readily available access to traditional and non-traditional funding sources, and the portions of the investment and loan portfolios that mature within one year. These sources of funds should enable MVB to meet cash obligations as they come due.

Another area of cash reserves is the portfolio of short-term certificates of deposit in other banks. This portfolio declined from $3.2 million in 2002 to $800,000 in 2003. This portfolio is used to increase yield compared to federal funds sold and was reduced to invest in the growing loan portfolio.

Investment Securities

Investment securities totaled $25.1 million at December 31, 2003, compared to $22.3 million at December 31, 2002. US Government sponsored agency securities comprise the majority of the portfolio.

MVB’s investment securities are primarily classified as available-for-sale. Management believes the available-for-sale classification provides flexibility for MVB in terms of managing the portfolio for liquidity, yield enhancement and interest rate risk management opportunities. At December 31, 2003, the amortized cost of MVB’s investment securities totaled $25.3 million, resulting in unrealized depreciation in the investment portfolio of $203,000.

Management monitors the earnings performance and liquidity of the investment portfolio on a regular basis through Investment/Asset and Liability Committee (“IALC”) meetings. The group also monitors net interest income and manages interest rate risk for MVB. Through active balance sheet management and analysis of the investment securities portfolio, MVB maintains sufficient liquidity to satisfy depositor requirements and the various credit needs of its customers. Management believes the risk characteristics inherent in the investment portfolio are acceptable based on these parameters.

Loans

MVB’s lending is primarily focused in Marion County, West Virginia with a secondary focus on the adjacent counties in West Virginia. The portfolio consists principally of commercial lending, retail lending, which includes single-family residential mortgages and consumer lending. Loans totaled $62.6 million as of December 31, 2003, compared to $48.0 million at December 31, 2002.

During 2003, MVB experienced loan growth slightly above its average annual growth rate of $12.5 million, when loans grew $14.6 million. While MVB experienced increases in all loan categories during 2003, the significant portion of the growth came in two areas. Commercial loans grew approximately $9.3 million, while adjustable rate residential real estate loans grew $3 million. MVB added an experienced lender in each of these categories early in 2003.

At December 31, 2003, commercial loans represented the largest portion of the portfolio approximating 47.7% of the total loan portfolio. Commercial loans totaled

$29.8 million at December 31, 2003, compared to $20.5 million at December 31, 2002. Management will continue to focus on the enhancement and growth of the commercial loan portfolio while maintaining appropriate underwriting standards and risk/price balance. Management expects commercial loan demand to continue to be strong in 2004.

Residential real estate loans to MVB’s retail customers (including home equity lines of credit) account for the second largest portion of the loan portfolio, comprising 31.1% of MVB’s total loan portfolio. Residential real estate loans totaled $19.5 million at December 31, 2003, compared to $16.4 million at December 31, 2002. Included in residential real estate loans are home equity credit lines totaling $3.6 million at December 31,2003, compared to $2.6 million at December 31, 2002. Management believes the home equity loans are competitive products with an acceptable return on investment after risk considerations. Residential real estate lending continues to represent a primary focus of MVB’s lending due to the lower risk factors associated with this type of loan and the opportunity to provide service to those in the Marion County market.

Consumer lending continues to be a part of MVB’s core lending. At December 31, 2003, consumer loan balances totaled $12.5 million compared to $10.4 million at December 31, 2002. The majority of MVB’s consumer loans are in the direct lending area. Management is pleased with the performance and quality of the consumer loan portfolio, which can be attributed to the many years of experience of its consumer lenders. This is another important product necessary to serve the Marion County market.

The following table provides additional information about MVB’s loans:

The following details total loans outstanding as of December 31:

(dollars in thousands)


	2003					2002
	Amount			Percent		Amount			Percent
Commercial and nonresidential real estate	$	29,848		47.7	%	$	20,469		42.6	%
Residential real estate		19,454		31.1	%		16,421		34.2	%
Consumer and other		13,313		21.2	%		11,142		23.2	%

Gross Loans	$	62,615		100.0	%	$	48,032		100.0	%
Less:
Allowance for loan losses		(689	)				(503	)

Net loans	$	61,926				$	47,529

Average total loans	$	55,301				$	42,153
Average allowance for loan losses		(600	)				(445	)

Average loans, net of allowance	$	54,701				$	41,708

MVB has no foreign loans.

Loan maturities at December 31, 2003:

(Dollars in thousands)


	Due in One year Or less		Due in One-year Thru Five Years		Due After Five Years		Total
Commercial and nonresidential real estate	$	10,384	$	18,625	$	839	$	29,848
Residential real estate		4,070		11,772		3,612		19,454
Consumer and other		4,665		8,272		377		13,314

Total	$	19,119	$	38,669	$	4,828	$	62,616

Loan maturities at December 31, 2002:

(Dollars in thousands)


	Due in One year Or less		Due in One year Thru Five Years		Due After Five Years		Total
Commercial and nonresidential real estate	$	7,196	$	13,000	$	273	$	20,469
Residential real estate		772		12,864		2,785		16,421
Consumer and other		3,875		7,120		147		11,142

Total	$	11,843	$	32,984	$	3,205	$	48,032

The preceding data has been compiled based upon the earlier of either contractual maturity or next repricing date

Loan Concentration

At December 31, 2003, commercial loans comprised the largest component of the loan portfolio. There are very few commercial loans that are not secured by real estate. Such non-real estate secured loans generally are lines of credit secured by accounts receivable. While the loan concentration is in commercial loans, the commercial portfolio is comprised of loans to many different borrowers, in numerous different industries and primarily located in our market area.

Allowance for Loan Losses

Management continually monitors the risk in the loan portfolio through review of the monthly delinquency reports and the Loan Review Committee. The Loan Review Committee is responsible for the determination of the adequacy of the allowance for loan losses. This analysis involves both experience of the portfolio to date and the makeup of the overall portfolio. The allocation among the various components of the loan portfolio and its adequacy is somewhat difficult considering the limited operating history of MVB. Specific loss estimates are derived for individual loans based on specific criteria such as current delinquent status, related deposit account activity, where applicable, local market rumors, which are generally based on some factual

information, and changes in the local and national economy. While local market rumors are not measurable or perhaps not readily supportable, historically, this form of information is an indication of a potential problem.

The result of the evaluation of the adequacy at each period presented herein indicated that the allowance for loan losses was considered adequate to absorb losses inherent in the loan portfolio.

MVB incurred net charge-offs of $37,000 in 2003 and $77,000 in 2002. At December 31, 2003 and 2002, MVB had no non-accrual loans, other non-performing assets or other real estate owned. At December 31, 2003 and 2002, MVB had loans more than 30 days past due of 186,000 and 416,000 respectively. MVB provided a provision for loan losses of $223,000 in 2003 and $225,000 in 2002. Net charge-offs during these periods represented .07% and .18% of average loans outstanding in 2003 and 2002, respectively.

Activity in the allowance for loan losses follows:


	2003			2002
Balance, January 1	$	503		$	354
Provision		223			225
Charge-offs		<72	>		<81	>
Recoveries		35			5

Net charge-offs		37			77

Balance, December 31	$	689		$	502

Ratio of net charge-offs to average loans outstanding		.06	%		.15	%

All losses to date have been from the consumer loan portfolio.

The following table reflects the allocation of the allowance for loan losses as of December 31:

(Dollars in Thousands)

Allocation of allowance for loan losses at December 31


	2003				2002
	Amount		Percent		Amount		Percent
Commercial	$	364	47.7	%	$	264	42.6	%
Real estate		75	31.1			38	34.2
Consumer		250	21.2			200	23.2

Total	$	689	100.0	%	$	502	100.0	%

Non-performing assets consist of loans and leases that are no longer accruing interest, loans that have been renegotiated to below market rates based upon financial difficulties of the borrower, and real estate acquired through foreclosure. When interest accruals are suspended, accrued interest income is reversed with current year accruals charged to earnings and prior year amounts generally charged off as a credit loss. When, in management’s judgment, the borrower’s ability to make periodic interest and principal payments resumes and collectibility is no longer in doubt, the loan is returned to accrual status. MVB had no such loans at December 31, 2003 or 2002.

Funding Sources

MVB considers a number of alternatives, including but not limited to deposits, short-term borrowings, and long-term borrowings when evaluating funding sources. Traditional deposits continue to be the most significant source of funds for MVB, totaling $75.3 million, or 86.8% of MVB’s funding sources at December 31, 2003. This same information at December 31, 2002 reflected $64.9 million in deposits representing 88.6% of such funding sources. Cash management accounts, which are available to large corporate customers represented 7.7% and 7.6% of MVB’s funding sources at December 31, 2003

and 2002, respectively. Borrowings from the Federal Home Loan Bank of Pittsburgh for specific purposes represented the remainder of such funding sources.

Management continues to emphasize the development of additional non-interest-bearing deposits as a core funding source for MVB. At December 31, 2003, non-interest-bearing balances totaled $7.2 million compared to $6.1 million at December 31, 2002 or 10.5% and 9.4% respectively.

Interest-bearing deposits totaled $68.2 million at December 31, 2003, compared to $64.9 million at December 31, 2002. On a percentage basis, Certificates of Deposits compose the largest component of MVB’s deposits. Average interest-bearing liabilities totaled $76.9 million during 2003 compared to $63.3 million during 2002. Average non-interest bearing liabilities totaled $7.2 million during 2003 compared to $5.6 million during 2002. Management will continue to emphasize deposit gathering in 2004 by offering outstanding customer service and competitively priced products.

Maturities of Certificates of Deposit $100,000 or More:


(Dollars in Thousands)	2003		2002
Under 3 months	$	1,520	$	1,049
3 to 12 months		3,225		4,560
Over 12 months		5,331		2,844

Total	$	10,076	$	8,453

Along with traditional deposits, MVB has access to both short-term and long-term borrowings to fund its operations and investments. MVB’s short-term borrowings consist of corporate deposits held in overnight repurchase agreements and retail funds such as term repurchase agreements. At December 31, 2003, short-term borrowings totaled $6.7 million compared to $5.6 million in 2002. Long-term borrowings consist of advances from the Federal Home Loan Bank of Pittsburgh. At December 31, 2003, long-term borrowings totaled $1.73 million compared to $1.74 million at year-end 2002.

Capital/Stockholders’ Equity

During the year ended December 31, 2003, stockholders’ equity increased approximately $500,000 (or 6.6%) to $7.8 million. This increase resulted primarily from MVB’s $781,000 net income for the year and a decrease in other comprehensive income resulting from a decrease in the market value of the investment portfolio. MVB paid no dividends during 2003 or 2002.

At December 31, 2003, accumulated other comprehensive income <loss> totaled $293,000 loss, a decrease of $386,000 from December 31, 2002. This principally represents net unrealized loss on available-for-sale securities, net of income taxes, at December 31, 2003. Because principally all the investment securities in MVB’s portfolio are classified as available-for-sale, both the investment and equity sections of MVB’s balance sheet are more sensitive to the changing market values of investments than those institutions that classify more of their investment portfolio as “hold to maturity”. Interest rate fluctuations between year end 2002 and 2003 resulted in the change in market value of the portfolio.

MVB has also complied with the standards of capital adequacy mandated by the banking industry. Bank regulators have established “risk-based” capital requirements designed to measure capital adequacy. Risk-based capital ratios reflect the relative risks of various assets banks hold in their portfolios. A weight category of either 0% (lowest risk assets), 20%, 50%, or 100% (highest risk assets) is assigned to each asset on the balance sheet. Detailed information concerning MVB’s risk-based capital ratios can be found in Note 12 of the Notes to the Audited Financial Statements. At December 31, 2003, MVB’s risk-based capital ratios were above the minimum standards for a well-capitalized institution. MVB’s risk-based capital ratio of 13.0% at December 31, 2003, is above the well-capitalized standard of 10%. MVB’s Tier 1 capital ratio of 12.0% also exceeded the well-capitalized minimum of 6%. The leverage ratio at December 31, 2003, was 8.2% and was also above the well-capitalized standard of 6%. Management believes MVB’s capital continues to provide a strong base for profitable growth.

Liquidity and Interest Rate Sensitivity

The objective of MVB’s asset/liability management function is to maintain consistent growth in net interest income within it’s policy guidelines. This objective is accomplished through management of MVB’s balance sheet liquidity and interest rate risk exposure based on changes in economic conditions, interest rate levels, and customer preferences.

Interest Rate Risk

The most significant market risk resulting from MVB’s normal course of business, extending loans and accepting deposits, is interest rate risk. Interest rate risk is the potential for economic loss due to future interest rate changes which can impact both the earnings stream as well as market values of financial assets and liabilities. MVB’s Investment/ Asset/ Liability Committee (IALC) is responsible for the overall review and management of the bank’s balance sheets related to the management of interest rate risk. The IALC strives to keep MVB focused on the future, anticipating and exploring alternatives, rather than simply reacting to change after the fact.

To this end, the IALC has established an interest risk management policy that sets the minimum requirements and guidelines for monitoring and controlling the level and amount of interest rate risk. The objective of the interest rate risk policy is to encourage management to adhere to sound fundamentals of banking while allowing sufficient flexibility to exercise the creativity and innovations necessary to meet the challenges of changing markets. The ultimate goal of these policies is to optimize net interest income within the constraints of prudent capital adequacy, liquidity, and safety.

The IALC relies on different methods of assessing interest rate risk including simulating net interest income, monitoring the sensitivity of the net present market value of equity or economic value of equity, and monitoring the difference or gap between maturing or rate-sensitive assets and liabilities over various time periods. The IALC places emphasis on simulation modeling as the most beneficial measurement of interest rate risk due to its dynamic measure. By employing a simulation process that measures the impact of potential changes in interest rates and balance sheet structures, and by establishing limits on changes in net income and net market value, the IALC is better able to evaluate the possible risks associated with alternative strategies.

The simulation process starts with a base case simulation which represents projections of current balance sheet growth trends. Base case simulation results are prepared under a flat interest rate forecast and what is perceived to be the most likely alternative interest rate forecast. Comparisons showing the earnings variance from the flat rate forecast illustrate the risks associated with the current balance sheet strategy. If necessary, additional balance sheet strategies are developed and simulations prepared. The results from model simulations are reviewed for indications of whether current interest rate risk strategies are accomplishing their goal and, if not, what alternative strategies should be considered. The policy calls for periodic review by the IALC of assumptions used in the modeling.

The IALC believes that it is beneficial to monitor interest rate risk for both the short-and long-term. Therefore, to effectively evaluate results from model simulations, limits on changes in net interest income and the value of the balance sheet will be established. The IALC has determined that the earnings at risk of the bank shall not change more than 10 % from the base case for a 1% shift in interest rates, nor more than 15 % from the base case for a 2% shift in interest rates. MVB is in compliance with this policy as of June 30, 2004. At December 31, 2003, MVB is in compliance with the policy except for the 2% decrease in interest rates. At a 1% Federal Funds rate a 2% decline seems a very unlikely happening. The following table is provided to show the earnings at risk of MVB as of December 31, 2003 and June 30, 2004, the latest date for which information is available.

(Dollars in Thousands)


Immediate Interest Rate Change (one year time frame) (in Basis Points)	Estimated Increase (Decrease) in Net Interest Income December 31, 2003				Estimated Increase (Decrease) in Net Interest Income June 30, 2004
	Amount		Percent		Amount		Percent
+200	$	3,963	14.4	%	$	3,706	-3.2	%
+100		3,664	5.8			3,759	-1.8	%
Base rate		3,463				3,830
-100		3,190	-7.9			3,830	0	%
-200*	$	2,773	-19.9	%	$	3,494	-8.8	%

*	considered extremely unlikely since the targeted Fed Funds rate is less than 2% at each period indicated.

Liquidity

Maintenance of a sufficient level of liquidity is a primary objective of the IALC. Liquidity, as defined by the IALC, is the ability to meet anticipated operating cash needs, loan demand, and deposit withdrawals, without incurring a sustained negative impact on net interest income. It is MVB’s policy to manage liquidity so that there is no need to make unplanned sales of assets or to borrow funds under emergency conditions.

The main source of liquidity for MVB comes through deposit growth. Liquidity is also provided from cash generated from investment maturities, principal payments from loans, and income from loans and investment securities. During the year ended December 31, 2003, cash provided by financing activities totaled $13.6 million, while outflows from investing activity totaled $15.0 million. When appropriate, MVB has the ability to take advantage of external sources of funds such as advances from the Federal Home Loan Bank (FHLB) and national market certificate of deposit issuance programs. These external sources often provide attractive interest rates and flexible maturity dates that enable MVB to match funding with contractual maturity dates of assets. Securities in the investment portfolio are generally classified as available-for-sale and can be utilized as an additional source of liquidity.

Off-Balance Sheet Commitments

MVB has entered into certain agreements that represent off-balance sheet arrangements that could have a significant impact on MVB’s financial statements and could have a significant impact in future periods. Specifically, MVB has entered into agreements to extend credit or provide conditional payments pursuant to standby and commercial letters of credit. Further discussion of these agreements, including the amounts outstanding at December 31, 2003, is included in Note 7 to the financial statements.

Year to Date 2004

As can be seen from the unaudited interim financial statements found beginning on page F-17, 2004 has been good for MVB Financial from both a balance sheet and income statement standpoint.

Since year-end 2003, MVB Financial’s total assets have grown by $10.4 million or $11.3 million since September 30, 2003. In each period comparison noted above, the growth was primarily funded through the growth in deposits with such approximating $9.6 million for the nine-months ended September 30, 2004 and $11.8 million for the twelve months then ended. More importantly than the overall growth in deposits has been the growth in non-interest bearing deposits during these same periods. For the nine months ended September 30, 2004, such deposits grew nearly $2.6 million or 37.0%. For the twelve months then ended the growth was somewhat less at $2.38 million, or 28.7%. During 2004, MVB has continued to emphasize local decisions, quality service and local staff. We believe this is the reason for our continued growth. On the asset side of the balance sheet there are two areas of significant change, both of which are by design. The loan portfolio has grown significantly during both periods being reviewed. In early 2003, MVB hired two new lenders, one for commercial loans and one for mortgage loans. The result of these two additions can be seen in the subsequent period loan growth. For the nine-months ended September 30, 2004, loans grew by nearly $13.0 million, or 20.7%. For the twelve months then ended loans grew by $17.3 million or 29.7%.

The growth of the loan portfolio as described above was funded from three primary sources. First, is the deposit growth previously described. Second is the reduction in the Federal Home Loan Bank balance and federal funds sold. For the nine-month period ended September 30, 2004, this source of funds provided $870,000 and $1.5 million for the twelve months then ended.

The third source of funds and significant balance sheet change relates to the investment portfolio. Except for some replacement of securities necessary for repurchase agreement purposes, no investment securities have been made since September 2003. For the nine-months ended September 30, 2004, the investment portfolio has provided cash flow approximating $2.6 million and $4.1 million for the 12 months then ended.

As can be seen from the Average Balances and Analysis of Net Interest Income for the nine-months ended September 30, 2004 and 2003 and for the years ended December 31, 2003 and 2002. MVB’s shift in balance sheet composition as described above has had a significant impact on its net interest margin. This margin has grown from 3.53% for the first nine months of 2003 to 4.10% for the same period of 2004. In fact, the change in composition has resulted in an increase in the yield on earning assets for the two comparative nine-month periods from 5.56% to 5.72% during a time when interest rates were decreasing as can be seen in the decrease in the cost of interest bearing liabilities from 2.30% for the first nine-months of 2003 to 1.84% for this same period in 2004. The net result is a .57% increase in net interest margin.

Other income is approximately $68,000 greater for the first nine months of 2004 versus 2003. This essentially relates to two areas. Security gains of $90,000 were recognized in 2003 versus less than $1,000 in 2004. Service Charges on Deposit Accounts were $124,000 higher in 2004 compared to the comparable 2003 period. This increase relates to an allowable overdraft implemented in the second half of 2003. The customers to whom this service has been made available have been pleased to have a check paid rather than returned, thus saving them the merchant fee for a returned check.

Other expenses for the first nine months of 2004 exceed the same period of 2003 by approximately $230,000. One half of this increase relates to an increase in Salaries and Employee Benefits categories. This increase is the result of staff salary increases and staff additions. Approximately one half of the remaining increase relates to data processing costs. The majority of this increase is due to the conversion to image processing in anticipation of Check 21, which will become law during the fourth quarter of 2004. This change was made during the second half of 2003. Legal and accounting fees are higher in 2004 because of becoming a bank holding company January 1, 2004 and related charges necessitated by the Sarbanes-Oxley Act of 2002.

The effective income tax rate for 2004 is approximately 41% compared to 34% for the first half of 2003. Since MVB is relatively new, the early years produced net operating loss carryforwards. For federal income taxes, these carryforwards were fully utilized in 2002 with the State of West Virginia carryforwards being used completely in 2003. Hence the 2004 tax rate is that which is likely to continue into the future unless there are changes in the various rates by the taxing authorities.

While nothing is certain, it appears that the second half of 2004 performance will be similar to the first half. Balance sheet growth continues as does the balance sheet conversion from securities to loans.

FUTURE OUTLOOK

During the third quarter of 2004, several items of significance have occurred or are underway.

The Board of Directors of MVB Financial declared a 5% stock dividend to shareholders of record July 1, 2004, payable August 15, 2004. This stock dividend has been paid. No fractional shares were issued. All those entitled to receive fractional shares received cash in lieu of such shares at a rate of $13.50 per share.

In addition, the Board of Directors of MVB Financial and MVB determined that MVB should begin to expand its current market area through the establishment of a new office in Harrison County, West Virginia. Harrison County is the county immediately south of Marion County and is economically strong. MVB has signed a letter of intent to lease, with the option to purchase, property located on Johnson Avenue in the

Bridgeport section of Harrison County. Negotiations are currently underway to finalize the described lease.

In addition, architectural proposals have been received and are currently under review. Alternatives related to construction of the branch facility are being evaluated. Cost, as well as proposed construction times will be considered in selecting the best alternative.

While technically a branch office, the management structure for the proposed office is somewhat different than the normal. MVB Financial has organized two wholly-owned second-tier holding companies, known as MVB Marion, Inc. and MVB Harrison, Inc.. Their purpose will be to own MVB. The Board of Directors of these two second-tier holding companies will be responsible for the operations of their respective markets, Marion County and Harrison County. The current members of the Board of Directors of MVB will become the Board of Directors of MVB Marion, Inc. A new Board of Directors is currently being selected for MVB Harrison, Inc. There will be three members of each Board serving on the other Board to ensure each Board has access to the same information.

A President and CEO will be hired for MVB Harrison, Inc. That person will be responsible for the operations of that market area. This person, in consultation with the MVB Financial President, will be responsible for hiring qualified staff, developing market related products and pricing, providing leadership and community involvement.

As with the opening of any new facility, it is anticipated that such will operate at a loss for one or two years, which will have some impact on MVB Financial’s earnings. Current projections indicate a loss from MVB Harrison, Inc. the first year to be less than $200,000, with a near breakeven performance for year 2 and a profit of somewhat more than $100,000 for year 3. It is cautioned that these are early projections and may be subject to change. The Board of Directors of MVB Financial and MVB believe that these results are reasonable expenditures to broaden and diversify the current MVB market area.

MANAGEMENT

Directors of MVB Financial

MVB Financial’s board of directors consists of the following persons, all of whom are also directors of the bank: Barbara L. Alexander, Robert L. Bell, Stephen R. Brooks, Harvey M. Havlichek, James R. Martin, Dr. Saad Mossallati, Leonard W. Nossokoff, J. Christopher Pallotta, Nitesh S. Patel, Louis W. Spatafore, Richard L. Toothman, Dr. Michael F. Trent, Dr. James E. Valentine, and Samuel J. Warash.

There have been no transactions between MVB Financial and any of its directors, officers, principal shareholders, and their associates, although the bank has had transactions with directors and officers in the normal course of business. See Certain Transactions With Directors, Officers and Associates. No fees have been paid to MVB Financial’s directors as such by either MVB Financial or the bank. See Compensation Directors & Executive Officer.

Officers of MVB Financial

The principal officers of MVB Financial are: James E. Valentine, Chairman of the Board, James R. Martin, President, and Judith A. Merico, Secretary. Each of these individuals is an officer of the bank.

MVB Financial has paid no compensation, direct or indirect, to any officer, and management has no present intention of instituting any such compensation. In the event that substantial duties unrelated to the operation of the bank should develop, this policy will be re-examined as necessary to attract and retain qualified directors and officers.

Directors and Executive Officers MVB Financial

The directors and executive officers of MVB Financial are:


Directors	Age as of Sept 30, 2004	Director and/or Officer Since*	Principal Occupation During the Last Five Years
Barbara L. Alexander 250 Lakewood Center Morgantown, WV 26501	47	1999	Owner/Broker – Howard Hanna/Premier Properties by Barbara Alexander, LLC; Member of Board of Directors of MVB

Robert L. Bell 333 Baldwin Street Morgantown, WV 26505	69	1999	Commissioner – Monongalia County Commission, West Virginia; Member of Board of Directors of MVB

Stephen R. Brooks 1009 Greystone Circle Morgantown, WV 26508	56	1999	Attorney – Flaherty, Sensabaugh & Bonasso; Previously Attorney – Furbee, Amos, Webb & Critchfield; Member of Board of Directors of MVB

Harvey M. Havlichek PO Box 42 Colfax, WV 26566	55	1999	President – Adams Office Supply & Novelty Company, Inc.; Member of Board of Directors of MVB

James R. Martin 911 Henry Drive Fairmont, WV 26554	57	1999	President and Chief Executive Officer – The Monongahela Valley Bank, Inc. & MVB Financial Corp.

Dr. Saad Mossallati 200 Route 98 West, Suite 107 Nutter Fork, WV 26301	55	1999	Vascular Surgeon; Member of Board of Directors of MVB

Leonard W. Nossokoff 498 Canyon Road Morgantown, WV 26508	65	1999	Owner – Giant Eagle Supermarket; Member of Board of Directors of MVB

J. Christopher Pallotta 8 Bel Manor Drive Fairmont, WV 26554	55	1999	President – Bond Insurance Company; Member of Board of Directors of MVB

Nitesh S. Patel 7003 Carriage Lane Fairmont, WV 26554	40	1999	President and Chief Executive Officer – D.N. American, Inc.; Member of Board of Directors of MVB

Louis W. Spatafore 14 Regency Drive Fairmont, WV 26554	47	1999	President and General Manager – Friendly Furniture Galleries, Inc.; Member of Board of Directors of MVB

Richard L. Toothman 6 Pheasant Drive Fairmont, WV 26554	63	1999	Broker and Owner – Toothman Realty; Member of Board of Directors of MVB

Dr. Michael F. Trent 1821 Martha Avenue Fairmont, WV 26554	55	1999	Dentist; Member of Board of Directors of MVB

Dr. James E. Valentine 907 Gaston Avenue Fairmont, WV 26554	67	1999	Orthodontist; Member of Board of Directors of MVB

Samuel L. Warash 1639 Otlahurst Drive Fairmont, WV 26554	55	1999	President – S.J. Warash & Co., Inc.; Member of Board of Directors of MVB

*	All directors’ terms expire annually.

There are no family relationships among MVB directors and executive officers. None of those identified as directors or executive officers of MFB Financial or the bank is involved in any legal proceedings that would require disclosure in this document.

Executive Compensation

No compensation is paid for serving as a member of the board of directors of MVB Financial. Members of the Board of Directors of MVB receive a fee of $300.00 for each meeting attended.

No officer or employee had total annual salary and bonus exceeding $100,000. Prior to 2004. MVB Financial had no bonus compensation plan. The employee benefit plans of MVB Financial include a 401K salary deferral plan, pension plan and a stock option plan. There are no employment contracts in place.

Summary Compensation Table

Name and Principal Position

Year

Salary ($)

Bonus ($)

Other Annual
Compensation ($)

Securities

Underlying

Options/SARS (#)

All Other ($)

Compensation ⁽²⁾

James R. Martin,

President and Chief Executive

Officer

2003
2002
2001

$
$
$

90,000
84,000
80,000

0
0
0

None
None
None

0
0
1,500

$
$
$

900
840
800

Awarded a stock purchase option for the right to purchase 1,500 shares of MVB Financial’s common stock at $11 per share, the market value at the time the option was granted under the 2000 Stock Incentive Plan. The award is structured in a manner that 25% of the total becomes available for purchase as of January 1, 2002, 2003, 2004 and 2005. No option has been exercised. The options expire September 17, 2011.

²	Represents employer matching of employee’s 401k salary deferral.

The bank’s retirement plan is The West Virginia Bankers’ Association Retirement Plan for Employees of Member Banks. This is a defined benefit plan under which benefits are determined based on an employee’s average annual compensation for any five consecutive full calendar years of service, which produce the highest average. An employee is any person who is regularly employed on a full-time basis. Directors who are not also employees are not eligible to participate in this plan. An employee becomes eligible to participate in the plan upon completion of at least one year of service with a minimum of 1,000 hours worked and attainment of age 21.

Normal retirement is at age 65 with the accrued monthly benefit determined on actual date of retirement. An employee may take early retirement from age 60 and the accrued monthly benefit as of the normal retirement date is actuarially reduced. Compensation covered by the pension plan is based upon actual W-2 pay.

As of December 31, 2003, the current credited years of service and projected estimated annual benefit under the pension plan (assuming that he continues employment, the plan is not terminated or amended, current compensation increases under the plan’s assumptions and that the maximum compensation allowed under the Code does not exceed $150,000) for the following officer is:


Name	Current Service	Projected Annual Pension
James R. Martin	Six Years	$	22,404

The Internal Revenue Code disallows deduction of compensation exceeding $1,000,000 for certain executive compensation. The Human Resources Committee has not adopted a policy in this regard because none of MVB Financial’s executives received compensation approaching the $1,000,000 level.

Stock Option Plan

On April 18, 2000, the company’s shareholders approved the 2000 Stock Incentive Plan (the “Plan”). The purpose of the Plan is to attract and retain executive, managerial and other key employees, motivate participating employees to achieve long-range goals, provide incentive compensation opportunities competitive with other major financial institutions, and to connect the interests of employees participating in the Plan with MVB Financial’s other stockholders through incentive compensation based on the company’s stock value thereby promoting the long-term financial interests of the company and all its stockholders. After MVB Financial was formed, the Plan was amended to substitute MVB Financial Corp stock for MVB stock and rename the plan “MVB Financial Corp. 2003 Stock Incentive Plan”. An aggregate of 55,125 shares of the company’s capital stock, par value One Dollar ($1.00), adjusted for the 5% stock dividends effective June 1, 2001 and August 15, 2004 have been reserved for issuance pursuant to the Plan.

Adjusted for the above noted stock dividend, 40,829 shares remain outstanding for exercise. Options for 14,296 shares remain available for granting under the Plan.

The board of directors of MVB Financial believes that the successful implementation of it’s business strategy will depend upon attracting and retaining able executives, managers and other key employees. The Plan provides that the Human Resources committee appointed by the board of directors of MVB Financial will have the flexibility to grant stock options, merit awards, and rights to acquire stock through purchase under a stock purchase program.

There have been no options granted during 2002, 2003 or through October 31, 2004 to any executive officer.

Aggregated Option/Exercises in Last Fiscal Year and Fiscal Year-End Options/Values


Name	Shares Acquired on Exercise (#)	Value Realized ($)		Number of Securities Underlying Unexercised Options/SARs at Fiscal Year-End		Value of Unexercised in-the- Money Options/SARs at Fiscal Year-End ¹
				Exercisable	Unexercisable	Exercisable		Unexercisable
James R. Martin	0	$	0	9,000	375	$	22,680	$	750

¹	Represents the difference between the option price and price paid for MVB Financial common stock for the last transaction in 2003. The date of the transaction was December 30, 2003, at a price of $13.00.

None of the options granted to Mr. Martin that are exercisable have been exercised.

The board of directors of the bank has purchased Bank Owned Life Insurance (BOLI) on the lives of four staff members, including President Martin. The purpose of the BOLI plan is to provide the funds necessary to replace the staff member(s) due to unanticipated death. These funds are to aid in locating succession management. As an inducement to retain these individuals until normal retirement, the plan provides for the sharing of the death benefit with their designated beneficiaries from the BOLI plan. The policies are for $250,000 each, with $100,000 of the death benefit being assigned to the designated beneficiary. The bank is the owner of the policies and retains a 100% interest in the cash surrender value of the policies. There are no other benefits to the insured or their beneficiaries under the BOLI plan.

Certain Transactions With Directors, Officers and Associates

The bank has had and expects to continue to have loan transactions in the ordinary course of business with directors, officers, principal shareholders and their associates. Such loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and did not involve more than the normal risk of collectibility or present other unfavorable features. During 2003, Directors Mossallati, Patel and Valentine and/or their related interests were indebted to the bank in excess of ten percent of the equity capital accounts of the bank. As required the maximum amount of such indebtedness in 2003 and as of September 30, 2004, the latest practicable date, is detailed below:


	Maximum Indebtedness During 2003			Outstanding Balance as of September 30, 2004
Director	Amount		Percent of December 31, 2003 Equity Capital	Amount		Percent of Sept. 30, 2004 Equity Capital
Saad Mossallati*	$	1,606,000	20.5	$	1,534,000	17.8
Richard L. Toothman	$	1,182,000	15.1	$	966,000	11.2
Dr. James E. Valentine	$	955,000	12.2	$	858 000	10.0

*	This loan secured by over $500,000 of readily marketable securities in addition to commercial real estate, the value of which far exceeds the loan balance.

The aggregate extensions of credit to directors and executive officers exceeded 41.0 percent of the average equity capital accounts of the bank for 2003. The highest aggregate outstanding loans to this group during 2003 occurred in December and totaled $ 4,898,000, which represented 62.6% of the December 31, 2003 equity capital. During 2004, until September 30, the highest aggregate outstanding loans to this group occurred during March 2004 and totaled $ 5,545,000, which represented 64.3% of the September 30, 2004 equity capital.

All of these transactions were originated and remain on substantially the same terms, including interest rates, collateral and repayment terms as those prevailing at the time for comparable transactions with unaffiliated persons, and in the opinion of the management of the bank, did not involve more than the normal risk of collectibility or present other unfavorable features.

Principal Holders of Voting Securities

The following shareholder currently beneficially owns or has the right to acquire shares that would result in ownership of more than 5% of MVB Financial’s common stock as of August 30, 2004:

Name of Beneficial Owner

As of August 31, 2004

Amount and Nature of
Beneficial Ownership

Percent of Common Stock ⁽¹⁾

Saad Mossallati

200 Route 98 West, Suite 107

Nutter Fort, WV 26301

56,552

7.51

*	Includes 30,747 shares held in name of daughter and 282 shares held in the name of wife.

⁽¹⁾	The MVB Financial Corp. directors and non-board member executive officers of MVB own or have the right to acquire within 60 days 288,411 shares of MVB Financial common stock, which is 37.75% percent of the related shares.

Ownership of Securities By Directors and Executive Officers

As of September 30, 2004, ownership by directors and executive officers in MVB Financial was:


Directors	Amount and Nature of Beneficial Ownership		Percent of Common Stock ⁽⁷⁾
Barbara Alexander	3,903	^(1,3)	.52
Robert L. Bell	15,527	^(1,3)	2.06
Stephen R. Brooks	4,018 181 1,301	^(1,3) ^(2,4) ⁽⁵⁾	.53 .02 .17
Harvey M. Havlichek	5,424 7,900	^(1,3) ^(2,4)	.72 1.05
James R. Martin	33,220 2,625	^(1,3,6) ⁽⁵⁾	4.41 .35
Dr. Saad Mossallati	25,543 31,009	^(1,3) ⁽⁵⁾	3.39 4.12
Leonard W. Nossokoff	1,225 36,190	^(1,3) ^(2,4)	.16 4.81
J. Christopher Pallotta	8,513 7,582	^(1,3) ^(2,4)	1.13 1.01
Nitesh S. Patel	14,903 1,960	^(1,3) ⁽⁵⁾	1.98 .26
Louis W. Spatafore	7,365 217 740	^(1,3) ^(2,4) ⁽⁵⁾	.98 .03 .10
Richard L. Toothman	703 6,232	^(1,3) ^(2,4)	.09 .83
Dr. Michael F. Trent	2,474 12,038	^(1,3) ^(2,4)	.33 1.60
Dr. James E. Valentine	30,430	^(1,3)	4.04

Samuel J. Warash	9,845	^(1,3)	1.31

	271,068

⁽¹⁾	Indicates sole voting power

⁽²⁾	Indicates shared voting power

⁽³⁾	Indicates sole investment power

⁽⁴⁾	Indicates shared investment power

⁽⁵⁾	Indicates indirect ownership by spouse or minor children

⁽⁶⁾	Includes 9,450 shares, which may be acquired by Martin within 60 days through the exercise of options.

⁽⁷⁾	Calculations include the 743,091 shares currently outstanding and 9,450 shares which may be acquired by Martin within 60 days through the exercise of options, for a total of 752,541 shares.

Note: The non-director executive officers of MVB own or may acquire within 60 days a total of 17,343 shares.

DESCRIPTION OF MVB FINANCIAL’S COMMON STOCK

General Rights

The articles of incorporation and bylaws of the company govern the holding company’s shareholders. The company’s shareholders have the following rights:

•

Holders of company common stock are entitled to one vote for each share of common stock and to receive pro rata any assets distributed to shareholders upon liquidation.

•

Shareholders do not have preemptive rights.

•

Shareholders have the right under West Virginia law to dissent from certain corporate transactions and to elect dissenters’ rights.

•

The board of directors may fill a vacancy of the board occurring during the course of the year, including a vacancy created by an increase in the number of directors.

Dividends and Dividend Rights

MVB Financial’s stockholders are entitled to receive dividends when and as declared by the Boards of director, subject to various regulatory restrictions. Dividends by MVB Financial are dependent on the ability of MVB to pay dividends to MVB Financial. Dividends of MVB are subject to the restrictions contained in W.Va. code § 31A-4-25. That statute provides that not less than one-tenth part of the net profits of the preceding half-year (in the case of quarterly or semi-annual dividends) or the preceding two consecutive half-year periods (in the case of annual dividends) must be carried to a bank’s surplus fund until the surplus fund equals the amount of its capital stock. MVB has met this provision of the statute. The prior approval of the West Virginia Commissioner of Banking is required if the total of all dividends declared by a state bank in any calendar year will exceed the bank’s net profits for that year combined with its retained net profits for the preceding two years. The statute defines “net profits” as the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets after deducting all current operating expenses, actual losses and all federal and state taxes.

MVB Financial’s future cash dividends will depend on its consolidated earnings, general economic conditions, financial condition of its subsidiaries and other factors generally affecting dividend policy.

Voting Rights

All voting rights with respect to MVB Financial will be vested in the holders of MVB Financial’s common stock. In the election of directors, the shareholders of MVB Financial have the right to vote the number of shares owned by them for as many persons as there are directors to be elected, or to cumulate such shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of shares they own, or to distribute them on the same principle among as many candidates as they may decide. For all other purposes, each share is entitled to one vote.

Preemptive Rights

The holders of common stock of MVB Financial have no preemptive rights to subscribe to any additional securities which MVB Financial may issue. If MVB Financial should decide to issue any or all of these shares, the effect could be to dilute the percentage ownership of the shareholders.

Indemnification

Directors and officers of MVB Financial or persons serving at the request of MVB Financial as directors, officers, employees or agents of another corporation or organization (including any of its subsidiaries) are entitled to indemnification as provided in its articles of incorporation.

In general, indemnification is provided for reasonable costs and expenses, fees and reasonable payments in settlement, except in matters in which the person is adjudged to be liable for gross negligence, willful misconduct or criminal acts.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the company pursuant to the foregoing, or otherwise, the company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

Anti-takeover Provisions

MVB Financial’s board of directors recently approved amendments to the company’s articles of incorporation and bylaws to add anti-takeover provisions. The amendments to the articles of incorporation are subject to shareholder approval which the company will seek at its annual meeting of shareholders in April 2005. If the amendments to the articles of incorporation are approved, MVB Financial’s articles of incorporation and bylaws will contain the following anti-takeover provisions.

•

Staggered Directors’ Terms. The directors of MVB Financial would be elected for staggered terms of three years with no more than one-third of the directors being elected in any one year. This provision has the effect of making it more difficult and time consuming for a shareholder who has acquired or controls a majority of MVB Financial’s outstanding common stock to gain immediate control of the board of directors or otherwise disrupt MVB Financial’s management.

•

75% Vote Required to Remove Directors. MVB Financial’s articles of incorporation and bylaws would provide that holders of at least 75% of the voting power of shares entitled to vote generally in the election of directors may remove a director. This provision in MVB Financial’s articles and bylaws would make it more difficult for a third party to fill vacancies created by removal with its own nominees.

•

MVB Financial’s Articles of Incorporation Would Contain Supermajority Provisions. The supermajority provisions in MVB Financial’s articles of incorporation and bylaws would provide that the affirmative vote of the holders of at least 75% of the outstanding shares of the voting stock of MVB Financial would be required to amend or repeal articles of incorporation provisions dealing with the classification of the board of directors, director nominations, appointment to newly created directorships, vacancies of directors, removal of directors and business combinations by unsolicited and unapproved third parties.

•

MVB Financial’s articles would also require a two-thirds affirmative vote of the members of the board to amend the bylaws to change the principal office, change the number of directors, change the number of directors on the executive committee or make a substantial change in the duties of the chairman of the board of the directors and the president. The purpose of a supermajority requirement is to prevent a shareholder with a majority of MVB Financial’s voting power from avoiding the requirements of the foregoing by simply repealing them.

•

Fair Price Provision. MVB Financial’s articles of incorporation would contain what is known as a “fair price provision.” The fair price provision requires the approval of at least 75% of MVB Financial’s shares entitled to vote to approve transactions with an interested shareholder except in cases where either (1) price criteria and procedural requirements are satisfied, or (2) a majority of MVB Financial’s board of directors recommends the transaction to the shareholders. If the minimum price criteria and procedural requirements are met or the requisite approval of MVB Financial’s board of directors are given, the normal requirements of West Virginia law would apply.

An “interested shareholder” is any person, other than MVB Financial or any of its subsidiaries, who is, or who was within the two-year period immediately before the announcement of a proposed business combination, the beneficial owner of more than 10% of MVB Financial’s voting power. It also includes any person who is an assignee of, or has succeeded to, any shares of voting stock in a transaction not involving a public offering which were at any time within the prior two-year period

beneficially owned by interested shareholders. A “disinterested director” is any member of the board of directors of MVB Financial who is not affiliated with an interested shareholder and who was a director of MVB Financial prior to the time the interested shareholder became an interested shareholder. It also includes any successor to a disinterested director who is not affiliated with an interested shareholder and who was recommended by a majority of the disinterested directors then on the board.

Advantages of MVB Financial’s Proposed Antitakeover Provisions

The provisions discussed above may constitute defensive measures because they may discourage or deter a third party from attempting to acquire control of MVB Financial. The purpose of these provisions is to discourage and to insulate MVB Financial against hostile takeover efforts which MVB Financial’s board of directors might determine are not in the best interests of MVB Financial and its shareholders. We believe that these provisions are reasonable precautions to ensure that a party seeking control will discuss its proposal with management.

Disadvantages of MVB Financial’s Antitakeover Provisions

The classification of the board of directors makes it more difficult to change directors because they are elected for terms of three years rather than one year, and at least two annual meetings instead of one are required to change a majority of the board of directors. Furthermore, because of the smaller number of directors to be elected at each annual meeting, holders of a majority of the voting stock may be in a less favorable position to elect directors through the use of cumulative voting. The supermajority provisions make it more difficult for shareholders to effect changes in the classification of directors.

Collectively, the provisions may be beneficial to management in a hostile takeover attempt, making it more difficult to effect changes, and at the same time, adversely affecting shareholders who might wish to participate in a takeover attempt.

PLAN OF DISTRIBUTION

MVB Financial will offer shares of its common stock to the public primarily through sales made by its directors, officers and employees, on a best-efforts basis. These individuals will use personal contact, telephone, mail or other media to solicit subscriptions. No MVB Financial or MVB director, consultant, officer or employee will receive any additional compensation for assisting with the sale of MVB Financial’s common stock. The expenses of the offering are estimated to be $57,200, including legal, accounting, printing and postage expenses. MVB Financial reserves the right to issue shares through sales made by brokers or dealers in securities, in which case expenses may exceed the amounts listed above.

LEGAL MATTERS

The legality of the shares of common stock offered by this prospectus will be passed upon by Jackson Kelly PLLC, Charleston, West Virginia, counsel to MVB Financial.

EXPERTS

Conley CPA Group, PLLC., independent auditors, have audited our consolidated financial statements at December 31, 2003, and 2002, and for the years then ended, and for the years ended December 31, 2003 and 2002 as set forth in their report. We have included our financial statements in the prospectus and elsewhere in the registration statement in reliance on Conley CPA Group, PLLC’s report, given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission, Washington, D.C. 20549, a registration statement on Form SB-2 under the Securities Act with respect to the common stock offered by this prospectus. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, with respect to us and the common stock offered by this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the

registration statement. Additionally, we file annual, quarterly and current reports with the Securities and Exchange Commission. You can read and copy any document we file at the Public Reference Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and the Securities and Exchange Commission’s Regional offices located at 500 West Madison Street, Suite 1400, Chicago, IL 60661. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a World Wide Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. The address of the Securities and Exchange Commission’s Web site is http://www.sec.gov.

You should rely only on the information contained in this prospectus. MVB Financial has not authorized anyone to provide prospective investors with any different or additional information. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is correct only as of the date hereof, regardless of the time of the delivery of this prospectus or any sale of these securities.

INDEX TO FINANCIAL STATEMENTS



Independent Auditor’s Report		F-2

Balance Sheet as of December 31, 2003 and 2002		F-3

Statements of Income for the Years Ended December 31, 2003 and 2002		F-4

Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2003 and 2002		F-5

Statements of Cash Flows for the Years Ended December 31, 2003 and 2002		F-6

Notes to Consolidated Financial Statements		F-7

Unaudited Interim Consolidated Financial Statements as of September 30, 2004

Consolidated Balance Sheet as of September 30, 2004 (Unaudited) and December 31, 2003		F-17

Consolidated Statements of Income for the Nine Months Ended September 30, 2004 and 2003 and for the Three Months Ended September 30, 2004 and 2003 (Unaudited)		F-18

Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2004 and 2003 (Unaudited)		F-19

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2003 (Unaudited)		F-20

Notes to Consolidated Financial Statements (Unaudited)		F-21

F-1

REPORT OF INDEPENDENT AUDITORS

[Conley CPA Group, PLLC]

To the Board of Directors

The Monongahela Valley Bank, Inc.

Fairmont, West Virginia

We have audited the accompanying balance sheets of The Monongahela Valley Bank, Inc. as of December 31, 2003 and 2002, and the related statements of income, changes in stockholders’ equity, and cash flows for the years ended December 31,2003 and 2002. These financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with 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.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Monongahela Valley Bank, Inc. as of December 31, 2003 and 2002, and the results of its operations and its cash flows for the years ended December 31, 2003 and 2002, in conformity with accounting principles generally accepted in the United States of America.

/s/ Conley CPA Group, PLLC

Fairmont, West Virginia

January 30, 2004

F-2

The Monongahela Valley Bank, Inc.

Balance Sheet as of December 31, 2003 and 2002


	2003			2002
ASSETS
Cash and due from banks	$	2,018,336		$	2,145,330
Interest bearing balances - FHLB		1,159,093			1,511,087
Federal funds sold		548,000			1,039,000
Certificates of deposit in other banks		797,000			3,185,015
Investment Securities: (Note 2)
Securities held-to-maturity, at cost		1,322,653			455,488
Securities available-for-sale, at approximate market value		23,750,283			21,879,457
Loans: (Note 3)		62,615,469			48,032,008
Less: Allowance for loan losses		(688,799	)		(502,570	)

Net Loans		61,926,670			47,529,438

Bank premises, furniture and equipment (Note 4)		1,671,484			1,733,050
Accrued interest receivable and other assets		1,737,357			1,499,403

TOTAL ASSETS	$	94,930,876		$	80,977,268

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits: (Note 5)
Non-interest bearing	$	7,155,243		$	6,078,535
Interest bearing		68,182,788			58,825,128

Total Deposits		75,338,031			64,903,663
Accrued interest, taxes, and other liabilities		261,142			392,856
Securities sold under agreements to repurchase (Note 6)		6,724,601			5,596,695
Federal Home Loan Bank borrowings (Note 6)		4,778,918			2,743,806

Total Liabilities		87,102,692			73,637,020

STOCKHOLDERS’ EQUITY
Common stock, par value $1; 1,000,000 shares authorized; 708,025 shares issued and outstanding		708,025			708,025
Additional paid-in capital		6,537,060			6,537,060
Retained earnings (deficit) (Note 12)		741,945			(39,377	)
Accumulated other comprehensive income		(158,846	)		134,540

Total Stockholders’ Equity		7,828,184			7,340,248

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	94,930,876		$	80,977,268

F-3

The Monongahela Valley Bank, Inc.

Statements of Income for the Years Ended December 31, 2003 and 2002


	Years Ended December 31
	2003		2002
INTEREST INCOME
Interest and fees on loans	$	3,946,259	$	3,140,240
Interest on deposits with other banks		93,827		173,386
Interest on federal funds sold		9,970		16,425
Investment securities - taxable		801,819		897,017

		4,851,875		4,227,068
INTEREST EXPENSE
Interest on deposits and borrowed funds		1,701,786		1,851,557

NET INTEREST INCOME		3,150,089		2,375,511
Provision for loan losses		222,765		224,795

Net interest income after provision for loan losses		2,927,324		2,150,716

OTHER INCOME
Service charges on deposit accounts		329,798		270,300
Commissions from investment services		1,771		36,565
Other operating income		183,162		143,993
Gain on sale of securities		82,739		6,827

		597,470		457,685

OTHER EXPENSES
Salaries and employee benefits		1,141,576		1,018,912
Occupancy expense		131,587		122,523
Equipment rentals, depreciation, and maintenance		163,470		151,466
Data processing		360,925		313,248
Postage		59,204		48,103
Telephone		18,337		12,944
Advertising		40,533		37,640
Credit investigations and other loan related expenses		30,976		25,117
Stationery and printing		58,439		57,684
Legal and accounting fees		68,039		44,002
FDIC and state assessment		25,881		25,588
Business franchise tax		35,200		16,250
Business & Occupation tax		29,950		23,600
Correspondent service charges		35,423		36,319
Other operating expenses		148,052		99,357

		2,347,592		2,032,753

Income Before Income Taxes		1,177,202		575,648
Income Taxes (Note 8)		395,880		175,400

NET INCOME	$	781,322	$	400,248

Basic earnings per share	$	1.10	$	.70
Diluted earnings per share	$	1.06	$	.68
Basic weighted- average shares outstanding		708,025		571,068
Diluted weighted- average shares outstanding		735,318		589,138

F-4

The Monongahela Valley Bank, Inc.

Statements of Changes in Stockholders’ Equity

Years Ended December 31, 2003 and 2002


	Common Stock		Surplus		Retained Earnings (Deficit)			Accumulated Other Comprehensive Income/(loss)			Total Stockholders’ Equity
Balance, December 31, 2001	$	543,677	$	4,652,881	($	439,625	)	$	41,585		$	4,798,518
Issuance of common stock		164,348		1,884,179								2,048,527
Net Income						400,248						400,248
Other comprehensive income(loss)
Net fair value adjustment on securities available for sale, less reclassification adjustment for realized gains - net of tax effect									116,500			116,500
Minimum pension liability adjustment - net of tax effect									(23,545	)		(23,545	)

Total Comprehensive Income												493,203

Balance, December 31, 2002		708,025		6,537,060		(39,377	)		134,540			7,340,248
Net Income						781,322						781,322
Other comprehensive income(loss)
Net fair value adjustment on securities available for sale, less reclassification adjustment for realized gains - net of tax effect									(342,687	)		(342,687	)
Minimum pension liability adjustment - net of tax effect									49,301			49,301

Total Comprehensive Income												487,936

Balance, December 31, 2003	$	708,025	$	6,537,060	$	741,945			($158,846	)	$	7,828,184

The notes to financial statements are an integral part of these statements.

F-5

The Monongahela Valley Bank, Inc.

Statements of Cash Flows for the

Years Ended December 31, 2003 and 2002


	2003			2002
OPERATING ACTIVITIES
Net Income	$	781,322		$	400,248
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) on sale of available- for- sale securities		(82,739	)		(6,827	)
Provision for loan losses		222,765			224,795
Depreciation		133,634			126,852
Amortization, net of accretion		406,581			220,675
Deferred income taxes		1,880			127,400
(Increase) in interest receivable and other assets		(147,636	)		(1,147,701	)
(Decrease)/increase in accrued interest, taxes, and other liabilities		(16,560	)		75,916

NET CASH PROVIDED BY OPERATING ACTIVITIES		1,299,247			21,358

INVESTING ACTIVITIES
(Increase) in loans, net		(14,619,997	)		(13,033,367	)
Purchases of premises and equipment		(72,068	)		(60,740	)
Purchases of investment securities available-for-sale		(25,207,085	)		(15,927,933	)
Decrease in deposits with Federal Home Loan Bank, net		351,994			3,246,478
Decrease/(increase) in federal funds sold		491,000			(14,000	)
Purchases of certificates of deposit with other banks		(697,000	)		(5,270,000	)
Proceeds from maturity of certificates of deposit with other banks		3,085,015			4,674,000
Proceeds from sales, maturities and calls of securities available-for-sale		21,386,350			11,406,872
Proceeds from maturities and calls of securities held-to-maturity		258,164			262,818

NET CASH (USED IN) INVESTING ACTIVITIES		(15,023,627	)		(14,715,872	)

FINANCING ACTIVITIES
Net increase in deposits		10,434,368			15,194,088
Net increase/(decrease) in repurchase agreements		1,127,906			(2,935,574	)
Net increase in Federal Home Loan Bank borrowings		2,035,112			743,806
Issuance of common stock		0			2,048,527

NET CASH PROVIDED BY FINANCING ACTIVITIES		13,597,386			15,050,847

(Decrease)/increase in cash and cash equivalents		(126,994	)		356,333
Cash and cash equivalents at beginning of year		2,145,330			1,788,997

Cash and cash equivalents at end of year	$	2,018,336		$	2,145,330

F-6

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operations

The Monongahela Valley Bank, Inc. provides banking services to the domestic market with the primary market area being Marion County, West Virginia. To a large extent, the operations of the Bank, such as loan portfolio management and deposit growth, are directly affected by the market area economy.

Management Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates, such as the allowance for loan losses, are based upon known facts and circumstances. Estimates are revised by management in the period such facts and circumstances change.

Investment Securities

Debt securities that management has the ability and intent to hold to maturity are classified as held-to-maturity and carried at cost, adjusted for amortization of premium and accretion of discounts computed by the interest method from purchase date to maturity. Other marketable securities are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on securities available-for-sale, net of the deferred income tax effect, are recognized as direct increases or decreases in stockholders’ equity. Cost of securities sold is recognized using the specific identification method.

Loans and Allowance for Loan Losses

Loans are stated at the amount of unpaid principal, reduced by an allowance for loan losses. Interest on loans is recognized as income on daily balances of the principal amount outstanding, calculated using the simple interest method. The allowance for loan losses is established through a provision for loan losses when management believes the collectibility of principal is unlikely. The allowance is an amount management believes will be adequate to absorb possible losses on existing loans that may become uncollectible based on evaluations of the collectibility of loans and prior loan loss experience. Evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans and current economic conditions that may affect the borrower’s ability to pay. Accrual of interest is discontinued on an impaired loan when management believes, after considering economic and business conditions and collection efforts, the borrowers’ financial condition is such that collection of interest is doubtful. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent of cash payments received.

Loan Origination Fees and Costs

Certain loan fees and direct loan costs are primarily being recognized as collected and incurred. The use of this method of recognition does not produce results that are materially different from results which would have been produced if such costs and fees were deferred and amortized as an adjustment of the loan yield.

Bank Premises, Furniture and Equipment

Bank premises, furniture and equipment are carried at cost less accumulated depreciation. The provision for depreciation is computed for financial reporting by the straight-line-method based on the estimated useful lives of assets.

Foreclosed Assets Held for Resale

Foreclosed assets held for resale acquired in satisfaction of mortgage obligations and in foreclosure proceedings are recorded at the lower of the loan balance or at fair market value of the property. Properties carried in foreclosed assets held for resale are assessed periodically for decline in market value, and provisions for losses are charged to income as required.

Income Taxes

Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes. The differences relate principally to accretion of discounts on investment securities, provision for loan losses, minimum pension liability, and differences between book and tax methods of depreciation.

F-7

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC

December 31, 2003

Net Income Per Common Share

Net income per common share includes any dilutive effects of stock options, and is computed by dividing net income by the average number of common shares outstanding during the period, adjusted for the dilutive effect of options under The Bank’s 2000 Stock Incentive Plan.

Cash Flows

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and deposits in other banks. The Monongahela Valley Bank, Inc. paid income taxes of $393,918 and $0 for the years ended December 31, 2003, and 2002, respectively. The Bank made no transfers of loans to foreclosed assets held for resale during these years. Payments of interest did not vary materially from interest reported on the statements of income for 2003 or 2002.

NOTE 2. INVESTMENT SECURITIES

Amortized cost and approximate market values of investment securities held-to-maturity at December 31, 2003, including gross unrealized gains and losses, are summarized as follows:


	Amortized Cost		Unrealized Gain		Unrealized Loss			Approximate Market Value
Mortgage-backed securities	$	196,383	$	8,158	$	—		$	204,541
Municipal securities		126,270		4,112		(13,435	)		1,116,947

	$	1,322,653	$	12,270	$	(13,435	)	$	1,321,488

Amortized cost and approximate market values of investment securities held-to-maturity at December 31, 2002, including gross unrealized gains and losses, are summarized as follows:


	Amortized Cost		Unrealized Gain		Unrealized Loss		Approximate Market Value
Mortgage-backed securities	$	455,488	$	13,477	$	—	$	468,965

	$	455,488	$	13,477	$	—	$	468,965

Amortized cost and approximate market values of investment securities available-for-sale at December 31, 2003 are summarized as follows:


	Amortized Cost		Unrealized Gain		Unrealized Loss			Approximate Market Value
U. S. Agency securities	$	9,032,238	$	53,905	$	(119,846	)	$	8,966,297
Mortgage-backed securities		12,262,093		24,887		(133,129	)		12,153,851
Corporate securities		2,216,473		26,821		(55,859	)		2,187,435
Federal Home Loan Bank stock		442,700		—		—			442,700

	$	23,953,504	$	105,613	$	(308,834	)	$	23,750,283

F-8

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

Amortized cost and approximate market values of investment securities available-for-sale at December 31, 2002 are summarized as follows:


	Amortized Cost		Unrealized Gain		Unrealized Loss			Approximate Market Value
U. S. Agency securities	$	6,915,561	$	133,520	$	(1,891	)	$	7,047,190
Mortgage-backed securities		12,657,541		156,738		(8,422	)		12,805,857
Corporate securities		1,744,538		24,392		(6,820	)		1,762,110
Federal Home Loan Bank stock		264,300		—		—			264,300

	$	21,581,940	$	314,650	$	(17,133	)	$	21,879,457

The following tables summarize amortized cost and approximate market values of securities by maturity:


	December 31, 2003
	Held to Maturity				Available for sale
	Amortized Cost		Approximate Market Value		Amortized Cost		Approximate Market Value
Within one year	$	365,997	$	371,348	$	6,049,926	$	5,965,461
After one year, but within five		308,722		311,878		10,139,268		10,130,917
After five years, but within ten		647,859		638,185		7,321,093		7,210,700
After ten Years		75		77		443,217		443,205

Total	$	1,322,653	$	1,321,488	$	23,953,504	$	23,750,283


	December 31, 2002
	Held to Maturity				Available for sale
	Amortized Cost		Approximate Market Value		Amortized Cost		Approximate Market Value
Within one year	$	217,701	$	224,142	$	7,986,863	$	8,092,337
After one year, but within five		220,349		226,870		10,543,526		10,725,231
After five years, but within ten		16,800		17,297		2,133,119		2,145,298
After ten Years		638		656		918,432		916,591

Total	$	455,488	$	468,965	$	21,581,940	$	21,879,457

Investment securities with a carrying value of $7,669,601 and $6,382,562 at December 31, 2003 and 2002, respectively, were pledged to secure public funds and repurchase agreements.

The Company’s investment portfolio includes several securities that are in an unrealized loss position as of December 31, 2003, the details of which are included in the following table. Although these securities, if sold at December 31, 2003 would result in a pretax loss of $322,269, the Company has no intent to sell the applicable securities at such market values, and maintains the Company has the ability to hold these securities until all principal has been recovered. Declines in the market values of these securities can be traced to general market conditions which reflect the prospect for the economy as a whole. When determining other-than-temporary impairment on securities, the Company considers such factors as adverse conditions specifically related to a certain security or to specific conditions in an industry or geographic area, the time frame securities have been in an unrealized loss position, the Company’s ability to hold the security for a period of time sufficient to allow for anticipated recovery in value, whether or not the security has been downgraded by a rating agency, and whether or not the financial condition of the security issuer has severely deteriorated. As of December 31, 2003, the Company considers all securities with unrealized loss positions to be temporarily impaired, and consequently, does not believe the Company will sustain any material realized losses as a result of the current temporary decline in market value.

F-9

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

The following table discloses investments in an unrealized loss position that are not other than temporarily impaired: At December 31, 2003, total temporary impairment totalled $322,269.


Description and number of positions	Less than 12 months					12 months or more
Description and number of positions	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Agencies (27)	$	6,197,806	$	(119,846	)	$	—	$	—
Mortgage-backed securities (49)		10,095,084		(130,082	)		—		—
Corporate securities (7)		1,361,622		(55,859	)		191,943		(3,047	)
Municipal securities (5)		558,997		(13,435	)		—		—

	$	18,213,509	$	(319,222	)	$	191,943	$	(3,047	)

NOTE 3. LOANS

The components of loans in the balance sheet at December 31, were as follows:


	2003		2002
Commercial and non-residential real estate	$	29,847,988	$	20,468,738
Residential real estate		19,453,879		16,420,846
Consumer and other		13,313,602		11,142,424

	$	62,615,469	$	48,032,008

Changes in the allowance for possible loan losses were as follows for the years ended December 31:


	2003			2002
Balance at beginning of period	$	502,570		$	354,403
Losses charged to allowance		(71,710	)		(81,348	)
Recoveries credited to allowance		35,174			4,720
Provision for possible loan losses		222,765			224,795

Balance at end of period	$	688,799		$	502,570

Impaired loans are accounted for in accordance with Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of Loans, as amended by Statement of Financial Accounting Standards No. 118. The Bank considers a loan impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement.

As of December 31, 2003 and 2002, the Bank had no impaired loans.

NOTE 4. BANK PREMISES, FURNITURE AND EQUIPMENT

Bank premises, furniture and equipment at December 31, were as follows:


	2003			2002
Bank Premises	$	1,484,571		$	1,482,581
Equipment, furniture and fixtures		750,901			684,690

		2,235,472			2,167,271
Allowance for depreciation		(563,988	)		(434,221	)

	$	1,671,484		$	1,733,050

F-10

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

NOTE 5. DEPOSITS

Deposits at December 31, were as follows:


	2003		2002
Demand deposits of individuals, partnerships, and corporations
Interest bearing	$	6,765,190	$	5,687,857
Non-interest bearing		6,331,448		5,420,665
Time and savings deposits of individuals, partnerships and corporations		60,378,515		52,108,678
Deposits of states and political subdivisions		1,409,015		1,289,465
Certified and official checks		453,863		396,998

Total Domestic Deposits	$	75,338,031	$	64,903,663

Time deposits of over $100,000 included above	$	10,076,044	$	8,453,256

Maturities of certificates of deposit at December 31, 2003 were as follows:


2004	$	14,999,906
2005		6,689,067
2006		4,106,348
2007		3,127,191
2008		2,500,160

Total	$	31,422,672

NOTE 6. BORROWED FUNDS

The Bank is a party to repurchase agreements with certain customers. These accounts function as sweep accounts. As of December 31, 2003 and 2002, the Bank had repurchase agreements of $6,724,601 and $5,596,695.

The Bank is a member of the Federal Home Loan Bank (“FHLB”) of Pittsburgh, Pennsylvania. The FHLB borrowings are secured by a blanket lien by the FHLB on certain residential mortgage loans or securities with a market value at least equal to the outstanding balances. The remaining maximum borrowing capacity with the FHLB at December 31, 2003 was approximately $28,229,082. At December 31, 2003 and 2002 the Bank had borrowed $4,778,918 and $2,743,806.

Borrowings from the FHLB as of December 31 were as follows:


	2003		2002
Fixed interest rate note, originating April 1999, due April 2014, interest of 5.405% is payable monthly.	$	1,000,000	$	1,000,000
Fixed interest rate note, originating February 2001, due February 2004, interest of 5.38% is payable quarterly.		1,000,000		1,000,000
Fixed interest rate note, originating April 2002, due May 2017, interest of 5.90% is payable monthly.		734,047		743,806
Floating interest rate note, originating March 2003, due December 2004, interest payable monthly.		2,044,871		—

		$4,778,918	$	2,743,806

Borrowings from the FHLB are secured by stock in the FHLB of Pittsburgh, qualifying first mortgage loans, mortgage-backed securities and certain investment securities.

F-11

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

Additionally the Bank has a line of credit of $3,500,000 available from the Community Bankers Bank. There were no borrowings against this line of credit at December 31, 2003 or 2002.

NOTE 7. FINANCIAL INSTRUMENTS

Financial Instruments with Off-Balance-Sheet Risk

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the statements of financial condition.

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

Commitments to extend credit are agreements to lend to a customer as long there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customers credit worthiness on a case-by-case basis. The amount and type of collateral obtained, if deemed necessary by the Bank upon extension of credit, varies and is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Standby letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit.

Total contractual amounts of the commitments as of December 31 were as follows:


	2003		2002
Available on lines of credit	$	8,569,334	$	7,176,919
Stand-by letters of credit		126,481		54,621
Other loan commitments		—		—

	$	8,695,815	$	7,231,540

Concentration of Credit Risk

The Bank grants a majority of its commercial, financial, agricultural, real estate and installment loans to customers throughout Marion County, West Virginia and adjacent counties. Collateral for loans is primarily residential and commercial real estate, personal property, and business equipment. The Bank evaluates the credit worthiness of each of its customers on a case-by-case basis, and the amount of collateral it obtains is based upon management’s credit evaluation.

F-12

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

NOTE 8. INCOME TAXES

The Bank records income taxes in accordance with Statement of Financial Accounting Standards No. 109 (FAS 109), Accounting for Income Taxes. FASB 109 is an asset and liability approach that requires the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities.

The amount reflected as income taxes represents federal and state income taxes on financial statement income. Certain items of income and expense, primarily the provision for possible loan losses, allowance for losses on foreclosed assets held for resale, depreciation, and accretion of discounts on investment securities are reported in different accounting periods for income tax purposes.

The provisions for income taxes for the years ended December 31, were as follows:


	2003		2002
Current:
Federal	$	392,000	$	42,000
State		2,000		6,000

	$	394,000	$	48,000

Deferred expense
Federal	$	1,500	$	102,000
State		380		25,400

		1,880		127,400

Income Tax expense	$	395,880	$	175,400

Following is a reconciliation of income taxes at federal statutory rates to recorded income taxes for the year ended December, 31:


	2003					2002
	Amount			%		Amount			%
Tax at Federal tax rate	$	400,300		34.0	%	$	195,700		34.0	%
Tax effect of:
State income tax		670		0.6	%		3,500		0.6	%
Surtax exemption/rate difference		21,600		1.8	%		(10,600	)	-1.8	%
Tax exempt earnings		(48,100	)	-4.1	%		(14,100	)	-2.5	%
Other		21,410		1.3	%		900		0.1	%

	$	395,880		33.6	%	$	175,400		30.4	%

Deferred tax assets and liabilities are the result of timing differences in recognition of revenue and expense for income tax and financial statement purposes.

Deferred income tax liabilities and (assets) were comprised of the following at December 31:


	2003			2002
Depreciation	$	100,000		$	68,000
Unrealized gain on securities available-for-sale		—			89,255
Pension		9,000			—

Gross deferred tax liabilities		109,000			157,255

Unrealized loss on securities available-for-sale		(69,095	)		—
Provision for loan loss		(175,955	)		(122,300	)
Minimum pension liability		(12,735	)		(31,800	)
Section 179 expense carryover		—			(4,150	)

Gross deferred tax (assets)		(257,785	)		(158,250	)

Net deferred tax (asset)	$	(148,785	)	$	(995	)

No deferred income tax valuation allowance is provided since it is more likely than not that realization of the deferred income tax asset will occur in future years.

F-13

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

NOTE 9. RELATED PARTY TRANSACTIONS

The Bank has granted loans to officers and directors of the Bank and to their associates. Related party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than normal risk of collectibility. Set forth below is a summary of the related loan activity.


	Balance at Beginning of Year		Borrowings		Repayments			Balance at end of Year
December 31, 2003	$	3,176,754	$	4,017,298	$	(2,296,157	)	$	4,897,895

December 31, 2002	$	3,303,519	$	4,007,423	$	(4,134,188	)	$	3,176,754

The Bank held related party deposits of $3,616,804 and $3,731,313 at December 31, 2003 and December 31, 2002, respectively.

The Bank held related party repurchase agreements of $879,957 and $976,662 at December 31, 2003 and December 31, 2002, respectively.

NOTE 10. PENSION PLAN

The Bank participates in a trusteed pension plan known as the West Virginia Bankers Association Retirement Plan covering virtually all full-time employees. Benefits are based on years of service and the employee’s compensation. The Bank’s funding policy is to fund normal costs of the plan as accrued. Contributions are intended to provide not only for benefits attributed to service to date, but also for those benefits expected to be earned in the future. The Bank participated in the pension plan beginning January 1, 1999. The Bank has recognized estimated pension expense of $69,536 and $79,630 for the years ended December 31, 2003 and 2002.

The following table sets forth the pension plan’s funded status as of the latest available actuarial valuations dated October 1, 2002 and 2001:


	2003			2002
Actuarial present value of benefit obligations:
Accumulated benefit obligation	$	(242,948	)	$	(160,091	)

Projected benefit obligation for service rendered to date	$	(307,110	)	$	(212,421	)
Plan assets at fair value, primarily listed stocks and U. S. Bonds		205,493			106,600

Projected benefit obligations (greater)/less than plan assets		(101,617	)		(105,821	)
Unrecognized net gain from past experience different from that assumed and effects of changes in assumptions		—			—
Prior service cost not yet recognized in net periodic pension cost		24,137			26,551
Unrecognized net (assets) at transition		108,113			87,439

(Accrued) pension cost	$	30,633		$	8,169

Net pension cost includes the following components:
Service cost-benefit earned during period	$	61,318		$	51,745
Interest cost on projected benefit obligation		15,201			10,441
Actual return on plan assets		(9,397	)		(4,022	)
Net amortization and deferral		2,414			2,414

Net periodic pension cost	$	69,536		$	60,578

The weighted-average discount rate and rate of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligation was 4.00% for 2003 and 4.25% for 2002. The expected long-term rate of return on plan assets was 8.5% in 2003 and 2002.

F-14

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

The expected employer contribution for the pension plan year ending October 31, 2004 is $59,373.

The following actuarial assumptions were used for the pension plan years ending as indicated:


	October 31
	2003		2002
Discount rate	6.50	%	7.00	%
Rate of return on plan assets	8.50	%	8.50	%
Salary increase	3.50	%	4.00	%
Increase rate for maximum benefit and compensation limit	3.00	%	3.00	%

An analysis of plan assets and the investment policy follows.


	Target Allocation 2004		Allowable Allocation Range		Percentage of Plan Assets at October 31
	Target Allocation 2004		Allowable Allocation Range		2003		2002
(1) Plan Assets
(a) Equity Securities	70	%	40-80	%	70	%	62	%
(b) Debt Securities	25	%	20-40	%	26	%	33	%
(c) Real Estate	0	%	0	%	0	%	0	%
(d) Other	5	%	3-10	%	4	%	5	%

(e) Total					100	%	100	%

Investment Policy and Strategy

The policy, as established by the Pension Committee of the West Virginia Bankers Association Retirement Plan, is to invest assets per the target allocations stated above. The assets will be reallocated periodically to meet the above target allocations. The investment policy will be reviewed periodically, under the advisement of a certified investment advisor, to determine if the policy should be changed.

The overall investment return goal is to achieve a return greater than a blended mix of stated indices tailored to the same asset mix of the plan assets by 0.5% after fees over a rolling 5-year moving average basis.

Allowable assets include cash equivalents, fixed income securities, equity securities, exchange traded index funds and GICs. Prohibited investments include, but are not limited to, commodities and future contracts, private placements, options, limited partnerships, venture capital investments, real estate and IO, PO, and residual tranche CMOs. Unless a specific derivative security is allowed per the plan document permission must be sought from the Pension Committee to include such investments.

In order to achieve a prudent level of portfolio diversification, the securities of any one company should not exceed more than 10% of the total plan assets, and no more than the 25% of total plan assets should be invested in any one industry (other than securities of U.S. Government or Agencies). Additionally, no more than 20% of the plan assets shall be invested in foreign securities (both equity and fixed).

Determination of Expected Long-term Rate of Return

The expected long-term rate of return for the plan’s total assets is based on the expected return of each of the above categories, weighted based on the median of the target allocation for each class.

NOTE 11. STOCK OPTION PLAN

The Monongahela Valley Bank, Inc. 2000 Stock Incentive Plan provides for the issuance of stock options to participating employees. Stock options vest 25% per year on January 1 of each year following the option grant date and expire 10 years from the option grant date. As of December 31, 2003, no stock options have been exercised. There were 15,615 shares available for options and 36,885 outstanding unexercised options at a weighted average exercise price of $10.50 per share.

F-15

NOTES TO FINANCIAL STATEMENTS

THE MONONGAHELA VALLEY BANK, INC.

December 31, 2003

NOTE 12. REGULATORY CAPITAL REQUIREMENTS

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

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets, as defined. As of December 31, 2002 and 2001, the Bank meets all capital adequacy requirements to which it is subject.

The most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the institution’s category. The Bank’s actual capital amounts and ratios are also presented in the table below.


	ACTUAL				MINIMUM TO BE WELL CAPITALIZED				MINIMUM FOR CAPITAL ADEQUACY PURPOSES
	AMOUNT		RATIO		AMOUNT		RATIO		AMOUNT		RATIO
As of December 31, 2003
Total Capital
(to risk-weighted assets)	$	8,529,000	13.0	%	$	6,543,400	10.0	%	$	5,234,720	8.0	%
Tier I Capital
(to risk-weighted assets)	$	7,840,000	12.0	%	$	3,926,040	6.0	%	$	2,617,360	4.0	%
Tier I Capital
(to average assets)	$	7,840,000	8.2	%	$	5,732,880	6.0	%	$	3,821,920	4.0	%
As of December 31, 2002
Total Capital
(to risk-weighted assets)	$	7,635,000	15.0	%	$	5,102,300	10.0	%	$	4,081,840	8.0	%
Tier I capital
(to risk-weighted assets)	$	7,132,000	14.0	%	$	3,061,380	6.0	%	$	2,040,920	4.0	%
Tier I Capital
(to average assets)	$	7,132,000	9.0	%	$	4,779,900	6.0	%	$	3,186,600	4.0	%

NOTE 13. REGULATORY RESTRICTION ON DIVIDEND

The approval of the regulatory agencies is required if the total of all dividends declared by the Bank in any calendar year exceeds the Bank’s net profits, as defined, for that year combined with its retained net profits for the preceeding two calendar years.

NOTE 14. FORMATION OF HOLDING COMPANY

On December 17, 2003 the stockholders of The Monongahela Valley Bank, Inc. approved a plan to form a bank holding company, MVB Financial Corp, effective January 1, 2004. Through the exchange of common stock in 2004, the bank holding company will own The Monongahela Valley Bank, Inc.

F-16

MVB Financial Corp.

Consolidated Balance Sheet as of September 30, 2004 (Unaudited)

and December 31, 2003

(Dollars in thousands, except Per Share Data)


	September 30, 2004 (Unaudited)			December 31, 2003 (Note A)
ASSETS
Cash and due from banks	$	2,967		$	2,018
Interest bearing balances - FHLB		837			1,159
Federal funds sold		—			548
Certificates of deposit in other banks		990			797
Investment Securities:
Securities held-to-maturity, at cost		1,733			1,323
Securities available-for-sale, at approximate market value
Loans:		75,574			62,616
Less: Allowance for loan losses		(831	)		(689	)

Net Loans		74,743			61,927

Bank premises, furniture and equipment		1,627			1,672
Accrued interest receivable and other assets		1,723			1,737

TOTAL ASSETS	$	105,342		$	94,931

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	9,802		$	7,155
Interest bearing		75,186			68,183

Total Deposits		84,988			75,338
Accrued interest, taxes, and other liabilities		350			261
Securities sold under agreements to repurchase		7,597			6,725
Federal Home Loan Bank borrowings		3,785			4,779

Total Liabilities		96,720			87,103

STOCKHOLDERS’ EQUITY
Preferred stock, par value $1,000; 5,000 shares authorized, none issued Common stock, par value $1; 4,000,000 shares authorized; 743,060 shares issued and outstanding		743			708
Additional paid-in capital		6,975			6,537
Treasury Stock		(9	)		0
Retained earnings		1,005			742
Accumulated other comprehensive income		(92	)		(159	)

Total Stockholders’ Equity		8,622			7,828

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	105,342		$	94,931

F-17

MVB Financial Corp.

Consolidated Statements of Income for the Nine Months Ended September 30, 2004 and 2003 and the Three Months Ended September 30, 2004 and 2003

(Unaudited) (Dollars in thousands Except Per Share Data)


	Nine Months Ended 30-Sep				Three Months Ended 30-Sep
	2004		2003		2004		2003
INTEREST INCOME
Interest and fees on loans	$	3,408	$	2,902	$	1,218	$	1,058
Interest on deposits with other banks		40		81		13		21
Interest on federal funds sold		1		8		—		2
Investment securities - taxable		619		579		200		173

		4,068		3,570		1,431		1,254
INTEREST EXPENSE
Interest on deposits and borrowed funds		1,154		1,307		392		409

NET INTEREST INCOME		2,914		2,263		1,039		845
Provision for loan losses		192		161		58		31

Net interest income after provision for loan losses		2,722		2,102		981		814

OTHER INCOME
Service charges on deposit accounts		341		218		123		90
Commissions from investment services		18		1		2		—
Other operating income		150		132		54		42
Gain on sale of securities		—		90		—		16

		509		441		179		148

OTHER EXPENSES
Salaries and employee benefits		1,010		852		357		299
Occupancy expense		99		100		33		34
Equipment rentals, depreciation, and maintenance		111		125		39		42
Data processing		319		259		107		91
Advertising		42		32		14		9
Legal and accounting fees		58		29		15		10
Other operating expenses		346		315		115		122

		1,985		1,712		680		607

Income before income taxes		1,246		831		480		355
Income tax expense		510		282		194		120

Net Income		736		549		286		235

Basic net income per share	$	0.99	$	0.74	$	0.39	$	0.32
Diluted net income per share	$	0.94	$	0.71	$	0.37	$	0.30
Basic weighted average shares outstanding		743,060		743,060		743,060		743,060
Diluted weighted average shares outstanding		779,570		770,353		779,570		770,353

F-18

The Monongahela Valley Bank, Inc.

Statements of Changes in Stockholders’ Equity

For the Nine Months Ended September 30, 2003 and 2004

(Unaudited) (Dollars in thousands)


	Common Stock		Surplus		Retained Earnings (Deficit)			Accumulated Other Comprehensive Income/(loss)			Treasury Stock			Total Stockholders’ Equity
Balance, January 1, 2003	$	708	$	6,537	$	(39	)	$	134					$	7,340
Net Income						549									549
Other comprehensive income(loss)
Net fair value adjustment on securities available for sale, less reclassification adjustment for realized gains - net of tax effect									(365	)					(365	)
Minimum pension liability adjustment - net of tax effect									39						39

Total Comprehensive Income															223

Balance, September 30, 2003	$	708	$	6,537	$	510		$	(192	)	$	—		$	7,563

Balance, January 1, 2004	$	708	$	6,537	$	742		$	(159	)				$	7,828
Net Income						736									736
Stock dividend - 5% stock dividend		35		438		(473	)								—
Other comprehensive income(loss)
Net fair value adjustment on securities available for sale, less reclassification adjustment for realized gains - net of tax effect									67						67
Minimum pension liability adjustment - net of tax effect									—						—

Total Comprehensive Income															803

Treasury stock acquired												(8,505	)		(9	)
Balance, September 30, 2004	$	743	$	6,975	$	1,005		$	(92	)	$	(8,505	)	$	8,622

F-19

MVB Financial Corp.

Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2003

(Unaudited) (Dollars in thousands)


	Nine Months Ended 30-Sep
	2004			2003
OPERATING ACTIVITIES
Net Income	$	736		$	549
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) on sale of available-for-sale securities		—			(90	)
Provision for loan losses		192			161
Depreciation		84			99
Amortization, net of accretion		146			339
Decrease/(increase) in interest receivable and other assets		6			8
Increase in accrued interest, taxes, and other liabilities		73			(54	)

NET CASH PROVIDED BY OPERATING ACTIVITIES		1,237			1,012

INVESTING ACTIVITIES
(Increase) in loans, net		(13,008	)		(10,250	)
Purchases of premises and equipment		(39	)		(41	)
Purchases of investment securities available-for-sale		(2,870	)		(23,785	)
Purchases of investment securities held-to-maturity		(950	)		—
Decrease/(increase) in deposits with Federal Home Loan Bank, net		322			226
Decrease/(increase) in federal funds sold		548			(8	)
Purchases of certificates of deposit with other banks		(3,258	)		(697	)
Proceeds from maturity of certificates of deposit with other banks		3,065			2,090
Proceeds from sales, maturities and calls of securities available-for-sale		5,859			18,535
Proceeds from maturities and calls of securities held-to-maturity		523			216

NET CASH (USED IN) INVESTING ACTIVITIES		(9,808	)		(13,714	)

FINANCING ACTIVITIES
Net increase in deposits		9,650			8,294
Net increase in repurchase agreements		872			2,343
Net (decrease)/increase in Federal Home Loan Bank borrowings		(993	)		2,270
Purchase of treasury stock		(9	)		—

NET CASH PROVIDED BY FINANCING ACTIVITIES		9,520			12,907

Increase in cash and cash equivalents		949			205
Cash and cash equivalents at beginning of period		2,018			2,145

Cash and cash equivalents at end of period	$	2,967		$	2,350

F-20

MVB Financial Corp.

Notes to Consolidated Financial Statements

Note A – Basis of Presentation

The accounting and reporting policies of MVB Financial Corp. conform to accounting principles generally accepted in the United States and practices in the banking industry. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. All significant inter-company accounts and transactions have been eliminated in consolidation. The interim financial information included in this report is unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the results of the interim periods have been made.

The consolidated balance sheet as of December 31, 2003 has been extracted from audited financial statements included in MVB’s 2003 filing on Form 10-KSB. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted. These financial statements should be read in conjunction with the financial statements and notes thereto included in MVB’s December 31, 2003, Form 10KSB filed with the Securities and Exchange Commission.

Note B – Cash Flows

For the three months ended September 30, 2004 and 2003, for purposes of reporting cash flows, cash and cash equivalents include cash and due from banks and interest-bearing balances available for immediate withdrawal of $2.967 million at September 30, 2004 and $2.350 million at September 30, 2003.

Note C – Other Comprehensive Income

MVB currently has two components of other comprehensive income, which include unrealized gains and losses on securities available-for-sale and pension liability adjustment. Details are as follows:


(Amounts in thousands)	Sep 30 2004			Dec 31 2003
Other Comprehensive Income:
Beginning accumulated other comprehensive income	$	(159	)	$	135
Unrealized gains/(losses) on securities available-for-sale		91			(501	)
Pension liability adjustment		0			68
Deferred income tax effect		24			139

Ending accumulated other comprehensive income	$	(92	)	$	(159	)

F-21

No dealer, salesperson or other person has been authorized to give any information or to make any representation not contained in this prospectus and if given or made, such information or representation must not be relied upon as having been authorized by MVB Financial. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities offered hereby in any jurisdiction to or from any person to or from whom it is unlawful to make such offer in such jurisdiction. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information herein is correct as of any time subsequent to the date hereof or that there has been no change in the affairs of MVB Financial since the date hereof.

286,000 Shares

MVB FINANCIAL CORP.

Common Stock

PROSPECTUS

December 1, 2004

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.

Indemnification of Directors and Officers

Reference is made to the provisions of Article VII of MVB Financial’s articles of incorporation below.

ARTICLE VII

Provisions for the regulation of the internal affairs of the corporation are:

A. Indemnification . Each person who was or is a party or is threatened to be made a party to or is involved (including, without limitation, as a witness or deponent) in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise in nature (“Proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was serving at the written request of the corporation’s Board of Directors, president or their delegate as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such Proceeding is alleged action or omission in an official capacity as a director, officer, trustee, employee or agent or in any other capacity, shall be indemnified and held harmless by the corporation to the fullest extent authorized by law, including but not limited to the West Virginia Code, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said Code permitted the corporation to provide prior to such amendment), against all expenses, liability and loss (including, without limitation, attorneys’ fees and disbursements, judgments, fines, ERISA or other similar or dissimilar excise taxes or penalties and amounts paid or to be paid in settlement) incurred or suffered by such person in connection therewith; provided, however, that the corporation shall indemnify any such person seeking indemnity in connection with a Proceeding (or part thereof) initiated by such person only if such Proceeding (or part thereof) was authorized by the Board of Directors of the corporation; provided, further, that the corporation shall not indemnify any person for civil money penalties or other matters, to the extent such indemnification is specifically not permissible pursuant to federal or state statute or regulation, or order or rule of a regulatory agency of the federal or state government with authority to enter, make or promulgate such order or rule. Such right shall include the right to be paid by the corporation expenses, including, without limitation, attorneys’ fees and disbursements, incurred in defending or participating in any such Proceeding in advance of its final disposition; provided, however, that the payment of such expenses in advance of the final disposition of such Proceeding shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such director or officer, in which such director or officer agrees to repay all amounts so advanced if it should be ultimately determined that such person is not entitled to be indemnified under this Article or otherwise. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, or that such person did have reasonable cause to believe that his conduct was unlawful.

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B. Right of Claimant to Bring Suit . If a claim under this Article is not paid in full by the corporation within thirty days after a written claim therefor has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful, in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending or participating in any Proceeding in advance of its final disposition where the required undertaking has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the applicable law for the corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the corporation.

Neither the failure of the corporation (including its Board of Directors, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action that indemnification or reimbursement of the claimant is permitted in the circumstances because he or she has met the applicable standard of conduct, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel, or its shareholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

C. Contractual Rights: Applicability . The right to be indemnified or to the reimbursement or advancement of expenses pursuant hereto (i) is a contract right based upon good and valuable consideration, pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the corporation and the director or officer, (ii) is intended to be retroactive and shall be available with respect to events occurring prior to the adoption hereof, and (iii) shall continue to exist after the rescission or restrictive modification hereof with respect to events occurring prior thereto.

D. Requested Service . Any director or officer of the corporation serving, in any capacity, (i) another corporation of which five percent (5%) or more of the shares entitled to vote in the election of its directors is held by the corporation, or (ii) any employee benefit plan of the corporation or of any corporation referred to herein shall be deemed to be doing so at the request of the corporation.

E. Non-Exclusivity of Rights . The rights conferred on any person hereunder shall not be exclusive of and shall be in addition to any other right which such person may have or may hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of shareholders or disinterested directors or otherwise.

F. Insurance . The corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against such expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under West Virginia law.

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the same may exist or are hereafter amended. Any repeal or modification of the foregoing provision by the stockholders of the corporation shall not adversely affect any right of protection of a director of the corporation existing at the time of such repeal or modification.

MVB Financial is a West Virginia corporation subject to the applicable indemnification provisions of the General Corporation Law of West Virginia.

The foregoing indemnity provisions have the effect of reducing directors’ and officers’ exposure to personal liability for actions taken in connection with their respective positions.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of MVB Financial pursuant to the foregoing provisions, or otherwise, MVB Financial has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by MVB Financial of expenses incurred or paid by a director, officer or controlling person of MVB Financial in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, MVB Financial will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

Item 25.

Other Expenses of Issuance and Distribution

The following table sets forth the various expenses payable by MVB Financial in connection with the sale and distribution of the securities being registered, other than underwriting discounts and the underwriter’s non-accountable expense allowance. All of the amounts shown are estimated except the Securities and Exchange Commission registration fee.


SEC registration fee	$	508.00
Printing and engraving expenses		10,000.00
Legal fees and expenses		29,692.00
Accounting fees and expenses		10,000.00
Miscellaneous		7,000.00

Total:	$	57,200.00

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Item 26.

Recent Sales of Unregistered Securities

None.

Item 27.

Exhibits

MVB Financial Corp. and Subsidiaries Filing on Form SB-2


Exhibit Number	Description	Exhibit Location

3.1	Articles of Incorporation	Filed herein.

3.1-1	Articles of Incorporation - Amendment	Filed herein

3.2	Bylaws	Filed herein.

5	Form of Opinion of Jackson Kelly PLLC as to Legality	Filed herein.

10.1	MVB Financial Corp. 2003 Stock Incentive Plan	Filed herein.

10.2	Master Lease Agreement with S-N-S Foods, Inc. for premises occupied by Middletown Mall Office	Filed herein.

10.3	Sublease Agreement with S-N-S Foods, Inc. for premises occupied by Middletown Mall Office	Filed herein

10.4	Lease Agreement with Essex Properties, LLC for land to be occupied by Bridgeport Branch	Filed herein

11	Statement Regarding Computation of Earnings per Share	Filed herein.

21	Subsidiary of Registrant	Filed herein.

23.1	Consent of Conley CPA Group, PLLC	Filed herein.

24	Power of Attorney	Filed herein.

99.1	Report of Conley CPA Group, PLLC, Independent Auditors	Found on Page F2 herein.

Item 28.

Undertakings

The undersigned hereby undertakes that it will:

(1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of

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Registration Fee” table in the effective registration statement.

(iii) Include any additional or changed material information on the plan of distribution.

The undersigned hereby undertakes that it will:

(1) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.

(2) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

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SIGNATURES

In accordance with the requirements of the Securities Act of 1933, MVB Financial certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorizes this registration statement to be signed on its behalf by the undersigned, in the City of Fairmont, State of West Virginia, on November 15, 2004.


MVB Financial Corp.

By:		/s/ J AMES R. M ARTIN
		James R. Martin
		(Principal Executive Officer)



By:		/s/ E RIC L. T ICHENOR
		Eric L. Tichenor
		(Principal Accounting and Financial Officer)

Dated: November 15, 2004

In accordance with the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates stated.


Signatures	Title	Date

/s/ J AMES R. M ARTIN James R. Martin	President and Chief Executive Officer and Director	November 15, 2004

/s/ * Barbara L. Alexander	Director	November 15, 2004

/s/ * Robert L. Bell	Director	November 15, 2004

/s/ * Stephen R. Brooks	Director	November 15, 2004

/s/ * Harvey M. Havlichek	Director	November 15, 2004

/s/ * Dr. Saad Mossallati	Director	November 15, 2004

/s/ * Leonard W. Nossokoff	Director	November 15, 2004

/s/ * J. Christopher Pallotta	Director	November 15, 2004

/s/ * Nitesh S. Patel	Director	November 15, 2004

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/s/ * Louis W. Spatafore		Director	November 15, 2004

/s/ * Richard L. Toothman		Director	November 15, 2004

/s/ * Dr. Michael F. Trent		Director	November 15, 2004

/s/ * Dr. James E. Valentine		Director	November 15, 2004

/s/ * Samuel J. Warash		Director	November 15, 2004

* By	/s/ J AMES R. M ARTIN James R. Martin, Attorney in Fact	Director	November 15, 2004

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Exhibit 3.1

Filed in the Office of the

Secretary of State of

West Virginia, this date:

ARTICLES OF INCORPORATION

MVB FINANCIAL CORP.

The undersigned, acting as incorporator of a corporation under Section 202, Article 2, Chapter 31D of the Code of West Virginia, adopt the following Articles of Incorporation of such corporation:

ARTICLE I

The undersigned agrees to become a corporation by the name of:

MVB Financial Corp.

ARTICLE II

The address of the principal office of said corporation will be 301 Virginia Avenue, in the City of Fairmont, County of Marion, State of West Virginia 26554-2777.

ARTICLE III

This corporation is formed for the purpose of transacting any or all lawful business for which corporations may be formed under the corporation laws of the State of West Virginia.

ARTICLE IV

No shareholder of this corporation or other person shall have any preemptive right whatsoever.

ARTICLE V

The amount of the total authorized capital stock of said corporation shall be Four Million Dollars ($4,000,000.00), which shall be divided into Four Million (4,000,000) shares of the par value of One Dollar ($1.00) each.

ARTICLE VI

The existence of this corporation is to be perpetual.

ARTICLE VII

Provisions for the regulation of the internal affairs of the corporation are:

be indemnified under this Article or otherwise. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, or that such person did have reasonable cause to believe that his conduct was unlawful.

G. Limitation of Liability . A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except to the extent that such exception from liability or limitation thereof is not permitted by the West Virginia Business Corporation Act or the laws of the United States or the State of West Virginia, as the same may exist or are hereafter amended. Any repeal or modification of the foregoing provision by the stockholders of the corporation shall not adversely affect any right of protection of a director of the corporation existing at the time of such repeal or modification.

ARTICLE IX

The full name and address of the appointed person to whom notice or process may be sent is:

MVB Financial Corp. (Attention: President), 301 Virginia Avenue, Fairmont, West Virginia 26554-2777.

ARTICLE X

The number of directors constituting the initial Board of Directors of the corporation is fourteen (14), and the names and addresses of the persons who shall serve as directors until the first meeting of the shareholders or until their successors are elected and shall qualify are:


NAME		ADDRESS

Barbara L. Alexander		250 Lakewood Center Morgantown, West Virginia 26508

Robert L. Bell		333 Baldwin Street Morgantown, West Virginia 26505

Stephen R. Brooks		1009 Greystone Circle Morgantown, West Virginia 26508

Harvey M. Havlichek		P.O. Box 42 Colfax, West Virginia 26566


NAME		ADDRESS

James R. Martin		911 Henry Drive Fairmont, West Virginia 26554

Dr. Saad Mossallati		200 Route 98 West Suite 107 Nutter Fort, West Virginia 26301

Leonard W. Nossokoff		498 Canyon Road Morgantown, West Virginia 26508

J. Christopher Pallotta		8 Bel Manor Drive Fairmont, West Virginia 26554

Nitesh S. Patel		7003 Carriage Lane Fairmont, West Virginia 26554

Louis W. Spatafore		14 Regency Drive Fairmont, West Virginia 26554

Richard L. Toothman		6 Pheasant Drive Fairmont, West Virginia 26554

Dr. Michael F. Trent		1821 Martha Avenue Fairmont, West Virginia 26554

Dr. James E. Valentine		907 Gaston Avenue Fairmont, West Virginia 26554

Samuel J. Warash		1639 Otlahurst Drive Fairmont, West Virginia 26554

ARTICLE XI

The name and address of the Incorporator is James R. Martin, 301 Virginia Avenue, Fairmont, West Virginia 26554-2777.

THE UNDERSIGNED , for the purposes of forming a corporation under the laws of the State of West Virginia, does make and file these Articles of Incorporation, and have accordingly hereto set his respective hand this 24 ^th day of May, 2003.

/s/ J AMES R. M ARTIN

JAMES R. MARTIN

Exhibit 3.1_1


Joe Manchin, III		Penney Barker, Team Leader
Secretary of State	[SEAL]	Corporations Division
State Capitol Bldg.		Tel: (304) 558-8000
1900 Kanawha Blvd. East		Fax: (304) 558-5758
Charleston, WV 25305		Hrs- 8:30-5:00pm


www.wvsos.com	WEST VIRGINIA	business@wvsos.com
	ARTICLES OF INCORPORATION
FEE: $25	PROFIT AMENDMENT
File One Original

In accordance with §31D-10-1006 of the Code of West Virginia, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation:


FIRST	The name of the corporation is MVB Financial Corp.

SECOND	The following amendment(s) to the Articles of Incorporation were adopted by: (check one of the following statements) x the shareholders of the corporation ¨ the incorporators or board of directors and shareholder approval was not required.

THIRD	The date of the adoption of the amendment(s) was: April 20, 2004

FOURTH	Change of Name information or Text of Amendment

	Change of name from:

	To:

	Other amendment(s) (attach additional pages to form, if needed)

	See attached Appendix 1.





FIFTH	Contact name and number of person to reach in case of problem with filing: (optional, however, listing one may help to avoid a return or rejection of filing if there appears to be a problem with the document)

	Name: James R. Martin	Phone: 304-367-8688

SIXTH	Signature of person executing document:

	/s/ J AMES R. M ARTIN	President
	Signature	Capacity in which he/she is signing
		(example: president, chairman, etc.)

FORM CD-2	Issued by the WV Secretary of State	Revised 2/04

Appendix I

ARTICLES OF AMENDMENT

ARTICLES OF INCORPORATION

MVB FINANCIAL CORP.

Pursuant to the provisions of West Virginia Code Section 31D-10-1003, the undersigned corporation hereby adopts the following Articles of Amendment to its Articles of Incorporation:

FIRST: The name of the corporation is MVB Financial Corp.

SECOND: The following amendment to the Articles of Incorporation was adopted by the shareholders of the corporation on April 26, 2004, in the manner prescribed by West Virginia Code Section 31D-10-1001, et seq ., and the corporation’s Articles of Incorporation:

RESOLVED , that Article V of the Articles of Incorporation be amended to read, in its entirety, as follows:

ARTICLE V

The amount of the total authorized capital stock of said corporation shall be nine million dollars ($9,000,000), which shall be divided into four million (4,000,000) shares of Common Stock with a value of $1.00 each per share, and five thousand (5,000) shares of Preferred Stock with a par value of $1,000 per share (“Preferred Stock”)

The Board of Directors shall have the power and authority at any time and from time to time to issue, sell or otherwise dispose of any unissued but authorized shares of any class or classes of stock presently provided for in the Articles of Incorporation, or that may hereafter be provided for by a subsequent amendment to the Articles of Incorporation, to such persons or parties, including the holders of Common Stock or Preferred Stock or of any such other class of stock, for such considerations (not less than the par value, if any, thereof) and upon such terms and conditions as the Board of Directors in its

discretion may deem to be in the best interests of the corporation. Except as expressly provided to the contrary hereinafter, such issuance, sale or other disposition may be made without offering such shares, or any part of any class thereof, to the holders of Common Stock or Preferred Stock or any such other class of stock, and no such holder shall have any preemptive right to subscribe for any shares of the Common Stock and shall only have such preemptive rights with respect to the Preferred Stock to the extent the Board of Directors, in its discretion, determines.

Each holder of Common Stock of the corporation entitled to vote shall have one vote for each share thereof held.

The voting powers, designations, preferences, limitations, restrictions and relative rights of the Preferred Stock are as follows:

A. Issuance in Series . Preferred Stock may be issued from time to time in one or more series. All shares of Preferred Stock shall be of equal rank and shall be identical, except in respect of the particulars that are fixed in the Articles of Incorporation or may be fixed by the Board of Directors as hereinafter provided pursuant to authority which is hereby expressly vested in the Board of Directors; and each share of Preferred Stock, whether of the same or a different series, shall be identical in all respects with the other shares of Preferred Stock, except as to the following relative rights and preferences, as to which there may be variations between different series:

(i)

the rate of dividends;

(ii)

whether shares may be redeemed and, if so, the redemption price and the terms and conditions of redemption;

(iii)

whether shares may be converted to Common Stock and if so, the terms and conditions of conversion;

(iv)

the amount payable upon shares in event of voluntary and involuntary liquidation;

(v)

sinking fund provisions, if any, for the redemption or purchase of shares;

(vi)

the terms and conditions, if any, on which shares may be converted; and

(vii)

voting rights, if any.

The Board of Directors of the corporation shall have all of the power and authority with respect to the shares of Preferred Stock that the shareholders may delegate to the Board of Directors pursuant to the terms and provisions of Chapter 31D, Article 6, Sections 601 and 602 of the Code of West Virginia, as amended, and shall exercise such power and authority by the adoption of a resolution or resolutions as prescribed by law.

B. Dividends . The holders of the Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors, out of any funds legally available therefor, preferential dividends in cash, in the amounts or at the rate per annum fixed for such series, and no more. Dividends on shares of the Preferred Stock shall accrue from the date of the initial issue of shares of such series, or from such other date as may be fixed by the Board of Directors and shall be payable as determined by the Board of Directors. Each share of Preferred Stock shall rank on a parity with each other share of Preferred Stock, irrespective of series, with respect to preferential dividends at the respective amounts or rates fixed for such series, and no dividend shall be declared or paid or set apart for payment for the Preferred Stock of any series unless at the same time a dividend in like proportion to the accrued and unpaid dividends upon the Preferred Stock of each other series shall be declared or paid or set apart for payment, as the case may be, on Preferred Stock of each other series then outstanding.

C. Dividend Restriction on Junior Stock . So long as any shares of Preferred Stock are outstanding, the corporation shall not pay or declare any cash dividends whatsoever on the Common Stock or any other class of stock ranking junior to the Preferred Stock unless (i) all dividends on the Preferred Stock of all series for all past dividend periods shall have been paid, or declared and a sum sufficient for the payment thereof set apart, and (ii) there shall exist no default in respect of any sinking fund or purchase fund for the redemption or purchase of shares of Preferred Stock of any series or such default shall have been waived by the holders of at least a majority of the then issued and outstanding shares of Preferred Stock of such series by a vote at a meeting called for such purpose or by written waiver with or without a meeting.

D. Liquidation or Dissolution . In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, then, before any distribution or payment shall be made to the holders of the Common Stock or any other class of stock of the corporation ranking junior to the Preferred Stock in respect of dividends or distribution of assets upon liquidation, the holders of the Preferred Stock shall be entitled to be paid in full, in the event of a voluntary or involuntary liquidation, dissolution or winding up, the respective amounts fixed for such series, plus in each case a sum equal to accrued and unpaid dividends thereon to the date of payment thereof. After such payment shall have been made in full to the holders of the Preferred Stock, the remaining assets and funds of the corporation shall be distributed among the holders of the stock of the corporation ranking junior to the Preferred Stock in respect of dividends or distribution of assets upon liquidation according to their respective rights and preferences and in each case according to their respective shares. In the event that the assets of the corporation available for distribution to holders of Preferred Stock shall not be sufficient to make the payment herein required to be made in full, such assets shall be distributed to the holders of the respective shares of Preferred Stock pro rata in proportion to the amounts payable upon such share thereof.

E. Status of Shares Redeemed or Retired . Preferred Stock redeemed or otherwise retired by the corporation shall, upon the filing of such statement as may be required by law, assume the status of authorized but unissued Preferred Stock and may thereafter be reissued in the same manner as other authorized but unissued Preferred Stock.

F. Amendments . Subject to such requirements as may be prescribed by law or as may be expressly set forth in the foregoing provisions of this Article V or in any amendment to these Articles establishing and designating a series of shares of Preferred Stock, any of the foregoing terms and provisions of this Article V may be altered, amended or repealed or the application thereof suspended or waived in any particular case and changes in any of the designations, preferences, limitations and relative rights of the Preferred Stock may be made with the affirmative vote, at a meeting called for that purpose, or the written consent with or without a meeting, of the holders of at least a majority of the then issued and outstanding shares of Preferred Stock.

THIRD: The number of shares of the corporation outstanding at the time of such adoption was 708,025 shares of common stock, par value $1.00 per share. The number of shares entitled to vote thereon was 708,025.

FOURTH: The number of shares that voted for such amendment was:


	Shares Voted FOR		Shares Voted AGAINST		ABSTAINED
Common Stock	488,315		14,176		1,343
Total Voted: 503,834	96.92	%	2.81	%	.27	%

Dated: July 16, 2004


MVB FINANCIAL CORP.

By		/s/ J AMES R. M ARTIN
		James R. Martin

Exhibit 3.2

BYLAWS

MVB FINANCIAL CORP.

ARTICLE I. OFFICES

The principal offices of the Corporation shall be located in the City of Fairmont, County of Marion, State of West Virginia. The Corporation may have such other offices, either within or without the State of West Virginia, as the Board of Directors may designate or as the business of the Corporation may require from time to time.

ARTICLE II. SHAREHOLDERS

Section 1 . Annual Meeting . The annual meeting of the shareholders shall be held on the third Tuesday in the month of April in each year, at such hour or on such other day as shall be fixed by the Board of Directors. If the day fixed for the annual meeting shall be a legal holiday in the State of the principal office of the Corporation, such meeting shall be held on the next succeeding business day. The Chairman of the Annual Meeting shall have sole and final authority to rule on any and all matters of procedure coming before the meeting and shall have the right to limit discussion on any matter.

Section 2 . Special Meetings . Special meetings of the shareholders, for any purpose or purposes, may be called by the Chairman of the Board, if any, President, Secretary, or by the Board of Directors, and shall be called by the President at the request of the holders of not less than twenty-five percent (25%) of all outstanding shares of the Corporation entitled to vote at the meeting.

Section 3 . Place of Meeting . The Board of Directors may designate any place, either within or without the State of West Virginia, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal office of the Corporation.

Section 4 . Notice of Meeting . Written notice stating the place, day and hour of the meeting and, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the Chairman of the Board, President, Secretary or the officer of other persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid.

Section 5 . Closing of Transfer Books or Fixing of Record Date . For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the Corporation may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, fifty days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof.

Section 6 . Voting Record . The officer or agent having charge of the stock transfer books for shares of the Corporation shall make a complete record of the shareholders entitled to vote at each meeting of shareholders or any adjournment thereof with the address of and the number of shares held by each. Such record shall be produced and kept open as required by law and at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof.

Section 7 . Quorum . A majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.

Section 8 . Proxies . At all meetings of shareholders, a shareholder may vote in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.

Section 9 . Voting of Shares . Subject to the provisions of West Virginia law with respect to cumulative voting, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders.

Section 10 . Voting of Shares by Certain Holders . Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the bylaws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such other corporation may determine.

Shares held by an administrator, executor, guardian, committee, curator, or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name.

Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so be contained in an appropriate order of the court by which such receiver was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred.

Neither treasury shares of its own stock held by the Corporation nor shares held by another corporation if a majority of the shares entitled to vote for the election of directors of such other corporation are held by the Corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time for purposes of any meeting.

Section 11 . Informal Action by Shareholders . Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof.

Section 12 . Rules of Conduct at Shareholders’ Meetings . The chairman of any meeting of shareholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation: maintenance of order; safety; limitations on the time allotted to questions or comments on the affairs of the Corporation; ruling motions or comments out of order as in poor taste, unworkable, moot, repetitious of another proposal on the agenda, or otherwise; restrictions on entry to the meeting after the time prescribed for the commencement thereof; and the opening and closing of the voting polls.

Section 13 . Shareholder Proposals . Shareholders who wish to submit a proposal for consideration at an Annual Meeting of Shareholders must submit the proposal, in writing, to the President of the Corporation. The proposal must be received as prescribed in Securities & Exchange Commission Regulation 14A. Currently this regulation required that the proposal must be received by the Corporation not less than 120 calendar days before the date of the Board’s proxy statement released to shareholders in connection with the previous year’s Annual Meeting.

Section 14 . Nominations for Director . Nominations for election to the Board of Directors may be made by the Board of Directors or by any shareholder of any outstanding class of capital stock of the Corporation entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the Corporation, shall be made in writing, and shall be delivered or mailed to the President of the Corporation, not less than fourteen days nor more than fifty days prior to any meeting of shareholders called for the election of directors, provided, however, that if less than twenty-one days notice of the meeting is given to the shareholders, such nomination shall be mailed or delivered to the President of the Corporation not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder; (a) the name, address, and the date of birth of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the total number of shares of capital stock of the Corporation that will be voted for each proposed nominee; (d) the name and residence address of the notifying shareholder; and (e) the number of shares of capital stock of the Corporation owned by the notifying shareholder. No person shall be elected as a director who is seventy years of age or over at the time of such election except those organizing directors of the Corporation. The organizing directors may not be elected if they are 75 years of age at the time of an election. Directors must meet the qualifications required by applicable law, the Articles of Incorporation, and the Bylaws of this Corporation. Nominations not made in accordance herewith may, in the discretion of the Chairman, be disregarded by the Chairman of the meeting, and upon the Chairman’s instructions the vote tellers may disregard all votes cast for each such nominee.

ARTICLE III. BOARD OF DIRECTORS

Section 1 . General Powers . The business and affairs of the Corporation shall be managed by its Board of Directors.

Section 2 . Number, Election and Terms . The number of the directors of the Corporation shall be fixed from time to time by resolution of the Board of Directors but shall not be less than five nor more than twenty-five. Directors need not be residents of the State of West Virginia, but shall hold not less than the number of shares of the capital stock of the Corporation in order to be eligible to serve as a director of the Corporation under West Virginia law.

Section 3 . Regular Meetings . A regular meeting of the Board of Directors shall be held without notice other than this bylaw, immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of West Virginia, for the holding of additional regular meetings without other notice than such resolution.

Section 4 . Special Meetings . Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board, if any, the President or any three (3) directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of West Virginia, as the place for holding any special meeting of the Board of Directors called by them.

Section 5 . Notice . Each member of the Board will be given notice by any usual means of communication not less than twelve (12) hours before the time fixed for the meeting, stating the hour, date and place of the meeting and the general nature of the business to be transacted. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting, except as otherwise provided by statute.

Section 6 . Quorum . A majority of the number of directors fixed by Section 2 of this Article III shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at the meeting a majority of the directors present may adjourn the meeting from time to time without further notice.

Section 7 . Manner of Acting . The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

Section 8 . Action Without a Meeting . Any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all the directors.

Section 9 . Newly Created Directorships and Vacancies . Newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence to fill a vacancy resulting from the death, resignation, disqualification, removal or other cause shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until such director’s successor shall have been elected and qualified, and any director elected in accordance with the preceding sentence by reason of an increase in the number of directors shall hold office only until the next election of directors by shareholders and until his successor shall have been elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

Section 10 . Compensation . Each director shall be entitled to received a fee as the Board of Directors of the Corporation from time to time shall determine for meetings of the Board of Directors, or committees of the Board, which the director attends as a regular member. No such compensation shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

Section 11 . Presumption of Assent . A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

Section 12 . Committees .

(a) Appointment . The Board of Directors, by resolution adopted by a majority of the full board, may establish an Executive Committee and such other standing or special committees of the board as it may deem advisable, each of which shall consist of two or more members of the Board of Directors. The designation of a committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law.

(b) Authority . The Executive Committee, when the Board of Directors is not in session shall have and may exercise all of the authority of the Board of Directors except to the extent, if any, that such authority shall be limited by the resolution appointing the Executive Committee and except also that the Executive Committee shall not have the authority of the Board of Directors in reference to amending the Articles of Incorporation, adopting a plan of merger or consolidation, recommending to the shareholders the sale, lease or other disposition of all or substantially all of the property and assets of the Corporation otherwise than in the usual and regular course of its business, recommending to the shareholders a voluntary dissolution of the Corporation or a revocation thereof, or amending the bylaws of the Corporation. The authority of other committees of the board shall be set forth in the resolutions, as amended from time to time, establishing the same.

(c) Tenure and Qualifications . Committees of the board shall consist only of members of the Board of Directors. Each member of the Executive Committee shall hold office until the next regular annual meeting of the Board of Directors following his designation and until his successor is designated as a member of the Executive Committee and is elected and qualified. The tenure of members of other committees of the board shall be set forth in the resolutions, as amended from time to time, establishing the same.

(d) Meetings . Regular meetings of the committees of the board may be held without notice at such times and places as each committee may fix from time to time by resolution. Special meetings of any committee may be called by any member thereof upon not less than one day’s notice stating the place, date and hour of the meeting, which notice may be written or oral, and if mailed at least five days prior to the date of the meeting, shall be deemed to be delivered when deposited in the United States mail addressed to the member of the committee at his business address. Any member of a committee may waive notice of any meeting and no notice of any meeting need be given to any member thereof who attends in person. The notice of a meeting of a committee need not state the business proposed to be transacted at the meeting.

(e) Quorum . A majority of the members of a committee shall constitute a quorum for the transaction of business at any meeting thereof, and action of the committee must be authorized by the affirmative vote of a majority of the members present at a meeting at which a quorum is present.

(f) Action Without a Meeting . Any action required or permitted to be taken by a committee at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the members of the committee.

(g) Vacancies . Any vacancy in a committee may be filled by a resolution adopted by a majority of the full Board of Directors.

(h) Resignations and Removal . Any member of a committee may be removed at any time with or without cause by resolution adopted by a majority of the full Board of Directors. Any member of a committee may resign from the committee at any time by giving written notice to the President or Secretary of the Corporation, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

(i) Procedure . A committee shall elect a presiding officer from its members and may fix its own rules of procedure which shall not be inconsistent with these bylaws. It shall keep regular minutes of its proceedings and report the same to the Board of Directors for its information at the meeting thereof held next after the proceedings shall have been taken.

Section 13 . Removal . Any director may be removed from office, with or without cause and only by the affirmative vote of the majority of the full Board of Directors or of combined voting power of the then outstanding shares of stock entitled to vote generally in the election of directors. If (i) the indebtedness of any director owing to any subsidiary of the Corporation, whether it be direct or indirect and/or in a corporate or a proprietary capacity, becomes subject to being charged off the books of the subsidiary by any federal or state regulatory agency, or any accounting firm employed by the subsidiary, or (ii) if such indebtedness becomes in default for a period of more than 30 days and the borrowing director has been officially and immediately notified thereof by the subsidiary and such default continues for a total period of 60 days, then in either event the borrowing director must immediately resign such position with the Corporation. If such resignation is not received by the

Corporation within seven days from the date same should be tendered, then such resignation shall be automatic without further notice to said director.

Section 14 . Participation in Meetings by Means of Conference Telephone or Similar Instrument . Any or all directors may participate in a meeting of the Board of Directors or in a meeting of a committee of the Board of Directors by means of a conference telephone or any similar electronic communications equipment by which all persons participating in the meeting can hear each other.

Section 15 . Director Emeritus . Upon reaching age 70, (75 for organizers) a director may be appointed to an emeritus status on an annual basis for a maximum of three years. A director Emeritus is not a voting member of the Board, does not have any duties, responsibilities or power of an active director, nor are they counted as a member of the Board for purposes of determining a quorum. Directors Emeriti may enjoy the contacts and privileges of being closely associated with the Board of Directors, sitting in all deliberations and being given the opportunity to voice their opinion, all without having any obligation to attend any meetings and without having any obligations of assuming any responsibility for the actions of the Board. Directors Emeriti will not receive any compensation.

Section 16 . Director Attendance . All members of the Board of Directors shall attend at least two-thirds of the meetings of the Board of Directors. Such attendance requirements shall be calculated on a semi-annual basis. Failure to attend two-thirds of the meetings in a semi-annual period shall result in the director being notified of such failure and such being entered in the minutes of the meeting of the Board of Directors. Should a director fail to attend less than two-thirds of the meetings of the Board of Directors for two consecutive six-month periods, the director shall resign from the Board of Directors. If such resignation is not received by the Bank within seven days of the director being notified of such occurrence, then such resignation shall be automatic without further notice to said director. The Board of Directors may consider extenuating circumstances as just cause for absences from attendance and such absences shall not be counted in calculating the attendance requirement.

ARTICLE IV. OFFICERS

Section 1 . Number . The officers of the Corporation shall be a President and a Secretary; each of whom shall be elected by the Board of Directors. A Chairman of the Board of Directors and such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person. The President and the Chairman of the Board, if any, shall be elected from the membership of the Board of Directors.

Section 2 . Election and Term of Office . The officers of the Corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his successor shall have been duly elected and shall have qualified

or until his death or until he shall resign or shall have been removed in the manner hereinafter provided.

Section 3 . Removal . Any officer or agent may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

Section 4 . Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term.

Section 5 . Chairman of the Board . The Board of Directors may appoint one of its members to be Chairman of the Board. If so appointed, he shall preside at all meetings of the Board of Directors and at all meetings of the shareholders and shall have and exercise such further powers and duties as may from time to time be conferred upon, or assigned to, him by the Board of Directors.

Section 6 . Vice Chairman of the Board . The Board of Directors may appoint one of its members to be Vice Chairman of the Board. In addition to any specific powers conferred upon him by these Bylaws, the Vice Chairman of the Board shall have and exercise such further powers and duties as from time to time may be conferred upon, or assigned to, him by the Board of Directors or the Chairman of the Board.

Section 7 . President . The Board of Directors shall appoint a President. He shall have and exercise such powers and duties as may from time to time be conferred upon, or assigned to, him by the Board of Directors. If the office of the Chairman of the Board be vacant, or if the Chairman of the Board be absent or unable to attend, the President (or if the President be so absent or unable to attend, the Vice Chairman of the Board, or in the event of the absence or inability to attend of the Vice Chairman of the Board, an Executive Vice President) shall preside at all meetings of the shareholders and of the Board of Directors.

Section 8 . The Vice Presidents . In the absence of the Chairman of the Board and President or in the event of their death, inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the Chairman of the Board and President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chairman of the Board and President. Any Vice President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the Corporation; and shall perform such other duties as from time to time may be assigned to him by the principal executive officer of the Corporation, the bylaws or the Board of Directors.

Section 9 . Chief Executive Officer . The Board of Directors shall select a Chief Executive Officer, who shall also be either the Chairman of the Board, the Vice Chairman of the Board, the President, or an Executive Vice President. The Chief Executive Officer shall be charged with the

carrying out of the policies adopted or approved by the Board of Directors. In addition to any specific powers conferred on him by these Bylaws, the Chief Executive Officer shall have supervision over, and exercise general powers concerning, all the operations and business of the Corporation. He shall have and exercise such further powers and duties as may from time to time be conferred upon, or assigned to him by the Board of Directors.

Section 10 . The Secretary . The Secretary shall: (a) keep the minutes of the proceedings of the shareholders and of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all documents the execution of which on behalf of the Corporation under its seal is duly authorized; (d) keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder; (e) sign with the President, or a Vice President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the Corporation; and (g) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the principal executive officer of the Corporation, the bylaws or by the Board of Directors.

Section 11 . Assistant Secretaries . The Assistant Secretaries, when authorized by the Board of Directors, may sign with the President or a Vice President certificates for shares of the Corporation the issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Secretaries, in general, shall perform such duties as shall be assigned to them by the Secretary, or by the principal executive officer of the Corporation, the bylaws or by the Board of Directors.

Section 12 . Officers’ Salaries . The salaries of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the Corporation.

ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section 1 . Contracts . The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

Section 2 . Loans . No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. The Board of Directors may encumber and mortgage real estate and pledge, encumber and mortgage stocks, bonds and other securities and other personal property of all types, tangible and intangible, and convey any such property in trust to secure the payment of corporate obligations.

Section 3 . Checks, Drafts, Etc . All checks, drafts and other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

Section 4 . Deposits . All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select.

ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

Section 1 . Certificates for Shares . Certificates representing shares of the Corporation shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary and sealed with the Corporate Seal or a facsimile thereof. The signatures of such officers upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent or a registrar, other than the Corporation itself or one of its employees. Each certificate for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. All certificates surrendered to the Corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors may prescribe.

Section 2 . Transfer of Shares . Transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.

Section 3 . Lost Certificates . Any person claiming a certificate of shares to be lost or destroyed shall make an affidavit or affirmation of that fact, and if requested do so by the Chief Executive Officer of the Corporation shall advertise such fact in such manner as the Chief Executive Officer may require, and shall give the Corporation a bond of indemnity in such sum as the Chief Executive Officer may direct, but not less than double the value of shares represented by such certificate, in form satisfactory to the Chief Executive Officer and with or without sureties as the Chief Executive Officer may prescribe; whereupon the President and the Secretary may cause to be issued a new certificate of the same tenor and for the same number of shares as the one alleged to have been lost or destroyed, but always subject to the approval of the Chief Executive Officer.

Section 4 . Stock Transfer Books . The stock transfer books of the Corporation shall be kept in the principal office of the Corporation and shares shall be transferred under such regulations as may be prescribed by the Board of Directors.

ARTICLE VII. INDEMNIFICATION

Section 1 . Indemnification . Each person who was or is a party or is threatened to be made a party to or is involved (including, without limitation, as a witness or deponent) in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise in nature (“Proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the written request of the Corporation’s Board of Directors, president or their delegate as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such Proceeding is alleged action or omission in an official capacity as a director, officer, trustee, employee or agent or in any other capacity, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by law, including but not limited to the West Virginia Code, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said Code permitted the Corporation to provide prior to such amendment), against all expenses, liability and loss (including, without limitation, attorneys’ fees and disbursements, judgments, fines, ERISA or other similar or dissimilar excise taxes or penalties and amounts paid or to be paid in settlement) incurred or suffered by such person in connection therewith; provided, however, that the Corporation shall indemnify any such person seeking indemnity in connection with a Proceeding (or part thereof) initiated by such person only if such Proceeding (or part thereof) was authorized by the Board of Directors of the Corporation; provided, further, that the Corporation shall not indemnify any person for civil money penalties or other matters, to the extent such indemnification is specifically not permissible pursuant to federal or state statute or regulation, or order or rule of a regulatory agency of the federal or state government with authority to enter, make or promulgate such order or rule. Such right shall include the right to be paid by the Corporation expenses, including, without limitation, attorneys’ fees and disbursements, incurred in defending or participating in any such Proceeding in advance of its final disposition; provided, however, that the payment of such expenses in advance of the final disposition of such Proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, in which such director or officer agrees to repay all amounts so advanced if it should be ultimately determined that such person is not entitled to be indemnified under this Article or otherwise. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Corporation, or that such person did have reasonable cause to believe that his conduct was unlawful.

Section 2 . Right of Claimant to Bring Suit . If a claim under this Article is not paid in full by the Corporation within thirty (30) days after a written claim therefor has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful, in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than

an action brought to enforce a claim for expenses incurred in defending or participating in any Proceeding in advance of its final disposition where the required undertaking has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the applicable law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation.

Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action that indemnification or reimbursement of the claimant is permitted in the circumstances because he or she has met the applicable standard of conduct, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its shareholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

Section 3 . Contractual Rights: Applicability . The right to be indemnified or to the reimbursement or advancement of expenses pursuant hereto (i) is a contract right based upon good and valuable consideration, pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Corporation and the director or officer, (ii) is intended to be retroactive and shall be available with respect to events occurring prior to the adoption hereof, and (iii) shall continue to exist after the rescission or restrictive modification hereof with respect to events occurring prior thereto.

Section 4 . Requested Service . Any director or officer of the Corporation serving, in any capacity, (i) another corporation of which five percent (5%) or more of the shares entitled to vote in the election of its directors is held by the Corporation, or (ii) any employee benefit plan of the Corporation or of any corporation referred to in clause (i), shall be deemed to be doing so at the request of the Corporation.

Section 5 . Non-Exclusivity of Rights . The rights conferred on any person hereunder shall not be exclusive of and shall be in addition to any other right which such person may have or may hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of shareholders or disinterested directors or otherwise.

Section 6 . Insurance . The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under West Virginia law.

ARTICLE VIII. FISCAL YEAR

The fiscal year of the Corporation may be fixed and may be changed from time to time by resolution of the Board of Directors. Until the Board of Directors has acted to fix such fiscal year, the fiscal year of the Corporation shall begin on the first day of January and end on the thirty-first day of December in each year.

ARTICLE IX. DIVIDENDS

The Board of Directors may, from time to time, declare and the Corporation may pay dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Articles of Incorporation.

ARTICLE X. CORPORATE SEAL

The Board of Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the Corporation and the state of incorporation and the words “Corporate Seal.”

ARTICLE XI. WAIVER OF NOTICE

Whenever any notice is required to be given to any shareholder or director of the Corporation under the provisions of these bylaws or under the provisions of the Articles of Incorporation or by law, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

ARTICLE XII. AMENDMENTS

Subject to the laws of the State of West Virginia, the Articles of Incorporation and these Bylaws, the Board of Directors may by majority vote of those present at any meeting at which a quorum is present amend these Bylaws, or enact such other bylaws as in their judgment may be advisable for the regulation of the conduct of the affairs of the Corporation.

ARTICLE XIII. MISCELLANEOUS

Section 1 . Voting Shares of Other Corporations . Unless otherwise ordered by the Board of Directors, shares in other corporations held by this Corporation may be voted by the Chairman of the Board or the President of this Corporation.

Section 2 . Gender . Whenever these Bylaws refer to the masculine, the reference shall include the feminine and vice versa.

Exhibit 5

[Jackson Kelly PLLC Letterhead]

November 23, 2004

MVB Financial Corp.

301 Virginia Avenue

Fairmont, West Virginia 26554-2777

Gentlemen:

Proceedings for the issuance of up to 286,000 shares (the “Shares”) of common stock, par value $14.00 per share, of MVB Financial Corp. (“MVB Financial”), pursuant to a Registration Statement filed on even date herewith (the “Registration Statement”), have been taken with our assistance for MVB Financial.

We have examined originals or copies certified to our satisfaction of such corporate records of MVB Financial, agreements and other instruments, certificates of public officials, certificates of officers or representatives of MVB Financial, and other documents as we have deemed necessary to examine and to require as the basis for the opinion hereinafter expressed. Upon the basis of such examination, we advise you that we are of the opinion that the Shares when issued upon effectiveness of the Registration Statement will be duly and validly issued Shares of MVB Financial, fully paid and nonassessable.

The foregoing opinion is limited to the West Virginia Business Corporation Act, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.

This opinion is given as of the date hereof and is limited to the law as now in effect and based on facts of which we have knowledge. We do not undertake to advise you of any change in the law hereof. No person other than you may rely on this opinion for any purpose, without our written consent.

We hereby consent to the inclusion of this opinion as an Exhibit to the Registration Statement and all amendments thereto, and the references therein to Jackson Kelly PLLC and its opinions. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.

Very truly yours,

/s/ J ACKSON K ELLY PLLC

Jackson Kelly PLLC

Exhibit 10.1

MVB FINANCIAL CORP.

2003 STOCK INCENTIVE PLAN

SECTION 1

Statement of Purpose

1.1 The MVB Financial Corp. 2003 Stock Incentive Plan (the “Plan”) has been established by The Monongahela Valley Bank, Inc. (the “Company”) to become effective at the Effective Time as defined herein in order to enhance shareholder value by:

(a) attracting and retaining well qualified executive, managerial and other employees;

(b) motivating participating employees, by means of appropriate incentives, to achieve long-range goals;

(c) providing incentive compensation opportunities that are competitive with those of other similarly situated banking institutions; and

(d) connecting a Participant’s interests with those of the Company’s other stockholders through compensation based on the Company’s capital stock thereby promoting the long-term financial interest of the Company, including the growth in value of the Company’s equity and enhancement of long-term stockholder return.

SECTION 2

Definitions

2.1 Unless the context indicates otherwise, the following terms shall have the meaning set forth below opposite each respective term:

(a) Acquiring Corporation . The term “Acquiring Corporation” means the surviving, continuing successor or purchasing corporation in an acquisition or merger with the Company in which the Company is not the surviving corporation.

(b) Award . The term “Award” means any award or benefit granted to any Participant under the Plan, including, without limitation, the grant of Options, Merit Awards and Stock acquired through purchase under Section 7.

(c) Board . The term “Board” means the Board of Directors of the Company acting as such but shall not include the Committee or other committees of the Board acting on behalf of the Board.

(d) Cause . The term “Cause” means (a) the continued failure by the Participant to substantially perform his or her duties with the Company (other than any such failure resulting from his or her incapacity due to physical or mental illness), or (b) the engaging by the Participant in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise.

(e) Change in Control . A “Change in Control” shall be deemed to have occurred (a) upon the approval of the Board (or if approval of the Board is not required as a matter of law, the shareholders of the Company) of (1) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Stock would be converted into cash, securities or other property, other than a merger in which the holders of the Stock immediately prior to the merger will have more than 50% of the ownership of common stock of the surviving corporation immediately after the merger, (2) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company, or (3) adoption of any plan or proposal for the liquidation or dissolution of the Company, or (b) when any person, other than a Significant Stockholder, or any subsidiary of the Company or employee benefit plan or trust maintained by the Company or any of its subsidiaries, shall become the beneficial owner, directly or indirectly, of more than 25% of the Stock outstanding at the time, without the prior approval of the Board.

Exhibit 10.1

(f) Code . The term “Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code shall include reference to any successor provision of the Code.

(g) Committee . The term “Committee” means the committee of the Board selected in accordance with the provisions of Subsection 4.2.

(h) Company . The term “Company” means The Monongahela Valley Bank, Inc., a West Virginia banking corporation.

(i) Date of Termination . A Participant’s “Date of Termination” shall be the date on which his or her employment with all Employers and Related Companies terminates for any reason; provided that for purposes of this Plan only, a Participant’s employment shall not be deemed to be terminated by reason of a transfer of the Participant between the Company and a Related Company (included Employers) or between two Related Companies (including Employers); and further provided that a Participant’s employment shall not be considered terminated by reason of the Participant’s leave of absence from an Employer or a Related Company that is approved in advance by the Participant’s Employer.

(j) Disability . Except as otherwise provided by the Committee, a Participant shall be considered to have a “Disability” during the period in which he or she is unable, by reason of a medically determined physical or mental impairment, to carry out his or her duties with an Employer, which condition may, but in the discretion of the Committee, shall not necessarily, be an event which qualifies as a “long term disability” under applicable long term disability benefit programs of the Company.

(k) Effective Date . The term “Effective Date” means the date on which the shareholders of the Company approve the Plan.

(l) Employee . The term “Employee” means a person with an employment relationship with an Employer.

(m) Employer . The Company and any Subsidiary which, with the consent of Company, participates in the Plan for the benefit of its eligible Employees are referred to collectively as the “Employers” and individually as an “Employer”.

(n) Exercise Price . The term “Exercise Price” means, with respect to each share of Stock subject to an Option, the price fixed by the Committee at which such share may be purchased from the Company pursuant to the exercise of such Option, which price at no time may be less than 100% of the Fair Market Value (or in the case of a Ten Percent Stockholder, less than 110% of the Fair Market Value) of the Stock on the date the Option is granted, except as permitted and contemplated by Section 16 of the Plan.

(o) Fair Market Value . The term “Fair Market Value” means with respect to each share of stock, the value as determined in good faith by the Committee, which determination shall be deemed to be conclusive.

(p) Immediate Family . With respect to a Participant, the term “Immediate Family” means, whether through consanguinity or adoptive relationships, the Participant’s spouse, children, stepchildren, siblings and grandchildren.

(q) Incentive Stock Option . The term “Incentive Stock Option” means any Incentive Stock Option granted under the Plan.

(r) Merit Award . The term “Merit Award” means any Merit Award granted under the Plan.

(s) Non-Qualified Stock Option . The term “Non-qualified Stock Option” means any Non-Qualified Stock Option granted under the Plan.

(t) Option . The term “Option” means any Incentive Stock Option or Non-Qualified Stock Option granted under the Plan.

Exhibit 10.1

(u) Outside Director . The term “Outside Director” means a person who qualifies as such under Section 162(m) of the Code.

(v) Participant . The term “Participant” means an Employee who has been granted an Award under the Plan.

(w) Plan . The term “Plan” shall mean The Monongahela Valley Bank, Inc. 2000 Stock Incentive Plan as the same may be from time to time amended or revised.

(x) Qualified Retirement Plan . The term “Qualified Retirement Plan” means any plan of an Employer or a Related Company that is intended to be qualified under Section 401(a) of the Code.

(y) Related Companies . The term “Related Companies” means any Significant Stockholder and any companies controlled by such Significant Stockholder; Subsidiaries; and any other company during any period in which it is a Subsidiary or a division of the Company, including any entity acquired by, or merged with or into, the Company or a Subsidiary.

(z) Retirement . “Retirement” of a Participant means the occurrence of a Participant’s Date of Termination under circumstances that constitute such Participant’s retirement at normal or early retirement age under the terms of the Qualified Retirement Plan of Participant’s Employer that is extended to the Participant immediately prior to the Participant’s Date of Termination or, if no such plan is extended to the Participant on his or her Date of Termination, under the terms of any applicable retirement policy of the Participant’s Employer.

(aa) Significant Stockholder . The term “Significant Stockholder” means any shareholder of the Company who, immediately prior to the Effective Date, owned more than 5% of the capital stock of the Company.

(bb) Stock . The term “Stock” means the shares of capital stock of the Company, $1.00 par value per share.

(cc) Subsidiary . The term “Subsidiary” means any future subsidiary corporation of the Company within the meaning of the Code Section 424(f).

(dd) Ten Percent Stockholder . The term “Ten Percent Stockholder” means any recipient of an Award pursuant to this Plan who, at the time of such Award owns, directly or indirectly, by virtue of the ownership attribution provisions of Section 424(d) of the Code more than 10 percent of the total combined voting power of all classes of the capital stock of the Company.

(ee) Tax Date . The term “Tax Date” means the date a withholding tax obligation arises with respect to an Award.

SECTION 3

Eligibility

3.1 Subject to the discretion of the Committee and the terms and conditions of the Plan, the Committee shall determine and designate from time to time, the Employees or other persons as contemplated by Section 15 of the Plan who will be granted one or more Awards under the Plan.

SECTION 4

Operation and Administration

4.1 The Plan shall be unlimited in duration and remain in effect until termination by the Board; provided, however, that no Incentive Stock Option may be granted under the Plan after April 18, 2010.

Exhibit 10.1

4.2 The Plan shall be administered by the Committee which shall consist of two or more members of the Board who are Outside Directors. Plenary authority to manage and control the operation and administration of the Plan shall be vested in the Committee, which authority shall include, but shall not be limited to:

(a) Subject to the provisions of the Plan, the authority and discretion to select Employees to receive Awards, to determine the time or times of receipt of Awards, to determine the types of Awards and the number of shares covered by the Awards, and to establish the terms and conditions, and other provisions of such Awards, including without limitation whether Shares subject to an Award shall be subject to a right of first refusal as referred to in Section 5.3 below. In making such Award determinations, the Committee may take into account the nature of services rendered by the respective Employee, his or her present and potential contribution to the Company’s success and such other factors as the Committee deems relevant.

(b) The authority and discretion to interpret the Plan and the Awards granted under the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, to make all other determinations that it deems necessary or advisable for the administration of the Plan and to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award, in each case, in the manner and to the extent the Committee deems necessary or advisable to carry it into effect.

4.3 Any interpretation of the Plan by the Committee and any decision made by it under the Plan shall be final and binding on all persons. The express grant in the Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee.

4.4 The Committee may only act at a meeting by unanimity if comprised of two members, and otherwise by a majority of its members. Any action of the Committee may be taken without a meeting by the unanimous written consent of its members. In addition, the Committee may authorize one or more of its members or any officer of an Employer to execute and deliver documents and perform other administrative acts pursuant to the Plan.

4.5 No member or authorized delegate of the Committee shall be liable to any person for any action taken or omitted in connection with the administration of the Plan unless attributable to his or her own fraud or gross misconduct. The Committee, the individual members thereof, and persons acting as the authorized delegates of the Committee under the Plan, shall be indemnified by the Employers against any and all liabilities, losses, costs, and expenses (including legal fees and expenses) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Committee or its members or authorized delegates by reason of the performance of any action pursuant to the Plan if the Committee or its members or authorized delegates did not act in willful violation of the law or regulation under which such liability, loss, cost or expense arises. This indemnification shall not duplicate but may supplement any coverage available under any applicable insurance policy, contract with the indemnitee or the Company’s Articles of Incorporation or By-laws.

4.6 Notwithstanding any other provision of the Plan to the contrary, but without giving effect to Awards made pursuant to Section 15, the maximum number of shares of Stock with respect to which any Participant may receive any Award of an Option under the Plan during any calendar year is 7,500 and the maximum number of shares with respect to which any Participant may receive Merit Awards during any calendar year is 1,000.

SECTION 5

Shares Available Under the Plan

5.1 The shares of Stock with respect to which Awards may be made under the Plan shall be shares of currently authorized but unissued or treasury shares acquired by the Company, including shares purchased in the open market or in private transactions. Subject to the provisions of Section 15, the total number of shares of Stock available for grant of Awards shall not exceed fifty thousand (50,000) shares of Stock. Except as otherwise provided herein, if any Award shall expire or terminate for any reason without having been exercised in full, the unissued shares of Stock subject thereto (whether or not cash or other consideration is paid in respect of such Award) shall again be available for the purposes of the Plan. Any shares of Stock which are used as full or partial payment to the Company upon exercise of an Award shall also be available for purposes of the Plan.

5.2 Shares of Stock issued by the Company pursuant to this Plan shall be free of any preemptive rights of stockholders of the Company, whether statutory or otherwise.

Exhibit 10.1

5.3 Shares of stock issued by the Company pursuant to this Plan may, at the discretion of the Committee, be issued subject to a right of first refusal on the part of the Company to purchase such shares in the event the Participant, or his or her heirs, successors, executors, administrators, or assigns should ever desire to sell, transfer, assign, pledge, or otherwise dispose of such shares, in whole or in part (“a Disposition”). In any such event, the Participant or such heir, executor, administrator, or assign (a “Disposing Participant”) shall notify the Company of such desire and the Company shall have, for a period of thirty (30) days following receipt of such notice, the right and option to purchase such shares upon the same terms and conditions and at the same price as the Disposing Participant proposes to dispose of such shares. If the Company desires to exercise its right and option, it shall so notify the Disposing Participant of such desire within said thirty (30) day period. In the event the proposed Disposition is for consideration other than cash, and the Company and the Disposing Participant cannot agree on the cash equivalent to be paid by the Company to the Disposing Participant, the Disposing Participant may dispose of the shares, but the shares shall remain subject to Company’s right of first refusal until such time as they are proposed to be disposed of for cash and the Company elects not to exercise its right of first refusal. Shares subject to a right of first refusal shall contain the following legend:

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL HELD BY THE MONONGAHELA VALLEY BANK, INC. PURSUANT TO THE MVB FINANCIAL CORP. 2003 STOCK INCENTIVE PLAN. A COPY OF THE MVB FINANCIAL CORP. 2003 STOCK INCENTIVE PLAN IS AVAILABLE FOR INSPECTION AT THE OFFICE OF THE BANK.

SECTION 6

Options

6.1 The grant of an Option under this Section 6 entitles the Participant to purchase shares of Stock at an Exercise Price fixed at the time the Option is granted, or at a price determined under a method established at the time the Option is granted, subject to the terms of this Section 6. Options granted under this Section 6 may be either Incentive Stock Options or Non-Qualified Stock Options, but subject to Sections 9 and 14, shall not be exercisable for at least six months from the date of grant, as determined in the discretion of the Committee. An Incentive Stock Option is an Option that is intended to satisfy the requirements applicable to an “incentive stock option” described in Section 422(b) of the Code. A Non-Qualified Option is an Option that is not intended to be an “incentive stock option” as that term is described in Section 422(b) of the Code.

6.2 The Committee shall designate the Employees to whom options are to be granted under this Section 6 and shall determine the number of shares of Stock to be subject to each such Option. To the extent that the aggregate Fair Market Value of Stock with respect to which Incentive Stock Options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and all Related Companies) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options, but only to the extent required by Section 422 of the Code.

6.3 The determination and payment of the Exercise Price of a share of Stock under each Option granted under this Section shall be subject to the following terms of this Subsection 6.3:

(a) The Exercise Price shall be established by the Committee or shall be determined by a method established by the Committee at the time the Option is granted; provided, however, that in no event shall the Exercise Price per share be less than the Fair Market Value per share on the date of the grant (or in the case of Ten Percent Stockholder, less than 110% of the Fair Market Value) except as otherwise permitted by Section 15 of the Plan;

(b) The full Exercise Price of each share of Stock purchased upon the exercise of any Option shall be paid at the time of such exercise and, as soon as practicable thereafter, a certificate representing the shares so purchased shall be delivered to the person entitled thereto; and

(c) The Exercise Price shall be paid either in cash, in shares of Stock (valued at Fair Market Value as of the day of exercise), through a combination of cash and Stock (so valued) or through such cashless exercise arrangement as may be approved by the Committee and established by the Company, provided that any shares of Stock used for payment shall have been owned by the Participant for at least six (6) months.

Exhibit 10.1

6.4 Except as otherwise expressly provided in the Plan, the terms and conditions relating to exercise of an Option shall be established by the Committee, and may include, without limitation, conditions relating to completion of a specified period of service, achievement of performance standards prior to exercise of the Option, or achievement of Stock ownership objectives by the Participant. No Option may be exercised by a Participant after the expiration date applicable to that Option.

6.5 The exercise period of any Option shall be determined by the Committee but the term of any Option shall not extend more than ten years after the date of grant.

SECTION 7

Stock Purchase Program

7.1 The Committee may, from time to time, establish one or more programs under which Employees will be permitted to purchase shares of Stock under the Plan, and shall designate the Employees eligible to participant under such Stock purchase programs. The purchase price of shares of Stock available under such programs, and other terms and conditions of such programs, shall be established by the Committee. The purchase price may not be less than 85% of the Fair Market Value of the Stock at the time of purchase (or, in the Committee’s discretion, the average Fair Market value over a period determined by the Committee), and further provided that if newly issued shares of Stock are sold, the purchase price may not be less than the aggregate par value of such newly issued shares of Stock.

7.2 The Committee may impose such restrictions with respect to shares purchased under this Section 7, as the Committee, in its sole discretion, determines to be appropriate.

SECTION 8

Merit Awards

8.1 The Committee may from time to time make an Award of Stock under the Plan to selected Employees for such reasons and in such amounts as the Committee, in its sole discretion, may determine. The consideration to be paid by an Employee for any such Merit Award, if any, shall be fixed by the Committee from time to time, but it shall not be less than the aggregate par value of the shares of Stock awarded to him or her.

SECTION 9

Termination of Employment

9.1 If a Participant’s employment is terminated by the Participant’s Employer for Cause or if the Participant’s employment is terminated by the Participant without the written consent and approval of the Participant’s Employer, all of the Participant’s unvested Awards shall be immediately forfeited and exercisable Options shall be forfeited after 90 days from the Participant’s Termination Date.

9.2 If a Participant’s Date of Termination occurs by reason of death, Disability, or Retirement, all Options outstanding immediately prior to the Participant’s Date of Termination shall immediately become exercisable and shall be exercisable until one year from the Participant’s Date of Termination and thereafter shall be forfeited if not exercised, and all restrictions on any Awards outstanding immediately prior to the Participant’s Date of Termination shall immediately lapse. Options which are or become exercisable at the time of a Participant’s death may be exercised by the Participant’s designated beneficiary or, in the absence of such designation, by the person to whom the Participant’s rights will pass by will or the laws of descent and distribution.

9.3 Options which are or become exercisable by reason of the Participant’s employment being terminated by the Participant’s Employer for reasons other than Cause or by the Participant with the consent and approval of the Participant’s Employer, shall be exercisable until 120 days from the Participant’s Termination Date and shall thereafter be forfeited if not exercised.

9.4 Except to the extent the Company shall otherwise determine, if, as a result of a sale or other transaction (other than a Change in Control), a Participant’s Employer ceases to be a Related Company (and the Participant’s Employer is or becomes an entity that is separate from the Company), the occurrence of such transaction shall be treated

Exhibit 10.1

as the Participant’s Date of Termination caused by the Participant’s employment being terminated by the Participant’s Employer for a reason other than Cause.

9.5 Notwithstanding the foregoing provisions of this Section 9, the Committee may, with respect to any Awards of a Participant (or portion thereof) that are outstanding immediately prior to the Participant’s Date of Termination, determine that a Participant’s Date of Termination will not result in forfeiture or other termination of the Award, or may extend the period during which any Options may be exercised, but shall not extend such period beyond the original expiration date set forth in the Award.

SECTION 10

Adjustments to Shares

10.1 If the Company shall effect a reorganization, merger, or consolidation, or similar event or effect any subdivision or consolidation of shares of Stock or other capital readjustment, payment of stock dividend, stock split, spin-off, combination of shares or recapitalization or other increase or reduction of the number of shares of Stock outstanding without receiving compensation therefor in money, services or property, then the Committee shall appropriately adjust (a) the number of shares of Stock available under the Plan, (b) the number of shares of Stock available under any individual or other limitations under the Plan, (c) the number of shares of Stock subject to outstanding Awards and (d) the per-share price under any outstanding Award to the extent that the Participant is required to pay a purchase price per share with respect to the Award.

10.2 If the Committee determines that an adjustment in accordance with the provisions of Subsection 10.1 would not be fully consistent with the purposes of the Plan or the purposes of the outstanding Awards under the Plan, the Committee may make such other adjustments, if any, that the Committee reasonably determines are consistent with the purposes of the Plan and/or the affected Awards.

10.3 To the extent that any reorganization, merger, consolidation, or similar event or any subdivision or consolidation of shares of Stock or other capital readjustment, payment of stock dividend, stock split, spin-off, combination of shares or recapitalization or other increase or reduction of the number of shares of Stock hereunder is also accompanied by or related to a Change in Control, the adjustment hereunder shall be made prior to the acceleration contemplated by Section 14.

SECTION 11

Transferability and Deferral of Awards

11.1 Awards under the Plan are not transferable except by will or by the laws of descent and distribution. To the extent that a Participant who receives an Award under the Plan has the right to exercise such Award, the Award may be exercised during the lifetime of the Participant only by the Participant. Notwithstanding the foregoing, the Committee may, subject to any restrictions under applicable laws, permit Awards under the Plan (other than an Incentive Stock Option) to be transferred by a Participant for no consideration to or for the benefit of the Participant’s Immediate Family (including, without limitation, to a trust for the benefit of a Participant’s Immediate Family or to a Partnership comprised solely of members of the Participant’s Immediate Family), subject to such limits as the Committee may establish, provided the transferee shall remain subject to all of the terms and conditions applicable to such Award prior to such transfer.

11.2 The Committee may permit a Participant to elect to defer payment under an Award under such terms and conditions as the Committee, in its sole discretion, may determine; provided that any such deferral election must be made prior to the time the Participant has become entitled to payment under the Award.

SECTION 12

Award Agreement

12.1 Each Participant granted an Award pursuant to the Plan shall sign an Award Agreement which signifies the offer of the Award by the Company and the acceptance of the Award by the Participant in accordance with the terms of the Award and the provisions of the Plan. Each Award Agreement shall reflect the terms and conditions of the Award. Participation in the Plan shall confer no rights to continued employment with an Employer nor shall it restrict the right of an Employer to terminate a Participant’s employment at any time for any reason, not withstanding the fact that the Participant’s rights under this Plan may be negatively affected by such action.

Exhibit 10.1

SECTION 13

Tax Withholding

13.1 All Awards and other payments under the Plan are subject to withholding of all applicable taxes, which withholding obligations shall be satisfied (without regard to whether the Participant has transferred an Award under the Plan) by a cash remittance, or with the consent of the Committee, through the surrender of shares of Stock which the Participant owns or to which the Participant is otherwise entitled under the Plan pursuant to an irrevocable election submitted by the Participant to the Company at the office designated for such purpose. The number of shares of Stock needed to be submitted in payment of the taxes shall be determined using the Fair Market Value as of the applicable tax date rounding down to the nearest whole share.

SECTION 14

Change in Control

14.1 After giving effect to the provisions of Section 10 (relating to the adjustment of shares of Stock), and except as otherwise provided in the Plan or the Agreement reflecting the applicable Award, upon the occurrence of a Change in Control:

(a) All outstanding Options shall become fully exercisable and may be exercised at any time during the original term of the Option; and

(b) All shares of Stock subject to Awards shall become fully vested and be distributed to the Participant.

SECTION 15

Mergers/Acquisitions

15.1 In the event of any merger or acquisition involving the Company and/or a Subsidiary of the Company and another entity which results in the Company being the survivor or the surviving direct or indirect parent corporation of the merged or acquired entity, the Committee may grant Awards under the provisions of the Plan in substitution for awards held by employees or former employees of such other entity under any plan of such entity immediately prior to such merger or acquisition upon such terms and conditions as the Committee, in its discretion, shall determine and as otherwise may be required by the Code to ensure such substitution is not treated as the grant of a new Award for tax or accounting purposes.

15.2 In the event of a merger or acquisition involving the Company in which the Company is not the surviving corporation, the Acquiring Corporation shall either assume the Company’s rights and obligations under outstanding Awards or substitute awards under the Acquiring Corporation’s plans, or if none, securities for such outstanding Awards, and without limiting Section 14, the Board shall provide that any unexercisable and/or unvested portion of the outstanding Awards shall be immediately exercisable and vested as of a date prior to such merger or consolidation, as the Board so determines. The exercise and/or vesting of any Award that was permissible solely by reason of this Subsection 15.2 shall be conditioned upon the consummation of the merger or consolidation. Unless otherwise provided in the Plan or the Award, any Awards which are neither assumed by the Acquiring Corporation nor exercised on or prior to the date of the transaction shall terminate effective as of the effective date of the transaction.

SECTION 16

Termination and Amendment

16.1 The Board may suspend, terminate, modify or amend the Plan, provided that any amendment that would (a) increase the aggregate number of shares of Stock which may be issued under the Plan, (b) would change the Value of Stock as set forth in Subsection 2.1(o) of the Plan, or (c) materially modify the requirements as to eligibility for or modification that may result from adjustments authorized by Section 10 does not require such approval. No suspension, termination, modification or amendment of the Plan may terminate a Participant’s existing Award or materially and adversely affect a Participant’s rights under such Award without the Participant’s consent.

Exhibit 10.2

MASTER LICENSE AGREEMENT

THIS MASTER LICENSE AGREEMENT (Master Agreement) is made this 1st day of May, 2000, by and between S-N-S FOODS, INC., a corporation, with its principal office at 2500 Fairmont Avenue, Fairmont, West Virginia 26554, (“Supermarket”), and THE MONONGAHELA VALLEY BANK, INC., a West Virginia chartered banking institution, having its principal office at 301 Virginia Avenue, Fairmont, West Virginia 26555-2528 (“Bank”).

INTRODUCTION :

IN CONSIDERATION of the mutual promises and subject to the terms and conditions set forth herein, Supermarket hereby grants to Bank a license to install, maintain and operate a Financial Service Facility, as defined below, in the Supermarket’s Store, as defined below, in accordance with the provisions of this Master Agreement.

DEFINITIONS .

For the purposes of this Master Agreement, the following terms shall have the following meanings:

(a)

“Affiliates” shall mean, (i) with respect to THE MONONGAHELA VALLEY BANK, INC., any entity which, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or common control with THE MONONGAHELA VALLEY BANK, INC.; and (ii) with respect to Supermarket, any entity which, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or common control with Supermarket.

(b)

“Automated Loan Machine” or “ALM” shall mean an electronic terminal that performs one or more of certain banking functions, including dispensing of loan documents and loan proceeds, dispensing of deposit account opening documents, and accepting customer executed loan and deposit documents.

(c)

“Automated Teller Machine” or “ATM” shall mean an electronic terminal that performs one or more of certain banking functions, including dispensing cash, coupons, documents of value and traveler’s checks, accepting deposits and loan payments, making transfers between accounts and giving account balances. These terms however shall not include point-of-sale systems or other direct debit systems installed by Supermarket at its check-out lanes.

(d)

“Banking Services” is defined in Section 4(a).

(e)

“Confidential Information” means all information, whether oral or written or via computer disk or electronic media to which the other is given access or is made available to the other party. Confidential Information shall include, without limitation, all technology, know-how, processes, software, databases, trade secrets, contracts, proprietary information, all historical and financial information, business strategies, operating data and organizational and cost structures, product descriptions, pricing information, customer information and customer lists, whether received before or after the date hereof Confidential Information also includes information of any subsidiary or affiliate of Bank or Supermarket

(f)

“Control” shall mean the power to direct the management of the affairs of an entity.

(g)

“Financial Service Facility” or “FSF” shall mean a banking facility staffed with one (1) or more bank employees, as determined solely by Bank, whose functions include, without limitation, opening new deposit accounts, accepting loan applications and performing customary teller transactions, such as cashing

Exhibit 10.2

checks and taking deposits. An FSF may be equipped with any one or more of the following: an ALM, ATM, Kiosk, safe deposit boxes and a night depository. An FSF may also offer such other products and services as may be permitted by the terms of the applicable Lease Agreement, and applicable laws and regulations, including, without limitation, insurance, investment products and travel agency services.

(i)

“Financial Services” is defined in Section 4(a).

(h)

“Force Majeure” shall mean a strike, lockout, labor trouble, material or equipment shortage, governmental delay, power failure, severe weather not reasonably anticipated, fire insurrection, war, or any other event that is beyond the reasonable control of the parties.

(i)

“FSF Personalty” is defined in Section 9(b).

(1)

“Grocery Store” means a retail facility of 20,000 square fee or greater that is operated for the principal purpose of selling food products for home preparation and consumption.

(2)

“Indemnified Party” is defined in Section 13(c).

(3)

“Indemnifying Party” is defined in Section 13(c)(i).

(o)

“Initial Term” is defined in Section 2(a).

(p)

“Kiosk Machine” or “Kiosk” shall mean an electronic terminal that performs one or more of certain banking functions, including dispensing of loan documents, dispensing of deposit account opening documents, allows interactive communication between customers and the Bank’s back office support or remote banking employees, and provides Bank product information.

(q)

“Landlord” shall mean, if applicable, the owner of the Store with whom Supermarket has a written Lease Agreement.

(r)

“Lease Agreement” shall mean the agreement between Supermarket and Landlord describing the terms under which Supermarket is entitled to occupancy of the Store, including any modification or supplement thereto. A copy of Supermarket’s model lease agreement is attached as Exhibit A. A copy of the applicable Lease Agreement shall be provided to Bank.

(s)

“Liability Insurance” is defined in Section 12(a).

(t)

“License” is defined in Section 5(d).

(u)

“Licensed Area” shall mean the area within any Store to be occupied by the FSF. The parties agree that the Licenses to be granted under this Agreement are not licenses coupled with an interest and that they will be personal to the Bank and shall not be deemed to vest in the Bank any interest or estate in the Licensed Areas.

(v)

“Notice” is defined in Section 13(c)(i).

Exhibit 10.2

(vi)

“Official Opening Date” means the first day an FSF is open and available to conduct the business of banking with customers, as verified by the parties pursuant to paragraph 29.

(aa)

“Opening” means that the Store is available and ready to serve the general public.

(bb)

“Ownership” shall mean the beneficial ownership of more than 50% of the equity of any entity.

(cc)

“Plans” is defined in Section 9(a).

(dd)

“Pre-Existing Agreement” shall mean with respect to Supermarket, those agreements attached as part of Exhibit B (or described therein if confidentiality provisions preclude such attachment), which provide for financial services to be provided to Supermarkets customers that are similar to any of the Services to be provided by Bank under the terms of this Master Agreement.

(ee)

“Relocation Area” shall mean the “front wall” or the side of the Store that includes the main entrance to the Store or the “front portion” of the Store. “Front portion” shall mean the portion of the Store from the main entrance to the beginning of the shelving units.

(ff)

“Renewal Term” is defined in Section 2(b).

(gg)

“Services” shall mean the Banking Services and Financial Services as defined in Section 4. (a) of this Master Agreement.

(hh)

“Store” shall mean the locations designated on Exhibit A, as may be amended from time to time by the parties, which is attached and incorporated by this reference.

(ii)

“Term” shall mean the Initial Term and, if applicable, the Renewal Term.

(jj)

“Third Party Claim” is defined in Section 13(c).

TERM

(a)

The Initial Term of this Master Agreement shall commence on the date of execution by the parties and shall continue as per the terms and conditions on the Schedule and Summary of Lease attached hereto and incorporated herein as Exhibit “1”.

(b)

The Bank shall have the option of renewing the Lease under the terms and conditions of the above- referenced Schedule by providing at least one hundred eighty (180) days prior notice to the expiration of the then current term.

(c)

On the last day of the Term, subject to applicable regulatory approvals, Bank shall vacate the FSF of each of the Stores and remove all of its furnishings, equipment and signs (including any exterior signs) and shall leave the Licensed Area in substantially the condition as on the Official Opening Date, except for condemnation, casualty, permitted alterations and ordinary wear and tear.

Exhibit 10.2

EXCLUSIVITY AND RIGHT OF FIRST REFUSAL

(a)

Bank shall have the sole and exclusive right of first refusal to place similar banking establishments in Supermarket Stores owned and/or obtained by the Supermarket within Marion County, West Virginia. Said right shall continue during the term of the within Lease.

(b)

If Supermarket constructs or acquires a facility other than a Grocery Store, Bank shall have no obligation to place an FSF in such facility.

(c)

During the Term, Supermarket or Store shall not enter into an agreement, endorse or allow any other person or entity to offer services substantially similar to the services being offered and provided by Bank.

USE, LICENSE AND OCCUPANCY

(a)

Unless otherwise provided in this Agreement, and subject to the terms of the applicable Lease Agreement Bank shall be obligated to install, maintain and operate an FSF within the Store designated on Exhibit C and any other Store as the parties may mutually agree to add to Exhibit C upon delivery of access to the Store in accordance with the terms of this Agreement. Bank shall use the Licensed Area for the operation of an FSF under its name, as it may change from time to time, which provides or promotes those FSF services which are now or hereafter ordinarily transacted or conducted by Bank in the operation of its business. Such services may include opening new deposit accounts (checking, savings, certificates of deposit and individual retirement accounts), accepting consumer loan applications (including, credit cards), accepting mortgage applications, performing normal banking transactions, Kiosk Services, and ALM Services (collectively, “Banking Services”), and automated teller machine (“ATM”) services and may include financial services such as investment counseling, investment management, brokerage and trust services, nondeposit investment products, annuities, the sale of insurance and/or any other financial service permifted by applicable law (collectively, “Financial Services”), and for no other purpose.

(b)

Bank agrees to conduct the operations of the FSF in an efficient, timely and courteous manner and that the FSF shall be under the supervision of a competent, experienced manager, although such manager may not always be “on-site.”

(c)

During the term of this Agreement, Supermarket shall not offer Banking Services or Financial Services within the Store nor allow any other entity to conduct or offer ₁ Banking Services or Financial Services within the Store, with the exception of:

(i)

offering a point-of-sale electronic fund transfer processing system utilizing debit cards and credit cards;

(ii)

selling money order, phone cards, lottery tickets, and wire transfer of funds; accepting utility payments, check cashing, processing and accepting electronic governmental benefits transfer, or operating a postal unit; and/or

(iii)

offering any other type of products or services by Supermarket personnel which are then customary to the grocery business and are being offered by competing supermarket or drugstore operators in general vicinity of the Store; and/or

(iv)

any product or service offered by Supermarket under a Pre-Existing Agreement, identified on Exhibit B.

Exhibit 10.2

FSF LOCATION

(a)

Supermarket represents that it will obtain a letter from the Lessor acknowledging and authorizing the sublease to the Bank herein contained.

(b)

If Supermarket or Bank determine that a Lease Agreement may prohibit or substantially restrict Bank from conducting Banking Services, Financial Services, or Bank’s usual and customary business activities in the Licensed Area or in a Store or that Supermarket is prohibited from entering the Master Agreement, then the parties shall exclude such Store from the terms of this Master Agreement, unless and until Supermarket eliminates the restriction or prohibition. If any objection is raised by any Landlord as to any Lease Store, Supermarket shall be responsible to address and resolve such objection. If Supermarket determines that a Landlord’s objections cannot be resolved without an excessive expense or time delay (greater than ninety (90) days), then such Lease Store shall be excluded from this Agreement unless and until such objection has been resolved. If more than twenty- five (25%) percent of the Store locations listed on Exhibit A are not available, the parties agree to renegotiate the compensation schedule.

(c)

If Supermarket and Bank determine that there are no restrictions or prohibitions that may prevent Bank from conducting Banking Services, Financial Services or Bank’s usual or customary business activities or that may prevent Supermarket from entering the Master Agreement, the Bank shall promptly request and pursue diligently any applicable governmental approvals necessary to construct, open operate the FSF as part of the Store, at the Bank’s sole cost and expense. Supermarket shall cooperate with and assist the Bank in obtaining any such approvals and permits, at no cost or liability to Supermarket.

(d)

Following receipt of all required approvals, Supermarket grants to Bank a license, to occupy, use and conduct its business within the Licensed Area in each Store, together with a nonexclusive easement and right to use all facilities erected or serving such Store and intended for public or common use under the terms of this Master Agreement (“License”) and Bank accepts such License. Under the License, Supermarket shall provide Bank, its agents, contractors, employees and customers access to the Licensed Area at all reasonable times without interference. Supermarket shall also consult with Bank prior to granting any third party the right occupy, use or conduct its business in any additional space that may become available at any time during the term of this Master Agreement within the Store that is immediately adjacent to the Licensed Area or within the Relocation Area, but shall not be under any obligation to grant to Bank any expanded rights within the Store. If Bank is successful, and in need of expansion, the parties agree to negotiate a mutually amenable addition to the Leased Premises, if available, under terms and conditions acceptable to the parties at that time.

OPERATIONS

(a)

Bank shall commence operations of an FSF on or before the later to occur of (i) regulatory approval of such FSF location or (ii) Opening of the applicable Store. Bank shall, subject to regulatory requirements or restrictions, operate each FSF on a six day per week basis with not less than forty- eight (48) hours of operation in each week or such other schedule as can be mutually agreed. Supermarket shall provide Bank on a weekly basis customer counts per hour per Store in order to assist Bank in determining the peak hours of Store customer traffic.

Exhibit 10.2

(b)

Bank shall conduct all activities in an orderly, safe and clean manner, without damage, interference or injury to the Store and Landlord’s and Supermarket’s respective employees, agents, licensees and invitees. Supermarket shall operate the balance of the Store in a manner which does not damage and seeks not to interfere with the Licensed Area, or access thereto, or the operation of the FSF or Bank’s respective customers, employees, invitees or agents. Bank and Supermarket respectively shall comply with all applicable law. Bank shall also have the right to use the area outside the Licensed Area, as mutually agreed to by the parties.

(c)

Bank shall have the right, but not the obligation, to have security personnel present in an FSF at all times, giving due regard to the safety of Store customers, personnel and visitors.

(d)

In the event any labor or other organization pickets the Store because of Store’s labor relations for a period exceeding ten (10) consecutive days, then Bank at its discretion, may elect to suspend operations at the FSF pending resolution of the labor dispute. In the event Supermarket elects to suspend operations at the Store pending termination of the picketing, Supermarket shall cooperate with Bank, at no cost to Supermarket, in making the FSF available to customers, so long as Bank is responsible for security in connection therewith.

COMPENSATION TO SUPERMARKET

During the Term of the Master Agreement, Bank shall pay Supermarket in accordance with the terms of Exhibit “1”, as previously discussed.

REPRESENTATIONS AND WARRANTIES

(a)

Supermarket represents and warrants, as of the execution date of this Master Agreement and during the term of this Master Agreement that:

(i)

Supermarket is duly incorporated, validly existing and in good standing under the laws of the State of West Virginia.

(ii)

The execution, delivery and performance by Supermarket under the terms of this Master Agreement are within the Supermarkets corporate powers, have been duly authorized by all necessary corporate action and do not contravene the Supermarket’s bylaws or charter or any law or contractual restrictions.

(iii)

No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the execution, delivery and performance by Supermarket of this Master Agreement.

(iv)

This Master Agreement constitutes the legal valid and binding obligation of the Supermarket. This Master Agreement is enforceable against the Supermarket in accordance with the terms of this Master Agreement.

(v)

No information, schedule, exhibit, financial information furnished or to be furnished by Supermarket to Bank in connection with this Master Agreement is inaccurate in any material respect as of the date it is dated or contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not misleading.

Exhibit 10.2

(vi)

Supermarket shall advise in writing all of its employees that they are not to make any representation, warranty, promise or statement to any customer regarding the approval, decline, collection, processing, or any other handling of customer’s Banking Services or Financial Services as provided by Bank and that any questions regarding Banking Services or Financial Services should be immediately referred to Bank.

(vii)

Supermarket shall, provide Bank a copy of any and all Lease Agreements applicable to Lease Store(s).

(viii)

Supermarket has not entered and will not enter any agreement that would prohibit Supermarket from fulfilling its duties and obligations under the terms of this Master Agreement

(b)

Bank represents and warrants as of the execution date of this Master Agreement that:

(i)

Bank is a state chartered banking institution, duly incorporated, validly existing and in good standing under the laws of the State of West Virginia.

(ii)

The execution, delivery and performance by Bank of this Master Agreement are within Banks corporate powers, have been duly authorized by all necessary corporate action and do not contravene Banks bylaws or charter or any law or contractual restrictions.

(iii)

This Master Agreement constitutes the legal, valid and binding obligation of Bank. This Master Agreement is enforceable against Bank in accordance with the terms of this Master Agreement.

(iv)

No information, schedule, exhibit, financial information furnished or to be furnished by Bank to Supermarket in connection with this Master Agreement is inaccurate in any material respect as of the date it is dated or contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not misleading.

(v)

The marketing and advertising materials used by Bank to generate applications, deposit accounts or any and all other customer relationships shall comply with all applicable federal, state or local rules, laws or regulations.

(f)

Bank has not entered and will not enter any agreement that would prohibit Bank from fulfilling its duties and obligations under the terms of this Master Agreement.

(g)

Bank shall advise in writing its employees that they are not to make any representation, warranty, promise or statement to any customer regarding any aspect of the Supermarket’s operations and that any questions regarding Supermarket’s operations should be immediately referred to the Store manager.

CONSTRUCTION. IMPROVEMENTS. ADDITIONS AND SIGNS

(a)

The Bank shall be responsible for and construct the Banking Premises in such a manner as to reasonably comply with the decor currently existing at the Supermarket. The Supermarket will deliver the licensed area to the Bank to allow Bank to commence said construction upon receipt from Bank of the complete plans and specifications in such reasonable detail as to allow the Supermarket to approve said plans. Said approval shall not be unreasonably withheld by the Supermarket.

Exhibit 10.2

(b)

Bank, at its sole cost and expense, shall furnish all fixtures, equipment (including ATM5) and furnishings (collectively, “FSF Personalty”) which it deems necessary or desirable for the FSF operations within thirty (30) days after Delivery, subject to Force Majeure. Bank shall coordinate with Supermarket access to the FSF for such purpose. Such FSF Personalty shall remain the property of Bank. Bank will not install any equipment on or penetrate the roof, except for the purpose of supporting required equipment, such as, but not limited to alarm systems, and Bank will provide written notice of such requirement to Supermarket. Bank shall make all electrical connections and extensions at its expense not included in the initial construction. Bank shall pay for telephone, cable television and any other datalink or communication utilities which may be offered in the future, whether for the FSF or for ATMs.

(c)

Bank shall, at its sole cost and expense, keep and maintain the Licensed Area in good order and repair, including all equipment installed therein and all electrical or other transmission lines within the Licensed Area or dedicated to Bank for computer data processing and transmission. Security guards and employees of companies which manufacture or service Bank’s fixtures and equipment shall be granted access during normal business hours to enter the Store for the purpose of servicing, maintaining and otherwise performing services in connection with the FSF so long as they do not materially interfere with Store operations. Bank shall not make any alterations to the Licensed Area unless at its cost, pursuant to plans and procedures (construction, operation and labor) approved by Supermarket, (not to be unreasonably withheld), and in accordance with all laws.

(d)

Supermarket shall, at its sole cost and expense, keep and maintain the balance of the Store in good order and repair. Supermarket shall, provide or cause to be provided at its sole cost and expense, the janitorial services for aisles and floors contiguous with the Licensed Area and FSF, including spillage coverage and which shall be of a quality and at a level of that provided to the Store. If for any reason not the fault of Supermarket utilities are suspended or discontinued, Supermarket shall not be liable to Bank for any interruption of its operations by reason of such suspension or discontinuance, but shall use commercially reasonable efforts to obtain recommencement of such disrupted utility service.

(e)

Bank, at its sole cost and expense, shall furnish any other fixtures, equipment and furnishings which it deems necessary or desirable for FSF operations. Bank shall not make any modification or attach any substantial fixtures or equipment without Supermarket’s prior written approval, which shall not be unreasonably withheld. Bank shall, within ninety (90) days of execution of a written agreement adding a Store location to this Master Agreement submit to Supermarket plans for all improvements proposed, including without limitation, construction materials, colors, fixtures, lighting, signing and graphics. Supermarket agrees, within thirty (30) days after receipt of the plans from Bank, to give Bank written approval, disapproval or approval with conditions of such plans. In the event Supermarket fails to so notify Bank in writing within the 30-day period, such plans shall be construed as being approved as submitted.

(f)

(i) Supermarket shall permit Bank to place signs identifying its operations inside the Store at locations to be agreed upon by the parties. Bank will submit to Supermarket for its approval a signage package detailing the appearance and size of all signs to be installed.

(ii) Subject to any applicable Lease Agreement and applicable law, and so long as Supermarket does not have to reduce, modify or relocate its planned or current exterior building signage, Supermarket shall permit Bank to install an exterior sign in the form, size and location as mutually agreed upon by the

Exhibit 10.2

parties. Bank shall be responsible for obtaining all necessary governmental approvals for installing such signage. Supermarket agrees to cooperate with and assist and support Bank in obtaining any necessary approvals and permits in connection with Bank’s signage but shall not be required to incur any cost in so doing. Supermarket shall make electricity available to such signage. Any signage placed on or about the Store by Bank shall be at Banks sole cost, including the cost of obtaining any permits or governmental approvals. If Bank cannot obtain approval for exterior signage, Supermarket will cooperate in allowing Bank to hang a reasonable sign from the inside of an exterior window (which sign shall constitute the exterior sign for purposes of this section) and Supermarket will not obstruct visibility therefrom. All Bank signs shall at all times remain the property of Bank.

(g)

Supermarket expressly waives its rights to a lien upon any and all fixtures, machinery or equipment installed or to be installed on the Licensed Area by or through Bank for the satisfaction of any cause which may accrue to Supermarket under the provisions of this Master Agreement. Supermarket further agrees to execute any documents necessary to evidence said waiver as may be required from time to time by third parties from which Bank leases such fixtures, machinery or equipment.

10.

MAINTENANCE AND REPAIR

(a)

Bank shall keep and maintain the FSF in good order and repair, including all equipment installed therein and all electrical or other transmission lines installed by Bank for computer data processing and transmission. Supermarket shall not be liable to Bank for any damages, expenses, or claims incurred by Bank arising from an interruption of utility service. Bank shall be solely responsible for the cost, installation, and maintenance of any heating and air conditioning equipment that may be required beyond what the Supermarket is required to provide under the terms of the Plans referenced in Section 9(a) of this Master Agreement.

(b)

Supermarket shall, at its sole cost and expense provide janitorial services for aisles and floors contiguous with the Licensed Area and FSF. Supermarket shall also make available janitorial services for spillage within the Licensed Area. Supermarket shall also keep and maintain the Store and toilet facilities in good order and repair, I including, without limitation, plumbing, heating & air conditioning, doors, windows, the exterior of the Store, and all structural portions of the Store, provided that where obligations with respect to exterior maintenance are imposed on the Landlord under the Lease Agreement the obligation of the Supermarket shall be merely to enforce the Lease Agreement. Supermarket shall not be responsible for any additional heating and cooling equipment that may be required and installed by Bank.

(c)

To the extent not inconsistent with Supermarket’s normal operations, and the physical layout of the Store, Supermarket shall, maintain the Store free of all ads, flyers and signs that might prohibit or unreasonably hinder the operation of Bank’s business within the Licensed Area or which might prohibit or hinder viewing through or into the Licensed Area; shall maintain the Store free and clear of any sales items, fixtures, barriers, signs or other obstructions that would materially inhibit the ingress to and egress from the Licensed Area; and shall cooperate with Bank in establishing a satisfactory customer line queuing area adjacent to the FSF.

(d)

Supermarket shall promptly commence and diligently complete any and all repairs to the Licensed Area, excluding repairs to the fixtures and equipment of Bank, upon written notice thereof from Bank. Security guards and employees of companies which manufacture or service Banks fixtures and equipment shall be granted access during normal business hours to enter the Store for the purpose of servicing, maintaining

Exhibit 10.2

and otherwise performing services in connection with the FSF, so long as they do not materially interfere with Store operations. Bank shall not make any structural alterations to the Licensed Area unless at its cost, pursuant to plans and procedures (construction, operation and labor) approved by Supermarket (such approval not to be unreasonably withheld) and in accordance with all laws. Bank shall be permitted to make nonstructural alteration additions and improvements without Supermarket’s prior written consent.

11.

ADVERTISING. PROMOTION AND RELATED ACTIVITIES

(a)

Supermarket and Bank may advertise the existence and location of the FSF in such media and in such manner as each deems appropriate. Neither shall use the other’s trademarks or trade names without first obtaining the written consent of the other, which shall not be unreasonably withheld. Supermarket must have Banks prior written approval for any advertising materials that include any references to Bank’s I products or services, which consent shall not be unreasonably withheld. Bank must also have Supermarket’s prior written approval for any advertising materials that include any references to Supermarket’s operations, which consent shall not be unreasonably withheld.

(b)

The parties shall each conduct joint promotional activities within the Store. Joint promotional campaigns and Bank promotional campaigns outside the Licensed Area of Banks FSF shall, to the best of each party’s ability, be coordinated between the Store Manager and the FSF Manager. All in-store promotional campaigns shall be conducted by the parties in a professional and courteous manner and shall not unreasonably interfere with the other party’s conduct of its business at the Store.

(c)

Supermarket may, in its discretion, grant Bank access to the PA System within some or all of the Stores. The use of such PA System shall be coordinated between the Store Manager and the FSF Manager.

(d)

Supermarket will provide Bank with customer data in the aggregate as the parties mutually agree. Supermarket will not provide Bank with customer data if the customer has notified Supermarket that the customer does not want to be solicited for products and services.

(e)

Supermarket and Bank each agree that they shall cooperate with the other with respect to advertising the existence of the FSF within the Store.

12.

INSURANCE

(a)

“Liability Insurance” is insurance providing coverage for sums the insured becomes legally obligated to pay as damages because of an occurrence resulting in property damage or in bodily injury (including sickness and disease, and including death from such injury, sickness or disease), or because of an occurrence resulting in personal injury or advertising injury, an example of which is insurance known at the date of this Master Agreement as “commercial general liability” insurance (formerly known as “comprehensive general liability), and which coverage is provided under customary terms, conditions, and limitations, including occurrence-based coverage (and not claims-based coverage) as long as such coverage is available at commercially reasonable rates.

(b)

Bank may carry and shall cause its contractors to carry Liability Insurance with a limit of at least $2,000,000 (combined single limit for bodily injury and property damage) which limit is subject to increase each three years, on Supermarkets reasonable request. Bank’s Liability Insurance is primary

Exhibit 10.2

to Supermarket’s Liability Insurance for occurrences in the Licensed Area. The insurer must be licensed in the state in which the Store is located, give Supermarket thirty (30) days notice of cancellation or reduction in coverage, and furnish Supermarket certificates of coverage on request under the Liability Insurance policy, the inclusion of additional insureds must not affect coverage for the named insured for claims made regarding this Master Agreement and the FSF against it by additional insureds where the claims would have been covered under the policy had the additional insured not been included. Bank shall carry property insurance with respect to its furniture, fixtures and equipment providing “all risk” coverage. Bank may use blanket policies.

(c)

Supermarket shall carry Liability Insurance with a limit of at least $2,000,000 (combined single limit for bodily injury and property damage) which limit is subject to increase each three years, on Bank’s reasonable request. Supermarkets Liability Insurance is primary to Bank’s Liability Insurance for occurrences in the Store outside the Licensed Area. The insurer must be licensed in the state in which the Store is located, give Bank thirty (30) days’ notice of cancellation or reduction in coverage, and furnish Bank certificates of coverage on request. Under the Liability Insurance policy, the inclusion of additional insureds must not affect coverage for the named insured for claims made against it by additional insureds where the claims would have been covered under the policy had the additional insured not been included. The parties will coordinate the subrogation clauses of these coverages. To the extent required by any applicable Lease Agreement, Supermarket shall carry property insurance on the Store providing “all risk” coverage with a replacement cost endorsement. Supermarket may use blanket policies and property insurance deductibles up to $100,000.

(d)

Each party shall at its own cost and expense, maintain workers’ compensation coverage, unemployment compensation coverage, and such other insurance as may be required by law with respect to its employees and the provision of Section 13 below

(e)

The merchandise and other property of Bank and its employees at the Licensed Area may be subject to damage or loss by reason of many hazards, such as theft, fire, leakage, heater power failure, accidents, defects in plumbing, boiler or other explosions, and the bursting of pipes. Insurance is obtainable against most, if not of such hazards. Supermarket shall not be liable for any damage to the Licensed Area or to the fixtures or equipment of Bank contained therein or any loss suffered by Bank caused by fire or any such other hazards, excluding such damage or loss caused by the gross negligence or willful misconduct of Supermarket, its employees, agents or subcontractors. Supermarket shall not be liable to Bank or its employees for any loss or damaged occasioned by failure to keep the Store and/or Licensed Area in repair, and shall not be liable for any damage done from plumbing, water, heat, air conditioning, electricity, gas, steam pipes of any kind, running or leaking of any wash stand or wastepipe, stairs, ramps, railings, walls, the backing up of any sewer pipe or downspout., water coming through or being on the roof, or broken glass in, above, upon, below or about the Store and/or the Licensed Area, from any damage arising from acts of Supermarket unless any of the aforesaid is caused by the gross negligence or willful misconduct of Supermarket, its employees, agents or subcontractors.

13.

INDEMNIFICATION

(a)

Bank shall indemnify Supermarket, its Affiliates and their respective officers, directors, employees and agents, hold them harmless and defend them (if requested) against any and all penalties, claims, actions, damages, liability and expense, including reasonable attorney’s fees and court costs, resulting from a breach of any obligation under this Master Agreement or the activities or business of Bank., any Bank

Exhibit 10.2

employees or any contractor of Bank at the Store, except to the extent caused by the negligence, gross negligence or willful misconduct of Supermarket or its Affiliates or their respective agents, employees or contractors.

(b)

Supermarket shall indemnify Bank, its Affiliates and their respective officers, directors, employees and agents, hold them harmless and defend them (if requested) against any and all penalties, claims, actions, damages, liability and expense, including reasonable attorneys fee and court costs, resulting from a breach of any obligations under this Master Agreement or the activities or business of Supermarket, any Supermarket employees or any contractor or agent of Supermarket at the Store, except to the extent caused by the negligence, gross negligence or willful misconduct of Bank or its Affiliates or their respective agents, employees or contractors.

(c)

In any case where a third party, excluding the Landlord, shall seek indemnification under this Master Agreement (the “Indemnified Party”), for a third party claim, suit or proceeding (“Third Party Claim”), such indemnification shall be conditioned on such Indemnified Party’s compliance with the following procedures:

(i)

The Indemnified Party shall give prompt written notice (“Notice”) of any Third Party Claim to the party from whom such indemnification is sought (the “Indemnifying Party”), specifying the amount and nature of such Third Party Claim and in accordance with the notice provisions set forth in Section 28.

(ii)

Provided that prompt Notice is given, unless the failure to give such Notice does not prejudice the interests of the Indemnifying Party, the Indemnifying Party shall promptly defend, contest, and otherwise protect the Indemnified Party against such Third Party Claim, at its own expense and using counsel of its own choosing, which shall be reasonably satisfactory to the Indemnified Party.

(iii)

The Indemnified Party may, but shall not be obligated to, participate in the defense of such Third Party Claim at its own expense and using counsel of its own. choosing, but the Indemnifying Party shall be entitled to control the defense thereof unless the Indemnified Party shall relieve the Indemnifying Party from all liability for such Third Party Claim. The Indemnified Party shall cooperate and provide such assistance as the Indemnifying Party reasonably may request in connection with the Indemnifying Party’s defense and shall be entitled to recover from the Indemnifying Party the reasonable costs of providing such assistance. The Indemnifying Party shall inform the Indemnified Party on a regular basis of the status of such Third Party Claim and the Indemnifying Party’s defense thereof

(iv)

If the Indemnifying Party shall control the defense of a Third Party Claim the Indemnifying Party shall not compromise or settle such Third Party Claim without the Indemnified Party’s prior written consent, if: (a) such compromise or settlement would impose an injunction or other equitable relief upon the Indemnified Party; or (b) such compromise or settlement does not include the release of the Indemnified Party from all liability arising from or relating to such Third Party Claim.

(v)

If the Indemnifying Party fails timely to defend, contest or otherwise protect against such Third Party Claim, the Indemnified Party may, but shall not be obligated to, defend, contest, or otherwise protect itself against the same, and make any compromise or settlement thereof in its sole discretion, and recover from the Indemnifying Party all losses of the Indemnified Party arising from or relating to such compromise or settlement.

Exhibit 10.2

14.

TAXES

(a)

Bank shall have no responsibility to pay any share of common area maintenance charges, real estate taxes or such similar taxes which may be assessed upon Supermarket as part of any applicable Lease Agreement. Supermarket shall be solely liable for any and all common area maintenance charges, real estate taxes, or any applicable taxes under the terms of the Lease Agreement.

(b)

Bank shall pay all taxes properly assessed against it or its property by any taxing authority because of its operations and conduct of its business (including Banks income, employment of personnel, franchise, sales, use and excise taxes) and shall pay all personal property taxes assessed on its fixtures, equipment and furnishings. Bank shall pay any applicable license or other fee incident to the conduct of the FSF. Bank shall have no obligation to pay taxes related to Supermarket’s operations or conduct of its business (including Supermarket’s income, employment of personnel, franchise, sales, use and excise taxes).

(c)

Supermarket shall pay all taxes properly assessed against it or its property by any taxing authority because of its operations and conduct of its business (including Supermarkets income, employment of personnel, franchise, sales, use and excise taxes) and shall pay all personal property taxes assessed on its fixtures, equipment and furnishings. Supermarket shall have no obligation to pay taxes related to Banks operations or conduct of its business (including Bank’s income, employment of personnel, franchise, sales, use and excise taxes).

15.

ASSIGNMENT/SUBLICENSE

Neither party may assign this Agreement or any rights granted herein without the prior written consent of the other party, which consent shall not be unreasonably withheld. Notwithstanding the prior sentence, Bank may assign this Agreement to its parent or an Affiliate I or to any third party who acquires, merges or controls all or substantially all of the assets of Bank.

16.

RELOCATION: REMODELING OR VACATION OF STORES

(a)

(i) If Supermarket desires to relocate the Licensed Area within the Store, at any time and from time to time, Supermarket shall present to Bank a relocation plan (including the proposed or estimated date for commencement of construction) at least one hundred twenty (120) days prior to the date Supermarket desires to commence construction.

(ii)

The now location shall be subject to Bank’s approval within thirty (30) days after receiving such plan.

(iii)

In the event Supermarket finds it desirable to remodel or enlarge the Store, the Financial Service Facility may be moved from the Premises to a like location within the Store mutually satisfactory to the Tenant and Sublessor. If remodeling occurs during the first five (5) years of this Agreement, Sublessor shall pay all costs associated with the relocation of the Financial Service Facility.

(b)

In the event Supermarket decides to relocate the Store, Supermarket will give Bank notice of such decision at least one hundred eighty (180) days prior to the day the Store will cease operating and the new Store location shall be subject to all of the terms of this Master Agreement Supermarket shall

Exhibit 10.2

pay all costs associated with relocating the FSF in the new building. Relocation of the FSF shall be completed in accordance with federal and state laws, rules or regulations regarding the relocation of a bank branch. All fees shall abate during the period of relocation until Bank is open and able to conduct Banking Services and Financial Services at the new location.

17.

PARTIAL TERMINATION

(a)

Bank shall have the option to terminate the Term of the FSF under the terms of this Master Agreement as to any Store location in the event the governmental approvals necessary for the opening of the FSF are not received in a timely manner, by written notice to Supermarket.

(b)

Within one hundred twenty (120) days or the applicable federal or state mandated time frame, whichever is shorter, after the effective date of any termination of the Term of the FSF under the terms of this Master Agreement as to a Store location, Bank shall surrender peaceful possession of the Licensed Area and shall, at its expense, remove all furnishings, machinery and equipment placed on the Licensed Area by or through Bank and restore the Licensed Area to as good a condition as it received same, loss or damage by fire and ordinary wear and tear from reasonable use excepted.

18.

CASUALTY~ CONDEMNATION

(a)

If by fire or other casualty, the FSF or Store is destroyed or damaged to the extent that Bank is deprived of its ability to utilize the Licensed Area for the FSF, Supermarket shall notify Bank as to whether it (or Landlord, as the case may be) has decided to repair the damage or destruction resulting from any such casualty, as soon as possible after its decisions but in no event more than (60) days after the occurrence of the fire or other casualty. If Supermarket (or Landlord, as the case may be) elects to repair such damage or destruction, Supermarket shall cause such restoration to proceed with due diligence and Bank shall proceed with due diligence to restore the fixtures, furnishings and equipment on the Licensed Area to substantially the same condition as existed before such damage or destruction. If Supermarket fails to so notify the Bank within 60 days after such damage or destruction, or if Supermarket notifies Bank that it (or landlord, under any applicable Lease Agreement, as the case may be) has decided not to repair such damage or destruction, or if such damage or destruction is not substantially repaired within 270 days after such election if a substantial portion of the Store was damaged or 75 days if only the Licensed Area was destroyed, Supermarket and Bank each shall have the right and option to terminate this Master Agreement with respect to the affected Licensed Area by written notice to the other, such termination to be effective on the date set forth in such notice or such later date as may be required by applicable’ regulations concerning regulations concerning Bank closings.

(b)

If the entire Store shall be taken or condemned by any competent authority, if the Licensed Area is taken or condemned, or if any lessor portion of the Store shall be taken or condemned which would entitle Supermarket or Landlord to cancel or terminate the Lease Agreement and Supermarket or Landlord does cancel or terminate the Lease Agreement, the Term of the FSF under this Master Agreement shall be terminated as of the date of cancellation or termination of the Lease Agreement and the FSF shall close at a time that is in accordance with any applicable federal, stale and local rules law or regulations. All awards attributable to trade fixtures, equipment, leasehold improvements and moving expenses made by reason of condemnation shall be made subject to the Lease Agreement, to Supermarket, and Bank as their interests may appear.

Exhibit 10.2

19.

PEACEFUL POSSESSION

Supermarket warrants that for so long as Bank performs its obligations under this Master Agreement, Bank shall have peaceful and uninterrupted possession of the Licensed Area during the term of this Master Agreement.

20.

SECURITY

(a)

It shall be Bank’s obligation to provide security for the FSF. Bank shall have the right to have a security guard who is an employee or agent of Bank in the Store at all times and to install any electronic surveillance equipment it deems necessary. Subject to the rules and regulations as established by Supermarket, Bank shall have the right, but not the obligation, to have security personnel present in the FSF at all times, giving due regard to the safety of Store customers, personnel and visitors.

(b)

It shall be Supermarkets obligation to provide security for the Store. Supermarket shall have the right to a security guard who is an employee or agent of Supermarket in the Store at all times and to install any electronic surveillance equipment it deems necessary in the Store, exclusive of the Licensed Area.

(c)

Bank hereby releases Supermarket from any claims, loss or damage that Bank might sustain by virtue of a robbery or attempted robbery of or theft or attempted theft from the FSF.

(d)

Supermarket hereby releases Bank from any claim, loss or damage that Supermarket might sustain by reason of a robbery or attempted robbery of or theft or attempted theft from the Store.

21.

CONFIDENTIALITY

(a)

Each party acknowledges that in connection with this Master Agreement or in the performance hereof, it has or will come into possession or knowledge of Confidential Information of the other party. Each party, therefore, agrees to hold such Confidential Information in strictest confidence, not to make use thereof except in the performance of this Master Agreement, and not to release or disclose it to any other party with the exception of their Affiliates, consultants, who are subject to written confidentiality agreements with the party receiving the Confidential Information, auditors, attorneys or regulators. The parties agree that any breach of this Section 21 would cause irreparable damage to the non-breaching party which would be difficult to quantify and, accordingly, the parties agree that in the event any such breach is threatened or occur, the non-breaching party shall be entitled to specific performance, including preliminary and permanent injunctive relief against the breaching party, as well as all rights and remedies to which the non-breaching party may otherwise be entitled to at law or in equity.

(b)

Either party may disclose Confidential Information pursuant to a requirement or request of a governmental agency or pursuant to a court or administrative subpoena, order or other such legal process or requirement of law, or in defense of any claims or causes of action asserted against it; provided, however, that it shall (i) first notify the other of such request or requirement, or use in defense of a claim, unless such notice is prohibited by statute, rule or court order, (ii) attempt to obtain the other’s consent to such disclosure, and (iii) in the event consent is not given, I to agree to permit a motion to quash, or other similar procedural step, to frustrate the production or publication of information. Nothing herein shall require either party to fail to honor a subpoena, court or administrative order, or a requirement on a timely basis.

Exhibit 10.2

(c)

It is understood and agreed that no information shall be within the protection of this Agreement where such information: (i) is or becomes publicly available through no fault of the party to whom such Confidential Information has been disclosed; (ii) is released by the originating party to anyone without restriction; or (iii) is rightly obtained from third parties, who, to the best of a party’s knowledge, are not under obligation of confidentiality.

22.

ENTIRE AGREEMENT

This Master License Agreement, together with the Sublease associated herewith and incorporated herein, express the entire agreement between Supermarket and Bank, and no earlier statement or written agreements have any force or effect. Tenant agrees it is not relying on any representation or agreement except those contained in the within Sublease and the Master License Agreement.

23.

FORCE MAJEURE

Neither party shall be held liable for any delay or failure in performance of any part of this Master Agreement from any cause beyond its control or without its fault or negligence, including Force Majeure.

24.

CAPTIONS

The captions of the several sections of this Master Agreement are not part of the context hereof and shall be ignored in construing this Master Agreement. They are intended only as aids in locating various provisions hereof.

25.

SEVERABILITY

Each provision contained in the Master Agreement shall be independent and severable from all other provisions contained herein, and the invalidity of any such provision shall in no way affect the enforceability of the other provisions.

26.

GOVERNING LAW

(a)

This Master Agreement is deemed to have been executed in the State of West Virginia and it is agreed that any controversy or claim arising from or related in any way to this Master Agreement shall be governed and controlled by the laws of the State of West Virginia.

(b)

Supermarket acknowledges and agrees that the covenants and obligations of Bank hereunder with respect to the establishment, maintenance, closure, relocation and hours of operation of FSF is at all times subject to the consent or approval of all state and federal regulatory agencies now or hereafter empowered to regulate Bank. Supermarket agrees to cooperate with and assist Bank in obtaining any necessary approvals and permits in connection with the construction, installation and operation of the FSF, but shall not be required to incur any cost in doing so.

27.

BINDING EFFECT

This Master Agreement shall be binding upon and shall inure to the benefit of Supermarket and Bank and their respective legal, representatives, successors and permitted assigns.

Exhibit 10.2

28.

NOTICES

(a)

All notices required or permitted hereunder shall be in writing and signed by a duly authorized representative of the party making the same. All notices shall be deemed effective when delivered personally or by Federal Express Corporation or similar overnight delivery service or two (2) business days following deposit in the United States mail, registered or certified, return receipt requested, postage or overnight delivery charge prepaid, addressed as follows:

(i)

If to Supermarket, then to:

S-N-S Foods, Inc.

Shop-N-Save

Middletown Mall

2500 Fairmont Avenue

Fairmont, WV 26554

With a copy to:

Gary J. Frankhouser, Esquire

DAVIS & DAVIS

107 East Main Street

P.O. Box 1163

Uniontown, PA 15401

(ii)

If to Bank, then to:

The Monongahela Valley Bank, Inc.

ATTENTION: JAMES R. MARTIN

P.O. Box 2528

Fairmont, WV 26555-2528

With a copy to:

(b)

The names and addresses for the purpose of this Section may be changed by giving written notice of such change in the manner herein provided for giving notice. Unless and until such written notice is actually received, the last name and address stated by written notice or provided herein, if no such written notice of change has been received, shall be deemed to continue in effect for all purposes hereunder.

29.

CONFIRMATORY AMENDMENT

Promptly after Bank opens an FSF, each party shall sign a document confirming the Official Opening Date, and other appropriate items.

Exhibit 10.2

30.

BROKERS OR CONSULTANTS

Each party represents that is has not dealt with any broker on this Master Agreement Supermarket shall indemnify Bank against brokerage claims asserted to arise from Supermarket’s acts or omissions and Bank shall indemnify Supermarket against brokerage claims asserted to arise from Banks acts or omissions.

31.

RELATIONSHIP

The relationship created herein is solely that of independent contractors as licensor and licensee and not, for example, landlord and tenant, or joint venturers. Supermarket covenants that for so long as Bank performs its obligations under this Master Agreement, Supermarket shall afford Bank peaceful and quiet enjoyment of the Licensed Area in accordance with and subject to the terms of this Master Agreement and subject to the Lease Agreement, any applicable Store mortgages, and any other matters of title. Supermarket and Bank shall have the sole and exclusive right to select, direct, discipline and terminate their respective employees and to determine the terms and conditions of their employment in accordance with applicable law. Each party shall have the right to inform the other party of any employee of such other party whose conduct in its good faith discretion is unsatisfactory and such other party shall take appropriate measures.

32.

ESTOPPEL CERTIFICATE

At any time, and from time to time, within twenty (20) days after request therefor by a party, the other party agrees to deliver a certificate to the requesting party or any party directed by the requesting party certifying (if such is the case) that this Master Agreement is in full force and effect, that there are no defenses or offsets thereto (or stating those claimed by such party) and such other matters as the requesting party or such addressee may reasonably request at any time, and from time to time, within twenty (20) days after request therefor by Bank, Supermarket agrees to use its best efforts to deliver a certificate to Bank or any party directed by Bank certifying (if such is the case) that the terms of the Sublease Agreement or Master License Agreement remain in full force and effect, that there are not defaults under such Sublease Agreement or Master License Agreement and such other matters as Bank may reasonably request.

33.

WAIVER

The waiver by any party of any breach of any term in this Master Agreement shall not be deemed to be a subsequent waiver of such term or condition. No term of this Master Agreement shall be deemed to have been waived, unless such waiver shall be in writing by the non-breaching party.

34.

REMEDIES

All remedies provided for under the terms of this Master Agreement shall be cumulative and not alternative.

35.

ADDITIONAL PROVISIONS

Supermarket shall not enter into any amendment or modification of the Lease Agreement which adversely affects Banks use and enjoyment of the Licensed Area without Banks prior written consent Supermarket agrees to use all reasonable efforts to enforce all of the obligations and duties of Landlord under the Lease Agreement, if applicable.

Exhibit 10.2

IN WITNESS WHEREOF, the parties have caused duplicate counterparts of this Master Agreement to be duly executed as of the date first set forth at the beginning of this Master Agreement


SUPERMARKET

By:		/s/ T HOMAS E. J AMIESON
Name:		Thomas E. Jamieson
Title:		President


BANK

By:		/s/ J AMES R. M ARTIN
Name:		James R. Martin
Title:		President

Exhibit 1

SUMMARY OF LEASE

TERMS :

Two (2) years with renewals of two (2) years for the first renewal and then the option to renew four (4) times for four (4) years each for a total possible term of twenty (20) years.


ANNUAL RENT: YEAR(S)	RENT PER YEAR	ATM RENTAL
1	$0	$0
2-4	$16,000	$100/ month
5-8	$17,000	$100/ month
9-12	$18,000	$100/month
13-16	$19,000	$100/month
17-20	$20,000	$100/month

RESTRICTION :

If MVB leaves this location, we cannot open another office within two (2) miles for a period of two (2) years.

UTILITIES : Included in Lease Terms except for telephone and data communications.

Exhibit 10.3

SUBLEASE AGREEMENT

THIS SUBLEASE AGREEMENT made this 1st day of May, 2000, by and between S-N-S FOODS, INC., a West Virginia corporation (hereinafter referred to as “Sublessor”) and THE MONONGAHELA VALLEY BANK, INC., a West Virginia chartered banking institution (Hereinafter referred to as “Tenant”);

WITNESSETH:

WHEREAS, the Sublessor is the Lessee of certain premises situated at the Middletown Mall, County of Marion, State of West Virginia, more particularly described in its hereinafter referenced Lease dated , 2000, a copy of which is attached hereto and made a part hereof and marked as Exhibit “A”; and

WHEREAS, the Sublessor is desirous of subleasing a portion of the above—described premises consisting of approximately 644 square feet, along the front wall adjacent to the pharmacy, to the Tenant, and the Tenant is desirous of subleasing said premises from the Sublessor, for the term and on the other terms and conditions contained herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. The Sublessor, in consideration of rents to be paid and the~ covenants to be performed by the Tenant as set forth in the Exhibit~ “1” attached to the Master License Agreement associated herewith, hereby demises and subleases to Tenant, the premises located within the Shop-N-Save Supermarket, Middletown Mall, Marion County, West Virginia.

2. In reliance upon Tenant’s execution of this Agreement, Sublessor shall provide a shell for Tenant’s Banking facility. The Tenant shall complete the remainder of the required construction including, but not limited to, all interior wiring; all interior wall/floor finishes; all cabinets, vaults, safes, and counters; the glass wall and doors.

Sublessor shall furnish all utilities for the Store, including the space provided to the tenant. If utility service to the Store is interrupted for a period in excess of 24 hours, the annual rental fees payable hereunder shall be abated.

3. The Tenant covenants and agrees that it will peacefully and quietly vacate and surrender the leased premises to the Sublessor at the expiration of the term of this Sublease, or at any earlier termination as may be provided elsewhere herein, and that the Sublessor shall not in any way or to any extent be liable for any loss or damage to the Tenant or to any property of the Tenant in or upon the leased premises. It is further agreed and understood that the Sublessor will not be liable for any damages or any loss of profits due to the interruption of Tenant’s business resulting from, but not limited to, fire or other casualty or unavoidable accident, strikes or lockout.

4. The Sublessor shall not be in any sense a partner of the Tenant in the conduct of Tenant’s business, and the relationship between the parties hereto shall be strictly and solely that of the landlord and tenant.

5. The Tenant agrees that it will take good care of the leased premises, and will commit no waste, and will not do, suffer or permit to be done any injury to the same; that it will keep said premises in the same good order, condition and state of repair required of Sublessor as lessee under its Lease; Tenant shall provide all necessary janitorial services for the subject premises; that it will permit the Sublessor to enter onto said premises at any and all reasonable times during business hours in order to inspect the same or for any other proper purpose (in no event, shall Lessor enter the premises without a representative/manager of’ the Bank being present); that is will not suffer or permit any~ additions to or alteration of said premises without the prior written consent of the Sublessor, which consent shall not be unreasonably withheld; that it will not do, suffer or permit to be done any act or thing contrary to the covenants and agreement made by Sublessor in its Lease dated , 2000.

6. Not withstanding any other provisions contained in this Lease, in the event the Lessee is closed or taken over by the Banking Authority of the State of West Virginia, or other Bank supervisory authority, the Sublessor may terminate the Lease only with the concurrence of such banking authority or other bank supervisory authority, and any such authority shall, in any event, have the election to either continue or to terminate the Leases as provided in Section 31 of the West Virginia Code.

Exhibit 10.3

7. Supermarket expressly waives its rights to a lien upon any and all fixtures, machinery or equipment installed or to be installed on the Licensed Area by or through Bank for the satisfaction of any cause, which may accrue to Supermarket under the provisions of this Master Agreement. Supermarket further agrees to execute any documents necessary to evidence said waiver as may be required from time to time by third parties from which Bank leases such fixtures, machinery or equipment.

8. The Tenant further agrees to perform, fully obey and comply with all the ordinances, rules, regulations and laws of all public authorities, boards and officers relating to said premises, or the improvements thereon, or to the use thereof, and further not to use, occupy, or permit any person or other entity to use or occupy the said premises, or any part thereof for any purpose or use in violation of any law, statute or ordinance, whether Federal, State or Municipal, during the term of said Lease or any renewal thereof.

9. The Tenant further covenants and agrees that it will not sell, assign or pledge this Sublease or underlet the said premises or any part thereof without the prior written consent of the Sublessor, subject to all of the terms and conditions of the above-referenced Section 31 of the West Virginia Code.

10. The Tenant further covenants and agrees that it will not affix to or display from any part of the outside of the building of said leased premises any signs or advertisements except as have been approved in advance by Sublessor and are reasonable and customary in the business.

Sublessor shall permit Tenant to place signs identifying its operations inside the Store at locations to be agreed upon by the parties.

11. The Tenant further covenants and agrees at its expense to maintain the leased premises in a neat, clean and healthful condition and in every respect as required by laws and ordinances. The Branch will be operated on a six-day per week basis with not less than forty-eight (48) hours of operation in each week, with hours conforming to peak customer demand for banking services.

Tenant shall have the exclusive right to operate an Financial Service Facility within the Store. Sublessor shall not conduct nor allow any other entity to conduct of offer competing banking services at the Store with the exception of making change, cashing checks, verifying checks, selling money orders, and conducting point-of-sale transactions. Sublessor shall not allow a financial institution other than Tenant to advertise in the Store. Each party shall conduct its business at the Store in a clean and lawful manner. Each party agrees that it shall not block or restrict the aisles or passageways of the other party, nor shall either party interfere with the other party’s business.

All persons employed by the Tenant in or about, or in connection with, the operation of the Financial Service Facility shall be Tenant’s employees for all purposes under this Agreement. Tenant’s employees and agents and employees of companies which service the Financial service Facility who are not Tenant employees or agents shall be granted access to the Store for the purpose of servicing, maintaining and otherwise performing services in connection with the Financial Service Facility. Employees of Tenant, while working at the Financial Service Facility, shall be entitled to use the toilet facilities and break—room in the Store provided by Sublessor for the convenience of Sublessor’s employees. Employees of Tenant, while working at the Financial Service Facility, shall be permitted to park their automobiles in spaces designated by Sublessor for parking by Sublessor’ s employees.

Tenant shall be permitted to conduct promotional activities outside of the Financial Service Facility within the Store itself; provided, however, prior to the commencement of Financial Service Facility operations, Tenant shall meet with Sublessor and obtain approval for the various types of in-store promotional~ campaigns to be conducted by Tenant.

In the event Sublessor finds it desirable to remodel or enlarge the Store, the Financial Service Facility may be moved from the Premises to a like location within the Store mutually satisfactory to the Tenant and Sublessor. If remodeling occurs during the first five (5) years of this Agreement, Sublessor shall pay all costs associated with the relocation of the Financial Service Facility.

Exhibit 10.3

A like or similar location shall be defined as the same or more square footage and similar public exposure as well as similar entry and exit proximity.

12. No waiver of any default of Tenant hereunder shall be implied from any omission by Sublessor to take any action on account of such default if such default persists or is repeated. One or more waivers by Sublessor shall not be construed as waiver of subsequent breach of the same covenant, term or condition. The consent to or approval by Sublessor of any act by Tenant requiring Sublessor’s consent or approval shall not waiver or render unnecessary Sublessor’s consent to or approval of any subsequent similar act by Tenant.

13. Words used in this instrument in the masculine gender include feminine and neuter, the singular number includes the plural and the plural the singular wherever the context so requires.

14. Tenant shall maintain a policy of All Risk insurance insuring its improvements, betterments, fixtures, demised premises at the full replacement cost thereof. The Tenant shall also maintain comprehensive general liability insurance in the amount of not less than Two Million ($2,000,000.00) Dollars.

15. This Sublease, together with the Master License Agreement associated herewith and incorporated herein, express the entire agreement between Sublessor and Tenant, and no earlier statement or written agreements have any force or effect. Tenant agrees it is not relying on any representation or agreement except those contained in the within Sublease and the Master License Agreement.

16. If any provision of this Lease is invalid or unenforceable, the remainder of this Lease will not be affected, but will be valid and enforceable to the fullest extent permitted by Law.

17. This agreement shall be binding on and inure to the benefit of the parties hereto, their heirs, executors, administrators, successors in interest and assigns.

IN WITNESS WHEREOF, the parties to this agreement, intending to be legally bound hereby, have hereunto set their hands and seals the day and year first above written.


ATTEST:		SUBLESSOR:

	/s/ A LICE M. R ICE	BY:	/s/ T HOMAS E. J AMIESON

ATTEST:		TENANT:

	/s/ J UDITH A. M ERICO	BY:	/s/ J AMES R. M ARTIN

Exhibit 10.4

LEASE AGREEMENT

THIS LEASE AGREEMENT (“Lease”), effective the 1st day of November, 2004 , by and between ESSEX PROPERTIES, LLC, a West Virginia limited liability company, (“Landlord”) and THE MONONGAHELA VALLEY BANK, INC., a West Virginia banking corporation, (“Tenant”);

WHEREAS, Tenant intends to lease that certain parcel of real property containing approximately 0.63 acres, more or less, situate at 1000 Johnson Avenue, Bridgeport, in Harrison County, West Virginia, as the same as more fully shown and described in Exhibit A attached hereto and made a part hereof (the “Real Estate”) upon which Tenant intends to construct certain improvements thereon, being an approximately 7000 square foot full service bank branch building (the “Building”) (the Real Estate and the Building are collectively the “Premises”);

WHEREAS, the Landlord does not make any representations or warranties regarding the condition of the Premises, the zoning of the Real Estate, or the Tenant’s ability to use the Premises for its intended purposes, it being agreed and understood that Tenant has conducted all necessary due diligence prior to executing this Lease, and will be actively involved in supervising the construction of the Building;

WHEREAS, the Landlord has agreed to Lease the Real Estate to the Tenant under the terms and conditions as hereinafter set forth.

WITNESSETH: That for and in consideration of the rents, covenants and conditions herein contained, Landlord and Tenant do hereby agree as follows:

1. Premises .

1.1. Premises Leased . Landlord does hereby let, lease and demise unto Tenant and Tenant hereby takes and hires from Landlord, in an “As Is” condition, all that certain real estate and improvements thereon designated as 1000 Johnson Avenue, Bridgeport, West Virginia, containing 0.63 acres, more or less (the “Real Estate”). The Landlord makes no representations or warranties regarding the Building, or any of its components. In addition, the Landlord makes no representations or warranties regarding the ability of the Tenant to use the Premises or Building as intended to be used by the Tenant, it being agreed and understood that the Tenant has conducted all necessary due diligence with regards to the Real Estate and Building and Tenant’s intended use and occupancy of the Real Estate and Building, and will supervise the construction of the Building.

1.2. Building . The Building constructed on the Premises, including improvements, additions, and alterations thereto, shall be the sole and exclusive property of the Tenant, free and clear of all claims of the Landlord until the termination of the Lease.

Exhibit 10.4

2. Term .

2.1. Commencement Date . The initial term of this Lease shall commence on November 1, 2004 (the “Commencement Date”), and extend for a period of twenty (20) years (the “Initial Term”), terminating on the last day of the initial term, October 31, 2024 (the “Expiration Date”).

2.2. Renewal Terms . Provided Tenant has not defaulted and is not in default of any of the terms, covenants or conditions of this Lease, Tenant shall have the right to renew this Lease for two (2) additional terms of ten (10) year(s) each (each a “Renewal Term”), each of which Renewal Terms shall commence immediately upon the expiration of the Initial Term, or the immediately preceding term, and shall expire at midnight on the last day of the ten (10) year period (individually, “Renewal Term” and collectively, “Renewal Terms”). If Tenant elects to exercise its option to renew this Lease for any Renewal Term, Tenant shall give written notice to Landlord of such election, at least four (4) months prior to the date of expiration of the Initial Term, or the then current Renewal Term, as the case may be.

2.3. Holding Over . If, at the expiration of the Initial Term or any Renewal Term, Tenant continues to occupy the Premises, or any portion thereof, with or without Landlord’s consent, then Tenant’s tenancy under this Lease shall become month to month, terminable by either party on thirty (30) days written notice. During any such holdover period, Tenant shall be subject to all the conditions of this Lease excepting those relating to the term hereof. The rent shall be payable at the rate of one hundred fifty percent (150%) of the then monthly rental payment.

3. Rent .

3.1. Rent During Initial Term . During the twenty (20) years of the Initial Term, Tenant shall pay to Landlord rent in the amount of Three Thousand Dollars ($3,000.00) per month (“Rent”), payable in advance on the first day of each month. The Rent shall increase as hereinafter set forth.

3.2. Payment . Rent shall be paid in advance, without notice, demand, offset or deduction, on the first day of each calendar month during the Initial Term and any Renewal Terms hereunder, by mail or hand delivery to Landlord, 101 Cambridge Place, Bridgeport, West Virginia, 26330, or as Landlord may otherwise direct in writing to Tenant. In the event this Lease commences on any day other than the first day of a calendar month or expires or is terminated on any day other than the last day of a calendar month, the monthly installment of rent for such partial month shall be prorated by multiplying the monthly installment amount by a fraction, the numerator of which is the number of days of the partial month and the denominator of which is the total number of days in the full calendar month.

3.3. Deposit. Tenant shall give to Landlord a security deposit in the amount of Three Thousand Dollars ($3,000.00), to be held by Landlord until the completion of the construction of the Building.

Exhibit 10.4

3.4 Rent Increases . The Rent due under this Lease for the Renewal Terms shall be increased effective on the first day of any Renewal Term and every Twelve (12) months thereafter by an amount equal to the compounded annual percentage increase during the time period of November 1, 2004, until October 1, 2024 and thereafter every Twelve (12) months in the “U.S. Department of Labor, Bureau of Labor statistics, Consumer Price Index, United States City Average for Urban Wage Earnings and Clerical Workers Major Group Indexes (1982-1984=100). All items”, hereinafter called “CPI”. The initial increase shall be determined by compounding the annual increases in the CPI during the initial Twenty (20) years of the Lease. Each year thereafter, the cumulative percentage increase in the CPI shall be determined as follows: The CPI for the first full month of the prior year (hereinafter called “Prior Lease Year Commencement CPI”), shall be subtracted from the CPI for the last full month of the prior lease year; the resulting value shall be the percentage of the increase of and become the new Rent. The Rent shall be increased every year by the resulting value and the same process shall be repeated every year during any Renewal Terms. The parties agree that in no event shall the Rent ever decrease.

4. Landlord’s Covenants and Obligations .

4.1. Quiet Enjoyment . Landlord covenants that Tenant may quietly enjoy the Premises without hindrance by Landlord or any party claiming under Landlord, so long as Tenant is not in default in the performance of any of its obligations under this Lease.

4.2. Services and Maintenance . Landlord shall not be required to provide any service or maintenance to the Premises, it being agreed and understood that Tenant shall provide, at its expense, all maintenance and repair of the interior and exterior of the Premises and the Building, it being agreed by the parties this is a “Triple Net” Lease and that the Landlord is not responsible for any maintenance or repairs to the Real Estate, Premises or the Building. In addition, as part of the consideration for this Lease Agreement, Tenant shall be required to perform certain maintenance as hereinafter provided in Section 5.6, Additional Services and Maintenance.

4.3. Interruption of Services . Landlord does not warrant that any utility services to the Real Estate, Premises or the Building are available or will not be interrupted. Service interruptions caused by accidents, repairs, alterations, or improvements shall not be considered an eviction or disturbance of Tenant’s use and possession of the Real Estate, Premises or the Building, shall not make Landlord liable to Tenant for damages and shall not abate rent due under this Lease nor relieve Tenant of any of its other obligations hereunder.

4.4. Taxes . Tenant shall pay all real estate and personal property taxes assessed against the Premises. Landlord shall not be responsible for any real or personal property taxes assessed against the Premises or the Building or the Real Property upon which the Premises and Building are situate, it being agreed that the Tenant shall timely pay all such taxes and not allow the taxes to become delinquent, and is responsible to pay in a timely fashion, all real and personal property taxes assessed against the Premises, the Building and the Real Estate.

4.5. Signage . Tenant, to the extent allowed by applicable laws, is permitted to erect a

Exhibit 10.4

sign or signs on the Premises, provided that such sign is approved by all applicable governmental authorities, including without limitation, the City of Bridgeport. All exterior signage, now existing or hereafter placed on the Premises, shall remain with the Premises and become the property of the Landlord, and shall remain on the Premises after termination of this Lease. All such signs shall be constructed, erected, placed and installed solely at the Tenant’s expense.

5. Tenant’s Covenants and Obligations .

5.1. Construction Rights . Subject to the terms of this Lease, Tenant shall construct the Building on the Real Estate. In the event the Building is not completed by January 1, 2006, Landlord may immediately terminate this Lease and retain the deposit paid by Tenant, it being agreed and understood by the parties that a material part of the consideration for this Lease is the Tenant’s obligation to construct the Building on the Real Property, and to purchase the Premises upon the expiration of the initial term of this Lease. Prior to commencing construction, Tenant shall post and record for the benefit of Landlord, a construction, completion, performance and payment bond with acceptable bonding or surety company, in an amount equal to the proposed construction cost, including materials, machinery, equipment and labor for the completion of the Building, or such other satisfactory form of security for the protection of the Landlord during the construction of the Building.

5.2. Construction Standards . Tenant shall cause the construction of the Building on the Real Estate to be completed in a good and workmanlike manner according to the customary standards of the trade and in compliance with the laws and regulations of any governmental authority having jurisdiction thereof, all at Tenant’s sole expense. Tenant shall obtain all necessary permits, approvals and licenses for such work and construction and shall pursue such construction in a diligent manner to completion. Tenant shall assure that all improvements are completed so that they may be occupied in compliance with all laws, rules, regulations, ordinances and orders applicable to the use and occupancy of the Premises and such improvements .

5.3. Use of Premises . Tenant shall use the Premises and Building only as space for the operation of its primary business, which is banking and financial transactions, unless Landlord gives Tenant advance written consent to another use, which consent shall not be unreasonably withheld. Tenant shall not use the Premises in such manner as to create a nuisance to Landlord or other occupants of adjoining or adjacent real estate, or for any immoral or illegal purposes or for any purpose which Landlord in its sole opinion deems undesirable.

5.4. Compliance with Laws . Tenant’s use and occupancy of the Premises and Building shall at all times be in compliance with all applicable federal, state and local laws, statutes, ordinances, regulations and rules and in compliance with this Lease. Tenant shall be responsible for the full and complete compliance with this section 5.4 by Tenant’s agents, employees, customers, guests and invitees.

5.5. Covenant to Pay Rent . Tenant covenants that it will pay Landlord when due all rents and monies provided for herein and will perform and comply with all covenants, agreements,

Exhibit 10.4

conditions and obligations herein contained. Failure to promptly and timely pay rent or timely perform and comply with all covenants, agreements, conditions or obligations contained herein, shall be considered a material default and breach of this Lease and be grounds for immediate termination of this Lease, subject to the default and remedies section of this Lease.

5.6. Additional Services and Maintenance . Tenant shall provide, at its sole cost and expense, all maintenance and repairs to the Premises, the Building and the Real Estate. Tenant shall repair and maintain all components of the Building and Premises, including without limitation, the HVAC, roof, windows and plate glass, interior, exterior and structural and nonstructural components of the Building and the parking lot. Tenant shall keep and maintain complete and accurate records of all major maintenance and repairs, and copies of such records shall be provided to Landlord within five (5) business days after termination of this Lease, if Tenant does not purchase the Premises. In addition, Tenant shall be required to cause repairs or maintenance to be performed on the Premises, the Building and the Real Estate within twenty (20) days after receipt of written notice from Landlord. Failure to comply with the requirements contained in this paragraph will be considered a material breach and default of this Lease and grounds for immediate termination of this Lease. In addition to the remedies provided by law, Landlord shall be entitled to require the specific performance of the provisions of this paragraph.

5.7. Taxes . Tenant shall pay all real and personal property taxes assessed against the Real Estate, Premises and Building promptly when the same are due and as provided in Section 4.4, above, and provide a paid receipt to Landlord. In the event Tenant fails to timely pay the aforesaid taxes as required herein, Landlord may pay such taxes and send a bill to Tenant. In the event Tenant does not pay Landlord within fifteen (15) business days after receipt of an invoice or bill for such taxes, Tenant’s failure shall carry the same consequences as failure to pay an installment of rent. Failure to comply with the requirements contained in this paragraph will be considered a material breach and default of this Lease and grounds for immediate termination of this Lease.

5.8. Care of Premises . Tenant shall keep the Real Estate, Premises and Building and fixtures in good order and repair and shall be solely responsible for the cost of repairs and replacements of property and fixtures located on the Real Estate shall also be responsible for cleaning and maintaining its fixtures, the Real Estate both exterior and interior (including parking lot maintenance), and for snow removal on the Premises. Tenant shall not defer any care or maintenance of the Premises and shall be required to continually maintain and repair the Premises until the termination of this Lease Agreement. Any material deferral of care or maintenance of the Premises shall be considered a material default and breach of this Lease and grounds for immediate termination of this Lease.

5.9. Signs . Intentionally left blank.

5.10. Surrender of Premises . Upon the Expiration Date of the Initial Term or the current Renewal Term, or upon a breach or default under the terms or conditions of this Lease, Tenant shall surrender the Premises to Landlord in a clean and sanitary condition and in good order and repair, within fifteen (15) business days after notice of termination of this Lease. Upon surrender of the Premises to Landlord, it is explicitly agreed and understood that Landlord shall

Exhibit 10.4

become the owner of the Building and any and all improvements attached to the Premises during the term of this Lease. Tenant shall execute any and all documents necessary to effectuate and verify this provision.

5.11. Removal of Property . Upon surrender, Tenant shall have removed from the Premises its trade fixtures, furniture, equipment and other personal property; provided, however, that Tenant shall be responsible for the cost to repair any damage to the Real Estate, Premises and Building caused by such removal. Any such items of property not removed by Tenant shall be considered abandoned, and Landlord may dispose of such abandoned items as Landlord deems best and may bill Tenant for the cost of their removal and disposal.

5.12. Telephone and Other Utility Services . Tenant shall make arrangements directly with the companies serving the Real Estate, Premises and Building for telephone, security and all utility service installation and for installation and maintenance of all other utilities required by Tenant. Tenant shall pay for the installation, maintenance and replacement of telephone service, security, and for all other such utilities and monthly utility charges for electricity, gas, water, sewer, trash hauling, etc. Tenant acknowledges that telephone service, security, and other utilities and services furnished to the Real Estate, Building or Premises at Tenant’s request are provided by third parties and that Landlord shall not be held liable or responsible for any damages sustained by Tenant due to interruptions in service of such utilities and services for any reason.

5.13. Insurance .

5.13(a). Public Liability Insurance . During the Initial Term and any Renewal Terms, Tenant shall, at its sole cost and expense, keep in full force and effect public liability insurance, underwritten on an occurrences basis, in respect to the use and occupation of the Premises by Tenant, with respect to the negligent acts or omissions of Tenant and its employees, agents, guests, servants, invitees, and licensees, in an amount of not less than $1,000,000.00 per person and not less than $1,000,000.00 per occurrence on account of personal injury to or death of one or more persons and not less than $1,000,000.00 on account of damage to property. Tenant will maintain an umbrella policy in an amount of not less than $3,000,000 on these policies. Tenant shall also maintain, at its sole expense, builder’s risk insurance for the Improvements. The amount of the required insurance shall be required to be increased, upon written request by Landlord, at any time during the Initial Term and any time during any Renewal Terms to coverage amounts for similarly situate businesses in the Harrison County area. The insurance shall be underwritten by an insurance company licensed to do business in the State of West Virginia.

5.13(b). Tenant’s Personal Property . Landlord and its directors, members, officers, administrators, successors, assigns, employees and agents, shall not be liable for loss of or damage to Tenant’s equipment, trade fixtures, furnishings and items of personal property placed in or upon the Premises from accidents, conditions, or casualty occurring in, on or about the Premises unless due to Landlord’s, its officers, directors, members, successors, assigns, employees and agents’ negligence. Any insurance upon such equipment, trade fixtures, furnishings and items of personal property shall be kept and maintained at Tenant’s sole cost and expense.

Exhibit 10.4

5.13(c). Fire and Casualty Insurance . During the Term and all Renewal Terms of the Lease, Tenant shall, at its sole cost and expense, keep in full force and effect fire and extended coverage insurance in respect to the Real Estate, Premises and Building, naming both Landlord, its successors and assigns, and Tenant as insureds, as their interests appear. This policy of insurance shall cover all buildings, improvements and fixtures located in or upon the Premises, Real Estate and Building for their full replacement value.

5.13(d). Certificates of Insurance; Notice . All such insurance policies shall name Landlord, its successors and assigns, as additional insureds. Tenant shall deliver copies of all insurance policies required to be maintained hereunder or certificates thereof to Landlord on an annual basis. Each insurer on coverage maintained by Tenant shall agree, by endorsement on the policy or policies issued by it or by independent instrument furnished to Landlord, that it will give Landlord thirty (30) days written notice before any policy or policies of insurance are altered, terminated or canceled. The cost of insurance required to be carried by Tenant hereinabove shall be deemed to be an additional rental hereunder in the event of nonpayment by Tenant.

5.13(e). Failure to Pay Premiums . In the event Tenant fails either to obtain insurance as provided in this section 5.13 or to pay the policy premiums, or to deliver certificates thereof to Landlord, Landlord shall be entitled, but shall not be required, to obtain such insurance and to pay the premiums therefor. In such event, Landlord may make written demand to Tenant for reimbursement for all sums expended by Landlord to obtain such insurance, and Tenant’s failure to reimburse Landlord shall carry the same consequence as failure to pay an installment of rent.

5.14. Mechanic’s Liens . Within twenty (20) days after receiving notice of any mechanic’s, materialman’s or laborer’s lien or similar statutory lien for material or work claimed to have been furnished to the Real Estate, Premises or Building on Tenant’s behalf, Tenant shall either discharge the lien or post a bond equal to the amount of the disputed claim with a company satisfactory to Landlord. If Tenant posts a bond, it shall contest the validity of the lien. Landlord, at Tenant’s cost and expense, shall assist Tenant in the defense of any claim as Tenant may require. Tenant shall indemnify, defend and hold Landlord, its officers, directors, members, successors and assigns, harmless from losses incurred from any such lien or liens. If Tenant fails to discharge the lien or liens, or post bond within the twenty (20) day period, Landlord may pay any amount to discharge the lien, and seek reimbursement from Tenant in the form of additional rent payable under this Lease.

5.15. Hazardous Substances . Tenant and its directors, officers, contractors, subcontractors, agents, employees or invitees shall not install, store, recycle, dispose of, release or otherwise locate in or upon the Real Estate, Building or Premises any “Hazardous Substances,” as such term is hereinafter defined, without first obtaining the prior written consent of Landlord. Tenant acknowledges and agrees that Landlord may, in its sole discretion, either withhold consent to such usage or activity upon receipt of notice thereof from Tenant, or may require Tenant to obtain such insurance or other further assurances as Landlord in its sole discretion deem necessary in order to adequately protect the interests of Landlord. Tenant agrees to indemnify and hold Landlord, its directors, officers, members, assigns, employees, agents and contractors, harmless for any future liability arising out of or connected with any claims, judgments, damages, penalties, fines, assessments,

Exhibit 10.4

fees and other expenses related in any matter to the improper storage or discharge of Hazardous Substances on the Premises, whether actual or suspected, caused by the acts or omissions of Tenant, and its directors, officers, contractors, subcontractors, agents, employees or invitees, and Tenant shall further indemnify and hold Landlord, its directors, officers, members, assigns, employees, agents and contractors, harmless from any violation of such applicable environmental laws or any breach of the foregoing representations and warranties. Tenant further agrees to pay any and all fines, charges, assessments, fees, damages, losses, claims, liabilities or response costs arising out of or in any way connected with a violation by Tenant or its directors, officers, contractors, agents, employees or invitees of such applicable environmental laws, which indemnifications shall survive the expiration or termination of this Agreement. Landlord is not aware of the placement, disposal or release of any Hazardous Substances on the Real Estate. Tenant shall not be responsible for any loss, damage, injury or expense relating to Hazardous Substances caused, disposed or introduced by Landlord and their agents or employees.

For purposes of this paragraph, the term “Hazardous Substances” means (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; and (b) any chemicals, materials or substances defined as or included in the definitions of “hazardous substances,” “hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants” or “pollutants,” or words of similar import, under all federal, state and local environmental, safety or health laws and ordinances and rules of common law, including but not limited to, the Occupational Safety and Health Act of 1970, as amended (29 U.S.C. § 651 et seq .), the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. § 960 et seq .), the Hazardous Materials Transportation Act (49 U.S.C. § 1081 et seq .), the Resource Conservation and Recovery Act (42 U.S.C. § 6091 et seq .), the Toxic Substances Control Act of 1976, as amended (15 U.S.C. § 2601 et seq .), the Clean Air Act (42 U.S.C. § 7401 et seq .), the Safe Drinking Water Act (42 U.S.C. §§ 300f-300j), and the Federal Water Pollution Control Act, as any of the foregoing may hereafter be amended, any rule or regulation pursuant thereto, and any other present or future law, ordinance, rule, regulation, permit or permit condition, order or directive addressing environmental, health or safety issues of or by any governmental entity. Not withstanding the foregoing, the term “Hazardous Substance” shall not include the lawful use or storage of any substance used by the Tenant in the ordinary course of Tenant’s approved business.

6. Indemnification .

6.1. Tenant’s Indemnification . Tenant shall defend, indemnify and hold harmless Landlord and Landlord’s directors, managers, members, officers, successors, assigns, agents and employees from and against any and all claims, demands, settlements, judgments, fees, costs, expenses, and awards, including reasonable attorneys’ fees, for incidents occurring in or about the Premises caused by or in any manner related to any acts or omissions or the negligence or willful misconduct of Tenant, its officers, directors, agents, employees, customers, contractors, subcontractors, vendors, permitted subtenants, clients or invitees, resulting in personal injury, death or property damage.

Exhibit 10.4

6.2. Landlord’s Indemnification . Landlord shall defend, indemnify and hold harmless Tenant and Tenant’s directors, members, officers, successors, assigns, agents and employees from and against any and all claims, demands, settlements, judgments, fees, costs, expenses, and awards, including reasonable attorneys’ fees, for incidents occurring in or about the Premises caused by or in any manner related to the negligence or willful misconduct of Landlord resulting in personal injury, death or property damage.

7. Damage or Destruction of Premises . If any improvements on the Premises shall be damaged or destroyed during the Term or any Renewal Terms by fire or any other insurable casualty, Tenant shall be entitled to all insurance proceeds which may become available to Tenant pursuant to any fire and extended coverage or similar insurance policies that Tenant may carry on the Building or any other improvements constructed on the Premises by Tenant. Tenant shall within two (2) months of the casualty commence reconstruction or repairs to restore the Premises and improvements to substantially the condition they were in immediately prior to such damage or destruction, and shall prosecute such reconstruction or repairs with all reasonable dispatch to completion; provided, however, in the event that the destruction is to such extent that the improvements must be demolished and rebuilt, Tenant may elect not to rebuild the Building and improvements by giving written notice to Landlord within thirty (30) days of such damage or destruction. In the event that Tenant elects not to rebuild, Tenant shall continue to pay to rent through the original term of this Lease, and shall be obligated to purchase the Premises and exercise the Option set forth in section 14.11, hereof.

8. Condemnation .

8.1. Definitions . The terms “eminent domain,” “condemnation,” “taken” and the like shall include takings for public or quasi-public use, as well as private purchases in place of condemnation by any authority authorized to exercise the power of eminent domain.

8.2. Eminent Domain . In the event the Premises shall be taken by or pursuant to any governmental authority or through the exercise of the right of eminent domain, Landlord and Tenant shall join and cooperate in resisting such proceeding if such resistance is feasible and desirable, and if it is not, shall join and cooperate in prosecuting their respective claims for damages incurred from the successful exercise of such right or proceeding. Any condemnation award shall be paid in the following order of priority: (a) To the Landord for the then value of Landlord’s land and its lease interest; and (b) To Tenant for the then value of its improvements, its leasehold interest, and the Building.

8.3. Entire Taking . If the whole of the Premises shall be taken or condemned by any competent authority for any public use or purpose during the term of this Lease, all obligations of Tenant shall cease upon the date of this taking.

8.4. Partial Taking . If the taking of a part of the Premises materially interferes with Tenant’s ability to continue its business operations, then Tenant may terminate this Lease on the earlier of: (a) the date title vests in the condemning authority; (b) the date Tenant is dispossessed by the condemning authority; or (c) sixty (60) days following notice to Tenant of the date when vesting

Exhibit 10.4

of dispossession is to occur. If a partial taking occurs and this Lease continues, then this Lease shall end as to the part of the Premises taken and the rent payable by Tenant hereunder shall remain unchanged.

9. Subordination and Attornment .

9.1. Mortgages . This Lease and the rights of Tenant hereunder are expressly made subject and subordinate to the lien and provisions of any existing or future mortgages or deeds of trust on the Premises, placed on Premises by the Landlord.

9.2. Subordination Agreements and Estoppel Certificates . Although no instrument or act on the part of the Tenant is necessary to effectuate a subordination of this Lease, Tenant agrees to execute and deliver within five (5) days of a request, such instruments or agreements subordinating this Lease to the lien of any such mortgages or deeds of trust as may be requested by Landlord from time to time. In addition, Tenant agrees, upon request by Landlord, to execute and deliver within five (5) days of a request, a written statement certifying that this Lease is in full force and effect and that Landlord is not in default of any of the terms, covenants or conditions of this Lease.

9.3. Attornment . In the event of (a) a sale by Landlord of all or any portion of the Premises (b) a sale under any mortgage or deed of trust to which this Lease is subordinate; or (c) a taking of possession of all or any portion of the Premises by the mortgagee or other person acting for or through the mortgagee under any mortgage or deed of trust to which this Lease is subordinate; then this Lease shall not terminate and Tenant’s right to quiet possession of the Premises shall not be disturbed so long as Tenant continues to comply with all of the terms, covenants and conditions of this Lease and Tenant attorns to and recognizes as Landlord under this Lease such party who, but for this Lease, would be entitled to possession of the Premises.

10. Assignment and Subleasing .

10.1. Consent Required . Tenant shall not transfer, mortgage, encumber, pledge, assign or sublease all or any part of this Lease or the Premises without Landlord’s prior written consent, which consent shall not be unreasonably withheld.

10.2. Procedure . In the event Tenant seeks to transfer, mortgage, encumber, assign or sublease all or any part of this Lease or the Premises, Tenant must provide Landlord in writing the name and address of the proposed transferee, mortgagee, subtenant or assignee, the nature of the proposed subtenant’s or assignee’s business to be operated on the Premises, and the terms of the proposed transfer, mortgage, encumbrance, sublease or assignment so Landlord can evaluate the proposed subtenant or assignee. Within thirty (30) days after receiving the foregoing information, Landlord shall notify Tenant whether Landlord will permit or deny the proposed transfer, mortgage, encumbrance, assignment or sublease. If Landlord fails to provide notice within such thirty (30) day period, then Landlord’s consent will be assumed. Landlord’s denial of consent shall not be considered unreasonable if a proposed assignee or sublessee does not meet the criteria established by Landlord for tenants of the Premises, or if the proposed assignee’s or sublessee’s business is not in

Exhibit 10.4

the sole discretion of the Landlord suitable for the Premises. In the event of any permitted sublease or assignment, Tenant shall remain primarily responsible and liable for the keeping and performance of all of its covenants hereunder, including without limitation, the prompt and due payment of rent. This Lease is not assignable during the Initial Term of this Lease.

11. Landlord’s Access .

11.1. Permitted Entries . Landlord or its agents, employees and/or contractors may enter the Premises only during times that the Building is open for business and with reasonable notice to examine the Premises or to comply with applicable laws.

12. Tenant’s Default .

12.1. Defaults . Each of the following constitutes a default (“Default”) under this Lease if the event remains uncured for ten (10) business days following notice by Landlord to Tenant of the event, or such additional period of time, if any that is reasonably necessary to promptly and diligently cure the failure:

a. Tenant’s failure to pay any installment of rent due under this Lease within three (3) days after such installment becomes due;

b. Tenant’s failure to pay taxes or expenses due or to be paid by Tenant under this Lease by the date such payment becomes delinquent;

c. Tenant’s abandonment or vacating of the Premises for a period of time in excess of twenty (20) days;

d. The filing by or against Tenant of a petition in bankruptcy where said petition is not dismissed within thirty (30) days of filing;

e. The adjudication of Tenant as bankrupt or insolvent;

f. The appointment of a receiver, trustee or liquidator for all or a substantial portion of Tenant’s property;

g. The making by Tenant of an assignment for the benefit of creditors;

h. The placement of any uncontested liens against the Premises caused by Tenant’s failure to pay for Alterations, work, labor, materials or improvements to the Premises; and,

i. Tenant’s failure to perform or observe any other obligation of Tenant under this Lease, if such failure is not cured within the time period set forth herein or if no time period is set forth herein, within thirty (30) days of notice thereof given by Landlord to Tenant.

Exhibit 10.4

12.2. Landlord’s Remedies . In addition to the remedies given elsewhere in this Lease or under the law, Landlord may do any one or more of the following if Tenant commits a Default under section 12.1;

a. Terminate this Lease, upon which Tenant shall surrender the Premises to Landlord;

b. Enter and take possession of the Premises either with or without process of law and remove Tenant, with or without having terminated this Lease;

c. Alter the locks and other security devices on the Premises;

d. Hold Tenant liable for the entire unpaid rent and other indebtedness due under this Lease for the remainder of the then current Term or Renewal Term of this Lease; and,

e. Under no circumstance shall Landlord’s acceptance of any past due rent be considered or constitute a waiver of any of the remedies available to Landlord hereunder.

12.3. Other Expenses . Tenant shall also be liable to Landlord for reasonable broker’s fees incurred by Landlord for reletting the Premises, the cost of removing and storing Tenant’s property, the cost of repairs to Premises necessary to put the Premises in condition for reletting and other reasonable and necessary expenses incurred by Landlord in enforcing its remedies.

12.4. Payment . Tenant shall pay the sums due under sections 12.2 and 12.3 within ten (10) days of receiving Landlord’s invoice for such sums. Failure by Tenant to pay such sums due within such ten (10) day period shall entitle Landlord to use the deposit funds or pursue collection of such sums by legal action or by such other means available at law.

12.5. Landlord’s Lien . Subject to senior bank liens on equipment and fixtures, Landlord reserves a landlord’s lien upon all of Tenant’s personal property, including without limitation, equipment, inventory, furniture, fixtures, in or on the Premises to secure the payment of all rent payable or additional rent payable or any other sums payable under this Lease and all other sums which may become due to Landlord by Tenant hereunder.

12.6. Waiver of Damages . Tenant hereby waives claims for damages by reason of Landlord’s reentry, repossession or alteration of locks or other security devices and for damages by reason of any legal process.

12.7. Mitigation . If Landlord relets the Premises to another tenant for any portion of the remainder of the Initial Term, or any Renewal Term, Tenant shall be entitled to an offset against the sums due under sections 12.2 and 12.3 in the amount of the rent collected by Landlord from such other tenant during the remainder of the Term.

12.8. Survival . The remedies provided to Landlord under this section 12 shall survive the expiration or termination of this Lease.

Exhibit 10.4

12.9. Remedies Cumulative . The remedies provided herein shall be in addition to those provided by law.

12.10. Waiver . Failure of Landlord to enforce its remedies for any Default by Tenant shall not be considered as a waiver of Landlord’s right to enforce its remedies for any subsequent Default by Tenant.

13. Notices .

13.1. Mailing of Notices . All notices to be given hereunder by either party shall be in writing and shall be sent by Certified Mail, Return Receipt Requested, to the addresses stated in section 13.2, and shall be effective as of the date of mailing.

13.2. Addresses . The addresses of the parties to this Lease are as follows:


Landlord :		Tenant :
Essex Properties, LLC		Monongahela Valley Bank
101 Cambridge Place		301 Virginia Avenue
Bridgeport, WV 26330		Fairmont, WV 26554
Attention: Manager		Attention: President

14. Miscellaneous Provisions .

14.1. Successors . The terms, conditions, covenants and agreements herein contained shall extend and inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors and permitted assigns.

14.2. Force Majeure . Intentionally left blank.

14.3. Memorandum of Lease . This Lease shall not be recorded but either party may record a Memorandum of Lease. The party requesting that the Memorandum of Lease be recorded shall pay all costs of preparing and recording the Memorandum of Lease. The parties agree to timely execute a requested Memorandum of Lease.

14.4. Captions . The captions appearing in this Lease are for the purposes of identification only and shall not be considered or construed as affecting, in any way, the meaning of the provisions of this Lease.

14.5. Applicable Law . This Lease shall be construed in accordance with the laws of the State of West Virginia.

14.6. Time . Time is of the essence of this Lease and the performance of all obligations hereunder.

Exhibit 10.4

14.7. Severability . The unenforceability and validity or illegality of any provision or provisions of this Lease shall not render any of the other provisions of this Lease unenforceable, invalid or illegal.

14.8. Interest . All delinquent rent and sums due hereunder shall bear interest at the maximum rate permitted by law from the date due until paid.

14.9. Entire Agreement . This Lease and the Exhibits attached hereto contain the entire agreement between Landlord and Tenant concerning the Premises and there are no other agreements, either oral or written. Any future amendments to this Lease shall be in writing and shall be signed by both Landlord and Tenant.

14.10 Construction. This Lease shall not be construed for or against either party as a result of such parties counsel preparing the Lease, as both parties had counsel, review and revise this Lease, prior to its execution.

14.11. Option to Purchase. Except as provided in Section 7, hereof, when the Tenant shall be obligated to purchase the Premise, provided Tenant is not currently in default in the performance of any of its obligations under this Lease, on November 1, 2024, or at any time thereafter, Tenant may purchase the Premises for the sum of Five Hundred Eighty-Three Thousand Seven Hundred Twenty-Five Dollars ($583,725.00), with each party responsible for the customary and typical expenses of such party in the transfer of real property in West Virginia (the “Option”). In the event the closing is held after November 1, 2024, the purchase price for the Premises shall increase at the rate of Five (5.00%) percent per year, with said increase to be prorated for any partial year. For example, if the closing is held on November, 1, 2025, the purchase price shall be Six Hundred Twelve Thousand Nine Hundred Eleven Dollars and Twenty-Five Cents ($612,911.25).

14.11(a). If Tenant desires to exercise the Option, Tenant shall so notify Landlord, in writing, no later than ninety (90) days prior to the expiration of the Initial Term, or any Renewal Term.

14.11(b). Upon notice from Tenant of its desire to exercise the Option, and receipt of the Five Hundred Eighty-Three Thousand Seven Hundred Twenty-Five Dollars ($583,725.00) purchase price on November 1, 2024, or the increased purchase price if the closing is delayed beyond November 1, 2024, Landlord shall deliver to Tenant a deed for the Premises free and clear of any and all liens and encumbrances, excepting easements and rights-of-way occurring in the normal course of business.

14.12. Banking Regulations . Notwithstanding any other provisions contained in this Lease, in the event (a) Tenant or its successors or assignees shall become insolvent or bankrupt, or if it or their interests under this Lease shall be levied upon or sold under execution or other legal process, or (b) the depository institution then operating on the Premises is closed, or is taken over by

Exhibit 10.4

any depository institution supervisory authority (“Authority”), Landlord may, in either such event, terminate this Lease only with the concurrence of any Receiver or Liquidator appointed by such Authority; provided, that in the event this Lease is terminated by the Receiver or Liquidator for rent, damages, or indemnity for injury resulting from the termination, rejection, or abandonment of the expired Lease shall by law in no event be in an amount equal to all accrued and unpaid rent to the date of termination.

WITNESS the following signatures as of the day and year first above written.


LANDLORD:

ESSEX PROPERTIES, LLC., a West Virginia limited liability company

By:		/s/ G REGORY A. Z ERKEL
		Gregory A. Zerkel, Member



By:		/s/ A SA M. B OWERS
		Asa M. Bowers, Member


TENANT:

THE MONONGAHELA VALLEY BANK, INC., a West Virginia banking corporation

By:		/s/ J AMES R. M ARTIN
		James R. Martin
Its:		President

Exhibit 11

MVB Financial Corp

Statement RE: Computation of Per Share Earnings:

For the Year Ended December 31,


				Earnings per Share
	Shares	Earnings		Basic		Fully Diluted
2001
Outstanding shares	543,677	$	147,408	$	0.271
Exercisable options	8,848

Total shares	552,525	$	147,408			$	0.267

2002

Shares outstanding:
January thru October	543,677
November and December	708,025
Average shares outstanding	571,068	$	400,248	$	0.701
Exercisable options	18,070

Total shares	589,138	$	400,248			$	0.679

2003

Outstanding shares	708,025	$	781,322	$	1.104
Exercisable options	27,293

Total shares	735,318	$	781,322			$	1.063


For the Nine-Month Period Ended September 30,
				Earnings per Share
	Shares	Earnings		Basic		Fully Diluted
2003
Outstanding shares	708,025	$	549,132	$	0.776
Exercisable shares	27,293

	735,318	$	549,132			$	0.747

2004
Outstanding shares	743,060	$	735,752	$	0.990
Exercisable options	36,510

Total shares	779,570	$	735,752			$	0.944

Exhibit 21

SUBSIDIARIES OF REGISTRANT


Subsidiary		State of Incorporation

The Monongahela Valley Bank, Inc.		West Virginia

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We, Conley CPA Group, PLLC., consent to the reference to our firm under the caption “Experts” and to the use of our report dated January 30, 2004, in the registration statement (Form SB-2) and related prospectus of MVB Financial Corp., for the registration of 286,000 shares of its common stock.

/s/ D ONALD R. C ONLEY

November 19, 2004

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned do hereby constitute and appoint James R. Martin (whose address is 911 Henry Dr., Fairmont, WV 26554) and Judith A. Merico (whose address is Rt 9, Box 485, Fairmont, WV 26554) and each of them severally, the true and lawful agents and attorneys-in-fact (the “Agents” and, severally, an “Agent”) of the undersigned with full power to act, upon the terms and conditions herein set forth, for and in the name, place and stead of the undersigned in any way which the undersigned could do, if the undersigned were personally present, to execute in their name, place and stead (in any such capacity), all applications, certificates, letters, registration statements, amendments to registration statements or other documents addressed to or filed with the Securities and Exchange Commission which may be required in connection with the registration under the Securities Act of 1933, as amended, of the 286,000 shares of the common stock of MVB Financial Corp., and to file the same with the Securities and Exchange Commission and other appropriate agencies or departments, each of said attorneys and agents to have power to act with or without the other, and to have full power and authority to do and perform in the name and on behalf of each of the undersigned directors every act whatsoever necessary or advisable to be done in the premises as fully and to all intents and purposes as the undersigned may or could do in person.

Dated this 15th day of November, 2004.



WITNESS the following signatures and seals:	/s/ J AMES R. M ARTIN	(SEAL)
	James R. Martin

	/s/ B ARBARA L. A LEXANDER	(SEAL)
	Barbara L. Alexander

	/s/ R OBERT L. B ELL	(SEAL)
	Robert L. Bell

	/s/ S TEPHEN R. B ROOKS	(SEAL)
	Stephen R. Brooks

	/s/ H ARVEY M. H AVLICHEK	(SEAL)
	Harvey M. Havlichek

	/s/ D R . S AAD M OSSALLATI	(SEAL)
	Dr. Saad Mossallati

	/s/ L EONARD W. N OSSOKOFF	(SEAL)
	Leonard W. Nossokoff

	/s/ J. C HRISTOPHER P ALLOTTA	(SEAL)
	J. Christopher Pallotta

	/s/ N ITESH S. P ATEL	(SEAL)
	Nitesh S. Patel

	/s/ L OUIS W. S PATAFORE	(SEAL)
	Louis W. Spatafore

	/s/ R ICHARD L. T OOTHMAN	(SEAL)
	Richard L. Toothman

	/s/ D R . M ICHAEL F. T RENT	(SEAL)
	Dr. Michael F. Trent

	/s/ D R . J AMES E. V ALENTINE	(SEAL)
	Dr. James E. Valentine

	/s/ S AMUEL J. W ARASH	(SEAL)
	Samuel J. Warash