PURCHASE AND ASSUMPTION AGREEMENT

1.

Effective Date and Closing . The effective date of the transactions provided for in Section 3 hereof (the “Effective Date”) shall be October 7, 2005, or in the event of a delay or delays in regulatory approvals or data process conversion or as otherwise agreed by the parties, such other Friday as mutually agreed to by the parties. The closing of the transactions provided for herein (the “Closing”) shall be at a time agreed upon by the parties on the Effective Date at the offices of Seller, at which time title to and possession of the assets to be sold hereunder will be transferred from Seller to Purchaser in accordance with the procedures set forth in Section 6 hereof.

2.

Events Preceding Effectiveness . On or before the Effective Date, the following shall have occurred:

2.1.

the Board of Directors of Purchaser and of Seller shall have approved this Agreement and the transactions provided for herein; and

2.2.

The Federal Deposit Insurance Corporation and the West Virginia Division of Banking and any other applicable regulatory agencies shall have approved this Agreement and the transactions provided for herein.

3.

Assets to be Purchased and Liabilities to be Assumed . The following assets and services shall be purchased and liabilities shall be assumed hereunder:

3.1.

Assets to be Purchased . Seller shall sell to Purchaser and Purchaser shall purchase from Seller each of the following assets and services of Seller (the “Assets”):

3.1.1.

all furniture, fixtures and equipment of the Branch, and the real estate that constitutes the Branch premises (the “Real Estate”).

3.1.2.

the cash “on hand” at the Branch as of the close of business on the Effective Date.

3.2.

Liabilities Assumed .

3.2.1.

Seller shall transfer to Purchaser and Purchaser shall assume from Seller each of the following deposit liabilities of Seller: an amount equal to the face value, plus accrued interest, (i) of all the deposit accounts including without limitation (other than non-IRA fiduciary accounts) in all retail and commercial checking accounts, passbook savings accounts, money market investment accounts (including, without limitation, NOW accounts, statement savings accounts and individual retirement accounts listed on the books of the Branch as of the close of business on the Effective Date as to which permission to transfer is not withheld under Section 10.5 (collectively, the “Accounts”), and (ii) all of the certificates of deposit listed as originating at the Branch or owned by customers whose accounts are maintained at the Branch (except for certificates owned by municipalities) as of the close of business on the Effective Date as to which permission to transfer is not withheld under Section 10.5 (the “Certificates”) (the Accounts and the Certificates being referred to collectively as the “Total Accounts”), the aggregate balance of which as of May 31, 2005 is $12,683,000;

3.2.2.

Purchaser shall assume no tax or other liabilities of Seller in connection with the purchase of the Total Accounts or otherwise, except that Purchaser shall assume each of the following liabilities of Seller and will indemnify and hold Seller harmless from and against any liability, cost or expense incurred by Seller as a result of Purchaser’s failure to perform its obligations with respect to any of the following assumed liabilities (collectively, the “Liabilities”): the liabilities for payment to or the order of the depositors of the Total Accounts and written contractual or statutory obligations associated with the Total Accounts.

3.3.

Unitary Enterprise . It is recognized that Purchaser in acquiring the Branch will be buying a unitary economic enterprise. It is also recognized that Purchaser is paying a premium in order to obtain the benefit of a substantial core deposit base.

4.

Employment Matters . With respect to the Employees:

4.1.

Solicitation for Employment . Purchaser agrees to offer employment to all employees and officers of the Branch (herein, collectively, the “Officers and Employees”) on terms and conditions comparable to those provided by Seller to the Officers and Employees. The Purchaser agrees to keep the Officers and Employees employed for a period of at least six (6) months on such comparable terms and conditions, unless any of the Officers and Employees is discharged for cause.

4.2.

Employee Benefits . Officers and Employees who are offered and accept employment with Purchaser shall receive their current salaries and shall participate in the pension plan and other employee benefit plans of Purchaser. Credit under the pension plan for

4.3.

Assistance with Employees . Seller will assist Purchaser in discussions with the Officers and Employees, will transfer (provided there is no objection by the Officers and Employees) all employee records to the Purchaser, will encourage the Officers and Employees of the Branch to accept employment with the Purchaser, and will assist Purchaser with the transfer of the Officers and Employees to the employment of the Purchaser. This Section shall not be construed as a guarantee that any or all of the Officers and Employees will accept employment with the Purchaser. No provision of this Agreement shall be construed as a contract for future employment except as employment at will.

4.4.

Replacement . In the event that Officers or Employees leave employment at the Branch within the period beginning thirty (30) days prior to the Closing, Seller shall first attempt to use contract employees supplied by Buyer to fill the vacancies so created.

5.

Purchase Price, Adjustment and Payment . The purchase price shall be $2,655,000 plus an amount equal to the cash “on hand” at the Branch as of the close of business on the Effective Date, plus or minus, as the case may be, the adjustments described in Sections 5.1 (the “Purchase Price”).

5.1.

Settlement . Purchaser and Seller shall settle with each other at the Closing and subsequently thereafter with each other in consideration of the transactions contemplated herein as follows:

5.1.1.

At the Closing, Purchaser shall pay to Seller an initial payment for the Purchase Price, as specified in this section, through a deduction from the amount of cash transferred by Seller to Purchaser in the amount of the Total Accounts (the “Initial Payment”). The Initial Payment shall be based upon the amounts stated in this section as of the close of business on the latest day prior to the Effective Date for which Seller has complete records concerning the Total Accounts.

5.1.2.

By no later than ten business days from the Effective Date, Purchaser or Purchaser’s independent accountants shall report to Seller in writing of, (A) the actual aggregate principal amount of and accrued interest on the Deposits transferred hereunder as of the close of business on the Effective Date (the “Actual Deposits”), which amounts shall be reduced by any items in transit after the Effective Date, and (B) the amount of cash “on hand” at the Branch as of the close of business on the Effective Date. The payment amount finally due and owing (the “Final Payment Amount”) shall be based upon the aggregate amount of the Actual Deposits, and the cash “on hand.” The work papers, schedules and other data of Purchaser or Purchaser’s accountants supporting its determination shall be made available to Purchaser and Seller as may be reasonably requested.

5.1.3.

At the end of the three business days from receipt by Seller of the written report from Purchaser or Purchaser’s independent accounting firm (the “Final Settlement Date”), if there is no dispute between Seller and Purchaser as to the Final Settlement Amount:

5.1.4.

In the event Seller does not agree with Purchaser’s or Purchaser’s accountants’ determination of the Final Payment Amount as set out in the work papers and written report at the end of the three day period referred to in (c) above, Seller and Purchaser shall retain as arbitrator KPMG Peat Marwick LLP or, failing their agreement to act as arbitrator, such other independent accounting firm as may be mutually agreed upon by the parties to review such matters and request such arbitrator to act as promptly as practicable in accordance with its own rules to resolve the dispute within 30 days after being retained by the parties. Upon resolution by such arbitrator of the dispute, such arbitrator shall cause to be prepared and shall deliver to the parties a certificate setting forth the Final Payment Amount. The decision of the arbitrator shall be final, non-appealable and binding on Seller and Purchaser, and the fees and expenses, if any, of such arbitrator shall be paid one-half by Purchaser and one-half by Seller.

5.1.5.

In the event that deposit liabilities, including accrued interest, of the Branch(es) to be assumed by the Purchaser at the close of business on the Effective Date, are less than ninety percent (90%) of the aggregate balance of deposit liabilities expected to be transferred as of the date of the Agreement, including accrued interest, then in that event $1,500,000 of the Purchase Price to be paid by the Purchaser shall be automatically adjusted downward to an amount calculated by multiplying (i) $1,500,000 by (ii) a fraction of which the numerator shall be the aggregate of deposit liabilities to be transferred, including accrued interest, at the close of business on the Effective Date and the denominator shall be ninety percent (90%) of the aggregate amount of the deposit liabilities expected to be transferred, including accrued interest as of the date of the Agreement.

6.

Closing Events . At the Closing:

6.1.

Total Accounts . Seller shall deliver to Purchaser a complete and accurate list of the Total Accounts as of the close of business on the day prior to the Effective Date and the parties shall execute an Agreement of Assignment and Assumption of Total Accounts in the form of Schedule 6.1 attached hereto and made a part hereof.

6.2.

Transfer of Funds . Purchaser and Seller shall execute a memorandum of settlement detailing the transfer of funds which occur in connection with the transactions contemplated by this Agreement, identifying specifically the Certificates and Accounts being transferred. In the event the memorandum of settlement proves to be inaccurate, and the Purchaser has provided notification of such inaccuracy to the Seller within 30 days after Closing, the parties will promptly make appropriate adjustments and accounting, including, but not limited to, any adjustments in order to reflect the amount of accrued interest on the Total Accounts on the Effective Date.

6.3.

Transfer Amount to Purchaser . The net cash transfer of amount due to Purchaser from Seller shall be made in immediately available funds to the account of Purchaser in accordance with instruction provided by Purchaser.

6.4.

Non-Solicitation of Business. Seller will not for eighteen (18) months subsequent to the Effective Date solicit for deposit accounts, customers whose Total Accounts have been transferred hereunder. It is the intention of the parties that Seller shall not solicit for deposits those customers whose Total Accounts are being transferred, but Purchaser recognizes and agrees that Seller cannot control mass mailing, distribution of statement “stuffers” or other advertising materials to persons who also hold accounts at other branches of Seller or newspaper, radio and television advertisements of a general nature, and that Seller cannot control the solicitation of such customers who enter branches of Seller or make telephone inquiries of Seller. It is the understanding of the Purchaser and the Seller that solicitation does not include the circumstances wherein a customer whose Total Accounts have been transferred hereunder initiates discussions with the Seller.

7.

Post Closing Agreements .

7.1.

Subsequent Purchaser Payments . Following the Effective Date, Purchaser agrees to pay in accordance with law and customary banking practices all properly drawn and presented checks, drafts and withdrawal orders presented to Purchaser by mail, over the counter or through the check clearing system of the banking industry, by depositors of the assumed accounts, whether drawn on the checks, withdrawal or draft forms provided by the Seller or by the Purchaser, and in all other respects to discharge, in the usual course of the banking business, the duties and obligations of the Seller with respect to the balances due and owing to the depositors whose accounts are assumed by Purchaser. Purchaser’s obligation under this subsection to honor checks, drafts and withdrawal orders on forms provided by Seller and carrying its imprint (including name and transit routing number) shall not apply to any such check, draft or withdrawal order presented to Purchaser more than sixty (60) days following the Effective Date. Seller and Purchaser will make appropriate arrangements (including establishment by Purchaser of a settlement account with Seller) to provide for settlement by Purchaser of checks, returns and other items which are presented to Seller within sixty (60) days after the Effective Date and which are drawn on or chargeable to accounts which have been assumed.

7.2.

Subsequent Seller Transfers . Seller agrees that it will transfer to Purchaser any deposits given to it after the Effective Date for credit to the assumed accounts, but it shall be under no obligation to accept such deposits.

7.3.

Payment of Items by Seller After the Effective Date . If any of such depositors, instead of accepting the obligation of Purchaser to pay the deposit liabilities assumed, shall demand payment from Seller for all or any part of any such assumed deposit liabilities, Seller shall not be liable or responsible for making such payment. If any of such depositors draw a check, draft or withdrawal order against the deposit liabilities, including accrued interest, assumed from Seller which is presented or charged to Seller within sixty (60) days after the Effective Date, Seller may accept same and present to Purchaser for payment. Purchaser must return to Seller any item, which is not properly payable and which was presented by Seller to Purchaser, at such time and in such a manner as to enable Seller to comply with all applicable laws and regulations.

7.4.

Purchaser Responsible for Returned Items . Purchaser agrees, no later than the start of the second business day after demand by Seller, to pay to Seller an amount equivalent to the amount of any uncollected item included in a depositor’s balance on the Effective Date which is returned within sixty (60) days after the Effective Date as not collected. Purchaser shall be required to make such payment for an item only up to the balance of any funds on deposit with the Purchaser and any balance available on a line of credit the customer has with the Purchaser at the time the Seller makes the demand as aforesaid; provided, however, if prior to the Effective Date the Seller had placed a “hold” or other similar protective measure on the depositor’s account with respect to such item and subsequent to the Effective Date the Purchaser removes such hold or protective measure, then the Purchaser will be obligated to pay the Seller in full on account of such uncollected item. So long as any hold or other protective measure placed on the depositor’s account with respect to such item complies with applicable law, the placing of any such hold or other protective measure shall not be deemed a breach of this Agreement.

8.

Representations and Warranties of Seller . Seller hereby represents and warrants to Purchaser as follows:

8.1.

Organization and Standing of Seller . Seller is a duly organized and validly existing bank chartered under the laws of the State of Maryland, is in good standing under the laws of such State, has the corporate power and authority to carry on its business as it is now being conducted, and holds a valid certificate of authority to do business as a commercial bank.

8.2.

Full Information . No representation or warranty made in this Agreement or information furnished pursuant hereto to Purchaser contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary in order to make statements contained herein, in light of the circumstances under which they are made, not misleading.

8.3.

No Conflict with Other Documents . Neither the execution and delivery of this Agreement nor the carrying out of the transactions contemplated hereunder will result in any violation, termination, or modification of, or be in conflict with, any terms of any contract or other instrument to which Seller is a party, or of any judgment, decree, or order applicable to Seller, or result in the creation of any lien, charge or encumbrance upon any of the properties or assets of Seller.

8.4.

Title to Total Accounts . Seller is the true owner of and has good title to the Total Accounts free and clear of all pledges, liens, encumbrances and adverse claims of any kind or character; Seller is duly authorized to transfer and assign the Total Accounts to Purchaser, subject to receipt of regulatory approval.

8.5.

Compliance with Laws . None of the Total Accounts is in violation of any federal laws, regulations and rulings applicable thereto, specifically including the Federal Deposit Insurance Act and any regulations and rulings issued pursuant thereto.

8.6.

Litigation, etc. There is no litigation, proceeding, or investigation pending or, to the knowledge of Seller, threatened against it with respect to any of the Total Accounts which might materially affect the validity of this Agreement or of any action taken or to be taken pursuant hereto or in connection herewith on the part of the Seller.

8.7.

Authority . The execution, delivery and performance of this Agreement by Seller have been duly and validly authorized by its Board of Directors or the Executive Committee thereof, subject only to the requisite approval by appropriate governmental regulatory authorities.

8.8.

List of Total Accounts . The list of the Total Accounts contained in Schedule 6.1 hereto to be delivered at Closing shall be a complete and accurate list as of the day prior to the Effective Date.

8.9.

Brokers . Except as disclosed to the Purchaser in writing, neither Seller nor anyone on behalf of Seller has used, employed or incurred any liability to any broker or finder in connection with this Agreement or the transactions contemplated by this Agreement. Seller has engaged Janney Montgomery Scott LLC (“JMS”) to assist it with the sale of the Branch, and will provide compensation to JMS separate from the settlement process described herein.

8.10.

Furniture, Fixtures and Equipment . Seller owns, and will convey to Purchaser at the Closing, all of