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2004 Press Releases

FOR IMMEDIATE RELEASE

Contact: Neil Cotiaux, Communications, FHLBank of Pittsburgh,
             412-288-2851, neil.cotiaux@fhlb-pgh.com

             Robert Schoonover, CEO, Citizens National Bank of Elkins,
             304-636-4095

CITIZENS NATIONAL BANK OF ELKINS SCORES A FIRST IN WEST VIRGINIA: PARTNERS WITH FEDERAL HOME LOAN BANK IN INNOVATIVE MORTGAGE PROGRAM

ELKINS, WV, August 16, 2004 — Citizens National Bank of Elkins (CNB) has become the first financial institution in West Virginia to participate in the Mortgage Partnership Finance® (MPF®) Program, an innovative risk-sharing partnership between local banks and their regional Federal Home Loan Banks that benefits consumers by adding competition and efficiency to the secondary mortgage market.

"Citizens National Bank of Elkins is pleased to be at the forefront of an exciting program offering real benefits to both our customers and shareholders," said Robert J. Schoonover, CNB's president and chief executive officer. "Our leadership role in this area is consistent with the spirit of community banking — offering our neighbors real value while enhancing our historic safety and soundness as a financial institution."

CNB joined the program through the Federal Home Loan Bank of Pittsburgh.

Community banks such as CNB often choose to sell fixed-rate mortgage loans they originate to other institutions to reduce the exposure to interest rate risk and maintain sufficient liquidity to make future loans. The MPF Program gives lenders such as CNB an alternative to the traditional approach to selling mortgage loans in the secondary market.

Under the program, FHLBank of Pittsburgh manages the interest rate risk on mortgages originated by CNB, while CNB manages the credit risk and retains mortgage servicing for its customers —- a risk-sharing arrangement that is more efficient and economical for the member institution.

"The Mortgage Partnership Finance Program gives us a big boost, keeping us strong and secure while making the rates we offer homebuyers even more competitive," CNB's Schoonover remarked. "And, by strengthening our customer relationships with a low-cost product and local servicing, we have the opportunity to generate additional deposits, giving us even more money to lend in our own backyard."

"Community bankers constantly tell me how the MPF Program helps them retain and enhance their customer relationships," said Renee A. Pfender, senior vice president and product manager for the Mortgage Acquisition Department at FHLBank of Pittsburgh. "We're delighted that Citizens National Bank of Elkins is leading the way in introducing this exciting opportunity in West Virginia."

With more than $212 million in assets, Citizens National Bank of Elkins serves families and businesses in Randolph, Tucker, Grant and Pocahontas counties. It is now in its 80th year of serving the community. CNB specializes in fixed-rate mortgage loans offering low rates, small down payments and generous credit terms. For more information on CNB's mortgage products, call 304-636-4095.

The Federal Home Loan Bank of Pittsburgh, with assets of more than
$57 billion, serves nearly 350 financial institution members in West Virginia, Pennsylvania and Delaware. It is one of twelve FHLBanks, all private cooperatively owned banks that provide wholesale housing finance, community lending and correspondent banking services to member banks, savings institutions, credit unions and insurance companies.