FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)
[X]  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

                   For the fiscal year ended December 31, 1999
or

[ ]  Transition  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934

For the transition period from _____________ to _______________

Commission File Number      000-23543

                             UNION COMMUNITY BANCORP
             (Exact name of registrant as specified in its charter)

             INDIANA                                   35-2025237
  (State or other Jurisdiction               (I.R.S. Employer Identification
of Incorporation or Organization)                        Number)


          221 East Main Street
        Crawfordsville,  Indiana                              47933
(Address of Principal Executive Offices)                   (Zip Code)

               Registrant's telephone number including area code:
                                 (765) 362-2400

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      None

           Securities Registered Pursuant to Section 12(g) of the Act:
                         Common Stock, Without Par Value

                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.          YES X  NO ____

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

The aggregate market value of the issuer's voting stock held by  non-affiliates,
as of March 27, 2000 was $23,726,000.

The  number of shares of the  Registrant's  Common  Stock,  without  par  value,
outstanding as of March 27, 2000, was 2,568,750 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to  Shareholders  for the year ended  December 31,
1999, are  incorporated  into Part II.  Portions of the Proxy  Statement for the
2000 Annual Meeting of Shareholders are incorporated in Part I and Part III.

                            Exhibit Index on Page E-1

                               Page 1 of 31 Pages
<PAGE>


                             UNION COMMUNITY BANCORP

                                    Form 10-K

                                      INDEX

                                                                            Page

Forward Looking Statement....................................................  3

PART I

     Item 1     Business.....................................................  3
     Item 2.    Properties................................................... 26
     Item 3.    Legal Proceedings............................................ 26
     Item 4.    Submission of Matters to a Vote of Security Holders.......... 26
     Item 4.5.  Executive Officers of the Registrant......................... 26
PART II

     Item 5.    Market for Registrant's Common Equity and Related
                    Shareholder Matters...................................... 27
     Item 6.    Selected Financial Data...................................... 27
     Item 7.    Management's Discussion and Analysis of Financial
                    Condition and Results of Operations...................... 27
     Item 7A.   Quantitative and Qualitative Disclosures about Market Risks.. 27
     Item 8.    Financial Statements and Supplementary Data.................. 27
     Item 9.    Changes in and Disagreements with Accountants on
                    Accounting and Financial Disclosure...................... 27
PART III

     Item 10.   Directors and Executive Officers of Registrant............... 27
     Item 11.   Executive Compensation....................................... 27
     Item 12.   Security Ownership of Certain Beneficial Owners
                        and Management....................................... 27
     Item 13.   Certain Relationships and Related Transactions............... 27

PART IV

     Item 14.   Exhibits, Financial Statement Schedules,
                        and Reports on Form 8-K.............................. 28

SIGNATURES          ......................................................... 29

                            FORWARD LOOKING STATEMENT

     This Annual Report on Form 10-K ("Form  10-K")  contains  statements  which
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-K and include  statements  regarding the intent,  belief,
outlook, estimate or expectations of the Holding Company (as defined below), its
directors or its officers primarily with respect to future events and the future
financial  performance  of the  Holding  Company.  Readers of this Form 10-K are
cautioned that any such forward looking  statements are not guarantees of future
events or  performance  and  involve  risks and  uncertainties,  and that actual
results may differ materially from those in the forward looking  statements as a
result of various factors. The accompanying  information  contained in this Form
10-K  identifies  important  factors  that could cause such  differences.  These
factors include  changes in interest rates;  loss of deposits and loan demand to
other  savings and  financial  institutions;  substantial  changes in  financial
markets;  changes in real estate values and the real estate  market;  regulatory
changes; or unanticipated results in pending legal proceedings.

Item 1.  Business

General

         Union Community Bancorp,  an Indiana corporation (the "Holding Company"
and  together  with "Union  Federal",  as defined  below,  the  "Company"),  was
organized in September, 1997. On December 29, 1997, it acquired the common stock
of  Union  Federal  Savings  and Loan  Association  ("Union  Federal")  upon the
conversion of Union Federal from a federal mutual  savings and loan  association
to a federal stock savings and loan association.

         Union  Federal  was  organized  as a  state-chartered  savings and loan
association in 1913.  Since then,  Union Federal has conducted its business from
its  full-service  office located in  Crawfordsville,  Indiana.  Union Federal's
principal  business consists of attracting  deposits from the general public and
originating  fixed-rate  and  adjustable-rate  loans secured  primarily by first
mortgage liens on one- to four-family  residential real estate.  Union Federal's
deposit accounts are insured up to applicable limits by the Savings  Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC").

      Management  believes  that it has developed a solid  reputation  among its
loyal customer base because of its commitment to personal service and because of
strong  support  of the  local  community.  Union  Federal  offers a  number  of
financial  services,   including:   (i)  residential  real  estate  loans;  (ii)
multi-family loans; (iii) commercial real estate loans; (iv) construction loans;
(v) home improvement loans; (vi) money market demand accounts  ("MMDAs");  (vii)
passbook savings accounts; and (viii) certificates of deposit.

Lending Activities

      Union Federal has historically  concentrated its lending activities on the
origination  of  loans  secured  by  first-mortgage   liens  for  the  purchase,
construction  or refinancing of one- to four-family  residential  real property.
One- to four-family residential mortgage loans continue to be the major focus of
Union Federal's loan  origination  activities,  representing  74.3% of its total
loan  portfolio  at December 31, 1999.  Union  Federal also offers  multi-family
mortgage loans,  commercial  real estate loans,  construction  loans,  and, to a
limited extent,  commercial loans and consumer loans consisting of loans secured
by deposits and home improvement  loans.  Mortgage loans secured by multi-family
properties and  commercial  real estate  totaled  approximately  8.8% and 11.4%,
respectively,  of Union  Federal's  total loan  portfolio  at December 31, 1999.
Construction loans totaled  approximately 4.0% of Union Federal's total loans as
of December 31,  1999.  Commercial  loans  totaled  approximately  1.3% of Union
Federal's total loans as of December 31, 1999.  Consumer loans, which consist of
personal installment loans and passbook loans, constituted  approximately .2% of
Union Federal's total loan portfolio at December 31, 1999.

     Loan  Portfolio  Data.  The following  table sets forth the  composition of
Union  Federal's  loan  portfolio by loan type and security type as of the dates
indicated,   including  a   reconciliation   of  gross  loans  receivable  after
consideration of the allowance for loan losses and loans in process.
<TABLE>
<CAPTION>

                                                                      At December 31,
                                         -------------------------------------------------------------------------
                                                1999                       1998                       1997
                                         ---------------------      --------------------      --------------------
                                                       Percent                   Percent                   Percent
                                         Amount       of Total      Amount      of Total      Amount      of Total
                                         ------       --------      ------      --------      ------      --------
                                                                         (Dollars in thousands)
TYPE OF LOAN
<S>                                      <C>            <C>         <C>           <C>         <C>           <C>
Real estate mortgage loans:
   One-to-four-family...............     $80,552        74.27%      $71,823       77.19%      $62,436       76.95%
   Multi-family.....................       9,549         8.80        10,609       11.40        10,197       12.57
   Commercial.......................      12,410        11.44         6,355        6.83         3,627        4.47
Real estate construction loans......       4,380         4.04         3,993        4.29         4,652        5.73
Commercial loans....................       1,394         1.29            51         .06           ---         ---
Consumer loans .....................         177          .16           213         .23           223         .28
                                        --------       ------       -------      ------       -------      ------
     Gross loans receivable.........    $108,462       100.00%      $93,044      100.00%      $81,135      100.00%
                                        ========       ======       =======      ======       =======      ======
TYPE OF SECURITY

   One-to-four-family real estate...     $83,558        77.04%      $73,130       78.60%      $64,730       79.78%
   Multi-family real estate.........      10,063         9.28        12,037       12.93        11,172       13.77
   Commercial real estate...........      13,270        12.24         7,666        8.24         5,094        6.28
   Deposits.........................         124          .11           160         .17           139         .17
   Other............................       1,447         1.33            51         .06           ---         ---
                                        --------       ------       -------      ------       -------      ------
     Gross loans receivable.........     108,462       100.00        93,044      100.00        81,135      100.00
Deduct:

Allowance for loan losses...........         422          .39           362         .39           252         .31
Deferred loan fees..................         334          .31           334         .36           325         .40
Loans in process....................       1,532         1.41         1,448        1.55         2,122        2.62
                                        --------       ------       -------      ------       -------      ------
   Net loans receivable.............    $106,174        97.89%      $90,900       97.70%      $78,436       96.67%
                                        ========       ======       =======      ======       =======      ======
Mortgage Loans:
   Adjustable-rate..................     $21,724        20.32%      $19,954       21.51%     $ 20,683       25.56%
   Fixed-rate.......................      85,167        79.68        72,826       78.49        60,229       74.44
                                        --------       ------       -------      ------       -------      ------
     Total..........................    $106,891       100.00%      $92,780      100.00%      $80,912      100.00%
                                        ========       ======       =======      ======       =======      ======
</TABLE>



     The following  table sets forth certain  information  at December 31, 1999,
regarding the dollar amount of loans maturing in Union  Federal's loan portfolio
based on the  contractual  terms to  maturity.  Demand  loans  having  no stated
schedule of repayments and no stated maturity are reported as due in one year or
less.  This  schedule  does not reflect the effects of possible  prepayments  or
enforcement of due-on-sale  clauses.  Management  expects that  prepayments will
cause actual maturities to be shorter.
<TABLE>
<CAPTION>


                                        Balance                     Due During Years Ended December 31,
                                    Outstanding at                                       2003       2005      2010       2015
                                     December 31,                                         to         to        to         and
                                         1999             2000       2001       2002     2004       2009      2014     following
                                                                                    (In thousands)
<S>                                   <C>              <C>       <C>            <C>    <C>        <C>        <C>        <C>
Real estate mortgage loans:
   Residential loans..................$  80,552        $   647   $    292       $216   $   858    $26,043    $31,673    $20,823
   Multi-family loans.................    9,549            ---        ---        ---     1,668      2,610      4,751        520
   Commercial loans...................   12,410             65          5        274       214      3,702      2,549      5,601
Construction loans....................    4,380            ---      1,299        ---       ---        912        959      1,210
Commercial loans......................    1,394            876        100        ---       271        147        ---        ---
Loans secured by deposits.............      124            124        ---        ---       ---        ---        ---        ---
Personal loans........................       53             19        ---          5        29        ---        ---        ---
                                       --------         ------     ------       ----    ------    -------    -------    -------
     Total............................ $108,462         $1,731     $1,696       $495    $3,040    $33,414    $39,932    $28,154
                                       ========         ======     ======       ====    ======    =======    =======    =======
</TABLE>


      The following table sets forth, as of December 31, 1999, the dollar amount
of all loans due after one year that have fixed  interest  rates and floating or
adjustable interest rates.

                                        Due After December 31, 2000
                             -----------------------------------------------
                             Fixed Rates      Variable Rates           Total
                             -----------      --------------           -----
                                              (In thousands)

Real estate mortgage loans:

   Residential loans........    $71,064            $8,841             $79,905
   Multi-family loans.......      5,442             4,107               9,549
   Commercial loans.........      4,815             7,530              12,345
Construction loans..........      3,238             1,142               4,380
Commercial loans............        191               327                 518
Installment loans...........         34               ---                  34
Loans secured by deposits...        ---               ---                 ---
                                -------           -------            --------
   Total....................    $84,784           $21,947            $106,731
                                =======           =======            ========

      One- to Four-Family  Residential  Loans.  Union Federal's  primary lending
activity consists of originating one- to four-family  residential mortgage loans
secured by property located in its primary market area. Union Federal  generally
does not originate one- to four-family  residential  mortgage loans if the ratio
of the loan amount to the lesser of the current cost or  appraised  value of the
property (the "Loan-to-Value Ratio") exceeds 95%. Union Federal requires private
mortgage  insurance  on loans with a  Loan-to-Value  Ratio in excess of 80%, and
factors  the cost of such  insurance  into the  annual  percentage  rate on such
loans.  Union Federal  originates and retains fixed rate loans which provide for
the payment of principal and interest over a 15- or 20-year  period,  or balloon
loans  having  terms of up to 15 years  with  principal  and  interest  payments
calculated using a 30-year amortization period.

      Union Federal also offers  adjustable-rate  mortgage  ("ARM")  loans.  The
interest rate on ARM loans is indexed to the one-year U.S.  Treasury  securities
yields  adjusted to a constant  maturity.  Union  Federal  may offer  discounted
initial  interest rates on ARM loans, but requires that the borrower qualify for
the ARM loan at the  fully-indexed  rate (the  index  rate plus the  margin).  A
substantial  portion of the ARM loans in Union  Federal's  portfolio at December
31, 1999 provide for maximum rate  adjustments per year and over the life of the
loan of 1% and 5%, respectively.  Union Federal's residential ARMs are amortized
for terms up to 25 years.

      ARM loans decrease the risk  associated  with changes in interest rates by
periodically  repricing,  but involve  other risks  because,  as interest  rates
increase, the underlying payments by the borrower also increase, thus increasing
the potential for default by the borrower.  At the same time, the  marketability
of the underlying collateral may be adversely affected by higher interest rates.
Upward  adjustment  of the  contractual  interest  rate is also  limited  by the
maximum  periodic and lifetime  interest rate  adjustment  permitted by the loan
documents,  and,  therefore,  is  potentially  limited in  effectiveness  during
periods of rapidly rising interest  rates.  At December 31, 1999,  approximately
20.3% of Union  Federal's real estate  mortgage  loans had  adjustable  rates of
interest.

      All of the one- to  four-family  residential  mortgage  loans  that  Union
Federal originates  include  "due-on-sale"  clauses,  which give it the right to
declare a loan  immediately  due and  payable  in the event  that,  among  other
things, the borrower sells or otherwise disposes of the real property subject to
the mortgage and the loan is not repaid.  However,  Union  Federal  occasionally
permits  assumptions  of existing  residential  mortgage loans on a case-by-case
basis.

      At December  31,  1999,  approximately  $80.6  million,  or 74.3% of Union
Federal's  portfolio  of loans,  consisted  of one- to  four-family  residential
loans.  Approximately $166,000, or .2% of total residential loans, were included
in  non-performing  assets as of that date.  See  "--Non-Performing  and Problem
Assets."

      Multi-Family  Loans. At December 31, 1999,  approximately $9.5 million, or
8.8% of Union  Federal's  total loan  portfolio,  consisted  of  mortgage  loans
secured by multi-family  dwellings  (those  consisting of more than four units).
Union Federal's  multi-family loans are generally written as one-year adjustable
rate loans indexed to the one-year  U.S.  Treasury rate with an original term of
up  to  20  years.   Union  Federal  writes   multi-family  loans  with  maximum
Loan-to-Value  ratios of 80%. Union Federal's  largest  multi-family  loan as of
December 31, 1999 had a balance of approximately  $979,000 and was secured by 28
duplexes located in Crawfordsville, Indiana. On the same date, Union Federal had
no multi-family loans included in non-performing assets.

      Multi-family  loans, like commercial real estate loans,  involve a greater
risk than do residential loans. See "-- Commercial Real Estate Loans" below.

      Commercial Real Estate Loans. Union Federal's commercial real estate loans
are secured by churches,  office  buildings,  and other  commercial  properties.
Union  Federal  generally  originates  commercial  real estate loans as one-year
adjustable  rate loans indexed to the one-year U.S.  Treasury  securities  yield
adjusted to a constant  maturity,  with a maximum term of 20 years and a maximum
Loan-to-Value  ratio of 80%. At  December  31,  1999,  Union  Federal's  largest
commercial  loan had an  outstanding  balance of $1.8 million and was secured by
farm property in Montgomery  County. At December 31, 1999,  approximately  $12.4
million,  or  11.4%  of Union  Federal's  total  loan  portfolio,  consisted  of
commercial real estate loans. On the same date,  Union Federal had no commercial
real estate loans included in non-performing assets.

      Loans secured by commercial real estate  generally are larger than one- to
four-family  residential loans and involve a greater degree of risk.  Commercial
real estate  loans often  involve  large loan  balances to single  borrowers  or
groups of related borrowers. Payments on these loans depend to a large degree on
results of operations  and management of the properties and may be affected to a
greater extent by adverse conditions in the real estate market or the economy in
general.  Accordingly,  the nature of the loans  makes them more  difficult  for
management to monitor and evaluate.

      Construction  Loans. Union Federal offers  construction loans with respect
to residential  and commercial real estate and, in certain cases, to builders or
developers constructing such properties on a speculative basis (i.e., before the
builder/developer  obtains a commitment  from a buyer).  Union Federal  provides
construction  loans only to borrowers  who commit to permanent  financing on the
finished project.  At December 31, 1999,  approximately $4.4 million, or 4.0% of
Union  Federal's  total loan portfolio,  consisted of  construction  loans.  The
largest construction loan had a balance of $514,000 on December 31, 1999 and was
secured by a  condominium  project  in  Crawfordsville,  Indiana.  None of Union
Federal's  construction  loans were  included in  non-performing  assets on that
date.

      Construction  loans generally match the term of the construction  contract
and are  written as  fixed-rate  loans with  interest  calculated  on the amount
disbursed under the loan and payable monthly.  The maximum  Loan-to-Value  Ratio
for a construction  loan is based upon the nature of the  construction  project.
For example,  a  construction  loan for a one- to  four-family  residence may be
written with a maximum Loan-to-Value Ratio of 95%, while a construction loan for
a multi-family project may be written with a maximum Loan-to-Value Ratio of 80%.
Inspections are made prior to any disbursement  under a construction loan. Union
Federal does not normally charge commitment fees for construction loans.

      While providing Union Federal with a comparable, and in some cases higher,
yield than  conventional  mortgage  loans,  construction  loans involve a higher
level of risk.  For  example,  if a project is not  completed  and the  borrower
defaults,  Union  Federal may have to hire  another  contractor  to complete the
project at a higher  cost.  Also,  a project  may be  completed,  but may not be
salable,  resulting in the borrower  defaulting and Union Federal's taking title
to the project.

      Commercial Loans.  Union Federal offers  commercial  loans,  which consist
primarily  of loans to  businesses  that are  secured by assets  other than real
estate. As of December 31, 1999,  commercial loans amounted to $1.4 million,  or
1.3% of Union  Federal's  total loan  portfolio.  Commercial  loans tend to bear
somewhat greater risk than residential mortgage loans,  depending on the ability
of the underlying  enterprise to repay the loan.  Although commercial loans have
not historically  comprised a large portion of Union Federal's portfolio,  Union
Federal intends to increase the amount of loans it makes to small  businesses in
the future in order to increase its rate of return and diversify its  portfolio.
As of December 31, 1999, none of Union Federal's  commercial loans were included
in nonperforming assets.

      Consumer  Loans.  Union Federal's  consumer loans,  consisting of passbook
loans and  personal  installment  loans,  aggregated  approximately  $177,000 at
December 31, 1999, or .2% of its total loan portfolio.  Union Federal's passbook
loans are made up to 90% of the deposit  account  balance  and, at December  31,
1999,  accrued at a rate of 7.7%.  This rate may  change  but will  always be at
least 3% over the underlying  passbook or certificate of deposit rate.  Interest
on loans secured by deposits is paid  semi-annually.  At December 31, 1999, none
of Union Federal's  consumer loans were included in non-performing  assets.  See
"-- Non-Performing and Problem Assets."

      Origination,  Purchase and Sale of Loans.  Union Federal  historically has
originated its mortgage loans pursuant to its own  underwriting  standards which
do not conform  with the  standard  criteria of the Federal  Home Loan  Mortgage
Corporation  ("FHLMC") or the Federal National Mortgage Association ("FNMA"). In
the event that Union Federal begins originating  fixed-rate residential mortgage
loans  for  sale to the  FHLMC  in the  secondary  market,  such  loans  will be
originated in accordance  with the guidelines  established by the FHLMC and will
be sold promptly  after they are  originated.  Union Federal has no intention to
originate loans for sale to the FHLMC at this time, however.

      Union  Federal  confines  its loan  origination  activities  primarily  to
Montgomery  County and the  surrounding  counties of Boone,  Hendricks,  Putnam,
Parke and Fountain.  Union Federal has also  originated  several loans in Marion
County.  At  December  31,  1999,  Union  Federal  also had six  loans  which it
originated, totaling approximately $609,000, secured by property located outside
of Indiana.  Union Federal's loan originations are generated from referrals from
existing   customers,   real  estate  brokers,   and  newspaper  and  periodical
advertising. Loan applications are underwritten and processed at Union Federal's
office.

      Union Federal's loan approval process is intended to assess the borrower's
ability to repay the loan,  the  viability  of the loan and the  adequacy of the
value of the  property  that will  secure  the loan.  To assess  the  borrower's
ability to repay,  Union Federal  studies the  employment and credit history and
information  on  the  historical  and  projected  income  and  expenses  of  its
mortgagors. All mortgage loans are approved or ratified by Union Federal's board
of directors.

      Union Federal generally requires  appraisals on all real property securing
its loans and requires an  attorney's  opinion and a valid lien on the mortgaged
real  estate.  Appraisals  for all real  property  securing  mortgage  loans are
performed  by  independent  appraisers  who are  state-licensed.  Union  Federal
requires fire and extended  coverage  insurance in amounts at least equal to the
principal  amount of the loan and also requires  flood  insurance to protect the
property  securing  its  interest  if the  property is in a flood  plain.  Union
Federal also generally  requires private mortgage  insurance for all residential
mortgage  loans  with  Loan-to-Value  Ratios of  greater  than 80%,  and  escrow
accounts  for  insurance  premiums  and  taxes for loans  that  require  private
mortgage insurance.

      Union Federal's  underwriting standards for consumer loans are intended to
protect against some of the risks inherent in making  consumer  loans.  Borrower
character, paying habits and financial strengths are important considerations.

      Union  Federal  occasionally  purchases  participation  interests in loans
originated by other financial  institutions in order to diversify its portfolio,
supplement  local  loan  demand  and  to  obtain  more  favorable  yields.   The
participations  that Union  Federal  purchases  normally  represent a portion of
residential  or  commercial  real  estate  loans  originated  by  other  Indiana
financial  institutions,  most of which  are  secured  by  property  located  in
Indiana.  As of December 31,  1999,  Union  Federal  held in its loan  portfolio
participations in mortgage loans aggregating $7.7 million that it purchased, all
of  which  were   serviced   by  others.   Included   within  this  amount  were
participations  in the  aggregate  amount of  $688,000  which  were  secured  by
property  located outside of Indiana.  The largest  participation  loan in Union
Federal's  portfolio  at  December  31,  1999 was a $775,000  interest in a loan
secured by a nursing home located in Greensburg, Indiana.

      The following table shows Union  Federal's loan  origination and repayment
activity during the periods indicated:

<TABLE>
<CAPTION>
                                                           Year Ended December 31,
                                                    1999            1998            1997
                                                   --------        -------         -------
                                                               (In thousands)
<S>                                                 <C>            <C>             <C>
Gross loans receivable
   at beginning of period.......................    $93,044        $81,135         $73,630
Loans originated:
     Real estate mortgage loans:
       One-to-four family loans.................     23,539         24,763          18,116
       Multi-family loans.......................        908          1,052             654
       Commercial loans.........................      3,461          3,763             483
     Construction loans.........................      4,719          3,163           5,284
     Commercial loans...........................      3,655             51             ---
     Loans secured by deposits..................        224            155             161
     Personal installment loans.................        392             30              85
                                                   --------        -------         -------
         Total originations.....................     36,898         32,977          24,783
Purchases (sales) of participation loans, net...      1,139            800             500
Reductions:
     Principal loan repayments..................     22,424         21,853          17,541
     Transfers from loans to real estate owned..        195             15             237
                                                   --------        -------         -------
         Total reductions.......................     22,619         21,868          17,778
                                                   --------        -------         -------
Total gross loans receivable at
   end of period................................   $108,462        $93,044         $81,135
                                                   ========        =======         =======
</TABLE>


      Union  Federal's  residential  loan  originations  during  the year  ended
December 31, 1999 totaled  $23.5  million,  compared to $24.8  million and $18.1
million in the years ended December 31, 1998 and 1997, respectively.

      Origination  and Other  Fees.  Union  Federal  realizes  income  from late
charges,  checking  account service  charges,  and fees for other  miscellaneous
services.  Union Federal currently charges a commitment fee of $200 on all loans
and an additional $500 origination fee on construction loans. Union Federal also
may charge points on a mortgage loan as consideration for a lower interest rate,
although it does so infrequently. Late charges are generally assessed if payment
is not  received  within a specified  number of days after it is due.  The grace
period depends on the individual loan documents.

Non-Performing and Problem Assets

      After a mortgage loan becomes 30 days past due,  Union Federal  delivers a
delinquency  notice to the  borrower.  When loans are 30 to 60 days in  default,
Union Federal sends additional delinquency notices and makes personal contact by
telephone with the borrower to establish an acceptable repayment schedule.  When
loans become 60 days in default, Union Federal again contacts the borrower, this
time in person, to establish an acceptable  repayment schedule.  When a mortgage
loan is 90 days  delinquent,  Union  Federal  will have  either  entered  into a
workout  plan with the  borrower  or  referred  the matter to its  attorney  for
collection. Management is authorized to commence foreclosure proceedings for any
loan upon making a determination that it is prudent to do so.

      Union Federal  reviews  mortgage  loans on a regular basis and places such
loans on a non-accrual  status when they become 90 days  delinquent.  Generally,
when  loans are placed on a  non-accrual  status,  unpaid  accrued  interest  is
written off, and further income is recognized only to the extent received.

      Non-performing  Assets.  At December 31, 1999,  $263,000,  or .2% of Union
Federal's total assets, were non-performing  (non-performing loans, non-accruing
loans and  foreclosed  real estate)  compared to $349,000,  or .3%, of its total
assets at December 31, 1998. At December 31, 1999,  residential  loans accounted
for $166,000 of Union Federal's  non-performing  assets.  Union Federal had real
estate  owned  ("REO")  properties  in the amount of $97,000 as of December  31,
1999.

      The table below sets forth the amounts and  categories of Union  Federal's
non-performing assets (non-performing loans, foreclosed real estate and troubled
debt  restructurings)  for the last three years. It is Union Federal's policy to
review all earned but uncollected  interest on all loans monthly to determine if
any portion thereof should be classified as uncollectible  for any loan past due
in excess  of 90 days.  Delinquent  loans  that are 90 days or more past due are
considered non-performing assets.

                                                 At December 31,
                                          ----------------------------
                                          1999         1998       1997
                                          ----        ------      ----
                                              (Dollars in thousands)

Non-performing assets:
   Non-performing loans................. $166           $349       $52
   Foreclosed real estate...............   97            ---        46
                                         ----           ----       ---
     Total non-performing assets........ $263           $349       $98
                                         ====           ====       ===

Non-performing loans to total loans.....  .16%           .38%      .07%

Non-performing assets to total assets...  .22%           .32%      .07%

      Interest income of $7,000, $30,000 and $4,000 for the years ended December
31, 1999,  1998 and 1997,  respectively,  was  recognized on the  non-performing
loans summarized above.  Interest income of $13,000,  $33,000 and $5,000 for the
years ended  December 31,  1999,  1998 and 1997,  respectively,  would have been
recognized under the original terms of these non-performing loans.

      At December 31, 1999,  Union Federal held loans  delinquent  from 30 to 89
days totaling approximately $622,000.  Other than in connection with these loans
and the other delinquent loans disclosed  elsewhere in this section,  management
was  not  aware  of  any  other  borrowers  who  were   experiencing   financial
difficulties.

     Delinquent  Loans.  The following  table sets forth certain  information at
December 31, 1999, 1998 and 1997,  relating to  delinquencies in Union Federal's
portfolio.  Delinquent  loans  that are 90 days or more past due are  considered
non-performing assets.
<TABLE>
<CAPTION>

                               At December 31, 1999                 At December 31, 1998              At December 31, 1997
                       -------------------------------------  ----------------------------------  ----------------------------------
                           30-89 Days      90 Days or More       30-89 Days      90 Days or More     30-89 Days     90 Days or More
                       ------------------  -----------------  ------------------ ---------------- ----------------- ----------------
                                Principal          Principal           Principal        Principal         Principal        Principal
                       Number   Balance    Number   Balance   Number    Balance Number   Balance  Number   Balance Number   Balance
                      of Loans  of Loans  of Loans of Loans  of Loans  of Loansof Loans of Loans of Loans of Loansof Loans  of Loans
                      --------  --------  -------- --------  --------  ---------------------------------------------------  --------
                                                                  (Dollars in thousands)
<S>                        <C>    <C>         <C>    <C>          <C>   <C>         <C>    <C>        <C>   <C>         <C>   <C>
One- to four-
   family loans.......     9      $429        4      $166         6     $406        3      $50        9     $300        4     $ 47
Commercial
   real estate loans..     2        61      ---       ---         1       17        2       89        1       48      ---      ---
Multi-family
   loans..............     1       132      ---       ---       ---      ---        1      210        1      207      ---      ---
Loans secured
   by deposits........   ---       ---      ---       ---       ---      ---      ---      ---      ---      ---      ---      ---
                         ---      ----      ---      ----       ---     ----      ---     ----      ---     ----      ---      ---
   Total..............    12      $622        4      $166         7     $423        6     $349       11     $555        5      $52
                          ==      ====      ===      ====       ===     ====      ===     ====       ==     ====      ===      ===
Delinquent loans to
   total loans........                                .74%                                 .85%                                .77%
                                                      ===                                  ===                                 ===
</TABLE>


      Classified   assets.   Federal   regulations  and  Union  Federal's  Asset
Classification  Policy provide for the  classification of loans and other assets
such as debt and equity securities considered by the OTS to be of lesser quality
as   "substandard,"   "doubtful"  or  "loss"  assets.  An  asset  is  considered
"substandard"  if it is  inadequately  protected  by the  current  net worth and
paying  capacity  of  the  obligor  or  of  the  collateral   pledged,  if  any.
"Substandard"  assets include those characterized by the "distinct  possibility"
that the  institution  will  sustain  "some  loss" if the  deficiencies  are not
corrected.  Assets classified as "doubtful" have all of the weaknesses  inherent
in those  classified  "substandard,"  with  the  added  characteristic  that the
weaknesses  present make  "collection  or  liquidation in full," on the basis of
currently  existing facts,  conditions,  and values,  "highly  questionable  and
improbable."  Assets  classified as "loss" are those considered  "uncollectible"
and  of  such  little  value  that  their  continuance  as  assets  without  the
establishment of a specific loss reserve is not warranted.

      An insured  institution  is required to establish  general  allowances for
loan  losses in an amount  deemed  prudent by  management  for loans  classified
substandard or doubtful,  as well as for other problem loans. General allowances
represent loss allowances  which have been established to recognize the inherent
risk associated with lending activities,  but which, unlike specific allowances,
have  not  been  allocated  to  particular  problem  assets.   When  an  insured
institution  classifies  problem  assets as  "loss,"  it is  required  either to
establish  a specific  allowance  for losses  equal to 100% of the amount of the
asset so classified or to charge off such amount. An institution's determination
as to  the  classification  of its  assets  and  the  amount  of  its  valuation
allowances is subject to review by the OTS which can order the  establishment of
additional general or specific loss allowances.

      At December 31, 1999, the aggregate  amount of Union Federal's  classified
assets and its general and specific loss allowances were as follows:

                                                          At December 31, 1999
                                                          --------------------
                                                             (In thousands)

  Substandard assets..........................................      $747
  Doubtful assets.............................................       ---
  Loss assets.................................................       ---
                                                                    ----
      Total classified assets.................................      $747
                                                                    ====
  General loss allowances.....................................      $422
  Specific loss allowances....................................       ---
                                                                    ----
      Total allowances........................................      $422
                                                                    ====

      Union Federal  regularly  reviews its loan portfolio to determine  whether
any loans require  classification  in accordance  with  applicable  regulations.
Included  in  substandard  assets at  December  31,  1999,  Union  Federal had a
multi-family  loan in the amount of $484,000 that was  performing.  The loan was
classified as substandard as a result of a regulatory examination.

Allowance for Loan Losses

      The allowance for loan losses is maintained through the provision for loan
losses,  which  is  charged  to  earnings.  The  allowance  for loan  losses  is
determined in conjunction  with Union Federal's review and evaluation of current
economic  conditions  (including  those of its  lending  area),  changes  in the
character and size of the loan portfolio,  loan delinquencies (current status as
well as past and  anticipated  trends) and adequacy of collateral  securing loan
delinquencies,  historical and estimated net  charge-offs,  and other  pertinent
information  derived  from a  review  of the  loan  portfolio.  In  management's
opinion,  Union  Federal's  allowance  for loan  losses  is  adequate  to absorb
probable  losses  inherent in the loan portfolio at December 31, 1999.  However,
there can be no assurance that  regulators,  when reviewing Union Federal's loan
portfolio  in  the  future,  will  not  require  increases  in  Union  Federal's
allowances  for loan  losses or that  changes in  economic  conditions  will not
adversely affect its loan portfolio.

      Summary of Loan Loss  Experience.  The following table analyzes changes in
the allowance during the past three fiscal years ended December 31, 1999.

                                                 Year Ended December 31,
                                              -----------------------------
                                              1999        1998         1997
                                              ----        -----        ----
                                                 (Dollars in thousands)

Balance at beginning of period..............  $362         $252        $159
Gross charge-offs - Multi-family loans......   ---          ---        (72)
Provision for losses on loans...............    60          110         165
                                              ----         ----        ----
   Balance end of period....................  $422         $362        $252
                                              ====         ====        ====
Allowance for loan losses as a percent of
   total loans outstanding..................   .40%         .40%        .32%
Ratio of net charge-offs to average
   loans outstanding........................   ---          ---         .10%

      Allocation of Allowance for Loan Losses.  The following  table presents an
analysis of the allocation of Union  Federal's  allowance for loan losses at the
dates  indicated.  The  allocation  of the  allowance  to each  category  is not
necessarily  indicative of future loss in any  particular  category and does not
restrict  Union  Federal's  use of the  allowance  to  absorb  losses  in  other
categories.

<TABLE>
<CAPTION>
                                                                       At December 31,
                                         ---------------------------------------------------------------------------
                                                 1999                       1998                       1997
                                         ---------------------      ---------------------       --------------------
                                                       Percent                    Percent                    Percent
                                                      of loans                   of loans                   of loans
                                                       in each                    in each                    in each
                                                      category                   category                   category
                                                      to total                   to total                     total
                                         Amount         loans       Amount         loans        Amount        loans
                                         ------         -----       ------         -----        ------        -----
                                                                    (Dollars in thousands)
<S>                                         <C>       <C>              <C>         <C>           <C>          <C>
Balance at end of period applicable to:
   Real estate mortgage loans:
     Residential...............             $90       74.27%           $75         77.19%        $  65        76.95%
     Commercial................             124        8.80             67          6.83            29         4.47
     Multi-family..............             115       11.44            134         11.40            82        12.57
   Construction loans..........              11        4.04             19          4.29            10         5.73
   Commercial loans............              32        1.29            ---           .06           ---          ---
   Loans secured by deposits...             ---         .11            ---           .17           ---          .17
   Personal installment loans..               2         .05            ---           .06           ---          .11
   Unallocated.................              48         ---             67           ---            66          ---
                                           ----      ------           ----        ------          ----       ------
     Total.....................            $422      100.00%          $362        100.00%         $252       100.00%
                                           ====      ======           ====        ======          ====       ======
</TABLE>



Investments

     Investments.  The Company's investment portfolio generally consists of U.S.
Treasury and federal agency securities,  mortgaged-backed securities, marketable
equity  securities,  FHLB stock and an investment in Pedcor Investments - 1993 -
XVI,  L.P.  See  "--Service  Corporation  Subsidiary."  At  December  31,  1999,
approximately $9.9 million,  or 8.2%, of the Company's total assets consisted of
such investments.  The Company also had $2.8 million,  or 2.3% of its assets, in
interest-earning deposits as of that date.

     The  amount of  interest-earning  deposits  held by the  Company  increased
significantly   during  1997  as  a  result  of  the  Conversion.   Because  the
subscription offering for the Holding Company's Common Stock was oversubscribed,
the Company  delivered  refund checks during the last week of December,  1997 to
those  subscribers  whose purchase orders were not filled.  Many of those checks
had not cleared as of December 31, 1997,  thereby increasing the amount of funds
held by the  Company in  interest-bearing  deposits.  In  addition,  the Company
invested  some of the  proceeds  that it  received  from the stock  offering  in
interest-bearing  overnight  accounts  at  the  FHLB  Indianapolis,  which  also
increased the amount of its interest-bearing  deposits at December 31, 1997. The
amount of  interest-earning  deposits  decreased to $6.2 million at December 31,
1998 as a result of the payment of the stock  subscription  of $22.7 million and
increased investment in loans and investment securities during 1998.

      The following  table sets forth the amortized cost and the market value of
the Company's investment portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                                At December 31,
                                        -----------------------------------------------------------------
                                              1999                   1998                    1997
                                        ------------------     ------------------     -------------------
                                        Amortized   Market     Amortized   Market     Amortized    Market
                                          Cost       Value       Cost       Value       Cost        Value
                                                                  (In thousands)
<S>                                        <C>         <C>    <C>         <C>          <C>       <C>
Investment securities:
Available for sale:
   marketable equity securities.......     $290        $315   $    ---    $   ---      $   ---   $    ---
Held to maturity:
   U.S. Treasury.......................     ---         ---        ---        ---          350        350
   Federal agencies....................   4,715       4,386      4,500      4,479        3,346      3,351
   Mortgage-backed securities..........   2,807       2,813      3,526      3,696        2,124      2,302
                                          -----       -----      -----      -----        -----      -----
     Total investment securities
       held to maturity................   7,522       7,199      8,026      8,175        5,820      6,003
Investment in limited partnership......   1,012          (1)     1,055         (1)       1,176         (1)
FHLB stock (2).........................   1,044       1,044        745        745          708        708
                                         ------                 ------                  ------
Total investments......................  $9,868                 $9,826                  $7,704
                                         ======                 ======                  ======
</TABLE>

(1)  Market values are not available
(2)  Market value is based on the price at which stock may be resold to the FHLB
     of Indianapolis.

         The  following  table sets forth the  amount of  investment  securities
(excluding mortgage-backed securities,  marketable equity securities, FHLB stock
and investment in limited  partnership)  which mature during each of the periods
indicated  and the  weighted  average  yields  for each range of  maturities  at
December 31, 1999.
<TABLE>
<CAPTION>

                                                         Amount at December 31, 1999 which matures in
                                     -----------------------------------------------------------------------------------
                                          One Year             One Year            Five Years
                                           or Less           to Five Years        to Ten Years          After Ten Years
                                     -------------------  ------------------   -------------------     ------------------
                                     Amortized   Average  Amoritzed  Average   Amortized   Average     Amortized  Average
                                       Cost       Yield     Cost      Yield      Cost       Yield        Cost      Yield
                                     --------    -------  ---------  -------   ---------   -------     ---------  -------
                                                                 (Dollars in thousands)
<S>                                    <C>                 <C>         <C>        <C>                   <C>      <C>
Federal agency securities...........   $---       ---%     $2,415      5.97%      $---        ---%      $2,300   6.64%
</TABLE>


Mortgage-backed Securities

         The  following  table sets  forth the  composition  of Union  Federal's
mortgage-backed securities portfolio at the dates indicated.
<TABLE>
<CAPTION>


                                                                                    December 31,
                                                -----------------------------------------------------------------------------------
                                                            1999                        1998                        1997
                                                --------------------------  -------------------------    --------------------------
                                                Amortized  Percent  Market  Amortized  Percent Market    Amortized  Percent  Market
                                                  Cost    of Total   Value    Cost    of Total  Value      Cost    of Total   Value
                                                --------- --------  ------  --------- -------- ------    --------- --------  ------
                                                                                   (In thousands)
<S>                                            <C>         <C>      <C>        <C>     <C>     <C>        <C>       <C>      <C>
Governmental National
   Mortgage Corporation....................    $    689    24.5%    $   748    $991    28.1%   $1,095     $1,223    57.6%    $1,348
Federal Home Loan Mortgage Corporation.....       2,043    72.8       1,995   2,395    67.9     2,464        635    29.9        691
Federal National
   Mortgage Corporation....................          63     2.3          58     123     3.5       120        243    11.4        240
Other......................................          12      .4          12      17      .5        17         23     1.1         23
                                                 ------   -----      ------  ------   -----    ------     ------   -----     ------
   Total mortgage- backed securities.......      $2,807   100.0%     $2,813  $3,526   100.0%   $3,696     $2,124   100.0%    $2,302
                                                 ======   =====      ======  ======   =====    ======     ======   =====     ======
</TABLE>


         The following table sets forth the amount of mortgage-backed securities
which  mature  during each of the periods  indicated  and the  weighted  average
yields for each range of maturities at December 31, 1999.
<TABLE>
<CAPTION>


                                                                        Amount at December 31, 1999 which matures in
                                                  -------------------------------------------------------------------------------
                                                          One Year                    One Year to                 After
                                                           or Less                     Five Years               Five Years
                                                  ------------------------      -----------------------    ----------------------
                                                                  Weighted                     Weighted                  Weighted
                                                   Amortized       Average      Amortized       Average    Amortized      Average
                                                     Cost           Yield         Cost           Yield       Cost          Yield
                                                  ----------      --------      ---------      --------    ---------     --------
                                                                             (Dollars in thousands)
<S>                                                     <C>        <C>             <C>            <C>       <C>            <C>
Mortgage-backed securities......................        $3         10.66%          $494           8.75%     $2,310         7.07%
</TABLE>


      The   following   table  sets  forth  the   changes  in  Union   Federal's
mortgage-backed securities portfolio for the years ended December 31, 1999, 1998
and 1997.

                                           For the Year Ended
                                              December 31,
                             --------------------------------------------------
                              1999                  1998                  1997
                             ------                ------                ------
                                               (In thousands)

Beginning balance......      $3,526                $2,124                $2,752
Purchases..............         ---                 2,004                   ---
Repayments.............        (731)                 (607)                 (639)
Premium and discount
   amortization, net...          12                     5                    11
                             ------                ------                ------
Ending balance.........      $2,807                $3,526                $2,124
                             ======                ======                ======

Sources of Funds

      General.  Deposits have  traditionally been Union Federal's primary source
of funds for use in lending and investment activities.  In addition to deposits,
Union Federal derives funds from scheduled loan payments, investment maturities,
loan prepayments,  retained  earnings,  income on earning assets and borrowings.
While scheduled loan payments and income on earning assets are relatively stable
sources  of  funds,  deposit  inflows  and  outflows  can  vary  widely  and are
influenced  by  prevailing  interest  rates,  market  conditions  and  levels of
competition.  Borrowings  from  the  FHLB  of  Indianapolis  may be  used in the
short-term to compensate for  reductions in deposits or deposit  inflows at less
than projected levels.

      Deposits.   Union  Federal  attracts  deposits   principally  from  within
Montgomery  County  through  the  offering  of  a  broad  selection  of  deposit
instruments, including fixed-rate passbook accounts, NOW accounts, variable rate
money market accounts,  fixed-term certificates of deposit and savings accounts.
Union  Federal does not actively  solicit or advertise  for deposits  outside of
Montgomery County, and substantially all of its depositors are residents of that
county.  Deposit  account terms vary, with the principal  differences  being the
minimum balance required, the amount of time the funds remain on deposit and the
interest  rate.  Union  Federal  does not pay broker  fees for any  deposits  it
receives.

      Union Federal establishes the interest rates paid, maturity terms, service
fees and withdrawal  penalties on a periodic basis.  Determination  of rates and
terms are predicated on funds acquisition and liquidity requirements, rates paid
by competitors,  growth goals, and applicable regulations. Union Federal relies,
in part, on customer service and long-standing  relationships  with customers to
attract and retain its deposits.  Union Federal also closely prices its deposits
to the rates offered by its competitors.

      The flow of  deposits  is  influenced  significantly  by general  economic
conditions,  changes in money  market and other  prevailing  interest  rates and
competition.  The  variety of deposit  accounts  that Union  Federal  offers has
allowed it to be competitive in obtaining funds and to respond with  flexibility
to changes in consumer  demand.  Union  Federal has become more  susceptible  to
short-term  fluctuations in deposit flows as customers have become more interest
rate  conscious.  Union  Federal  manages the pricing of its deposits in keeping
with its asset/liability management and profitability objectives. Based on Union
Federal's experience,  management believes that its passbook,  NOW and MMDAs are
relatively  stable  sources of  deposits.  However,  the  ability to attract and
maintain certificates of deposit, and the rates paid on these deposits, has been
and will continue to be significantly affected by market conditions.

      An analysis of the Company's deposit accounts by type, maturity,  and rate
at December 31, 1999, is as follows:
<TABLE>
<CAPTION>


                                                        Minimum        Balance at                          Weighted
                                                        Opening       December 31,          % of            Average
Type of Account                                         Balance           1999            Deposits           Rate
-----------------------------------------------------------------------------------------------------------------
                                                                           (Dollars in thousands)
Withdrawable:
<S>                                                 <C>                    <C>               <C>              <C>
   Fixed rate, passbook accounts..................  $      10              $3,184            4.62%            4.00%
   Variable rate, money market....................         10              16,329           23.67             4.97
   NOW accounts and other transaction accounts....        500               2,852            4.13             1.78
                                                                          -------          ------             ----
     Total withdrawable...........................                         22,365           32.42             4.43
                                                                          -------          ------             ----
Certificates (original terms):
   3 months or less...............................      1,000                  10             .01             4.12
   6 months.......................................      1,000               2,740            3.97             4.60
   12 months......................................      1,000               3,669            5.32             4.74
   18 months......................................      1,000               5,999            8.69             5.09
   24 months......................................      1,000               3,574            5.18             5.39
   30 months......................................      1,000              10,380           15.05             5.54
   36 months .....................................      1,000               2,957            4.29             5.83
   48 months......................................      1,000                 557             .81             5.84
   60 months......................................      1,000               6,039            8.75             5.96
Jumbo certificates - $100,000 and over............    100,000              10,700           15.51             5.63
                                                                          -------          ------             ----
Total certificates................................                         46,625           67.58             5.45
                                                                          -------          ------             ----
Total deposits....................................                        $68,990          100.00%            5.12%
                                                                          =======          ======             ====
</TABLE>


      The following  table sets forth by various  interest rate  categories  the
composition of time deposits of Union Federal at the dates indicated:

                                             At December 31,
                            ------------------------------------------------
                            1999                  1998                  1997
                            ----                  ----                  ----
                                            (In thousands)

3.00 to 3.99%........      $     1             $    ---               $   ---
4.00 to 4.99%........       11,957                4,193                 3,622
5.00 to 5.99%........       22,850               27,459                19,245
6.00 to 6.99%........       11,800               17,119                22,894
7.00 to 7.99%........           17                   26                   420
                           -------              -------               -------
   Total.............      $46,625              $48,797               $46,181
                           =======              =======               =======

     The following table  represents,  by various interest rate categories,  the
amounts of time  deposits  maturing  during  each of the three  years  following
December  31,  1999.  Matured  certificates,  which have not been  renewed as of
December 31, 1999, have been allocated based upon certain rollover assumptions.
<TABLE>
<CAPTION>


                                      Amounts at December 31, 1999 Maturing In
                    ----------------------------------------------------------------------------
                    One Year                 Two                  Three             Greater Than
                     or Less                Years                 Years              Three Years
                     -------              -------              --------                ------
                                                   (In thousands)

<S>                  <C>                  <C>                  <C>                     <C>
3.00 to 3.99%..      $     1              $   ---              $    ---                $  ---
4.00 to 4.99%..        8,793                3,168                   159                   ---
5.00 to 5.99%..       12,961                7,029                 1,141                 3,446
6.00 to 6.99%..        3,685                2,403                 3,017                   815
7.00 to 7.99%..            7                  ---                   ---                   ---
                     -------              -------              --------                ------
   Total.......      $25,447              $12,600              $  4,317                $4,261
                     =======              =======              ========                ======
</TABLE>


     The  following   table   indicates  the  amount  of  the  Company's   other
certificates  of deposit of $100,000 or more by time remaining until maturity as
of December 31, 1999.

                                                            At December 31, 1999
                                                           ---------------------
   Maturity Period                                             (In thousands)
   Three months or less...................................        $  2,895
   Greater than three months through six months...........           1,194
   Greater than six months through twelve months..........           2,101
   Over twelve months.....................................           4,510
                                                                   -------
        Total.............................................         $10,700
                                                                   =======

      The following  table sets forth the dollar  amount of savings  deposits in
the various  types of deposits that the Company  offers at the dates  indicated,
and the amount of  increase  or  decrease  in such  deposits  as compared to the
previous period.

<TABLE>
<CAPTION>
                                                                          DEPOSIT ACTIVITY
                                        --------------------------------------------------------------------------------------------
                                           Balance                Increase    Balance                Increase    Balance
                                             at                  (Decrease)     at                  (Decrease)     at
                                        December 31,     % of       from   December 31,     % of       from   December 31,   % of
                                            1999       Deposits     1998       1998       Deposits     1997       1997     Deposits
                                           -------      ------     ------    -------       ------     ------    -------      ------
                                                                       (Dollars in thousands)

Withdrawable:
<S>                                         <C>           <C>    <C>          <C>            <C>     <C>       <C>             <C>
   Fixed rate, passbook accounts......      $3,184        4.62%  $   (226)    $3,410         5.26%   $(1,169)  $  4,579        7.35%
   Variable rate, money market........      16,329       23.67      5,535     10,794        16.65      1,669      9,125       14.66
   NOW accounts and other
     transaction accounts.............       2,852        4.13      1,007      1,845         2.84       (528)     2,373        3.81
                                           -------      ------     ------    -------       ------     ------    -------      ------
     Total withdrawable...............      22,365       32.42      6,316     16,049        24.75        (28)    16,077       25.82
                                           -------      ------     ------    -------       ------     ------    -------      ------
Certificates (original terms):
   3 months...........................          10         .01        (91)       101          .16                   101         .16
   6 months...........................       2,740        3.97       (446)     3,186         4.91       (592)     3,778        6.07
   12 months..........................       3,669        5.32       (262)     3,931         6.06     (1,546)     5,477        8.80
   18 months..........................       5,999        8.69     (2,056)     8,055        12.42         69      7,986       12.83
   24 months..........................       3,574        5.18     (1,870)     5,444         8.40        270      5,174        8.31
   30 months..........................      10,380       15.05      1,390      8,990        13.86      2,375      6,615       10.62
   36 months .........................       2,957        4.29       (511)     3,468         5.35       (386)     3,854        6.19
   48 months..........................         557         .81         48        509          .78        188        321         .52
   60 months..........................       6,039        8.75        277      5,762         8.89        (53)     5,815        9.34
Jumbo certificates....................      10,700       15.51      1,349      9,351        14.42      2,291      7,060       11.34
                                           -------      ------     ------    -------       ------     ------    -------      ------
Total certificates....................      46,625       67.58     (2,172)    48,797        75.25      2,616     46,181       74.18
                                           -------      ------     ------    -------       ------     ------    -------      ------
Total deposits........................     $68,990      100.00%    $4,144    $64,846       100.00%    $2,588    $62,258      100.00%
                                           =======      ======     ======    =======       ======     ======    =======      ======
</TABLE>


     Total  deposits at  December  31, 1999 were  approximately  $69.0  million,
compared to  approximately  $64.8 million at December 31, 1998.  Union Federal's
deposit  base  depends  somewhat  upon the  manufacturing  sector of  Montgomery
County's  economy.   Although  Montgomery  County's   manufacturing   sector  is
relatively  diversified and does not significantly  depend upon any industry,  a
loss of a material portion of the manufacturing workforce could adversely affect
Union Federal's  ability to attract  deposits due to the loss of personal income
attributable  to the lost  manufacturing  jobs and the attendant loss in service
industry jobs.

      In the unlikely event of Union Federal's liquidation after the Conversion,
all claims of creditors  (including  those of deposit  account  holders,  to the
extent of their deposit  balances)  would be paid first followed by distribution
of the liquidation  account to certain deposit account holders,  with any assets
remaining thereafter  distributed to the Holding Company as the sole shareholder
of Union Federal.

      Borrowings.  Management  focuses on generating high quality loans and then
seeking the best source of funding from deposits,  investments or borrowings. At
December 31, 1999,  Union Federal had  borrowings in the amount of $11.7 million
from the FHLB of Indianapolis  which bear fixed and variable  interest rates and
are due at various  dates  through  2004.  Union Federal is required to maintain
eligible  loans in its  portfolio  of at least 160% of  outstanding  advances as
collateral  for advances from the FHLB of  Indianapolis.  Union Federal does not
anticipate  any  difficulty  in  obtaining  advances  appropriate  to  meet  its
requirements in the future. Union Federal also owes Pedcor Investments 1993-XVI,
L.P.  ("Pedcor")  $837,000  under a note  payable  that is not  included  in the
following table. See "--Service Corporation Subsidiary."

      The  following  table  presents  certain  information  relating  to  Union
Federal's borrowings at or for the years ended December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
                                                                   At or for the Year
                                                                   Ended December 31,
                                                      ------------------------------------------
                                                        1999             1998              1997
                                                      -------            ----             ------
                                                               (Dollars in thousands)

FHLB Advances:
<S>                                                   <C>                <C>              <C>
     Outstanding at end of period..................   $11,659            $772             $2,373
     Average balance outstanding for period........     6,043             873              5,748
     Maximum amount outstanding at any
       month-end during the period.................    11,659           1,272              6,873
     Weighted average interest rate
       during the period...........................      5.66%           5.84%              5.90%
     Weighted average interest rate
       at end of period............................      5.76%           5.71%              5.71%

Return on Equity and Assets
                                                        1999             1998              1997
                                                      -------            ----             ------
     Return on assets (net income
        divided by average total assets)...........      1.72%           1.82%              1.38%
     Return on equity (net income
        divided by average equity).................      5.02            4.65               8.10
     Dividend payout ratio (dividends
        per share divided by net
        income per share)..........................     57.41           50.71                ---
     Equity to assets ratio (average
        equity divided by average
        total assets)..............................     34.25           39.24              17.03
</TABLE>


Service Corporation Subsidiary

      OTS  regulations  permit  federal  savings  associations  to invest in the
capital  stock,   obligations  or  other   specified   types  of  securities  of
subsidiaries  (referred to as "service  corporations") and to make loans to such
subsidiaries  and joint ventures in which such  subsidiaries are participants in
an  aggregate  amount not  exceeding  2% of the  association's  assets,  plus an
additional 1% of assets if the amount over 2% is used for specified community or
inner-city  development  purposes.  In  addition,   federal  regulations  permit
associations to make specified types of loans to such  subsidiaries  (other than
special purpose finance  subsidiaries)  in which the association  owns more than
10% of the stock, in an aggregate amount not exceeding 50% of the  association's
regulatory capital if the association's regulatory capital is in compliance with
applicable  regulations.  A savings  association  that  acquires  a  non-savings
association  subsidiary,  or that  elects  to  conduct a new  activity  within a
subsidiary,  must  give the FDIC  and the OTS at least 30 days  advance  written
notice.  The FDIC  may,  after  consultation  with the OTS,  prohibit  specified
activities if it determines  such  activities pose a serious threat to the SAIF.
Moreover,  a savings  association  must deduct  from  capital,  for  purposes of
meeting the core capital,  tangible capital and risk-based capital requirements,
its entire  investment in and loans to a subsidiary  engaged in  activities  not
permissible for a national bank (other than  exclusively  agency  activities for
its customers or mortgage banking subsidiaries).

      Union Federal  currently owns one subsidiary,  UFS Service Corp.  ("UFS"),
whose  sole asset is its  investment  in  Pedcor,  which is an  Indiana  limited
partnership  that was established to organize,  build,  own, operate and lease a
48-unit  apartment  complex in  Crawfordsville,  Indiana known as Shady Knoll II
Apartments (the  "Project").  Union Federal owns the limited partner interest in
Pedcor. The general partner is Pedcor Investments LLC. The Project,  operated as
a multi-family,  low- and  moderate-income  housing project, is completed and is
performing as planned.  Because UFS engages  exclusively in activities  that are
permissible for a national bank, OTS regulations permit Union Federal to include
its investment in UFS in its calculation of regulatory capital.

       A low- and moderate-income  housing project qualifies for certain federal
income tax credits if (i) it is a residential  rental  property,  (ii) the units
are used on a  nontransient  basis,  and  (iii)  20% or more of the units in the
project are occupied by tenants whose incomes are 50% or less of the area median
gross income,  adjusted for family size, or  alternatively,  at least 40% of the
units in the project are occupied by tenants  whose  incomes are 60% of the area
median gross income. Qualified low income housing projects generally must comply
with these and other rules for fifteen years,  beginning with the first year the
project  qualified for the tax credit, or some or all of the tax credit together
with interest may be recaptured. The tax credit is subject to the limitations on
the use of general business  credit,  but no basis reduction is required for any
portion of the tax credit claimed.

      UFS  committed  to  invest  approximately  $1.8  million  in Pedcor at the
inception of the project in November,  1993.  Through December 31, 1999, UFS had
invested cash of  approximately  $973,000 in Pedcor with five additional  annual
capital  contributions  remaining  to be paid in  January  of each year  through
January, 2004, totaling $837,000. The additional  contributions will be used for
operating  and other  expenses of the  partnership.  In addition,  Union Federal
borrowed funds from the FHLB of  Indianapolis  to advance to Pedcor,  and Pedcor
currently owes Union Federal  $659,000  pursuant to a promissory note payable in
installments  through January 1, 2004 and bearing  interest at an annual rate of
9%.

       UFS transfers the tax credits  resulting  from Pedcor's  operation of the
Project to Union  Federal.  These tax credits will be available to Union Federal
through 2003.  Although Union Federal has reduced income tax expense by the full
amount of the tax  credit  available  each  year,  it has not been able to fully
utilize  available tax credits to reduce income taxes payable because it may not
use tax credits that would reduce its regular  corporate tax liability below its
alternative  minimum tax  liability.  Union Federal may carry forward unused tax
credits for a period of fifteen years and management believes that Union Federal
will be able to utilize  available tax credits during the carry forward  period.
Additionally,  Pedcor has  incurred  operating  losses in the early years of its
operations  primarily due to its  accelerated  depreciation  of assets.  UFS has
accounted for its  investment  in Pedcor on the equity method and,  accordingly,
has  recorded  its share of these  losses as  reductions  to its  investment  in
Pedcor,  which at December 31, 1999, was $1.0 million.  As of December 31, 1999,
100% of the units in the Project were  occupied,  and all of the tenants met the
income test required for the tax credits. UFS does not engage in any activity or
hold any assets other than its investment in Pedcor.

      The following  summarizes  UFS's equity in Pedcor's losses and tax credits
recognized in Union Federal's consolidated financial statements.

                                                   Year Ended December 31,
                                             ---------------------------------
                                             1999            1998         1997
                                           -------          ------       ------
                                                        (In Thousands)
Investment in Pedcor:
   Net of equity in losses...............   $1,012          $1,055       $1,176
                                            ======          ======       ======

Equity in losses, net
   of income tax effect..................  $   (26)        $   (73)      $  (95)
Tax credit...............................      178             178          178
                                           -------          ------       ------
Increase in after-tax net income from
   Pedcor investment.....................  $   152          $  105       $   83
                                            ======          ======       ======

Employees

      As of December 31, 1999,  Union Federal employed 16 persons on a full-time
basis.  Union  Federal  does  not have any  part-time  employees.  None of Union
Federal's employees is represented by a collective bargaining group.  Management
considers its employee relations to be good.

      Employee benefits for Union Federal's full-time  employees include,  among
other things, an employee stock ownership plan, a Pentegra Group (formerly known
as Financial  Institutions  Retirement  Fund)  defined  benefit  pension plan, a
noncontributory,   multiple-employer  comprehensive  pension  plan  (the"Pension
Plan"),  and  hospitalization/major  medical  insurance,  dental  and  eye  care
insurance,  long-term disability insurance, life insurance, and participation in
the Financial Institutions Thrift Plan.

      Management  considers its employee  benefits to be competitive  with those
offered by other  financial  institutions  and major  employers in the area. See
"Executive  Compensation" and "Certain Relationships and Related Transactions of
Union Federal."

                                   COMPETITION

      Union  Federal  originates  most of its loans to and  accepts  most of its
deposits from residents of Montgomery County,  Indiana. Union Federal is subject
to competition from various financial institutions, including state and national
banks,  state and  federal  savings  associations,  credit  unions,  and certain
nonbanking  consumer lenders that provide similar services in Montgomery  County
with  significantly  larger  resources than are available to Union  Federal.  In
total, there are 12 other financial  institutions  located in Montgomery County,
including  eight banks,  two credit unions and two other  savings  associations.
Union  Federal  also  competes  with money  market funds with respect to deposit
accounts.

      The primary  factors  influencing  competition  for  deposits are interest
rates,  service and convenience of office locations.  Union Federal competes for
loan  originations  primarily through the efficiency and quality of the services
that it provides  borrowers  and through  interest  rates and loan fees charged.
Competition  is affected by, among other  things,  the general  availability  of
lendable funds,  general and local economic  conditions,  current  interest rate
levels, and other factors that management cannot readily predict.

                                   REGULATION

General

         As a  federally  chartered,  SAIF-insured  savings  association,  Union
Federal is subject to extensive regulation by the OTS and the FDIC. For example,
Union  Federal  must  obtain  OTS  approval  before  it may  engage  in  certain
activities  and must file  reports with the OTS  regarding  its  activities  and
financial  condition.  The OTS  periodically  examines Union Federal's books and
records and, in conjunction with the FDIC in certain situations, has examination
and enforcement  powers.  This supervision and regulation are intended primarily
for the protection of depositors and federal deposit  insurance funds. A savings
association  must pay a semi-annual  assessment to the OTS based upon a marginal
assessment  rate that  decreases  as the asset size of the  savings  association
increases,  and which  includes a fixed-cost  component  that is assessed on all
savings associations.  The assessment rate that applies to a savings association
depends  upon the  institution's  size,  condition,  and the  complexity  of its
operations. Union Federal's semi-annual assessment is $17,000.

         Union  Federal is also  subject to federal and state  regulation  as to
such  matters  as loans  to  officers,  directors,  or  principal  shareholders,
required  reserves,  limitations  as to the  nature  and amount of its loans and
investments,  regulatory  approval of any merger or consolidation,  issuances or
retirements of Union Federal's securities, and limitations upon other aspects of
banking operations.  In addition,  Union Federal's activities and operations are
subject to a number of additional  detailed,  complex and sometimes  overlapping
federal and state laws and  regulations.  These include state usury and consumer
credit laws,  state laws relating to fiduciaries,  the Federal  Truth-In-Lending
Act and Regulation Z, the Federal Equal Credit Opportunity Act and Regulation B,
the Fair Credit Reporting Act, the Community  Reinvestment  Act,  anti-redlining
legislation and antitrust laws.

Savings and Loan Holding Company Regulation

         The Holding Company is regulated as a "non-diversified savings and loan
holding  company"  within the meaning of the Home  Owners'  Loan Act, as amended
(the "HOLA"), and subject to regulatory oversight of the Director of the OTS. As
such, the Holding  Company is registered  with the OTS and is thereby subject to
OTS  regulations,  examinations,  supervision and reporting  requirements.  As a
subsidiary  of a savings and loan holding  company,  Union Federal is subject to
certain  restrictions  in its dealings  with the Holding  Company and with other
companies affiliated with the Holding Company.

         In general,  the HOLA  prohibits a savings  and loan  holding  company,
without  obtaining the prior approval of the Director of the OTS, from acquiring
control of another  savings  association or savings and loan holding  company or
retaining  more than 5% of the  voting  shares of a  savings  association  or of
another holding  company which is not a subsidiary.  The HOLA also restricts the
ability of a director or officer of the Holding Company,  or any person who owns
more than 25% of the Holding  Company's stock, from acquiring control of another
savings  association or savings and loan holding company  without  obtaining the
prior approval of the Director of the OTS.

         The Holding  Company  currently  operates as a unitary savings and loan
holding company.  Prior to the enactment of the Gramm-Leach-Bliley Act (the "GLB
Act") on  November  12,  1999,  there were no  restrictions  on the  permissible
business  activities of a unitary savings and loan holding company.  The GLB Act
included a provision  that  prohibits  any new unitary  savings and loan holding
company,  defined as a company that  acquires a thrift  after May 4, 1999,  from
engaging in commercial  activities.  This  provision also includes a grandfather
clause,  however,  that  permits a company  that was a savings and loan  holding
company as of May 4, 1999,  or had an  application  to become a savings and loan
holding company on file with the OTS as of that date, to acquire and continue to
control a thrift and to continue to engage in commercial activities. Because the
Holding Company qualifies under this grandfather provision,  the GLB Act did not
affect  the  Holding  Company's  authority  to  engage in  diversified  business
activities.

         Notwithstanding  the above rules as to permissible  business activities
of unitary  savings  and loan  holding  companies,  if the  savings  association
subsidiary of such a holding  company fails to meet the Qualified  Thrift Lender
("QTL")  test,  then such unitary  holding  company would be deemed to be a bank
holding company subject to all of the provisions of the Bank Holding Company Act
of 1956 and other  statutes  applicable to bank holding  companies,  to the same
extent as if the Holding  Company were a bank holding  company and Union Federal
were a bank.  See  "-Qualified  Thrift  Lender." At  December  31,  1999,  Union
Federal's  asset  composition  was in excess of that required to qualify us as a
Qualified Thrift Lender.

         If the  Holding  Company  were to acquire  control  of another  savings
association other than through a merger or other business combination with Union
Federal,  the Holding Company would thereupon become a multiple savings and loan
holding  company.  Except where such acquisition is pursuant to the authority to
approve  emergency  thrift   acquisitions  and  where  each  subsidiary  savings
association meets the QTL test, the activities of the Holding Company and any of
Union  Federal's  subsidiaries  (other  than Union  Federal or other  subsidiary
savings associations) would thereafter be subject to further  restrictions.  The
HOLA provides  that,  among other things,  no multiple  savings and loan holding
company or subsidiary thereof which is not a savings  association shall commence
or continue for a limited period of time after  becoming a multiple  savings and
loan holding company or subsidiary thereof, any business activity other than (i)
furnishing  or  performing   management   services  for  a  subsidiary   savings
association,  (ii)  conducting  an insurance  agency or escrow  business,  (iii)
holding,  managing, or liquidating assets owned by or acquired from a subsidiary
savings  association,  (iv) holding or managing properties used or occupied by a
subsidiary savings association, (v) acting as trustee under deeds of trust, (vi)
those activities previously directly authorized by the FSLIC by regulation as of
March 5, 1987, to be engaged in by multiple  holding  companies,  or (vii) those
activities  authorized by the Federal  Reserve Board (the "FRB") as  permissible
for  bank  holding  companies,  unless  the  Director  of the OTS by  regulation
prohibits  or limits such  activities  for savings and loan  holding  companies.
Those activities  described in (vii) above must also be approved by the Director
of the OTS before a multiple holding company may engage in such activities.

         The Director of the OTS may also approve acquisitions  resulting in the
formation of a multiple  savings and loan holding company which controls savings
associations  in more than one state,  if the multiple  savings and loan holding
company involved controls a savings  association which operated a home or branch
office in the state of the association to be acquired as of March 5, 1987, or if
the  laws of the  state in which  the  association  to be  acquired  is  located
specifically permit associations to be acquired by state-chartered  associations
or savings and loan holding  companies  located in the state where the acquiring
entity is located (or by a holding  company that controls  such  state-chartered
savings associations).  Also, the Director of the OTS may approve an acquisition
resulting in a multiple  savings and loan holding  company  controlling  savings
associations  in more than one  state in the case of  certain  emergency  thrift
acquisitions.

         Indiana  law  permits  federal and state  savings  association  holding
companies with their home offices  located outside of Indiana to acquire savings
associations  whose home offices are located in Indiana and savings  association
holding  companies with their principal  place of business in Indiana  ("Indiana
Savings  Association Holding Companies") upon receipt of approval by the Indiana
Department of Financial  Institutions.  Moreover,  Indiana  Savings  Association
Holding  Companies  may acquire  savings  associations  with their home  offices
located outside of Indiana and savings  association holding companies with their
principal place of business  located outside of Indiana upon receipt of approval
by the Indiana Department of Financial Institutions.

         No subsidiary savings association of a savings and loan holding company
may declare or pay a dividend on its permanent or  nonwithdrawable  stock unless
it  first  gives  the  Director  of the  OTS 30  days  advance  notice  of  such
declaration  and payment.  Any dividend  declared  during such period or without
giving notice shall be invalid.

Federal Home Loan Bank System

         Union Federal is a member of the FHLB of Indianapolis,  which is one of
twelve  regional  FHLBs.  Each FHLB serves as a reserve or central  bank for its
members  within its assigned  region.  The FHLB is funded  primarily  from funds
deposited by banks and savings  associations  and proceeds derived from the sale
of consolidated obligations of the FHLB system. It makes loans to members (i.e.,
advances) in accordance with policies and procedures established by the Board of
Directors of the FHLB.  All FHLB  advances  must be fully  secured by sufficient
collateral  as  determined  by the  FHLB.  The  Federal  Housing  Finance  Board
("FHFB"), an independent agency, controls the FHLB System, including the FHLB of
Indianapolis.

         Prior to the  enactment of the GLB Act, a federal  savings  association
was required to become a member of the FHLB for the district in which the thrift
is  located.  The GLB Act  abolished  this  requirement,  effective  six  months
following the enactment of the statute.  At that time,  membership with the FHLB
will  become  voluntary.  Any  savings  association  that  chooses to become (or
remain) a member of the FHLB following the  expiration of this six-month  period
will have to qualify for membership under the criteria that existed prior to the
enactment of the GLB Act. Union Federal  currently intends to remain a member of
the FHLB of Indianapolis.

         As a member of the FHLB,  Union  Federal is required  to  purchase  and
maintain stock in the FHLB of  Indianapolis in an amount equal to at least 1% of
its aggregate unpaid  residential  mortgage loans, home purchase  contracts,  or
similar  obligations  at the beginning of each year. At December 1, 1999,  Union
Federal's  investment in stock of the FHLB of Indianapolis was $1.0 million. The
FHLB  imposes  various  limitations  on advances  such as limiting the amount of
certain types of real estate-related collateral to 30% of a member's capital and
limiting  total  advances to a member.  Interest rates charged for advances vary
depending upon maturity,  the cost of funds to the FHLB of Indianapolis  and the
purpose of the borrowing.

         The FHLBs are required to provide funds for the  resolution of troubled
savings  associations  and to contribute to affordable  housing programs through
direct loans or interest subsidies on advances targeted for community investment
and low-  and  moderate-income  housing  projects.  For the  fiscal  year  ended
December 31, 1999,  dividends paid by the FHLB of  Indianapolis to Union Federal
totaled approximately $70,000, for an annual rate of 8.0%.

Insurance of Deposits

         Deposit  Insurance.  The FDIC is an  independent  federal  agency  that
insures the deposits,  up to prescribed  statutory  limits, of banks and thrifts
and  safeguards  the safety and soundness of the banking and thrift  industries.
The FDIC administers two separate  insurance funds, the BIF for commercial banks
and state  savings  banks and the SAIF for  savings  associations  such as Union
Federal and banks that have  acquired  deposits from savings  associations.  The
FDIC is required to maintain  designated levels of reserves in each fund. During
1996, the reserves of the SAIF were below the level  required by law,  primarily
because a  significant  portion of the  assessments  paid into the SAIF had been
used to pay the cost of prior thrift failures, while the reserves of the BIF met
the  level  required  by law.  In 1996,  however,  legislation  was  enacted  to
recapitalize  the SAIF and eliminate the premium  disparity  between the BIF and
SAIF. See "- Assessments" below.

         Assessments.  The  FDIC is  authorized  to  establish  separate  annual
assessment rates for deposit insurance for members of the BIF and members of the
SAIF.  The FDIC may  increase  assessment  rates for either fund if necessary to
restore the fund's  ratio of reserves  to insured  deposits to the target  level
within a reasonable  time and may  decrease  these rates if the target level has
been met. The FDIC has established a risk-based  assessment system for both SAIF
and BIF members.  Under this system,  assessments vary depending on the risk the
institution poses to its deposit insurance fund. An institution's  risk level is
determined  based on its  capital  level  and the  FDIC's  level of  supervisory
concern about the institution.

         In 1996,  legislation was enacted that included  provisions designed to
recapitalize the SAIF and eliminate the significant  premium  disparity  between
the BIF and the SAIF.  Under the new law,  Union  Federal was charged a one-time
special  assessment equal to $.657 per $100 in assessable  deposits at March 31,
1995.  Union  Federal  recognized  this one-time  assessment as a  non-recurring
operating expense of approximately  $1.3 million ($785,000 after tax) during the
three-month  period ending  September 30, 1996, and paid this assessment  during
the fourth quarter of 1996. The assessment was fully deductible for both federal
and state income tax purposes. Beginning January 1, 1997, Union Federal's annual
deposit  insurance  premium was reduced from .23% to .0644% of total  assessable
deposits.   BIF  institutions   pay  lower   assessments  than  comparable  SAIF
institutions  because  BIF  institutions  pay only 20% of the rate  paid by SAIF
institutions  on their  deposits  with  respect  to  obligations  issued  by the
federally-chartered  corporation which provided some of the financing to resolve
the thrift  crisis in the 1980's  ("FICO").  Although  Congress  has  considered
merging  the  SAIF and the BIF,  until  then,  savings  associations  with  SAIF
deposits may not transfer  deposits into the BIF system  without  paying various
exit and entrance fees, and SAIF  institutions  will continue to pay higher FICO
assessments.  Such exit and entrance fees need not be paid if a SAIF institution
converts to a bank charter or merges with a bank, as long as the resulting  bank
continues to pay  applicable  insurance  assessments to the SAIF, and as long as
certain other conditions are met.

Savings Association Regulatory Capital

         Currently,  savings  associations are subject to three separate minimum
capital-to-assets  requirements:  (i) a leverage limit,  (ii) a tangible capital
requirement,  and (iii) a risk-based  capital  requirement.  The leverage  limit
requires that savings  associations  maintain  "core  capital" of at least 3% of
total assets. Core capital is generally defined as common  shareholders'  equity
(including retained income), noncumulative perpetual preferred stock and related
surplus,   certain  minority  equity   interests  in  subsidiaries,   qualifying
supervisory  goodwill,  purchased mortgage servicing rights and purchased credit
card relationships  (subject to certain limits) less nonqualifying  intangibles.
The OTS recently  amended this requirement to require a core capital level of 3%
of total  adjusted  assets for  savings  associations  that  receive the highest
rating  for  safety  and  soundness,   and  4%  to  5%  for  all  other  savings
associations.  This amendment became effective April 1, 1999. Under the tangible
capital requirement,  a savings association must maintain tangible capital (core
capital less all intangible  assets except purchased  mortgage  servicing rights
which may be included after making the above-noted adjustment in an amount up to
100% of tangible capital) of at least 1.5% of total assets. Under the risk-based
capital  requirements,  a minimum  amount of  capital  must be  maintained  by a
savings  association  to account for the relative risks inherent in the type and
amount  of  assets  held by the  savings  association.  The  risk-based  capital
requirement   requires  a  savings  association  to  maintain  capital  (defined
generally for these purposes as core capital plus general  valuation  allowances
and  permanent  or maturing  capital  instruments  such as  preferred  stock and
subordinated  debt,  less  assets  required  to be  deducted)  equal  to 8.0% of
risk-weighted  assets.  Assets are  ranked as to risk in one of four  categories
(0-100%).  A credit  risk-free  asset,  such as  cash,  requires  no  risk-based
capital,  while an asset with a significant  credit risk,  such as a non-accrual
loan,  requires a risk  factor of 100%.  Moreover,  a savings  association  must
deduct from capital, for purposes of meeting the core capital,  tangible capital
and risk-based  capital  requirements,  its entire  investment in and loans to a
subsidiary engaged in activities not permissible for a national bank (other than
exclusively   agency   activities   for  its   customers  or  mortgage   banking
subsidiaries).  At December 31, 1999,  Union Federal was in compliance  with all
capital requirements imposed by law.

         The OTS has  promulgated  a rule which sets forth the  methodology  for
calculating an interest rate risk  component to be used by savings  associations
in calculating  regulatory  capital.  The OTS has delayed the  implementation of
this rule, however.  The rule requires savings  associations with "above normal"
interest rate risk  (institutions  whose portfolio equity would decline in value
by more than 2% of assets in the event of a hypothetical 200-basis-point move in
interest rates) to maintain  additional capital for interest rate risk under the
risk-based capital framework.  Even though the OTS has delayed implementing this
rule, Union Federal  nevertheless  measures its interest rate risk in conformity
with the OTS regulation  and, as of December 31, 1999,  would have been required
to deduct  $2.0  million  from its total  capital  available  to  calculate  its
risk-based capital requirement. The OTS recently updated its standards regarding
the  management  of interest rate risk to include  summary  guidelines to assist
savings associations in determining their exposures to interest rate risk. If an
association  is not in  compliance  with the  capital  requirements,  the OTS is
required to prohibit  asset  growth and to impose a capital  directive  that may
restrict,   among  other   things,   the  payment  of  dividends  and  officers'
compensation. In addition, the OTS and the FDIC generally are authorized to take
enforcement actions against a savings association that fails to meet its capital
requirements.  These actions may include restricting the operating activities of
the association,  imposing a capital directive, cease and desist order, or civil
money  penalties,  or imposing harsher measures such as appointing a receiver or
conservator or forcing the association to merge into another institution.

Prompt Corrective Regulatory Action

         The  Federal  Deposit  Insurance  Corporation  Improvement  Act of 1991
("FedICIA")   requires,   among  other  things,  that  federal  bank  regulatory
authorities take "prompt corrective action" with respect to institutions that do
not meet minimum capital requirements.  For these purposes,  FedICIA establishes
five capital tiers: well capitalized, adequately capitalized,  undercapitalized,
significantly undercapitalized, and critically undercapitalized. At December 31,
1999,  Union Federal was  categorized  as "well  capitalized,"  meaning that its
total risk-based capital ratio exceeded 10%, its Tier I risk-based capital ratio
exceeded  6%,  its  leverage  ratio  exceeded  5%,  and it was not  subject to a
regulatory order, agreement or directive to meet and maintain a specific capital
level for any capital measure.

         The FDIC may order savings associations which have insufficient capital
to take  corrective  actions.  For  example,  a  savings  association  which  is
categorized as  "undercapitalized"  would be subject to growth  limitations  and
would be required to submit a capital  restoration  plan, and a holding  company
that controls such a savings association would be required to guarantee that the
savings   association   complies  with  the  restoration  plan.   "Significantly
undercapitalized"   savings   associations   would  be  subject  to   additional
restrictions.  Savings  associations  deemed  by  the  FDIC  to  be  "critically
undercapitalized"  would  be  subject  to  the  appointment  of  a  receiver  or
conservator.

Dividend Limitations

         The OTS adopted a regulation,  which became effective on April 1, 1999,
that revised the restrictions  that apply to "capital  distributions" by savings
associations.  The  amended  regulation  defines  a  capital  distribution  as a
distribution of cash or other property to a savings  association's  owners, made
on account of their ownership.  This definition includes a savings association's
payment  of  cash  dividends  to  shareholders,  or  any  payment  by a  savings
association  to  repurchase,  redeem,  retire,  or otherwise  acquire any of its
shares or debt instruments that are included in total capital, and any extension
of credit to finance an  affiliate's  acquisition  of those shares or interests.
The amended regulation does not apply to dividends  consisting only of a savings
association's shares or rights to purchase such shares.

         The amended  regulation  exempts certain savings  associations from the
requirement  under  the  prior  version  of  the  regulation  that  all  savings
associations  file either a notice or an application  with the OTS before making
any  capital  distribution.  As  revised,  the  regulation  requires  a  savings
association  to  file  an  application  for  approval  of  a  proposed   capital
distribution  with the OTS if the  association  is not  eligible  for  expedited
treatment under OTS's  application  processing rules, or the total amount of all
capital  distributions,  including the proposed  capital  distribution,  for the
applicable   calendar   year  would  exceed  an  amount  equal  to  the  savings
association's  net income for that year to date plus the  savings  association's
retained  net  income for the  preceding  two years  (the  "retained  net income
standard").  At December 31, 1999, Union Federal's  retained net income standard
was  approximately  $4.0  million.  A  savings  association  must  also  file an
application for approval of a proposed  capital  distribution  if, following the
proposed  distribution,  the  association  would  not  be  at  least  adequately
capitalized  under  the OTS  prompt  corrective  action  regulations,  or if the
proposed  distribution  would violate a prohibition  contained in any applicable
statute,  regulation,  or agreement  between the  association and the OTS or the
FDIC.

         The amended regulation  requires a savings association to file a notice
of a proposed capital  distribution in lieu of an application if the association
or the proposed capital distribution do not meet the conditions described above,
and:  (1) the  savings  association  will not be at least well  capitalized  (as
defined  under the OTS  prompt  corrective  action  regulations)  following  the
capital  distribution;  (2) the capital distribution would reduce the amount of,
or retire any part of the savings  association's  common or preferred  stock, or
retire any part of debt instruments such as notes or debentures  included in the
association's  capital  under the OTS  capital  regulation;  or (3) the  savings
association is a subsidiary of a savings and loan holding company. Because Union
Federal is a  subsidiary  of a savings  and loan  holding  company,  this latter
provision requires,  at a minimum, that Union Federal file a notice with the OTS
30 days before making any capital distributions to the Holding Company.

         In addition to these regulatory  restrictions,  Union Federal's Plan of
Conversion imposes additional limitations on the amount of capital distributions
it may make to the  Holding  Company.  The  Plan of  Conversion  requires  Union
Federal to  establish  and  maintain a  liquidation  account  for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders and prohibits
Union Federal from making capital  distributions  to the Holding  Company if its
net  worth  would be  reduced  below the  amount  required  for the  liquidation
account.

Limitations on Rates Paid for Deposits

         Regulations   promulgated   by  the  FDIC  pursuant  to  FedICIA  place
limitations on the ability of insured depository  institutions to accept,  renew
or roll over  deposits by offering  rates of  interest  which are  significantly
higher  than the  prevailing  rates of  interest  on  deposits  offered by other
insured  depository  institutions  having  the  same  type  of  charter  in  the
institution's  normal market area. Under these  regulations,  "well-capitalized"
depository  institutions  may accept,  renew or roll such  deposits over without
restriction,  "adequately capitalized" depository institutions may accept, renew
or roll such  deposits  over with a waiver  from the FDIC  (subject  to  certain
restrictions   on   payments   of  rates)  and   "undercapitalized"   depository
institutions  may not accept,  renew or roll such deposits over. The regulations
contemplate that the definitions of "well-capitalized," "adequately-capitalized"
and  "undercapitalized"  will  be the  same  as the  definition  adopted  by the
agencies to implement the corrective  action  provisions of FedICIA.  Management
does not believe that these regulations will have a materially adverse effect on
Union Federal's current operations.

Safety and Soundness Standards

         In  1995,  the  federal  banking  agencies  adopted  final  safety  and
soundness  standards for all insured  depository  institutions.  The  standards,
which were issued in the form of guidelines rather than  regulations,  relate to
internal   controls,   information   systems,   internal  audit  systems,   loan
underwriting  and  documentation,  compensation  and interest rate exposure.  In
general,  the standards are designed to assist the federal  banking  agencies in
identifying and addressing  problems at insured depository  institutions  before
capital becomes impaired.  If an institution fails to meet these standards,  the
appropriate  federal  banking  agency may  require the  institution  to submit a
compliance  plan.  Failure to submit a compliance plan may result in enforcement
proceedings.  During 1996, the federal banking  agencies added asset quality and
earning standards to the safety and soundness guidelines.

Real Estate Lending Standards

         OTS regulations require savings  associations to establish and maintain
written  internal  real estate  lending  policies.  Each  association's  lending
policies  must be  consistent  with  safe and  sound  banking  practices  and be
appropriate  to the size of the  association  and the  nature  and  scope of its
operations.   The  policies  must  establish   loan  portfolio   diversification
standards;  establish prudent underwriting  standards,  including  loan-to-value
limits, that are clear and measurable;  establish loan administration procedures
for the  association's  real  estate  portfolio;  and  establish  documentation,
approval,   and  reporting   requirements   to  monitor   compliance   with  the
association's  real estate  lending  policies.  The  association's  written real
estate lending policies must be reviewed and approved by the association's Board
of Directors at least annually. Further, each association is expected to monitor
conditions  in its real  estate  market  to  ensure  that its  lending  policies
continue to be appropriate for current market conditions.

Loans to One Borrower

         Under  OTS  regulations,  Union  Federal  may not make a loan or extend
credit  to a single  or  related  group of  borrowers  in  excess  of 15% of its
unimpaired capital and surplus. Additional amounts may be lent, not in excess of
10% of unimpaired capital and surplus, if such loans or extensions of credit are
fully  secured by readily  marketable  collateral,  including  certain  debt and
equity  securities  but not  including  real  estate.  In some cases,  a savings
association may lend up to 30% of unimpaired capital and surplus to one borrower
for purposes of  developing  domestic  residential  housing,  provided  that the
association meets its regulatory capital requirements and the OTS authorizes the
association  to  use  this  expanded  lending   authority.   Union  Federal  has
established  an  "in-house"  lending  limit of $2 million to a single or related
group of borrowers,  which is  significantly  lower than the regulatory  lending
limit described above. Any loan that exceeds this "in-house" lending limit up to
the regulatory  lending limit must first be approved by Union Federal's board of
directors.  At December 31, 1999, Union Federal had no loan  relationships  that
exceeded its "in-house"  lending limit. Also on that date, Union Federal did not
have any loans or extensions of credit to a single or related group of borrowers
in excess of its regulatory lending limits. Management does not believe that the
loans-to-one-borrower  limits will have a significant  impact on Union Federal's
business operations or earnings.

Qualified Thrift Lender

         Savings associations must meet a QTL test that requires the association
to  maintain an  appropriate  level of  qualified  thrift  investments  ("QTIs")
(primarily  residential  mortgages and related  investments,  including  certain
mortgage-related  securities)  and  otherwise  to qualify as a QTL. The required
percentage  of QTIs is 65% of  portfolio  assets  (defined  as all assets  minus
intangible  assets,  property used by the association in conducting its business
and liquid assets equal to 10% of total assets). Certain assets are subject to a
percentage  limitation  of  20%  of  portfolio  assets.  In  addition,   savings
associations may include shares of stock of the FHLBs,  FNMA, and FHLMC as QTIs.
Compliance  with the QTL test is  determined  on a monthly  basis in nine out of
every twelve  months.  As of December 31, 1999,  Union Federal was in compliance
with its QTL  requirement,  with  approximately  89.4% of its assets invested in
QTIs.

         A savings  association  which  fails to meet the QTL test  must  either
convert to a bank (but its deposit  insurance  assessments  and payments will be
those of and paid to the SAIF) or be subject to the following penalties:  (i) it
may not enter into any new activity except for those  permissible for a national
bank and for a  savings  association;  (ii) its  branching  activities  shall be
limited  to those of a  national  bank;  (iii) it shall be bound by  regulations
applicable to national banks respecting payment of dividends.  Three years after
failing the QTL test the association  must dispose of any investment or activity
not permissible for a national bank and a savings association. If such a savings
association  is  controlled  by a savings and loan  holding  company,  then such
holding company must,  within a prescribed time period,  become  registered as a
bank holding company and become subject to all rules and regulations  applicable
to bank holding companies (including restrictions as to the scope of permissible
business activities).

Acquisitions or Dispositions and Branching

         The Bank  Holding  Company Act  specifically  authorizes a bank holding
company, upon receipt of appropriate regulatory approvals, to acquire control of
any savings association or holding company thereof wherever located.  Similarly,
a savings and loan  holding  company may  acquire  control of a bank.  Moreover,
federal  savings  associations  may  acquire  or  be  acquired  by  any  insured
depository  institution.   Regulations  promulgated  by  the  FRB  restrict  the
branching authority of savings associations  acquired by bank holding companies.
Savings  associations  acquired by bank  holding  companies  may be converted to
banks if they continue to pay SAIF premiums,  but as such they become subject to
branching and activity restrictions applicable to banks.

         Subject to certain  exceptions,  commonly-controlled  banks and savings
associations  must reimburse the FDIC for any losses suffered in connection with
a failed  bank or  savings  association  affiliate.  Institutions  are  commonly
controlled  if one is owned by another or if both are owned by the same  holding
company.  Such claims by the FDIC under this provision are subordinate to claims
of depositors,  secured creditors,  and holders of subordinated debt, other than
affiliates.

         The OTS has adopted  regulations which permit  nationwide  branching to
the extent permitted by federal statute. Federal statutes permit federal savings
associations to branch outside of their home state if the association  meets the
domestic  building  and loan  test in ss.  7701(a)(19)  of the Code or the asset
composition test of ss. 7701(c) of the Code.  Branching that would result in the
formation of a multiple  savings and loan holding  company  controlling  savings
associations  in more  than one  state is  permitted  if the law of the state in
which the savings association to be acquired is located specifically  authorizes
acquisitions of its state-chartered associations by state-chartered associations
or their  holding  companies  in the state where the  acquiring  association  or
holding company is located. Moreover, Indiana banks and savings associations are
permitted  to  acquire  other  Indiana  banks and  savings  associations  and to
establish branches throughout Indiana.

         Finally,  The Riegle-Neal  Interstate Banking and Branching  Efficiency
Act of 1994 (the  "Riegle-Neal  Act") permits bank holding  companies to acquire
banks  in  other  states  and,   with  state  consent  and  subject  to  certain
limitations, allows banks to acquire out-of-state branches either through merger
or de novo  expansion.  The State of Indiana  enacted  legislation  establishing
interstate  branching  provisions for Indiana  state-chartered  banks consistent
with those established by the Riegle-Neal Act (the "Indiana Branching Law"). The
Indiana Branching Law, which became effective in 1996,  authorizes Indiana banks
to  branch  interstate  by  merger  or de novo  expansion,  provided  that  such
transactions  are not permitted to  out-of-state  banks unless the laws of their
home  states  permit  Indiana  banks to merge or  establish  de novo  banks on a
reciprocial basis.

Transactions with Affiliates

         Union Federal is subject to Sections 22(h),  23A and 23B of the Federal
Reserve Act,  which  restrict  financial  transactions  between  banks and their
directors,  executive  officers and  affiliated  companies.  The statute  limits
credit  transactions  between a bank or savings  association  and its  executive
officers and its affiliates,  prescribes terms and conditions for bank affiliate
transactions deemed to be consistent with safe and sound banking practices,  and
restricts the types of collateral security permitted in connection with a bank's
extension of credit to an affiliate.

Federal Securities Law

         The shares of Common Stock of the Holding  Company have been registered
with the SEC under the 1934 Act and, as a result, the Holding Company is subject
to the information,  proxy solicitation,  insider trading restrictions and other
requirements  of the 1934 Act and the rules of the SEC  thereunder.  After three
years following Union Federal's conversion to stock form, if the Holding Company
has fewer than 300 shareholders, it may deregister its shares under the 1934 Act
and cease to be subject to the foregoing requirements.

         Shares  of Common  Stock  held by  persons  who are  affiliates  of the
Holding Company may not be resold without registration unless sold in accordance
with the  resale  restrictions  of Rule 144 under the 1933 Act.  If the  Holding
Company meets the current public  information  requirements under Rule 144, each
affiliate of the Holding Company who complies with the other  conditions of Rule
144 (including  those that require the  affiliate's  sale to be aggregated  with
those of certain  other  persons)  would be able to sell in the  public  market,
without  registration,  a number of shares  not to  exceed,  in any  three-month
period,  the greater of (i) 1% of the outstanding  shares of the Holding Company
or (ii) the average weekly volume of trading in such shares during the preceding
four calendar weeks.

Community Reinvestment Act Matters

         Federal law requires that ratings of depository  institutions under the
Community Reinvestment Act of 1977 ("CRA") be disclosed. The disclosure includes
both a  four-unit  descriptive  rating --  outstanding,  satisfactory,  needs to
improve,  and  substantial  noncompliance  --  and a  written  evaluation  of an
institution's  performance.  Each FHLB is required  to  establish  standards  of
community  investment  or service that its members must  maintain for  continued
access to long-term  advances from the FHLBs.  The standards take into account a
member's  performance under the CRA and its record of lending to first-time home
buyers.  The OTS has  designated  Union  Federal's  record of meeting  community
credit needs as satisfactory.

                                    TAXATION

Federal Taxation

      Historically,  savings  associations,  such as Union  Federal,  have  been
permitted to compute bad debt deductions using either the bank experience method
or the percentage of taxable income method.  However,  for years beginning after
December 31, 1995,  no savings  association  may use the  percentage  of taxable
income method of computing  its  allowable bad debt  deduction for tax purposes.
Instead,  all  savings  associations  are  required to compute  their  allowable
deduction  using  the  experience  method.  As a  result  of the  repeal  of the
percentage  of  taxable  income  method,  reserves  taken  after  1987 using the
percentage of taxable income method generally must be included in future taxable
income over a six-year  period,  although a two-year  delay may be permitted for
associations meeting a residential mortgage loan origination test. Union Federal
will recapture  approximately $55,000 over a six-year period that began with the
year ended December 31, 1996. In addition,  the pre-1988  reserve,  for which no
deferred taxes have been recorded, need not be recaptured into income unless (i)
the savings  association  no longer  qualifies as a bank under the Code, or (ii)
the savings association pays out excess dividends or distributions.

      Depending on the composition of its items of income and expense, a savings
association may be subject to the alternative minimum tax. A savings association
must pay an  alternative  minimum  tax on the  amount  (if any) by which  20% of
alternative minimum taxable income ("AMTI"),  as reduced by an exemption varying
with AMTI,  exceeds the regular tax due.  AMTI  equals  regular  taxable  income
increased or decreased by certain tax  preferences  and  adjustments,  including
depreciation  deductions in excess of that allowable for alternative minimum tax
purposes, tax-exempt interest on most private activity bonds issued after August
7, 1986  (reduced by any related  interest  expense  disallowed  for regular tax
purposes), the amount of the bad debt reserve deduction claimed in excess of the
deduction  based on the  experience  method  and 75% of the  excess of  adjusted
current  earnings over AMTI (before this  adjustment and before any  alternative
tax net  operating  loss).  AMTI may be reduced only up to 90% by net  operating
loss  carryovers,  but  alternative  minimum  tax paid can be  credited  against
regular tax due in later years.

     For federal  income tax  purposes,  Union  Federal has been  reporting  its
income and expenses on the accrual method of accounting. Union Federal's federal
income tax returns have not been audited in recent years.

State Taxation

      Union Federal is subject to Indiana's Financial  Institutions Tax ("FIT"),
which is imposed at a flat rate of 8.5% on "adjusted  gross  income."  "Adjusted
gross  income,"  for purposes of FIT,  begins with taxable  income as defined by
Section 63 of the Code and,  thus,  incorporates  federal  tax law to the extent
that it affects the  computation of taxable  income.  Federal  taxable income is
then adjusted by several Indiana  modifications.  Other  applicable  state taxes
include generally applicable sales and use taxes plus real and personal property
taxes.

      Union  Federal's  state income tax returns have not been audited in recent
years.

Item 2.   Properties.

         The following table provides certain  information with respect to Union
Federal's office as of December 31, 1999:

<TABLE>
<CAPTION>
                                                             Net Book
                                                             Value of
                                                             Property,   Approximate
    Description                Owned or   Year     Total    Furniture &    Square
    and Address                 leased   Opened  Deposits    Fixtures      Footage
    ------------------------------------------------------------------------------
                                 (Dollars in thousands)
<S>                              <C>      <C>     <C>          <C>         <C>
221 East Main Street             Owned    1913    $68,990      $367        19,065
Crawfordsville, Indiana 47933
</TABLE>


      Union  Federal  has also  contracted  for data  processing  and  reporting
services from Intrieve, Incorporated in Cincinnati, Ohio. The cost of these data
processing services is approximately $6,800 per month.

      Union Federal has also executed a  Correspondent  Services  Agreement with
the FHLB of  Indianapolis  under which it  receives  item  processing  and other
services for a fee of approximately $1,200 per month.

      Union Federal also receives income from leasing office space on the second
floor of its building and parking  spaces  located  behind its  building.  Union
Federal's  gross  income from  renting the office space was $27,000 for the year
ended  December 31, 1999,  and its gross income from renting the parking  spaces
was approximately $9,000 for the year ended December 31, 1999.

Item 3.  Legal Proceedings.

         Although Union Federal is involved, from time to time, in various legal
proceedings  in the  normal  course of  business,  there are no  material  legal
proceedings  to which it presently is a party or to which any of its property is
subject.

Item 4.  Submission of Matters to a Vote of Security Holders.

         No matter was submitted to a vote of the Holding Company's shareholders
during the quarter ended December 31, 1999.

Item 4.5.  Executive Officers of the Registrant.

         The executive officers of the Holding Company are identified below. The
executive  officers of the Holding  Company are elected  annually by the Holding
Company's Board of Directors.

         Name                        Position with Holding Company
         ----                        -----------------------------
         Joseph E. Timmons           Chairman of the Board, President and
                                        Chief Executive Officer
         Denise E. Swearingen        Secretary and Treasurer
         Ronald L. Keeling           Vice President

         Joseph E. Timmons (age 65) has served as President and Chief  Executive
Officer of the Holding  Company  since 1997,  of Union Federal since 1974 and of
UFS Service Corp.  since its inception in 1994. He has been an employee of Union
Federal since 1954.

         Denise  E.  Swearingen  (age 41) has  served as the  Holding  Company's
Secretary  and  Treasurer  since  1997  and as  Union  Federal's  Secretary  and
Controller/Treasurer since 1995. She has worked for Union Federal since 1983.

         Ronald L.  Keeling  (age 48) has served as the Holding  Company's  Vice
President since 1997, as Union Federal's Vice President and Assistant  Secretary
since  1984 and as Senior  Loan  Officer  since  1979.  He has  worked for Union
Federal since 1971.

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Shareholder Matters.

         The  information  required by this item is incorporated by reference to
the  material  under the  heading  "Shareholder  Information"  on page 43 of the
Holding  Company's  1999  Shareholder  Annual  Report (the  "Shareholder  Annual
Report").

Item 6.  Selected Financial Data.

         The  information  required by this item is incorporated by reference to
the material under the heading "Selected Consolidated Financial Data" on pages 2
and 3 of the Shareholder Annual Report.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operation.

         The  information  required by this item is incorporated by reference to
pages 3 through 15 of the Shareholder Annual Report.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risks

         The  information  required by this item is incorporated by reference to
pages 13 through 15 of the Shareholder Annual Report.

Item 8.  Financial Statements and Supplementary Data.

         The  Holding  Company's  Consolidated  Financial  Statements  and Notes
thereto  contained on pages 16 through 40 of the  Shareholder  Annual Report are
incorporated herein by reference.

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure.

         There were no such  changes  or  disagreements  during  the  applicable
period.

                                    PART III

Item 10.      Directors and Executive Officers of the Registrant.

     The  information  required  by this  item  with  respect  to  Directors  is
incorporated  by reference  to pages 2 to 4 and page 7 of the Holding  Company's
Proxy  Statement  for its Annual  Shareholder  meeting to be held April 19, 2000
(the "2000 Proxy Statement").  The information  concerning the Holding Company's
executive  officers is included in Item 4.5 in Part I of this  report.

Item 11. Executive Compensation.

     The  information  required  by this  item  with  respect  to  Directors  is
incorporated  by reference to pages 5 and 6 of the Holding  Company's 2000 Proxy
Statement.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The  information  required  by this  item  with  respect  to  Directors  is
incorporated  by  reference  to  page  3 of the  Holding  Company's  2000  Proxy
Statement.

Item 13. Certain Relationships and Related Transactions.

     The  information  required  by this  item  with  respect  to  Directors  is
incorporated  by reference to pages 6 and 7 of the Holding  Company's 2000 Proxy
Statement.

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)      List the following documents filed as part of the report:

                                                                  Annual Report
                                                                      Page No.

         Financial Statements:
         Independent Auditor's Report                                    16
         Consolidated Balance Sheet at December 31, 1999, and 1998       17
         Consolidated Statement of Income for the Years Ended
                December 31, 1999, 1998, and 1997                        18
         Consolidated Statement of Shareholders' Equity
                for the Years Ended
                December 31, 1999, 1998, and 1997.                       19
         Consolidated Statement of Cash Flows for the Years Ended
                December 31, 1999, 1998, and 1997                        20
         Notes to Consolidated Financial Statements                      21

(b)      Reports on Form 8-K.

         The  Holding  Company  filed no reports on Form 8-K during the  quarter
         ended December 31, 1999.

(c)      The exhibits filed herewith or incorporated by reference herein are set
         forth on the Exhibit Index on page E-1.  Included in those  exhibits is
         an executive  compensation  plan and arrangement which is identified as
         Exhibit 10(5).

(d)      All  schedules  are omitted as the required  information  either is not
         applicable or is included in the Consolidated  Financial  Statements or
         related notes.

                                   SIGNATURES

         Pursuant to the  requirement  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on behalf of the undersigned, thereto duly authorized.

         UNION COMMUNITY BANCORP


Date:  March 30, 2000                          By: /s/ Joseph E. Timmons
                                               ---------------------------------
                                               Joseph E. Timmons, President and
                                               Chief Executive Officer



         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 30th day of March, 2000.

     Signatures                         Title                           Date

(1)  Principal Executive Officer:



     /s/ Joseph E. Timmons                                   )
     --------------------------                              )
     Joseph E. Timmons              President and            )
                                    Chief Executive Officer  )
                                                             )
                                                             )
(2)  Principal Financial and                                 )
     Accounting Officer:                                     )
                                                             )
                                                             )
     /s/ Denise E. Swearingen       Treasurer                )
     --------------------------                              )
     Denise E. Swearingen                                    )
                                                             )
                                                             )    March 30, 2000
                                                             )
(3)  The Board of Directors:                                 )
                                                             )
                                                             )
     /s/ Philip L. Boots            Director                 )
     --------------------------                              )
     Philip L. Boots                                         )
                                                             )
                                                             )
     /s/ Marvin L. Burkett          Director                 )
     --------------------------                              )
     Marvin L. Burkett                                       )
                                                             )
                                                             )
     /s/ Phillip E. Grush           Director                 )
     --------------------------                              )
     Phillip E. Grush                                        )
                                                             )
                                                             )

<PAGE>

     /s/ Samuel H. Hildebrand                                )
     --------------------------                              )
     Samuel H. Hildebrand           Director                 )
                                                             )
                                                             )
     /s/ John M. Horner             Director                 )
     --------------------------                              )
     John M. Horner                                          )
                                                             )
                                                             )    March 30, 2000
     /s/ Harry A. Siamas            Director                 )
     --------------------------                              )
     Harry A. Siamas                                         )
                                                             )
                                                             )
     /s/ Joseph E. Timmons          Director                 )
     --------------------------                              )
     Joseph E. Timmons                                       )
                                                             )

<PAGE>

                                  EXHIBIT INDEX

     Exhibit No.           Description                                     Page

         3(1)     Registrant's  Articles of Incorporation  are incorporated
                  by  reference  to to  Exhibit  3(1)  to the  Registration
                  Statement

         (2)      Registrant's Code of By-Laws is incorporated by reference
                  to to Exhibit 3(2) to the Registration Statement

         10(5)    Employment  Agreement  between Union Federal  Savings and
                  Loan  Association  and Joseph E. Timmons  incorporated by
                  reference  to  to  Exhibit  10(5)  to  the   Registration
                  Statement

         (6)      Exempt Loan and Share  Purchase  Agreement  between Trust
                  under Union  Community  Bancorp  Employee Stock Ownership
                  Plan and Trust Agreement and Union  Community  Bancorp is
                  incorporated   by  reference  to  Exhibit  10(6)  to  the
                  Registrant's Form 10-K for the fiscal year ended December
                  31, 1997, which was filed with the Commission on April 1,
                  1998

         21       Subsidiaries of the Registrant

         23       Consent of Independent Auditors

         27       Financial Data Schedule (filed electronically)