<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(Mark One)
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES  EXCHANGE ACT OF 1934 FOR THE QUARTERLY
      PERIOD ENDED SEPTEMBER 30, 2004

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
      PERIOD FROM _________ TO __________

                        COMMISSION FILE NUMBER - 0-21809
                         HOME CITY FINANCIAL CORPORATION
                         -------------------------------
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

                OHIO                                   34-1839475
                ----                                   ----------
  (STATE OR OTHER JURISDICTION OF         (I.R.S. EMPLOYER IDENTIFICATION NO.)
   INCORPORATION OR ORGANIZATION)

    2454 North Limestone Street
           Springfield, Ohio                                45503
           -----------------                                -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)

                                 (937) 390-0470
                                 --------------
                           (ISSUER'S TELEPHONE NUMBER)

                                       N/A
                                       ---
                          (FORMER ADDRESS LAST REPORT)

As of November 3, 2004, 824,316 common shares of the Registrant were
outstanding. There were no preferred shares outstanding.

Transitional Small Business Format (Check one): Yes [ ] No [X]

<PAGE>

                         HOME CITY FINANCIAL CORPORATION
                                SPRINGFIELD, OHIO

                                   FORM 10-QSB
                                      INDEX



<TABLE>
<CAPTION>
                                                                                 Page Number
<S>                                                                              <C>
PART I FINANCIAL INFORMATION

   ITEM
     1. Financial Statements

        Condensed consolidated balance sheets --                                         3
        September 30, 2004, and December 31, 2003

        Condensed consolidated statements of income -- Nine months                       4
        and three months ended September 30, 2004 and 2003

        Condensed consolidated statement of changes in                                   5
        shareholders' equity --Nine months ended September 30, 2004

        Condensed consolidated statements of cash flows --                               6
        Nine months ended September 30, 2004 and 2003

        Notes to condensed consolidated financial statements                             7

     2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                                       12

     3. Controls and Procedures                                                         17

PART II OTHER INFORMATION

   ITEM
     1. Legal Proceedings                                                               18

     2. Unregistered Sales of Equity Securities and Use of Proceeds                     18

     3. Defaults upon Senior Securities                                                 18

     4. Submission of Matters to a Vote of Security Holders                             18

     5. Other Information                                                               18

     6. Exhibits                                                                        18

Signatures                                                                              19

Certifications                                                                     20 & 21
</TABLE>

                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                         HOME CITY FINANCIAL CORPORATION
                                SPRINGFIELD, OHIO
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                             (Dollars in thousands)
                                                                          (Unaudited)
                                                                          -----------
                                                                          At September     At December
                                                                          ------------     -----------
                                                                               30,            31,
                                                                               ---            ---
                                                                              2004           2003
                                                                              ----           ----
<S>                                                                       <C>             <C>
ASSETS
Cash and cash equivalents
     Cash and due from banks                                              $     1,302     $     1,035
     Interest-bearing demand deposits                                           7,435           1,876
     Federal funds sold                                                           332           7,562
                                                                          -----------     -----------
         Cash and cash equivalents                                              9,069          10,473

Available-for-sale securities                                                  10,720           5,089
Loans, net of allowance for loan losses of $822 and $995
          at September 30, 2004 and December 31, 2003                         128,273         126,512
Premises and equipment                                                          3,660           3,812
Federal Home Loan Bank stock                                                    2,335           2,265
Interest receivable                                                               587             578
Cash surrender value of life insurance                                          3,035           2,952
Other                                                                             707             103
                                                                          -----------     -----------
               TOTAL ASSETS                                               $   158,386     $   151,784
                                                                          ===========     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
       Demand                                                             $     7,653     $     5,352
       Savings, NOW and money market                                           50,625          47,355
       Time                                                                    49,753          51,215
                                                                          -----------     -----------
               Total Deposits                                                 108,031         103,922
                                                                          -----------     -----------

Federal Home Loan Bank advances                                                36,722          34,764
Interest payable and other liabilities                                          1,162           1,191
                                                                          -----------     -----------

               TOTAL LIABILITIES                                              145,915         139,877
                                                                          -----------     -----------

COMMITMENTS

SHAREHOLDERS' EQUITY
Preferred shares, no par value: authorized 1,000,000 shares; none issued          -0-             -0-
Common shares, no par value: authorized 5,000,000 shares;
     shares issued - 981,913 and 962,200                                          -0-             -0-
Additional paid-in capital                                                      6,300           6,130
Retained earnings                                                               8,777           8,549
Unearned Recognition and Retention Plan (RRP) shares                             (160)           (185)
Unearned Employee Stock Ownership Plan (ESOP) shares                             (136)           (229)
Accumulated other comprehensive loss                                             (151)            (92)
Treasury shares, at cost; 157,597 shares and 167,800 shares                    (2,159)         (2,266)
                                                                          -----------     -----------
               TOTAL SHAREHOLDERS' EQUITY                                      12,471          11,907
                                                                          -----------     -----------
               TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                 $   158,386     $   151,784
                                                                          ===========     ===========
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                         HOME CITY FINANCIAL CORPORATION
                                SPRINGFIELD, OHIO
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                      (Dollars in thousands)          (Dollars in thousands)
                                                    (Unaudited)     (Unaudited)    (Unaudited)     (Unaudited)
                                                  3 Months Ended  3 Months Ended  9 Months Ended  9 Months Ended
                                                   September 30,   September 30,   September 30,   September 30,
                                                   -------------   -------------   -------------   -------------
                                                       2004            2003            2004            2003
                                                       ----            ----            ----            ----
<S>                                               <C>             <C>             <C>             <C>
INTEREST INCOME
Loans                                                $  2,089        $  2,229        $  6,282        $  6,766
Securities                                                 55              39             128             104
Federal funds sold                                          4               9              41              13
Dividends on Federal Home Loan Bank stock                  25              23              70              66
Deposits with financial institutions                        6               1               7               3
                                                     --------        --------        --------        --------

     TOTAL INTEREST INCOME                              2,179           2,301           6,528           6,952

INTEREST EXPENSE
Deposits                                                  605             631           1,817           2,041
Borrowings                                                485             502           1,451           1,497
                                                     --------        --------        --------        --------

     TOTAL INTEREST EXPENSE                             1,090           1,133           3,268           3,538
                                                     --------        --------        --------        --------

     NET INTEREST INCOME                                1,089           1,168           3,260           3,414
Provision for loan losses                                  42             200             142             400
                                                     --------        --------        --------        --------

     NET INTEREST INCOME AFTER
     PROVISION    FOR LOAN LOSSES                       1,047             968           3,118           3,014

NONINTEREST INCOME
Service charges on deposits                                10               9              30              28
Net realized gains on sales of available-for-
     sale securities                                        1               0               6              17
Life insurance                                             34              34             103             104
Other                                                      12               3              19              53
                                                     --------        --------        --------        --------

     TOTAL NONINTEREST INCOME                              57              46             158             202

NONINTEREST EXPENSE
Salaries and employee benefits                            489             411           1,383           1,215
Net occupancy expense                                      71              81             213             274
Equipment expense                                          54              60             166             165
Data processing fees                                       60              62             174             174
Professional fees                                          56              58             196             256
Franchise taxes                                            38              35             113             110
Other                                                     113              91             321             313
                                                     --------        --------        --------        --------

     TOTAL NONINTEREST EXPENSE                            881             798           2,566           2,507
                                                     --------        --------        --------        --------

     NET INCOME BEFORE FEDERAL
     INCOME  TAX EXPENSE                                  223             216             710             709

Provision for income tax expense                           72              66             210             211
                                                     --------        --------        --------        --------

     NET INCOME                                      $    151        $    150        $    500        $    498
                                                     ========        ========        ========        ========

Earnings per common share - basic                    $   0.19        $   0.20        $   0.63        $   0.66
Earnings per common share - diluted                  $   0.19        $   0.20        $   0.62        $   0.65
Dividends declared per share                         $   0.11        $   0.11        $   0.33        $   0.33
</TABLE>

See notes to condensed consolidated financial statements.

                                       4
<PAGE>

                         HOME CITY FINANCIAL CORPORATION
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       Accumulated
                                        Additional                          Unearned      Other
                                         Paid-in    Retained    Unearned      ESOP    Comprehensive  Treasury
                               Shares    Capital    Earnings  Compensation   Shares   Income (Loss)   Shares     Total
                               -------  ----------  --------  ------------  --------  -------------  ---------  --------
<S>                            <C>      <C>         <C>       <C>           <C>       <C>            <C>        <C>
Balance, January 1, 2004       962,200   $ 6,130    $ 8,549     $ (185)      $ (229)     $  (92)     $ (2,266)  $ 11,907
 Comprehensive income
    Net income                                          500                                                          500
    Change in unrealized
       gain (loss) on
       securities available
       for sale, net of
       reclassification
       adjustment and tax
       effect                                                                                (59)                    (59)
                                                                                                                --------
        Total comprehensive
           income                                                                                                    441
                                                                                                                --------
 Purchase of  treasury
     shares (22,652)                                                                                     (384)      (384)

 Stock options exercised:
     From treasury (32,855)                 (107)                                                         491        384

     New issue                  19,713       231                                                                     231

 Amortization of unearned
    compensation expense                       2                    25                                                27

 ESOP shares earned                           44                                 93                                  137
 Dividends on common shares,
    $.33 per share                                     (272)                                                        (272)
                               -------   -------    -------     ------       ------      ------      --------   --------

Balance, September 30, 2004    981,913   $ 6,300    $ 8,777     $ (160)      $ (136)     $ (151)     $ (2,159)  $ 12,471
                               =======   =======    =======     ======       ======      ======      ========   ========
</TABLE>

See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                         HOME CITY FINANCIAL CORPORATION
                                SPRINGFIELD, OHIO
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                              (Dollars in thousands)
                                                                                        (Unaudited)              (Unaudited)
                                                                                        -----------              -----------
                                                                                      9 Months ended           9 Months ended
                                                                                      --------------           --------------
                                                                                    September 30, 2004       September 30, 2003
                                                                                    ------------------       ------------------
<S>                                                                                 <C>                      <C>
OPERATING ACTIVITIES
Net income                                                                             $        500             $        498
     Items not requiring (providing) cash
             Depreciation and amortization                                                      175                      178
             Provision for loan losses                                                          142                      400
             Amortization of premiums and discounts on securities                                36                       14
             Deferred income taxes                                                             (195)                     (18)
             Increase in cash surrender value of life insurance                                 (83)                     (93)
             Employees Stock Ownership Plan compensation expense                                137                        0
             Recognition and Retention Plan compensation expense                                 27                        9
             Net realized gains on available-for-sale securities                                 (6)                     (17)
             FHLB stock dividends                                                               (70)                     (66)

         Changes in

                     Interest receivable                                                         (9)                       1
                     Other assets                                                              (467)                     151
                     Interest payable and other liabilities                                      27                      280
                                                                                       ------------             ------------

                           NET CASH PROVIDED BY OPERATING ACTIVITIES                            214                    1,337
                                                                                       ------------             ------------

INVESTING ACTIVITIES
         Purchase of available-for-sale securities                                           (9,970)                  (2,609)
         Proceeds from payments and maturities of securities available-for-sale               3,754                    2,225
         Proceeds from sales of available-for-sale securities                                   554                    1,788
         Net change in loans                                                                 (1,903)                     (75)
         Purchases of premises and equipment                                                    (23)                      (5)
                                                                                       ------------             ------------

                            NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES              (7,588)                   1,324
                                                                                       ------------             ------------

FINANCING ACTIVITIES
        Net increase in demand deposits, money market, NOW and savings accounts               5,571                   18,079
        Net increase (decrease) in certificates of deposit                                   (1,462)                 (15,368)
        Proceeds from Federal Home Loan Bank advances                                         3,500                    5,750
        Repayment of Federal Home Loan Bank advances                                         (1,542)                  (8,521)
        Dividends paid                                                                         (272)                    (256)
        Purchase of common shares for Recognition and Retention Plan                              0                      (84)
        Net decrease in advances from borrowers for taxes and insurance                         (56)                     (61)
        Proceeds from stock options exercised - new                                             231                        0
        Proceeds from stock options exercised - from treasury                                   384                        0
        Purchase of treasury shares                                                            (384)                       0
                                                                                       ------------             ------------

                            NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES               5,970                     (461)
                                                                                       ------------             ------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                             (1,404)                   2,200

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                               10,473                    6,061
                                                                                       ------------             ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                               $      9,069             $      8,261
                                                                                       ============             ============

</TABLE>

See notes to condensed consolidated financial statements.

                                       6
<PAGE>

                         HOME CITY FINANCIAL CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                    SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

                                   (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

In the opinion of Management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments necessary for a fair presentation
of Home City Financial Corporation's ("Company" or "HCFC") financial position as
of September 30, 2004, and December 31, 2003, and the consolidated results of
operations and the cash flows for the nine months ended September 30, 2004 and
2003. Those adjustments consist only of normal recurring adjustments. The
condensed consolidated balance sheet of the Company as of December 31, 2003, has
been derived from the audited consolidated balance sheet of the Company as of
that date. Certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles ("GAAP") have been omitted pursuant to the rules and regulations of
the Securities and Exchange Commission. It is suggested that these condensed
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB. The results of operations for the nine months ended September
30, 2004, are not necessarily indicative of the results to be expected for the
entire fiscal year.

NOTE 2. ALLOWANCE FOR LOAN LOSSES

Activity in the allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>
                                                                          (Dollars in thousands)
                                                Three                  Three                 Nine                    Nine
                                            Months Ended            Months Ended         Months Ended            Months Ended
                                            September 30,           September 30,        September 30,           September 30,
                                                2004                    2003                 2004                     2003
                                                ----                    ----                 ----                     ----
<S>                                         <C>                     <C>                  <C>                     <C>
Balance, beginning of period                    $ 792                   $ 715                $ 995                    $ 503
Provision for loan losses                          42                     200                  142                      400
Charge-offs                                       (13)                     (3)                (320)                      (6)
Recoveries                                          1                       0                    5                       15
                                                -----                   -----                -----                    -----
Balance, end of period                          $ 822                   $ 912                $ 822                    $ 912
                                                =====                   =====                =====                    =====
</TABLE>

NOTE 3. ADVANCES FROM FEDERAL HOME LOAN BANK

Borrowings at September 30, 2004, consisted of six short-term advances for $2.7
million and seventeen long-term advances totaling $34.0 million from the Federal
Home Loan Bank of Cincinnati ("FHLB"). The advances are collateralized by all
shares of FHLB stock owned by the Home City Federal Savings Bank of Springfield
("Bank") and by the Bank's qualified mortgage loan portfolio.

                                       7
<PAGE>

Scheduled maturities of advances from the FHLB were as follows:

<TABLE>
<CAPTION>
                                         (Dollars in thousands)
                       At September 30, 2004                At December 31, 2003
                -----------------------------------  ------------------------------------
                           Range of     Weighted-                Range of     Weighted-
                           interest      average                 interest      average
                 Amount     rates     interest rate   Amount      rates     interest rate
                 ------     -----     -------------   ------      -----     -------------
<S>             <C>      <C>          <C>            <C>       <C>          <C>
Due within
 one year       $ 2,657  1.90%-8.35%      2.28%      $     60        8.35%      8.35%

After one but
 within five
 years          $ 7,607  3.05%-7.28%      5.28%      $  5,730  3.05%-8.35%      5.48%

After five
 years          $26,458  3.30%-6.84%      5.70%      $ 28,974  3.30%-6.84%      5.63%
</TABLE>

NOTE 4. REGULATORY CAPITAL

The following table illustrates the compliance by the Bank with currently
applicable regulatory capital requirements at September 30, 2004.

<TABLE>
<CAPTION>
                                                  (Dollars in thousands)
                                                                                  To be
                                                                           Categorized as "Well
                                                                            Capitalized" Under
                                                           For Capital      Prompt Corrective
                                                        Adequacy Purposes   Action Provisions
                                        Actual          -----------------   -----------------
                               Amount   Ratio   Amount  Ratio      Amount         Ratio
                               ------   -----   ------  -----      ------         -----
<S>                            <C>      <C>     <C>     <C>       <C>      <C>
Total Risk-Based Capital
    (To Risk-Weighted Assets)  $13,004  12.2%   $8,551   8.0%     $10,689         10.0%

Tier I Capital
    (To Risk-Weighted Assets)  $12,182  11.4%      N/A   N/A      $ 6,414          6.0%

Tier I Capital
     (To Total Assets)         $12,182   7.7%   $6,327   4.0%*    $ 7,920          5.0%

Tangible Capital
     (To Total Assets)         $12,182   7.7%   $2,376   1.5%         N/A          N/A
</TABLE>

*   Although the general required minimum is 4%, savings associations that meet
    certain requirements may be permitted to maintain minimum tier I capital to
    adjusted total assets of 3%.

                                       8
<PAGE>

NOTE 5. EARNINGS PER SHARE

Earnings per share ("EPS") is computed in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings per Share." Common stock
equivalents include shares held by the Company's Employee Stock Ownership Plan
("ESOP") that are committed for release and not subject to a loan pledge
agreement, shares awarded but not released under the Company's Recognition and
Retention Plan ("RRP") and stock options granted under the Stock Option Plan
("SOP"). Unearned ESOP and RRP shares which have not vested have been excluded
from the computation of average shares outstanding. For the three and nine
months ended September 30, 2004, stock options totaling 7,500 shares of common
stock were not considered in computing EPS as they were anti-dilutive. For the
three and nine months ended September 30, 2003, there were no anti-dilutive
stock options. Following is a reconciliation of the numerators and denominators
of the basic and diluted EPS calculations.

<TABLE>
<CAPTION>
                                                               For the Three Months Ended
                                                               --------------------------
                                                                   September 30, 2004
                                                                   ------------------
                                                                        Weighted-
                                                                         average               Per
                                                     Income              Shares               Share
                                                  (Numerator)         (Denominator)           Amount
                                                  -----------         -------------           ------
<S>                                               <C>                 <C>                     <C>
Basic EPS
    Income available to common shareholders         $150,763             795,943              $0.19

    Effective of dilutive securities
    Stock options                                          0              15,690
                                                    --------             -------

Diluted EPS
    Income available to common shareholders +
    assumed conversions                             $150,763             811,633              $0.19
                                                    ========             =======
</TABLE>

<TABLE>
<CAPTION>
                                                               For the Three Months Ended
                                                               --------------------------
                                                                   September 30, 2003
                                                                   ------------------
                                                                        Weighted-
                                                                         average               Per
                                                     Income              Shares               Share
                                                  (Numerator)         (Denominator)           Amount
                                                  -----------         -------------           ------
<S>                                               <C>                 <C>                     <C>
Basic EPS
    Income available to common shareholders         $150,215             747,960              $0.20

    Effective of dilutive securities
    Stock options                                          0              17,705
                                                    --------             -------

Diluted EPS
    Income available to common shareholders +
    assumed conversions                             $150,215             765,665              $0.20
                                                    ========             =======
</TABLE>

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                               For the Nine Months Ended
                                                               -------------------------
                                                                   September 30, 2004
                                                                   ------------------
                                                                        Weighted-
                                                                         average               Per
                                                     Income              Shares               Share
                                                  (Numerator)         (Denominator)           Amount
                                                  -----------         -------------           ------
<S>                                               <C>                 <C>                     <C>
Basic EPS
    Income available to common shareholders         $499,524             791,090              $0.63

    Effective of dilutive securities
    Stock options                                          0              17,294
                                                    --------             -------

Diluted EPS
    Income available to common shareholders +
    assumed conversions                             $499,524             808,384              $0.62
                                                    ========             =======
</TABLE>

<TABLE>
<CAPTION>
                                                               For the Nine Months Ended
                                                               -------------------------
                                                                   September 30, 2003
                                                                   ------------------
                                                                        Weighted-
                                                                         average               Per
                                                     Income              Shares               Share
                                                  (Numerator)         (Denominator)           Amount
                                                  -----------         -------------           ------
<S>                                               <C>                 <C>                     <C>
Basic EPS
    Income available to common shareholders         $498,654             750,665              $0.66

    Effective of dilutive securities
    Stock options                                          0              11,608
                                                    --------             -------

Diluted EPS
    Income available to common shareholders +
    assumed conversions                             $498,654             762,273              $0.65
                                                    ========             =======
</TABLE>

                                       10
<PAGE>

NOTE 6. STOCK OPTIONS

The Company accounts for its stock option plan under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. No stock-based employee compensation
cost is reflected in net income, as all options granted under those plans had an
exercise price equal to the market value of the underlying common stock on the
grant date. The following table illustrates the effect on net income and
earnings per share if the company had applied the fair value provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation, to stock based
employee compensation.

<TABLE>
<CAPTION>
                                                                 ( Dollars in thousands except per share amounts )
                                                  For the Three Months ended September 30,  For the Nine Months ended September 30,
                                                  ----------------------------------------  ---------------------------------------
                                                       2004                     2003               2004                  2003
                                                     --------                 --------           --------              --------
<S>                                                  <C>                      <C>                <C>                   <C>
Net income, as reported                              $    151                 $    150           $    500              $    498
Less: Total stock-based employee compensation
      cost determined under the fair value based
      method, net of income taxes                          (2)                      (2)                (7)                   (4)
                                                     --------                 --------           --------              --------

Pro forma net income                                 $    149                 $    148           $    493              $    494
                                                     ========                 ========           ========              ========

Earnings per share:
     Basic - as reported                             $   0.19                 $   0.20           $   0.63              $   0.66
                                                     ========                 ========           ========              ========
     Basic - pro forma                               $   0.19                 $   0.20           $   0.62              $   0.66
                                                     ========                 ========           ========              ========
     Diluted - as reported                           $   0.19                 $   0.20           $   0.62              $   0.65
                                                     ========                 ========           ========              ========
     Diluted - pro forma                             $   0.18                 $   0.19           $   0.61              $   0.65
                                                     ========                 ========           ========              ========
</TABLE>

                                       11
<PAGE>

                                     ITEM 2.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



SAFE HARBOR CLAUSE

      This report contains certain "forward-looking statements." The Company
desires to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 and is including this statement for the
express purpose of availing itself of the protection of such safe harbor with
respect to all such forward-looking statements. These forward-looking
statements, which are included in Management's Discussion and Analysis, describe
future plans or strategies and include the Company's expectations of future
financial results. The words "believe," "expect," "anticipate," "estimate,"
"project," and similar expressions identify forward-looking statements. The
Company's ability to predict results or the effect of future plans or strategies
is inherently uncertain. Factors that could affect actual results include
interest rate trends, the general economic climate in the Company's market area
and the country as a whole, loan delinquency rates, and changes in federal and
state regulations. These factors should be considered in evaluating the
forward-looking statements, and undue reliance should not be placed on such
statements. See Exhibit 99.1 attached hereto, "Safe Harbor Under the Private
Securities Litigation Reform Act of 1995," which is incorporated by reference.

GENERAL

      In September 1996, the Board of Directors of Home City Federal Savings
Bank of Springfield ("Bank") adopted a Plan of Conversion ("Plan") whereby the
Bank would convert to the stock form of ownership, followed by the issuance of
all the Bank's outstanding stock to a newly formed holding company, Home City
Financial Corporation ("Company"). Pursuant to the Plan, the Company offered
common shares for sale to certain depositors of the Bank and members of the
community. The conversion was completed on December 30, 1996, and resulted in
the issuance of 952,200 common shares of the Company which, after consideration
of offering expenses totaling approximately $447,000 and $762,000 in shares
purchased by the ESOP ("Employee Stock Ownership Plan"), resulted in net capital
proceeds of $8.3 million. Consolidated financial statements of the Company are
presented herein. Future references are made either to the Company or the Bank
as applicable.

      The Company is a unitary savings and loan holding company whose activities
are primarily limited to holding the stock of the Bank. The Bank conducts a
general banking business in west central Ohio which consists of attracting
deposits from the general public and applying those funds to the origination of
loans secured by single-family residences, consumer loans and loans secured by
non-residential real estate. The Bank also originates loans for the construction
of residential real estate loans secured by multifamily real estate (over four
units), and commercial loans. The Bank's profitability is significantly
dependent on net interest income, which is the difference between interest
income generated from interest-earning assets (i.e., loans and investments) and
the interest expense paid on interest-bearing liabilities (i.e., customer
deposits and borrowed funds). Net interest income is affected by the relative
amount of interest-earning assets and interest-bearing liabilities and interest
received or paid on these balances. The level of interest rates paid or received
by the Bank can be significantly influenced by a number of environmental
factors, such as governmental monetary policy, that are outside of management
control.

      The consolidated financial information presented herein has been prepared
in accordance with generally accepted accounting principles ("GAAP") and general
accounting practices within the financial services industry. In preparing
consolidated financial statements in accordance with GAAP, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the
reporting period. Actual results could differ from such estimates.

                                       12
<PAGE>

      The Bank is regulated by the Office of Thrift Supervision ("OTS") and its
deposits are insured up to applicable limits under the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC").

      The Bank is a member of the FHLB, conducting its business through its two
offices located in Springfield, Ohio. The primary market area of the Bank is
Clark County, Ohio, and contiguous counties.

CRITICAL ACCOUNTING POLICIES

      The accounting and reporting policies of Home City are in accordance with
accounting principles generally accepted in the United States and conform to
general practices within the banking industry. Home City's significant
accounting policies are described in detail in the notes to Home City's
consolidated financial statements for the year ended December 31, 2003. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions. The
financial position and results of operations can be affected by these estimates
and assumptions and are integral to the understanding of reported results.
Critical accounting policies are those policies that management believes are the
most important to the portrayal of Home City's financial condition and results,
and they require management to make estimates that are difficult, subjective, or
complex.

      The policy of management with respect to the amount of the allowance for
loan losses is a critical accounting policy for Home City. Management evaluates
the adequacy of the allowance for loan losses each quarter based on management's
regular review of the loan portfolio and consideration of such factors as
historical loss experience, generally prevailing economic conditions, changes in
the size and composition of the loan portfolio and considerations relating to
specific loans, including the ability of the borrower to repay the loan and the
estimated value of the underlying collateral.

      Some types of loans are inherently more risky than others. The allowance
for commercial loans, nonresidential real estate loans and multifamily real
estate loans, which generally carry more risk than single-family residential
real estate loans, is determined based upon the individual credit relationships
and national and local economic factors that could affect such borrowers, as
well as actual loss histories. The allowance recorded for homogeneous consumer
loans is based on an analysis of loan mix, risk characteristics of the
portfolio, fraud loss and bankruptcy experiences, and historical losses,
adjusted for current trends. The allowance for one- to four-family residential
real estate is based upon an analysis of national and local economic conditions
and loss histories. The allowance for impaired loans is based on the collateral
for collateral-dependent loans or the discounted cash flows using the loan's
effective interest rate.

      Although management utilizes its best judgment and information available,
the ultimate adequacy of the allowance is dependent upon a variety of factors.
Undetected losses are probable due to inherent delays in obtaining information
regarding a borrower's financial condition or changes in their unique business
conditions; the judgmental nature of individual loan evaluations, collateral
assessments and interpretations of economic trends; the volatility of economic
or customer-specific conditions affecting the identification and estimation of
losses for larger non-homogeneous credits; and the sensitivity of assumptions
utilized to establish allowances for homogeneous groups of loans.

                         CHANGES IN FINANCIAL CONDITION

      At September 30, 2004, the consolidated assets of the Company totaled
$158.4 million, an increase of $6.6 million, or 4.35%, from $151.8 million at
December 31, 2003. The increase in total assets was primarily the result of the
doubling of our available-for-sale securities to $10.7 million, funded mainly by
a $4.1 million increase in deposits with the remainder resulting from a
reallocation from our federal funds position.

                                       13
<PAGE>

      Net loans receivable increased by $1.8 million, or 1.39%, to $128.3
million during the nine months ended at September 30, 2004. The net increase
reflected an improvement in loan activity in the third quarter of 2004.

      Total cash and cash equivalents decreased by $1.4 million during the first
nine months of 2004. Interest bearing demand deposits totaled $7.4 million, an
increase of $5.5 million, or 296.32%, from $1.8 million at December 31, 2003.
This was more than offset by the decrease of federal funds sold by $7.2 million,
or 95.61%, from $7.6 million at December 31, 2003, mainly resulting from
management's allocation thereof into short-term treasury bills and 90-day FHLB
deposits.

      Available-for-sale securities increased $5.6 million, or 110.65%, from
$5.1 million at December 31, 2003, to $10.7 million at September 30, 2004,
mainly as the result of a portion of the aforementioned allocation of federal
funds into treasury investments.

      Deposit balances increased $4.1 million, or 3.95%, from $103.9 million at
December 31, 2003, to $108.0 million at September 30, 2004. While demand,
savings, NOW and money market deposits increased by $5.6 million, or 10.57%,
time deposits decreased by $1.5 million, or 2.85%, with the growth in the former
representing the continued popularity of the tiered Prime Statement savings
product.

      Advances from the FHLB increased $2.0 million, or 5.63%, from $34.8
million at December 31, 2003, to $36.7 million at September 30, 2004, reflecting
short-term cash flow needs. $2.5 million of short-term variable rate FHLB
advances were paid off in early October.

      Total shareholders' equity increased $564,000, or 4.74%, from December 31,
2003, to September 30, 2004. This increase was primarily the result of the
$500,000 of first nine months 2004 income together with increases of $231,000
generated from the exercise of stock options, $137,000 from ESOP shares earned
and $27,000 amortization of unearned compensation expense, all of which were
partially offset by the $272,000 cash dividend payment and the $59,000 increase
in accumulated other comprehensive loss.

      The Bank's liquidity, primarily represented by cash and cash equivalents,
is a result of its operating, investing and financing activities. Principal
sources of funds are deposits, loan and mortgage-backed securities repayments,
maturities of securities and other funds provided by operations. The Bank also
has the ability to borrow from the FHLB and other local financial institutions.
While scheduled loan repayments and maturing investments are relatively
predictable, deposit flows and early loan and mortgage-backed security
prepayments are more influenced by interest rates, general economic conditions
and competition. The Bank maintains investments in liquid assets based upon
management's assessment of (i) the need for funds, (ii) expected deposit flows,
(iii) the yields available on short-term liquid assets and (iv) the objectives
of the asset/liability management program. In the ordinary course of business,
part of such liquid investment portfolio is composed of deposits at
correspondent banks. Although the amount on deposit at such banks often exceeds
the $100,000 limit covered by FDIC insurance, the Bank monitors the capital of
such institutions to ensure that such deposits do not expose the Bank to undue
risk of loss.

      OTS regulations presently require the Bank to maintain an average daily
balance of liquid assets, which may include, but are not limited to, investments
in United States Treasury, federal agency obligations and other investments
having maturities of five years or less, in an amount sufficient to provide a
source of relatively liquid funds upon which the Bank may rely if necessary to
fund deposit withdrawals or other short-term funding needs. The liquidity ratio
is the percentage that this average daily balance of liquid assets bears to the
sum of the Bank's average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. At September 30, 2004, the Bank's
regulatory liquidity ratio was 19.33%. At such date, the Bank had commitments to
originate loans totaling $13.6 million and no commitments to purchase or sell
loans. The Bank considers its liquidity and capital reserves sufficient to meet
its outstanding short- and long-term needs. Adjustments to liquidity and capital
reserves may be necessary, however, if loan demand increases more than expected
or if deposits decrease substantially.

                                       14
<PAGE>

      The Bank is required by applicable law and regulation to meet certain
minimum capital standards. Such capital standards include a tangible capital
requirement, a core capital requirement or leverage ratio and a risk-based
capital requirement. See "Note 4 - Regulatory Capital." The Bank exceeded all of
its capital requirements at September 30, 2004.

      On February 23, 2004, the Board of Directors of the Company declared a
quarterly cash dividend in the amount of $.11 per share to each shareholder of
record on March 8, 2004, which was paid on March 15, 2004. On May 24, 2004, the
Board of Directors of the Company declared a quarterly cash dividend in the
amount of $.11 per share to each shareholder of record on June 8, 2004, which
was paid on June 15, 2004. On August 23, 2004, the Board of Directors of the
company declared a quarterly cash dividend in the amount of $.11 per share to
each shareholder of record on September 8, 2004, which was paid on September 15,
2004.

                              RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

      GENERAL. Net income was $151,000 for the three months ended September 30,
2004, versus $150,000 for the three months ended September 30, 2003. The $1,000
increase was comprised of a decrease of $79,000 in net interest income, an
increase of $83,000 in noninterest expense and an increase of $6,000 in the
provision for federal income tax expense, all of which were more than offset by
an $11,000 increase in noninterest income and a decrease of $158,000 in the
provision for loan losses.

      INTEREST INCOME. The $4.2 million increase in average earning assets was
offset by a 52 basis point decrease in yields which resulted in a decrease in
interest income of $122,000, or 5.30%, for the three months ended September 30,
2004, compared to the same period in 2003. The decrease in yields caused a
decline of $150,000 in interest income, which was slightly offset by the $28,000
increase in interest income resulting from the higher amount of average
interest-earning assets.

      INTEREST EXPENSE. Interest expense on deposit liabilities decreased
$26,000, or 4.12%, for the three months ended September 30, 2004, as compared to
the same period in 2003. Total average deposits increased by $4.1 million
comparing the quarters ended September 30, 2004 and 2003, and the average
interest rate paid on interest-bearing deposits decreased by 21 basis points
from 2.63% for the three months ended September 30, 2003, to 2.42% for the same
period in 2004. The average balance of FHLB advances decreased from $35.3
million for the three-month period ended September 30, 2003, to $34.6 million
for the same period in 2004 and, coupled with a 7 basis point decrease in rates
paid, resulted in a decrease in interest on FHLB advances of $17,000 for the
three months ended September 30, 2004, compared to the same period in 2003.

      PROVISION FOR LOAN LOSSES. The provision for loan losses was $42,000, and
there were $12,000 in net charge-offs during the three months ended September
30, 2004, compared to a $200,000 provision and $3,000 in net charge-offs during
the three months ended September 30, 2003. The provision was decreased
significantly based upon the results of management`s determination of the
adequacy of the allowance for loan losses based on ongoing loan reviews,
analysis of loan delinquencies and awareness of the local and national
economics.

      NONINTEREST INCOME. Noninterest income increased by $11,000 for the three
months ended September 30, 2004, compared to the same period in 2003. The
increase was mainly due to $9,000 more in other income.

      NONINTEREST EXPENSE. Noninterest expense increased $83,000, or 10.40%, to
$881,000 for the three months ended September 30, 2004, from $798,000 in the
comparable period in 2003. This increase, was mainly attributable to a $78,000
increase in salaries and employee benefits reflecting management's personnel
related decisions. The annualized ratio of noninterest expense to average total
assets was 2.26% and 2.14% for the three months ended September 30, 2004 and
2003, respectively.

                                       15
<PAGE>

      INCOME TAXES. The provision for income taxes increased $6,000 for the
three months ended September 30, 2004, compared with the same period in the
prior year, primarily as a result of the increased net income before federal
income tax expense and the composition of the taxable and non-taxable income for
the quarter.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

      GENERAL. Net income increased $2,000, or 0.40%, to $500,000 for the nine
months ended September 30, 2004, from $498,000 for the nine months ended
September 30, 2003. This slight increase was primarily attributed to a decrease
of $258,000 in the provision for loan losses and a decrease of $1,000 in federal
income tax expense which were almost fully offset by the $154,000 decrease in
net interest income, the $59,000 increase in noninterest expense and the $44,000
decrease in noninterest income.

      INTEREST INCOME. The $5.0 million increase in average earning assets was
offset by a 62 basis point decrease in yields resulting in a decrease in
interest income of $424,000, or 6.10%, for the nine months ended September 30,
2004, compared to the same period in 2003. The decrease in yields caused a
decline of $421,000 in interest income, which was slightly offset by the $3,000
which resulted from the increase in the amount of average interest earning
assets.

      INTEREST EXPENSE. Interest expense on deposit liabilities decreased
$224,000, or 10.98%, for the nine months ended September 30, 2004, as compared
to the same period in 2003. Total average interest-bearing deposits increased by
$5.9 million comparing the nine months ended September 30, 2004 to 2003, but the
average interest rate paid on interest-bearing deposits decreased by 48 basis
points from 2.91% for the nine-month period ended September 30, 2003, to 2.43%
for the same period ended September 30, 2004. The average balance of FHLB
advances decreased from $36.7 million for the nine-month period ending September
30, 2003, to $34.6 million for the same period ended September 30, 2004,
resulting in a decrease in interest on FHLB advances of $46,000 for the
nine-month period ended June 30, 2004, compared to the same period ended
September 30, 2003. Of the overall decrease of $270,000 in interest expense,
$256,000 is attributable to rates paid, or yields, on interest costing
liabilities, which is offset by $14,000 attributed to volume increases.

      PROVISION FOR LOAN LOSSES. The provision for loan losses was $142,000 and
there were net charge-offs of $315,000 during the nine months ended September
30, 2004, compared to a $400,000 provision and net recoveries of $9,000 during
the nine months ended September 30, 2003. The provision was decreased
significantly based upon the results of management's ongoing analyses of the
adequacy of the allowance for loan losses.

      NONINTEREST INCOME. Noninterest income decreased by $44,000 for the nine
months ended September 30, 2004, compared to the same period in 2003. The
decrease was mainly due to an $11,000 reduction in net gains on sales of
available-for-sale securities and a $34,000 reduction in other income.

      NONINTEREST EXPENSE. Noninterest expense increased $59,000, or 2.35%, to
$2,566,000 for the nine months ended September 30, 2004, from $2,507,000 in the
comparable period in 2003. Of this increase, a $168,000 increase in salaries and
employee benefits expense reflected management's personnel related decisions.
This was offset partially by a $61,000 decrease in net occupancy expense and a
$60,000 reduction in professional fees. The annualized ratio of noninterest
expense to average total assets was 2.22% and 2.23% for the nine months ended
September 30, 2004 and 2003, respectively.

      INCOME TAXES. The provision for income taxes decreased $1,000 for the nine
months ended September 30, 2004, compared with the same period in the prior
year, with very little change in net income before federal income tax expense
and the composition of the taxable and non-taxable income for the nine-month
period.

                                       16
<PAGE>

                                     ITEM 3.

                             CONTROLS AND PROCEDURES

The registrant's principal executive officer and principal financial officer
have concluded, based upon their evaluation of the registrant's disclosure
controls and procedures, that the registrant's disclosure controls and
procedures were effective as of September 30, 2004. There was no change in the
registrant's internal control over financial reporting during the quarter ended
September 30, 2004, that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.

                                       17
<PAGE>

                         HOME CITY FINANCIAL CORPORATION
                                SPRINGFIELD, OHIO
                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         None

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         Not Applicable

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         Not Applicable

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not Applicable

ITEM 5 - OTHER INFORMATION

         Not Applicable

ITEM 6 - EXHIBITS

      (a)   The following exhibits are attached:

            1.    Exhibit 31:1  Rule 13a-14(a)/15d-14(a) Certification.

            2.    Exhibit 31:2  Rule 13a-14(a)/15d-14(a) Certification.

            3.    Exhibit 32:   Certification Pursuant to 18 U.S.C. Section
                                1350, as Adopted Pursuant to Section 906
                                of the Sarbanes-Oxley Act of 2002.

            4.    Exhibit 99.1: Safe Harbor Under
                                the Private Securities
                                Litigation Reform Act of 1995.

                                       18
<PAGE>

SIGNATURES

      In accordance with the requirements of the Securities Exchange Act of
1933, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                   HOME CITY FINANCIAL CORPORATION

Date: November  12, 2004           /s/J. William Stapleton
                                   ---------------------------------------------
                                   J. William Stapleton, President, Chief
                                   Executive Officer and Chief Operating Officer

Date: November 12, 2004            /s/Charles A. Mihal
                                   ---------------------------------------------
                                   Charles A. Mihal
                                   Treasurer and Chief Financial Officer

                                       19