EXHIBIT 13
<PAGE>



                   HARRODSBURG FIRST FINANCIAL BANCORP, INC.







--------------------------------------------------------------------------------
                               1999 ANNUAL REPORT
--------------------------------------------------------------------------------

<PAGE>

                   HARRODSBURG FIRST FINANCIAL BANCORP, INC.
--------------------------------------------------------------------------------

Harrodsburg  First  Financial  Bancorp,   Inc.,  a  Delaware   corporation  (the
"Company"),   is  a  unitary   savings  and  loan  holding  company  whose  only
subsidiaries are First Federal Savings Bank of Harrodsburg  ("Harrodsburg  First
Federal" or the "Bank") and its  subsidiary.  On September  29,  1995,  the Bank
converted from mutual to stock form as a wholly owned subsidiary of the Company.
In connection with the conversion,  the Company issued  2,182,125  shares of its
common stock (the "Common Stock") to the public.

The Company is subject to regulation by the Office of Thrift Supervision ("OTS")
of the  Department  of the  Treasury.  The  primary  activity  of the Company is
holding  the  stock  of the  Bank  and  operating  the  Bank.  Accordingly,  the
information set forth in this report, including financial statements and related
data, relates primarily to the Bank and its subsidiary.

The Bank was formed in 1961 as a federal mutual savings and loan association and
obtained insurance of accounts and became a member of the Federal Home Loan Bank
("FHLB")  of  Cincinnati  at that  time.  Upon its  conversion  to stock form in
September 1995, the Bank adopted its present name. The Bank operates through one
full service office in  Harrodsburg,  Kentucky,  and another full service branch
office in Lawrenceburg, Kentucky.

The  executive  offices  of the  Company  and the Bank are  located at 104 South
Chiles Street,  Harrodsburg,  Kentucky 40330,  and its telephone number is (606)
734-5452.


                         MARKET AND DIVIDEND INFORMATION
--------------------------------------------------------------------------------

Market for the Common Stock

Since  October 4, 1995,  the Common  Stock of the  Company  has been  listed for
trading  under the  symbol  "HFFB" on the  National  Association  of  Securities
Dealers,  Inc. Automated  Quotation  ("NASDAQ")  National Market. As of December
8th,  there were  1,692,575  shares of the Common Stock issued and  outstanding,
held by  approximately  497  stockholders  of record,  not including  beneficial
owners in nominee or street name.

Dividends

The Company  maintains a policy whereby it will pay a semi-annual  cash dividend
payable as of the 15th day of each April and October or the first  business  day
thereafter  if such day is not a business day, to  stockholders  of record as of
the last business day of the month following the end of such semi-annual period.
The regular  semi-annual  dividend of $0.30 per share was payable on October 15,
1999 to stockholders of record on September 30, 1999. On September 20, 1999, the
Board of  Directors  declared a special  dividend  of $.25 per share  payable on
October 16, 1999, to  stockholders of record as of October 1, 1999. The Board of
Directors of the Company periodically reviews its dividend policy. Any change in
the Company's  dividend  policy,  as determined by the Board of Directors,  will
depend on the Company's debt and equity structure,  earnings, regulatory capital
requirements,  and other  factors,  including  economic  conditions,  regulatory
restrictions,  and tax  considerations.  See  Note 7 of  Notes  to  Consolidated
Financial  Statements for  restrictions  on the payment of cash  dividends.  For
further  information  on stock  prices  and  dividends,  see  Stock  Prices  and
Dividends (page 3).

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
----------------------------------------------------------------------------------------------------------


<S>                                                                                    <C>
Harrodsburg First Financial Bancorp, Inc.                                               Inside Front Cover
Market and Dividend Information                                                         Inside Front Cover
Letter to Stockholders                                                                                   1
Selected Financial and Other Data                                                                        2
Management's Discussion and Analysis of Financial Condition and Results of Operations                    4
Financial Statements                                                                                    17
Corporate Information                                                                    Inside Back Cover
</TABLE>


<PAGE>

                                     [LOGO]
                   Harrodsburg First Financial Bancorp, Inc.
--------------------------------------------------------------------------------

                        104 S. Chiles St., P.O. Box 384
                             Harrodsburg, KY 40330

                             LETTER TO STOCKHOLDERS
--------------------------------------------------------------------------------

Dear Stockholder:

On behalf of the Board of  Directors of  Harrodsburg  First  Financial  Bancorp,
Inc., I am proud to provide you with our 1999 Annual Report to Stockholders. The
Company's  consolidated  net income for our fourth full year as a public company
was over $1.5  million or $.94 per share.  This  compares  with the prior year's
income of $.79 per share.

Total  assets at  September  30, 1999 were  $110.4  million,  deposits  were $82
million,  and our net loan  balance  was  $89.1  million.  Stockholders'  equity
totaled $26.2 million or $16.67 per share, representing 23.7% of assets.

During fiscal year 1999,  222,643 shares of the Company's stock were repurchased
in open market  transactions  totaling $3.2 million. In December 1999, the Board
announced another  repurchase plan of an additional 5% of the outstanding shares
of the Company,  in an effort to improve  liquidity in the market for our common
stock and increase the Company's earnings and book value per share.

Since  coming to the Company and the Bank on October 1, 1999,  I have spent much
of my time  with the  Board  and staff  doing  strategic  planning  for the 21st
Century.  As a result of that  planning,  the Bank will open the new  millennium
with a new  attitude  and a new name.  First  Federal  Savings will become First
Financial  Bank. The new name more closely  reflects that of our holding company
and better identifies us as a provider of a wide range of financial products.

At our upcoming Annual  Meeting,  I will share with you our plans and vision for
the coming months and years.  You can expect to see First Financial  broaden its
markets, through growth, acquisition, and new technologies, and become much more
aggressive in becoming the market leader in each community we serve. Our mission
is a simple one: To provide the very best service and financial products through
a network of locally  managed  community  banks while assuring growth and income
for our shareholders.

Having served as Kentucky's  Banking  Commissioner  for the past two years, I am
confident in the preparation the banking industry has made for Year 2000. As CEO
of Harrodsburg First Financial Bancorp, Inc., I want to reassure you that we are
ready for the  calendar  change.  We have  either  upgraded  or  replaced  every
component of our operating  systems to bring them into Y2K  compliance.  Testing
has been  successfully  completed in all areas of the bank and contingency plans
are in place.  We fully expect the  transition to the Year 2000 to be uneventful
for our customers.

The directors,  management,  and staff of Harrodsburg  First Financial  Bancorp,
Inc. and First  Financial  Bank are proud of the  confidence  stockholders  have
shown in our company.  We are, however,  in the banking  business.  If you are a
First Federal  customer,  thank you! If you are not currently banking with First
Federal,  stop by or call me. I would  like to show you why you  should be doing
business with the bank you own.

Sincerely,

/s/ Art Freeman
Art Freeman
Chairman and Chief Executive Officer


<PAGE>

                        SELECTED FINANCIAL AND OTHER DATA
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Financial Condition Data
                                                                            At September 30,
                                                 1999            1998           1997           1996            1995
                                              -----------    -----------    -----------     -----------    -----------
                                                                            (Dollars in Thousands)
<S>                                          <C>            <C>            <C>           <C>         <C>
Total Amount of:
    Assets...............................     $   110,416    $   109,919    $   109,638   $ 108,953   $    107,234
    Loans receivable, net................          89,062         85,272         81,261     77,502         75,434
    Investments (1)......................          11,240         14,966         14,382     14,884         8,580
    Cash and cash equivalents............           8,350          8,074         12,621     15,065         21,990
    Deposits.............................          82,018         78,996         78,629     76,946         75,893
    Stockholders' equity.................          26,220         28,982         29,773     30,222         30,185

Number of:
  Real estate loans outstanding..........           1,532          1,601          1,668     1,710          1,745
    Deposit accounts.....................           9,574          9,590          9,594     9,524          10,559
    Full service offices.................               2              2              2     2              2
</TABLE>

-------------------------------
(1) Includes FHLB stock, and term deposits with the FHLB.
<TABLE>
<CAPTION>

Operating Data
                                           For the year ended September 30,
                                      ------------------------------------------
                                       1999     1998     1997    1996      1995
                                      ------   ------   ------   ------   ------
                                               (Dollars in Thousands)
                                      ------------------------------------------
<S>                                  <C>      <C>      <C>      <C>      <C>
Interest income ...................   $7,745   $7,778   $7,699   $7,712   $6,612
Interest expense ..................    3,813    3,897    3,835    3,901    3,807
                                      ------   ------   ------   ------   ------
    Net interest income ...........    3,932    3,881    3,864    3,811    2,805
Provision for loan losses .........       35       96       11        8       92
                                      ------   ------   ------   ------   ------
    Net interest income after
     provision for loan losses ....    3,897    3,785    3,853    3,803    2,713
Non-interest income ...............      116      122       95      101       81
Non-interest expense1 .............    1,728    1,679    1,701    2,225    1,444
                                      ------   ------   ------   ------   ------
Income before income tax expense ..    2,285    2,228    2,247    1,679    1,350
Income tax expense ................      777      799      771      589      459
                                      ------   ------   ------   ------   ------

Net income ........................   $1,508   $1,429   $1,476   $1,090   $  891
                                      ======   ======   ======   ======   ======
</TABLE>

-----------------------
1  Reflects one-time special SAIF assessment of $536,063 in fiscal 1996.

                                       2
<PAGE>
<TABLE>
<CAPTION>

Key Operating Ratios
                                              At or for the year ended September 30,
                                                1999       1998      1997      1996      1995
                                              --------   -------    ------   -------    ------
<S>                                            <C>      <C>       <C>       <C>        <C>
Performance Ratios:
Return on average assets (net income
    divided by average total assets)             1.36%     1.31%     1.36%     1.00%      .95%

Return on average equity (net income
    divided by average equity)                   5.49      4.98      5.12      3.56      7.84

Average interest-earning assets to
    average interest-bearing liabilities       133.86    136.40    136.34    139.15    113.08

Net interest rate spread                         2.43      2.30      2.32      2.14      2.50

Net yield on average interest-
    earning assets                               3.63      3.63      3.64      3.57      3.04

Dividend payout                                 87.74    102.38     45.26     72.71       N/A

Capital Ratios:
Average equity to average assets
    (average equity divided by
    average total assets)                       24.80     26.31     26.64     28.18     12.11

Equity to assets at period end                  23.75     26.37     27.14     27.74     28.15

Asset Quality Ratios:
Net interest income after provision for
    loan losses to total other expenses .      225.58    225.43    226.51    170.92    187.88
Non-performing loans to total loans               .32       .57       .64      1.12       .88
Non-performing loans to total assets              .25       .44       .47       .79       .62

</TABLE>

Stock Prices and Dividends

The  following  table sets forth the range of high and low sales  prices for the
common  stock as well as  dividends  declared in each quarter for 1999 and 1998.
Such  over-the-counter  market quotations reflect inter-dealer  prices,  without
retail  mark-up,  mark-down,  or commission  and may not  necessarily  represent
actual transactions.
<TABLE>
<CAPTION>

Quarterly Stock Information

                    Fiscal 1999                              Fiscal 1998
        ------------------------------------   --------------------------------------
            Stock Price Range      Per Share   Stock Price Range            Per Share
Quarter    Low           High      Dividend          Low           High     Dividend
-------------------------------------------------------------------------------------

<S>    <C>             <C>         <C>          <C>             <C>           <C>
1st     $ 13.75        $ 15.38     $  .30       $  16.125       $ 18.250      $  0.40
2nd       13.00          15.06        .20          16.500         17.875         0.20
3rd       12.00          13.56                     16.500         17.750
4th       12.63          14.00        .30          14.000         16.750         0.20
-------------------------------------------------------------------------------------
Total                              $  .80                                    $   0.80
                                   ======                                    ========
</TABLE>


<PAGE>

                           MANAGEMENTS DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

General

Harrodsburg First Financial  Bancorp,  Inc.  ("Company") became publicly held on
September 29, 1995, when its wholly-owned subsidiary completed a conversion from
a federal mutual  savings and loan  association to a federal stock savings bank,
First  Federal  Savings  Bank  of  Harrodsburg  ("Bank").  The  purpose  of  the
discussion  that follows is to provide insight into the  consolidated  financial
condition and results of operations of Harrodsburg First Financial Bancorp, Inc.
and its subsidiary, First Federal Savings Bank of Harrodsburg.

The primary  business of the Company is the operation of the Bank. The assets of
the  Company  consist  of cash on  deposit  with  the  Bank,  all of the  Bank's
outstanding  capital stock,  and a note receivable  from the Company's  Employee
Stock Ownership Plan ("ESOP").  Therefore,  this discussion relates primarily to
the Bank.

Historically,  the Bank has functioned as a financial  intermediary,  attracting
deposits from the general public and using such deposits, to make mortgage loans
and, to a lesser extent consumer loans and to purchase investment securities. As
such, its net earnings are dependent primarily on its net interest income, which
is the difference between interest income earned on its interest-earning  assets
and  interest  paid on  interest-bearing  liabilities.  Net  interest  income is
determined  by (i) the  difference  between  yields  earned on  interest-earning
assets and rates paid on interest-bearing liabilities (interest rate spread) and
(ii) the  relative  amounts  of  interest-earning  assets  and  interest-bearing
liabilities.  The  Bank's  interest  rate  spread  is  affected  by  regulatory,
economic,  and competitive  factors that influence  interest rates, loan demand,
and deposit flows. To a lesser extent, the Bank's net earnings are also affected
by the level of non-interest income, which primarily consists of service charges
and  other  fees.  In  addition,  net  earnings  are  affected  by the  level of
non-interest (general and administrative) expenses.

The  operations  of the Bank and the entire  thrift  industry are  significantly
affected by prevailing economic  conditions,  competition,  and the monetary and
fiscal policies of the federal  government and  governmental  agencies.  Lending
activities are  influenced by the demand for and supply of housing,  competition
among  lenders,  the level of interest  rates,  and the  availability  of funds.
Deposit flows and costs of funds are  influenced  by prevailing  market rates of
interest, competing investments,  account maturities, and the levels of personal
income and savings in the Bank's market area.

The Bank's interest-earning  assets have been historically  concentrated in real
estate-collateralized instruments,  principally single-family residential loans,
and to a lesser extent, loans secured by multi-family residential and commercial
properties, construction loans, home equity lines of credit, second mortgages on
single-family  residences  and  consumer  loans,  both  secured  and  unsecured,
including  loans  secured  by  savings  accounts.   The  Bank  also  invests  in
securities,  primarily U.S.  Government  Treasury and Agency securities,  and in
interest-earning deposits,  primarily with the FHLB of Cincinnati. Its source of
funding for these investments has principally been deposits placed with the Bank
by consumers in the market areas it serves.

Asset/Liability Management

Quantitative  Aspects  of  Market  Risk.  The Bank does not  maintain  a trading
account for any class of  financial  instrument.  Further,  it is not  currently
subject to foreign  currency  exchange  rate risk or commodity  price risk.  The
stock in the FHLB of  Cincinnati  does not have equity  price risk because it is
issued only to members and is redeemable  for its $100 par value.  The following
table illustrates quantitative sensitivity to interest rate risk for

                                       4
<PAGE>

financial instruments other than non-interest earning cash balances,  FHLB stock
and demand deposit accounts for the Bank as of September 30, 1999.

Market Rate Analysis - September 30, 1999
<TABLE>
<CAPTION>
                                                             Expected Maturity Date
                       ----------------------------------------------------------------------------------------------------
                                                            Year ended September 30,
                       ----------------------------------------------------------------------------------------------------
                                                             (Dollars in Thousands)
                                2000       2001        2002        2003        2004      Thereafter    Total     Fair
                                                                                                                 Value
---------------------------------------------------------------------------------------------------------------------------
<S>                          <C>         <C>         <C>         <C>          <C>      <C>         <C>          <C>
Assets:
 Loans-fixed:
  Balance                       $110        $129        $226        $292         $282     $19,738     $20,777      $20,836
  Interest rate                 5.87%       9.17%       8.80%       8.81%        8.81%       7.82%       7.87%
 Loans-variable:
  Balance                     43,647       1,461       4,343       7,803       11,811                  69,065       69,261
  Interest rate                 7.61%       7.06%       7.21%       7.34%        7.30%                   7.49%
 Investments:
  Balance                     11,818                               3,038        2,567         148      17,571       17,490
  Interest rate                 4.07%                               6.37%        6.40%       5.89%       4.82%
Liabilities:
 Deposits:
  Balance                     16,741                                                                   16,741       16,741
  Interest rate                 2.61%                                                                    2.61%
 Deposits-certificates
  Balance                     48,310      10,241       2,971       3,012                               64,534       64,631
  Interest rate                 5.09%       5.27%       5.42%       5.74%                                5.16%

</TABLE>

Qualitative  Aspects of Market Risk. Net interest income,  the primary component
of the Bank's net earnings,  is derived from the difference between the yield on
interest-earning assets and the cost of interest-bearing liabilities. One of the
Bank's  principal  financial  objectives is to achieve  long-term  profitability
while  reducing its exposure to  fluctuations  in interest  rates.  The Bank has
sought to reduce exposure of its earnings to changes in market interest rates by
managing the mismatch between asset and liability maturities and interest rates.

An asset or liability is interest rate  sensitive  within a specific time period
if it will  mature or reprice  within  that time  period.  If the Bank's  assets
mature or reprice more quickly or to a greater extent than its liabilities,  the
Bank's net portfolio value and net interest income would tend to increase during
periods of rising interest rates but decrease during periods of falling interest
rates.  If the Bank's assets mature or reprice more slowly or to a lesser extent
than its liabilities, as is the case with most savings institutions,  the Bank's
net  portfolio  value and net  interest  income  would tend to  decrease  during
periods of rising interest rates but increase during periods of falling interest
rates. The Bank's policy has been to mitigate the interest rate risk inherent in
the  historical  savings  institution  business of originating  long-term  loans
funded by  short-term  deposits  by  pursuing  certain  strategies  designed  to
decrease the  vulnerability of its earnings to material and prolonged changes in
interest rates.

Management's  principal  strategy in managing the Bank's  interest rate risk has
been to maintain short and intermediate-term assets in the portfolio,  including
locally  originated  adjustable rate mortgage loans.  The Bank does not actively
offer  long-term  fixed rate  loans.  All fixed rate loans that are  offered are
secured by one to  four-family  owner-occupied  dwellings  for terms of up to 30
years.  Likewise,  the interest rate charged on the Bank's adjustable rate loans
typically reprice after one, three, or five years with maximum periodic interest
rate  adjustment  limits  ("caps").  At  September  30,  1999,  the  Bank had no
adjustable  rate loans that reprice after five years from that date. In managing
its investment portfolio,  the Bank seeks to purchase investments that mature on
a basis that approximates the estimated maturities of the Bank's liabilities.

                                       5
<PAGE>

In addition to shortening  the average  repricing of its assets,  management has
attempted  to lengthen  the average  maturity of its  liabilities  by adopting a
tiered pricing program for its  certificates of deposit.  The Bank offers market
rates of interest on its certificates of deposit,  which are typically higher on
its longer term  certificates,  in order to  encourage  depositors  to invest in
certificates with longer maturities.

There  have been no  significant  changes  in the  Bank's  primary  market  risk
exposures or methods for managing those exposures since September 30, 1999.

The  Bank's  future  financial  performance  depends  to a large  extent  on how
successful it is in limiting the  sensitivity of earnings and net asset value to
changes in interest  rates.  Such  sensitivity  may be analyzed by examining the
amount by which the market value of the Bank's portfolio equity changes given an
immediate  and  sustained  change  in  interest  rates.   Based  on  the  latest
information available,  the Bank's market value of portfolio equity at September
30,  1999  would  decrease  by $2.2  million  or 7.8%  given a 200  basis  point
immediate and sustained increase in interest rates.

Average Balances, Interest, and Average Yields

Net interest  income is affected by (i) the difference  ("interest rate spread")
between  rates of  interest  earned  on  interest-earning  assets  and  rates of
interest paid on  interest-bearing  liabilities and (ii) the relative amounts of
interest-earning assets and interest-bearing  liabilities. When interest-earning
assets approximate or exceed interest-bearing liabilities, any positive interest
rate spread  will  generate  net  interest  income.  Savings  institutions  have
traditionally  used interest  rate spreads as a measure of net interest  income.
Certificates  of  deposit  constitute  approximately  79%  of the  Bank's  total
deposits and  generally  pay higher rates of interest  than core  deposits.  The
Bank's  emphasis on certificates of deposits may result in a higher average cost
of deposits which may adversely affect the Bank's interest rate spread.  Another
indication  of an  institution's  net  interest  income  is its  "net  yield  on
interest-earning  assets"  which  is net  interest  income  divided  by  average
interest-earning  assets.  The following  table sets forth  certain  information
relating  to the Bank's  average  interest-earning  assets and  interest-bearing
liabilities  and  reflects  the  average  yield on assets  and  average  cost of
liabilities  for the  periods  indicated.  Such  yields and costs are derived by
dividing  income  or  expense  by the  average  monthly  balance  of  assets  or
liabilities,  respectively,  for  the  periods  presented.  During  the  periods
indicated,  nonaccruing  loans are  included in the net loan  category.  Average
balances  are derived  from  month-end  average  balances.  Management  does not
believe  that the use of month-end  average  balances  instead of average  daily
balances has caused any material difference in the information presented.

                                       6

<PAGE>
<TABLE>
<CAPTION>

                                                            1999                          1998                         1997
                                                ---------------------------- ----------------------------  -------------------------

Average                                                             Average                       Average                    Average
                                                Average              Yield   Average              Yield/   Average            Yield/
Yield/Cost                                      Balance  Interest    Cost    Balance    Interest   Cost    Balance   Interest  Cost
----------                                      -------  --------    ----    -------    --------   ----    -------   --------  ----
                                                                                 (Dollars in Thousands)
<S>                                          <C>         <C>       <C>     <C>         <C>       <C>      <C>       <C>     <C>
Interest-earning assets:
   Loans receivable......................... $    86,754  $ 6,757     7.79% $ 83,637    $ 6,550     7.83%  $ 79,642  $ 6,239   7.83%
   Investment securities1 ..................      21,701      988     4.55    23,335      1,228     5.26     26,480    1,460   5.51
                                             -----------  -------           --------      -----            --------  -------
     Total interest-earning assets..........     108,455    7,745     7.14   106,972      7,778     7.27    106,122    7,699   7.25
                                                          -------                         -----                      -------
Non-interest earning assets.................       2,409                       2,118                          2,031
                                             -----------                    --------                        -------
   Total assets............................. $   110,864                    $109,090                       $108,153
                                             ===========                    ========                       ========
Interest-bearing liabilities:
   Deposits................................. $    81,022    3,813     4.71  $ 78,425      3,897     4.97   $ 77,834    3,835   4.93
                                             -----------  -------           --------      -----            --------  -------
   Total interest-bearing liabilities.......      81,022    3,813     4.71    78,425      3,897     4.97     77,834    3,835   4.93
                                                          -------                         -----            --------  -------
Non-interest bearing liabilities:...........       2,351                       1,965                          1,512
                                             -----------                    --------                       --------
   Total liabilities........................      83,373                      80,390                         79,346

Stockholders' equity........................      27,491                      28,700                         28,807
                                             -----------                    --------                       --------

   Total liabilities & stockholders' equity. $   110,864                    $109,090                       $108,153
                                             ===========                    ========                       ========

Net interest income.........................                3,932                         3,881                        3,864
                                                          =======                         =====                      =======

Interest rate spread 2......................                          2.43%                         2.30%                      2.32%
                                                                      ====                          ====                       ====
Net yield on interest-earning assets3.......                          3.63%                         3.63%                      3.64%
                                                                      ====
Ratio of average interest-earning assets
   to average interest-bearing liabilities..                        133.86%                       136.40%                    136.34%
                                                                    ======                        ======                     ======
</TABLE>
-----------------
1    Includes interest-bearing overnight deposits and term deposits with FHLB.
2    Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
3    Net yield on  interest-bearing  assets  represents net interest income as a
     percentage of average interest-earning assets.


                                       7
<PAGE>



The net  interest  margin is a key  measure in  determining  the  Bank's  income
performance.  The  Bank's  net  interest  margin  was 3.63% for the years  ended
September 30, 1999 and 1998. Net interest income  increased  $51,000 or 1.3% for
the year  ended  September  30,  1999 as  compared  to the same  period in 1998.
Interest  expense  decreased  $84,000 or 2.2% while  interest  income  decreased
$33,000 or .4% for the 1999 period compared to the 1998 period.

The Bank's net interest  margin was 3.63% for the year ended  September 30, 1998
compared to 3.64% for the same period in 1997.  Net  interest  income  increased
$17,000 or .4% for the year ended  September  30,  1998 as  compared to the same
period in 1997. Interest income increased $79,000 or 1.0% while interest expense
increased $62,000 or 1.6% for the 1998 period compared to the 1997 period.

Rate/Volume Analysis

The following table below sets forth certain  information  regarding  changes in
interest income and interest expense of the Bank for the periods indicated.  For
each  category  of  interest-earning  assets and  interest-bearing  liabilities,
information  is  provided  on  changes  attributable  to (i)  changes  in volume
(changes  in  average  volume  multiplied  by old rate);  (ii)  changes in rates
(changes in rate multiplied by old average volume); (iii) changes in rate-volume
(changes in rate multiplied by the change in average  volume).  Average balances
are derived from month-end balances. Management does not believe that the use of
month-end  balances  instead of average  daily  balances has caused any material
difference in the information presented.

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                Year Ended September 30,
                              ----------------------------------------------------------------
                                        1999 vs 1998                      1998 vs 1997
                              ---------------------------------  -----------------------------
                                     Increase (Decrease)               Increase (Decrease)
                                             Due to                          Due to
                              ---------------------------------  -----------------------------
                                                 Rate/                              Rate/
                               Volume     Rate   Volume     Net     Volume   Rate  Volume  Net
                               ------     ----   ------     ---     ------   ----  ------  ---
                                 (In thousands)
<S>                            <C>      <C>      <C>      <C>      <C>      <C>    <C>
Interest-earning assets:
   Loans receivable             $ 241    $ (33)   $  (1)   $ 207    $ 313    $      $     $313
   Investment securities1         (86)    (166)      12     (240)    (176)     (66) $  8  (234)
                                -----    -----    -----    -----    -----    -----  ----  ----
     Total                      $ 155    $(199)   $  11    $ (33)   $ 137    $ (66) $  8  $ 79
                                =====    =====    =====    =====    =====    =====  ====  ====
Interest expense:
   Deposits                     $ 126    $(204)   $  (6)   $ (84)   $  30    $  32  $     $ 62
                                -----    -----    -----    -----    -----    -----  ----  ----
     Total                      $ 126    $(204)   $  (6)   $ (84)   $  30    $  32  $     $ 62
                                =====    =====    =====    =====    =====    =====  ====  ====
Net change in interest income   $  29    $   5    $  17    $  51    $ 107    $ (98) $  8  $ 17
                                =====    =====    =====    =====    =====    =====  ====  ====
</TABLE>

-----------------------------
1    Includes interest-earning overnight deposits and term deposits with FHLB of
     Cincinnati.

                                       9
<PAGE>

NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information contained herein, the following discussion
contains  forward-looking   statements  that  involve  risk  and  uncertainties.
Economic  circumstances,  the Company's  operations,  and the  Company's  actual
results could differ  significantly from those discussed in the  forward-looking
statements.  Some  of the  factors  that  could  cause  or  contribute  to  such
differences  are discussed  herein,  but also include changes in the economy and
interest rates in the nation and the Company's market area generally.

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE YEARS
ENDED SEPTEMBER 30, 1999 AND 1998

Net Income. Net income increased by $79,000, or 5.58% to $1,508,000 for the year
ended  September 30, 1999 as compared to $1,429,000 for the year ended September
30, 1998.  The net  increase  was due to an increase in net  interest  income of
$51,000, a decrease in the provision for loan losses of $61,000,  and a decrease
in income tax expense of $23,000 offset by a decrease of $7,000 in  non-interest
income and an increase of $49,000 in non-interest expense.

Net Interest  Income.  Net interest income for the year ended September 30, 1999
was $3.9 million. The increase in net interest income in fiscal 1999 compared to
1998 of $51,000 was due to a decrease in interest expense of $84,000 offset by a
decrease in interest income of $33,000. Interest income in 1999 was $7.7 million
with an average yield of 7.14% compared to $7.8 million with an average yield of
7.27% in 1998. The decrease in interest  expense of $84,000 was primarily due to
the  decrease in the  average  rate paid on interest  bearing  liabilities.  The
average balance of interest  bearing  liabilities in 1999 was $81.0 million with
an average  cost of funds of 4.71%  compared  to average  balances  of  interest
bearing  liabilities  in 1998 of $78.4  million with an average cost of funds of
4.97%.

Interest  Income.  Interest  income  was  $7.7  million,  or  7.14%  of  average
interest-earning  assets,  for the year ended  September 30, 1999 as compared to
$7.8 million,  or 7.27% of average  interest-earning  assets, for the year ended
September 30, 1998.  Interest income decreased $33,000 or .4% from 1999 to 1998.
The  decrease  was due to a decline of 13 basis points in the rate earned on the
average balance of interest earning assets offset by an increase of $1.5 million
in the average balance of interest earning assets.

Interest  Expense.  Interest  expense  was $3.8  million,  or  4.71% of  average
interest-bearing  liabilities, for the year ended September 30, 1999 as compared
to $3.9  million,  or 4.97% of  average  interest-bearing  liabilities,  for the
corresponding  period in 1998.  The decrease in interest  expense of $84,000 was
the result of a 26 basis point decrease in the average rate paid on the deposits
offset by the  increase  of $2.6  million in the  average  balance  of  interest
bearing  deposits  for the year ended  September  30, 1999  compared to the same
period in 1998.

Provision for Loan Losses. The provision for loan losses was $35,000 and $96,000
for the  years  ended  September  30,  1999 and 1998,  respectively.  Management
considers many factors in determining the necessary  levels of the allowance for
loan losses, including an analysis of specific loans in the portfolio, estimated
value of the  underlying  collateral,  assessment of general  trends in the real
estate  market,   delinquency  trends,   prospective   economic  and  regulatory
conditions,  inherent loss in the loan  portfolio,  and the  relationship of the
allowance for loan losses to outstanding  loans.  At September 30, 1999 and 1998
the  allowance  for loan  losses  represented  .41%  and  .38% of  total  loans,
respectively.

                                       10
<PAGE>

Non-Interest  Income.  Non-interest income amounted to $116,000 and $123,000 for
the years ended September 30, 1999 and 1998,  respectively.  The largest item in
non-interest income is service fees on loan and deposit accounts, which amounted
to $99,000 for 1999 and 1998.

Non-Interest Expense.  Non-interest expense increased  approximately $49,000, or
2.93%,  to $1.7  million for the year ended  September  30,  1999.  Non-interest
expense was 1.6% and 1.5% of average  assets for the years ended  September  30,
1999 and 1998,  respectively.  The increase of $49,000 was  primarily  due to an
increase of $15,000 in data  processing  expenses,  $6,000 in franchise tax, and
$28,000 in other operating expenses.  The increase of $15,000 in data processing
expenses is due to increased  services from the provider  related to Y2K changes
and item processing. The increase of $28,000 in other operating expenses was due
to increases in  advertising,  transfer  agent fees,  ATM expense and accounting
fees.

Income  Tax  Expense.   The  provision  for  income  tax  expense   amounted  to
approximately  $777,000 and $800,000 for the years ended  September 30, 1999 and
1998,  respectively.  The  provision  for income tax expense as a percentage  of
income before income tax expenses amounted to 34.0% and 35.9% for 1999 and 1998,
respectively.

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE YEARS
ENDED SEPTEMBER 30, 1998 AND 1997

Net Income. Net income decreased by $47,000, or 3.18% to $1,429,000 for the year
ended  September 30, 1998 as compared to $1,476,000 for the year ended September
30, 1997.  The net  decrease  was due to an increase in net  interest  income of
$17,000 an  increase  in  non-interest  income of  $27,000,  and a  decrease  in
non-interest  expense of $22,000 offset by an increase in the provision for loan
losses of $85,000, and an increase in income tax expense of $28,000.

Net Interest  Income.  Net interest income for the year ended September 30, 1998
was $3.9 million. The increase in net interest income in fiscal 1998 compared to
1997 of $17,000 was due to an increase in interest  income of $79,000  offset by
an  increase in interest  expense of $62,000.  Interest  income in 1998 was $7.8
million with an average yield of 7.27%  compared to $7.7 million with an average
yield  of 7.25% in 1997.  The  increase  in  interest  expense  of  $62,000  was
primarily  due to the  increase  in the  average  balance  in  interest  bearing
liabilities.  The average  balance of interest  bearing  liabilities in 1998 was
$78.4  million  with an  average  cost of  funds of 4.97%  compared  to  average
balances  of  interest  bearing  liabilities  in 1997 of $77.8  million  with an
average cost of funds of 4.93%.

Interest  Income.  Interest  income  was  $7.8  million,  or  7.27%  of  average
interest-earning  assets,  for the year ended  September 30, 1998 as compared to
$7.7 million,  or 7.25% of average  interest-earning  assets, for the year ended
September  30, 1997.  Interest  income  increased  $79,000 or 1.03% from 1997 to
1998. The increase was primarily due to management  maintaining a higher average
balance of loans  receivable,  which has a higher  average yield during the year
ended September 30, 1998 compared to the year ended September 30, 1997.

Interest  Expense.  Interest  expense  was $3.9  million,  or  4.97% of  average
interest-bearing  liabilities, for the year ended September 30, 1998 as compared
to $3.8  million,  or 4.93% of  average  interest-bearing  liabilities,  for the
corresponding  period in 1997.  The increase in interest  expense of $62,000 was
the result of a 4 basis point  increase in the average rate paid on the deposits
plus the  increase  of  $591,000  in the  average  balance of  interest  bearing
deposits for the year ended  September  30, 1998  compared to the same period in
1997.

Provision for Loan Losses. The provision for loan losses was $96,000 and $11,000
for the  years  ended  September  30,  1998 and 1997,  respectively.  Management
considers many factors in determining the necessary  levels of the

                                       11
<PAGE>

allowance  for loan  losses,  including  an analysis  of  specific  loans in the
portfolio,  estimated value of the underlying collateral,  assessment of general
trends in the real estate market,  delinquency trends,  prospective economic and
regulatory conditions, inherent loss in the loan portfolio, and the relationship
of the allowance for loan losses to outstanding loans. At September 30, 1998 and
1997 the allowance for loan losses represented .38% of total loans.

Non-Interest  Income.  Non-interest  income amounted to $122,000 and $95,000 for
the years ended September 30, 1998 and 1997,  respectively.  The largest item in
non-interest income is service fees on loan and deposit accounts, which amounted
to $99,000 and $75,000 for 1998 and 1997, respectively.

Non-Interest Expense.  Non-interest expense decreased  approximately $22,000, or
1.29%,  to $1.7  million for the year ended  September  30,  1998.  Non-interest
expense was 1.5% and 1.6% of average  assets for the years ended  September  30,
1998 and 1997,  respectively.  The  decrease of $22,000 was due to a decrease of
$27,000 in  federal  and other  insurance  premiums,  a  decrease  of $22,000 in
franchise tax, and a decrease of $25,000 in other  operating  expenses offset by
an increase of $29,000 in  compensation  and benefits,  an increase of $9,000 in
occupancy expenses plus an increase of $14,000 in data processing expenses.  The
decrease of $27,000 in federal and other insurance premiums is due to savings in
1998 resulting from the reduction of the insurance assessment rate on the Bank's
deposits as a result of the recapitalization of SAIF. The decrease of $25,000 in
other  operating  expenses was primarily due to decrease in legal expense of the
Company.  The increase of $29,000 in compensation  and benefits  resulted from a
$9,000 increase related to benefits earned in the employee stock option plan and
normal salary increases and related benefits of $20,000.

Income  Tax  Expense.   The  provision  for  income  tax  expense   amounted  to
approximately  $800,000 and $772,000 for the years ended  September 30, 1998 and
1997,  respectively.  The  provision  for income tax expense as a percentage  of
income before income tax expenses amounted to 35.9% and 34.3% for 1998 and 1997,
respectively.

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 1999 AND 1998

The Company's consolidated assets increased $497,000, or .45%, to $110.4 million
at September 30, 1999 compared to $109.9 million at September 30, 1998. Cash and
cash equivalents  increased $276,000,  securities  available-for-sale  increased
$183,000,  securities  held-to-maturity  decreased $3.9 million, loans increased
$3.8 million, and other non-interest earning assets increased by $157,000.

Securities  classified  as  available-for-sale  are  carried at market  value in
accordance with SFAS No. 115,  "Accounting  for Certain  Investments in Debt and
Equity Securities." Securities  available-for-sale increased $183,000 due to the
increase in fair value of such securities. Securities held-to-maturity decreased
$3.9  million  due to the call of  thirteen  debt  securities  backed  by a U.S.
Government  Agency  offset by the purchase of five debt  securities  backed by a
U.S. Government Agency.

Loans  receivable  increased  $3.8 million or 4.4% to $89.1 million at September
30, 1999 from $85.3 million at September 30, 1998.  The increase in loans during
the year ended  September  30, 1999 is the result of  management  becoming  more
active in loan solicitation.

Liabilities of the Company increased $3.3 million,  or 4.0%, to $84.2 million at
September 30, 1999 compared to $80.9 million at September 30, 1998. The increase
in  liabilities  was  primarily due to the increase in deposits of $3.0 million,
reflecting management's success in attracting depositors within the local market
area.

Stockholder's  equity was $26.2  million at  September  30,  1999 and  decreased
approximately  $2.8 million from the balance at September 30, 1998. The decrease
was due to the  repurchase  of  common  stock  totaling  $3.2  million  plus the
declaration  of dividends  totaling  $1.3  million  offset by net income of $1.5
million, an increase of $121,000 in

                                       12
<PAGE>

the  net  unrealized  appreciation  on  securities  available-for-sale,  plus an
increase of $154,000 due to ESOP shares released from collateral in 1998.

Year 2000 Readiness

The  financial  industry is one of the largest  industries  impacted by the year
2000 issue. However, this is not a new problem. This issue was first faced years
ago when financial  institutions  began issuing  mortgage loans for 25-30 years,
which caused the maturity date to fall in year 2000 or beyond. So, this is not a
new issue for financial institutions.

The following  discussion of the  implications  of the Year 2000 problem for the
Bank contains numerous forward looking statements based on inherently  uncertain
information.  The cost of the  project  and the date on which the Bank  plans to
complete the internal Year 2000  modifications  are based on  management's  best
estimates,  which are derived utilizing a number of assumptions of future events
including the continued  availability of internal and external resources,  third
party modifications,  and other factors. However, there can be no guarantee that
these  statements will be achieved,  and actual results could differ.  Moreover,
although management believes it will be able to make the necessary modifications
in advance,  there can be no guarantee  that failure to modify the systems would
not have a material adverse effect on the Bank.

The Bank places a high degree of reliance on computer  systems of third parties,
such as customers, suppliers, and other financial and governmental institutions.
Although  the Bank is  assessing  the  readiness  of  these  third  parties  and
preparing contingency plans, there can be no guarantee that the failure of these
third  parties to modify their systems in advance of December 31, 1999 would not
have a material adverse affect on the Bank.

Harrodsburg  First  Financial  Bancorp,  Inc. has fully  completed the Awareness
Phase,  Assessment Phase, and Renovation Phase of its Year 2000 Compliance Plan.
All mission  critical systems have been  identified,  and all systems  requiring
replacement  have been  replaced.  The Bank's  entire  computer  system has been
replaced with Y2K compliant  hardware and software and is already in use;  thus,
completing the  Implementation  Phase.  All testing,  including the  Contingency
Plan, has been successfully completed.

The Bank's service provider,  INTRIEVE, Inc., continues to actively pursue every
avenue  required to insure their Y2K compliance and continues to be monitored by
the Bank's regulatory agency, the Office of Thrift Supervision.  INTRIEVE,  Inc.
is keeping their customers informed as to their state of readiness.

Total expenses  related to Year 2000  compliance are estimated at  approximately
$187,000.  Expenses  consist of the cost of  replacement  hardware and software,
consulting fees, and labor.  Expenses to date are  approximately  $183,000.  The
balance of  expenses  are  estimated  at $2,000 for 1999,  of which  consists of
consulting fees and labor, with the remaining expense of $2,000 in the year 2000
for consulting fees and labor.

The  major  component  of risk to the  Bank  lies  with  its  service  provider,
INTRIEVE, Inc. Should INTRIEVE, Inc. not become fully Y2K compliant, it would be
necessary  for the Bank to revert to manual  processing  of  customer  accounts.
Though this would be a labor-intensive  process, it would be possible to operate
in such a manner for a reasonable  period of time.  The Bank does not anticipate
any  risk   associated   with   environmental   systems,   such  as  heating/air
conditioning,  phone  systems,  or  utilities,  as it has been  assured that all
systems are Y2K compliant. The Bank is relying on the utility companies internal
testing  and  representations  to provide  the  required  services as drives the
Bank's  data  systems.  Any  failure of the  utilities  to address the Year 2000
issues  could  result in the Bank being  unable to service  its  customers  on a
timely basis.  However,  as Harrodsburg First Financial  Bancorp,  Inc. does not
control all software it uses or interfaces to, it is possible that errors may be
undetected  should  other  parties  fail to ensure  their  systems are year 2000
compliant.

                                       13
<PAGE>

The  Bank  has  adopted  a  Contingency  Plan to be used  in the  event  on-line
processing with INTRIEVE,  Inc., the Bank's service provider, is not operational
due to the rollover of the date from  December 31, 1999 to January 1, 2000.  The
plan,  if  needed,  will  be  implemented  by the  Year  2000  Steering  Team as
designated  in the Bank's  Year 2000  Compliance  Plan  approved by the Board of
Directors.

Despite the best efforts of management to address this issue, the vast number of
external entities that have direct and indirect business  relationships with the
Company,  such as  customers,  vendors,  payment  system  providers,  and  other
financial institutions,  makes it impossible to assure that a failure to achieve
compliance  by one or more of these  entities  would not have  material  adverse
impact on the operations of the Bank.

Regulatory Capital

The OTS imposes  regulations  which provide that the savings  institutions  must
maintain certain levels of capital.  Specifically,  the regulations provide that
savings  institutions  must maintain core capital equal to 4% of adjusted  total
assets and a combination of core and  supplementary  capital equal to 8% of risk
weighted assets.

The following summarizes the Bank's regulatory capital requirements and position
at September 30, 1999 and 1998:
<TABLE>
<CAPTION>
                                                              1999               1998
                                                      ------------------   -----------------
                                                              (Dollars in Thousands)
                                                         Amount   Percent   Amount   Percent
                                                      ---------   -------  --------  -------
<S>                                                 <C>           <C>    <C>         <C>
Core capital.....................................     $  22,556     21.2   $ 24,912    23.5
Core capital requirement.........................         4,260      4.0      4,247     4.0
                                                      ---------   -------  --------  -------
Excess...........................................     $  18,296     17.2   $ 20,665    19.5
                                                      =========   =======  ========  =======
Core capital ....................................     $  22,556            $ 24,912
General valuation allowance......................           350                 335
                                                      ---------            --------
Total capital (core and supplemental)............        22,906     36.9     25,247    43.8
Risk-based capital requirement...................         4,961      8.0      4,612     8.0
                                                      ---------   -------  --------  -------
Excess...........................................     $  17,945     28.9   $ 20,635    35.8
                                                      =========   =======  ========  =======
</TABLE>

Liquidity

The liquidity of the Company  depends  primarily on the dividends  paid to it as
the sole  shareholder  of the Bank. The payment of cash dividends by the Bank on
its common  stock is limited by  regulations  of the OTS,  which are tied to the
Bank's level of compliance with its regulatory capital requirements.

The Bank's primary sources of funds are deposits and proceeds from principal and
interest  payments of loans.  Additional  sources of liquidity are advances from
the FHLB of Cincinnati and other borrowings. At September 30, 1999, the Bank had
no outstanding borrowings.  The Bank has utilized and may in the future, utilize
FHLB of  Cincinnati  borrowings  during  periods  when  management  of the  Bank
believes that such borrowings  provide a lower cost source of funds than deposit
accounts  and the Bank  desires  liquidity  in order to help  expand its lending
operations.

The Company's  operating  activities produced positive cash flows for the fiscal
years ended September 30, 1999, 1998, and 1997.

                                       14
<PAGE>

The Bank's  most  liquid  assets are cash and  cash-equivalents,  which  include
investments in highly liquid, short-term investments.  At September 30, 1999 and
1998,  cash  and  cash  equivalents  totaled  $8.4  million  and  $8.1  million,
respectively.

At September 30, 1999,  the Bank had $48.3 million in  certificates  of deposits
due  within  one year  and  $13.2  million  due  between  one and  three  years.
Management believes, based on past experience, that the Bank will retain much of
the deposits or replace them with new deposits or  borrowings.  At September 30,
1999,  the  Bank  had $1.5  million  in  outstanding  commitments  to  originate
mortgages.   The  Bank  intends  to  fund  these   commitments  with  short-term
investments and proceeds from loan repayments.

OTS regulations  require that the Bank maintain  specified  levels of liquidity.
Liquidity  is measured as a ratio of cash and  certain  investments  to deposits
subject to withdrawal.  The minimum level of liquidity required by regulation is
presently 4.0%. The Bank's liquidity ratio at September 30, 1999, 1998, and 1997
was 23.21%, 27.34%, and 32.2%, respectively.

Impact of Inflation and Changing Prices

The consolidated  financial  statements and notes thereto  presented herein have
been prepared in accordance with generally accepted accounting principles, which
require the measurement of financial  position and operating results in terms of
historical  dollars without  considering  the change in the relative  purchasing
power of money  over  time and due to  inflation.  The  impact of  inflation  is
reflected  in the  increased  cost  of the  Company's  operations.  Unlike  most
industrial  companies,  nearly all the assets and liabilities of the Company are
monetary in nature.  As a result,  interest  rates have a greater  impact on the
Company's  performance  than do the  effects  of  general  levels of  inflation.
Interest  rates do not  necessarily  move in the same  direction  or to the same
extent as the price of goods and services.

Impact of Recent Accounting Pronouncements

Reporting  of  Comprehensive  Income.  In June 1997,  the  Financial  Accounting
Standards  Board issued  Statements of Financial  Accounting  Standards No. 130,
Reporting of Comprehensive Income ("SFAS 130"), which establishes  standards for
reporting  and display of  comprehensive  income and its  components  (revenues,
expenses,  gains,  and  losses)  in a full  set of  financial  statements.  This
statement also requires that all items that are required to be recognized  under
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial statements.

This statement is effective for fiscal years  beginning after December 15, 1997.
Earlier application is permitted.  Reclassification of financial  statements for
earlier  periods  provided for  comparative  purposes is  required.  The Company
adopted  SFAS 130  during  fiscal  year 1999  without a  material  effect on the
Company.

Disclosure about Segments and Related  Information.  In June 1997, the Financial
Accounting  Standards Board issued Statement of Financial  Accounting  Standards
No. 131,  Disclosure  about  Segments of an Enterprise  and Related  Information
("SFAS  131"),  which  establishes  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating  segments in interim  financial  reports issued to stockholders.  This
statement also establishes  standards for related disclosures about products and
services,  geographic  areas, and major customers.  This statement  requires the
reporting  of  financial  and  descriptive  information  about  an  enterprise's
reportable operating segments.

This statement is effective for financial statements for periods beginning after
December 15, 1997. In the initial year of application,  comparative  information
for earlier years is to be restated.  The Company adopted SFAS 131 during fiscal
year 1999, and there was no material effect on the Company's  financial position
or operating results.

                                       15
<PAGE>

Accounting for Derivative Instruments and Hedging Activities.  In June 1998, the
FASB issued SFAS No. 133,  "Accounting  for Derivative  Instruments  and Hedging
Activities,"  which  requires  entities to recognize  all  derivatives  in their
financial  statements  as either assets or  liabilities  measured at fair value.
SFAS No. 133 also specifies new methods of accounting for hedging  transactions,
prescribes the items and transactions that may be hedged, and specifies detailed
criteria to be met to qualify for hedge accounting.

The definition of a derivative  financial instrument is complex, but in general,
it is an instrument  with one or more  underlyings,  such as an interest rate of
foreign exchange rate, that is applied to a notional  amount,  such as an amount
of currency,  to determine  the  settlement  amounts.  It generally  requires no
significant initial investment and can be settled net or by delivery of an asset
that is  readily  convertible  to cash.  SFAS No.  133  applies  to  derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

SFAS No.  133,  as amended  by SFAS No.  137,  is  effective  for  fiscal  years
beginning  after June 15, 2000. On adoption,  entities are permitted to transfer
held-to-maturity  debt securities to the  available-for-sale or trading category
without  calling into  question  their intent to hold other debt  securities  to
maturity in the future.  SFAS No. 133 is not expected to have a material  impact
on the Company's financial statements.


                                       16
<PAGE>


                      MILLER, MAYER, SULLIVAN & STEVENS LLP
                          CERTIFIED PUBLIC ACCOUNTANTS
                      "INNOVATORS OF SOLUTION TECHNOLOGY"sm

                                 (606) 223-3095

                          INDEPENDENT AUDITORS' REPORT


Board of Directors
Harrodsburg First Financial Bancorp, Inc.
Harrodsburg, Kentucky


We have audited the  accompanying  consolidated  balance  sheets of  Harrodsburg
First Financial  Bancorp,  Inc. and Subsidiary as of September 30, 1999 and 1998
and the related  consolidated  statements of income,  stockholders'  equity, and
cash flows for each of the years in the three year period  ended  September  30,
1999. These  consolidated  financial  statements are the  responsibility  of the
management  of  Harrodsburg  First  Financial  Bancorp,   Inc.  (Company).   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Harrodsburg First
Financial  Bancorp,  Inc. and  Subsidiary as of September 30, 1999 and 1998, and
the  results of their  operations  and their cash flows for each of the years in
the three year period ended  September  30, 1999 in  conformity  with  generally
accepted accounting principles.


/s/ Miller, Mayer, Sullivan, & Stevens, LLP
Lexington, Kentucky
November 29, 1999

                                                                 (606) 223-3095
2365 HARRODSBURG ROAD      LEXINGTON, KENTUCKY 40504-3399   FAX: (606) 223-2143


                                       17
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                           September 30, 1999 and 1998

                        --------------------------------
<TABLE>
<CAPTION>

ASSETS                                                                         1999             1998
                                                                         ------------------------------
<S>                                                                     <C>              <C>
Cash and due from banks                                                  $     541,527    $     739,772
Interest Bearing Deposits                                                    7,808,786        7,334,333
Securities available-for-sale at fair value                                  4,008,576        3,825,492
Securities held-to-maturity, fair value of $7,150,839 and                    7,231,745       11,140,809
  $11,226,762 for 1999 and 1998, respectively
Loans receivable, net                                                       89,061,610       85,271,904
Accrued interest receivable                                                    618,854          660,798
Premises and equipment, net                                                  1,055,196          852,123
Other assets                                                                    89,837           94,046
                                                                         -------------    -------------
         Total assets                                                    $ 110,416,131    $ 109,919,277
                                                                         =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                 $  82,018,317    $  78,995,644
Advance payments by borrowers for taxes and insurance                           80,865           71,849
Deferred Federal income tax                                                  1,395,875        1,398,193
Dividends payable                                                              468,701          354,445
Other liabilities                                                              232,139          117,533
                                                                         -------------    -------------
         Total liabilities                                                  84,195,897       80,937,664
                                                                         -------------    -------------

Stockholders' equity
Common stock, $0.10 par value, 5,000,000 shares authorized;                    218,213          218,213
  2,182,125 shares issued and outstanding
Additional paid-in capital                                                  21,194,168       21,154,129
Retained earnings, substantially restricted                                 11,187,966       11,003,179
Accumulated other comprehensive income                                       2,595,842        2,475,007
Treasury stock, 481,250 and 258,607 shares, at cost, for 1999               (7,698,625)      (4,477,515)
  and 1998, respectively
Unallocated employee stock ownership plan (ESOP) shares                     (1,277,330)      (1,391,400)
                                                                         -------------    -------------
Total stockholders' equity                                                  26,220,234       28,981,613
                                                                         -------------    -------------
         Total liabilities and stockholders' equity                      $ 110,416,131    $ 109,919,277
                                                                         =============    =============
</TABLE>


The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                       18
<PAGE>

            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
             for the years ended September 30, 1999, 1998, and 1997

                      -----------------------------------
<TABLE>
<CAPTION>
                                                                1999        1998          1997
                                                             ----------   ----------   ----------
<S>                                                         <C>          <C>          <C>
Interest income:
  Interest on loans                                          $6,757,256   $6,549,702   $6,238,613
  Interest and dividends on securities                          552,243      769,604      781,583
  Other interest income                                         435,817      459,484      678,480
                                                             ----------   ----------   ----------
                  Total interest income                       7,745,316    7,778,790    7,698,676
                                                             ----------   ----------   ----------

Interest expense:
  Interest on deposits                                        3,812,626    3,897,383    3,834,806
                                                             ----------   ----------   ----------

Net interest income                                           3,932,690    3,881,407    3,863,870
Provision for loan losses                                        35,000       96,631       11,000
                                                             ----------   ----------   ----------
Net interest income after provision for loan losses           3,897,690    3,784,776    3,852,870
                                                             ----------   ----------   ----------

Non-interest income:
Loan and other service fees, net                                 99,932       99,189       75,275
Other                                                            16,330       23,594       20,165
                                                             ----------   ----------   ----------
                                                                116,262      122,783       95,440
                                                             ----------   ----------   ----------
Non-interest expense:
Compensation and benefits                                       934,838      940,119      911,051
  Occupancy expenses, net                                       144,784      138,310      129,040
  Federal and other insurance premiums                           48,297       51,062       78,539
  Data processing expenses                                      135,063      119,365      104,842
  State franchise tax                                           124,034      117,096      139,350
  Other operating expenses                                      341,400      313,313      338,585
                                                             ----------   ----------   ----------
                                                              1,728,416    1,679,265    1,701,407
                                                             ----------   ----------   ----------
Income before income tax expense                              2,285,536    2,228,294    2,246,903
Income tax expense                                              777,074      799,620      770,637
                                                             ----------   ----------   ----------
Net income                                                   $1,508,462   $1,428,674   $1,476,266
                                                             ==========   ==========   ==========
Earnings per common share                                    $      .94   $     0.79   $     0.78
                                                             ==========   ==========   ==========
Earnings per common share assuming dilution                  $      .94   $     0.79   $     0.78
                                                             ==========   ==========   ==========
Weighted average common shares outstanding during the year    1,609,855    1,811,551    1,896,684
                                                             ==========   ==========   ==========
Weighted average common shares after dilutive
         effect outstanding during the year                   1,609,855    1,813,229    1,896,684
                                                             ==========   ==========   ==========
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                       19
<PAGE>

            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
             for the years ended September 30, 1999, 1998, and 1997

                     -------------------------------------
<TABLE>
<CAPTION>
                                                                                 Accumulated
                                                       Additional                   Other                  Unallocated     Total
                                            Common      Paid-In     Retained    Comprehensive   Treasury      ESOP     Stockholders'
                                             Stock      Capital     Earnings        Income       Stock       Shares        Equity
                                           ---------- -----------  -----------  -----------   ----------  -----------  ------------
<S>                                        <C>       <C>          <C>           <C>          <C>         <C>           <C>
Balance, September 30, 1996                 $218,213  $21,001,572  $10,229,074   $1,191,925   $(789,495)  $(1,629,300)  $30,221,989
                                                                                                                      --------------
Comprehensive income:
  Net income                                                         1,476,266                                            1,476,266
  Other comprehensive income, net of tax
    unrealized gains on securities                                                  551,709                                 551,709
                                                                                                                      --------------
Total comprehensive income                                                                                                2,027,975
Dividend declared                                                     (667,836)                                            (667,836)
ESOP shares earned in 1997                                 75,667                                             116,360       192,027
Purchase of 107,977 shares of common stock                                                   (2,001,331)                 (2,001,331)
                                           ---------- -----------  -----------  -----------   ----------  -----------  ------------
Balance, September 30, 1997                  218,213   21,077,239   11,037,504    1,743,634  (2,790,826)   (1,512,940)   29,772,824
                                                                                                                      --------------
Comprehensive income:
  Net income                                                         1,428,674                                            1,428,674
  Other comprehensive income, net of tax
    unrealized gains on securities                                                  731,373                                 731,373
                                                                                                                      --------------
Total comprehensive income                                                                                                2,160,047
Dividend declared                                                   (1,462,999)                                          (1,462,999)
ESOP shares earned in 1998                                 76,890                                             121,540       198,430
Purchase of 101,238 shares of common stock                                                   (1,686,689)                 (1,686,689)
                                           ---------- -----------  -----------  -----------   ----------  -----------  ------------
Balance, September 30, 1998                  218,213   21,154,129   11,003,179    2,475,007  (4,477,515)   (1,391,400)   28,981,613
                                                                                                                      --------------
Comprehensive income:
  Net income                                                         1,508,462                                            1,508,462
  Other comprehensive income, net of tax
    unrealized gains on securities                                                  120,835                                 120,835
                                                                                                                      --------------
Total comprehensive income                                                                                                1,629,297
Dividend declared                                                   (1,323,675)                                          (1,323,675)
ESOP shares earned in 1999                                 40,039                                             114,070       154,109
Purchase of 222,643 shares of common stock                                                   (3,221,110)                 (3,221,110)
                                           ---------- -----------  -----------  -----------   ----------  -----------  ------------
Balance, September 30, 1999                 $218,213  $21,194,168  $11,187,966   $2,595,842 $(7,698,625)  $(1,277,330)  $26,220,234
                                           ========== ===========  ===========  ===========   ==========  ===========  ============
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                       20
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             for the years ended September 30, 1999, 1998, and 1997

                        -------------------------------
<TABLE>
<CAPTION>

                                                                 1999         1998             1997
                                                            -----------    -----------    -----------
Operating activities

<S>                                                        <C>            <C>            <C>
Net income                                                  $ 1,508,462    $ 1,428,674    $ 1,476,266
Adjustments to reconcile net income to net cash
provided by operating activities:
  Provision for loan losses                                      35,000         96,631         11,000
  Provision for depreciation                                     68,042         70,809         55,017
  ESOP benefit expense                                          154,109        198,430        192,027
  Amortization of loan fees                                     (66,649)       (65,361)       (41,689)
  Amortization of investment premium (discount)                  (3,055)         4,349         (2,691)
  Loss on sale of fixed asset                                     3,397
  FHLB stock dividend                                           (99,900)       (95,400)       (87,300)
Change in:
  Interest receivable                                            41,944        (19,474)        34,109
  Interest payable                                                1,004           (437)           676
  Accrued liabilities                                           113,602        (48,615)      (552,244)
  Prepaid expense                                                 4,209        (17,275)        41,610
           Income taxes payable                                 (64,567)        17,790        163,000
                                                            -----------    -----------    -----------

         Net cash provided by operating activities            1,695,598      1,570,121      1,289,781
                                                            -----------    -----------    -----------

Investing activities

Net (increase) decrease in loans                             (3,758,057)    (4,041,896)    (3,728,253)
Purchase of certificates of deposit                            (600,000)
Maturity of certificates of deposit                             600,000      2,500,000
Purchase of securities held-to-maturity                      (2,500,000)    (5,000,000)    (3,502,968)
Call of security held-to-maturity                             6,500,000      5,000,000      3,000,000
Principle repayments - mortgage back securities                  12,018         14,847         31,119
Purchase of fixed assets                                       (274,512)      (266,735)       (53,294)
                                                            -----------    -----------    -----------

         Net cash provided (used) by investing activities       (20,551)    (3,693,784)    (2,353,396)
                                                            -----------    -----------    -----------
</TABLE>
                                   (Continued)

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                       21
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
             for the years ended September 30, 1999, 1998, and 1997

                        -------------------------------
<TABLE>
<CAPTION>

                                                                 1999             1998            1997
                                                            ------------    ------------    ------------
<S>                                                        <C>             <C>              <C>
Financing activities

Net increase (decrease) in demand deposits,                    1,191,312        (378,672)        (53,051)
NOW accounts and savings accounts
Net increase (decrease) in certificates of deposit             1,831,362         745,111       1,736,046
Net increase (decrease) in custodial accounts                      9,017           5,779          (2,464)
Purchase of treasury stock                                    (3,221,110)     (1,686,689)     (2,001,331)
Payment of dividends                                          (1,209,420)     (1,108,554)     (1,059,469)
                                                            ------------    ------------    ------------
         Net cash provided (used) by financing activities     (1,398,839)     (2,423,025)     (1,380,269)
                                                            ------------    ------------    ------------
         Increase (decrease) in cash and cash equivalents        276,208      (4,546,688)     (2,443,884)
Cash and cash equivalents, beginning of year                   8,074,105      12,620,793      15,064,677
                                                            ------------    ------------    ------------
Cash and cash equivalents, end of year                      $  8,350,313    $  8,074,105    $ 12,620,793
                                                            ============    ============    ============
Supplemental Disclosures
Cash payments for:
Interest on deposits                                        $  3,811,622    $  3,897,821    $  3,834,129
Income taxes                                                $    745,000    $    830,000    $    602,000

</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                       22
<PAGE>

            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        -------------------------------

1.   Summary of Significant Accounting Policies

     On September  29, 1995,  Harrodsburg  First  Financial  Bancorp,  Inc. sold
     through a public  offering  2,182,125  shares of common stock at a price of
     $10 per  share in  connection  with the  conversion  of  Harrodsburg  First
     Federal  Savings and Loan  Association  from a federally  chartered  mutual
     savings and loan  association to a federally  chartered stock savings bank,
     and the simultaneous  formation of a savings and loan holding  company.  In
     the  conversion,  Harrodsburg  First Federal  Savings and Loan  Association
     changed its name to First Federal Savings Bank of Harrodsburg (Bank).

     The  Company's  articles of  incorporation  authorize the issuance of up to
     500,000 shares of preferred stock,  which may be issued with certain rights
     and  preferences.  As of September  30, 1999,  no preferred  stock has been
     issued.

     The Company is a  corporation  organized  under the laws of  Delaware.  The
     Company  is a  savings  and  loan  holding  company  whose  activities  are
     primarily limited to holding the stock of the Bank. The Bank is a federally
     chartered  stock  savings  bank and a member of the Federal  Home Loan Bank
     System.  As a member of this  system,  the Bank is  required to maintain an
     investment  in capital  stock of the Federal  Home Loan Bank of  Cincinnati
     (FHLB) in an amount equal to at least the greater of 1% of its  outstanding
     loan and  mortgage-backed  securities or .3% of total assets as of December
     31 of each year.

     The Bank  conducts a general  banking  business in central  Kentucky  which
     primarily  consists of  attracting  deposits  from the  general  public and
     applying those funds to the origination of loans for residential, consumer,
     and  nonresidential  purposes.  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 the 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's 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.

                                       23
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     The following is a summary of the Company's significant accounting policies
     which have been consistently applied in the preparation of the accompanying
     consolidated financial statements.

     Principles of Consolidation.  The consolidated financial statements include
     the  accounts  of the  Company,  the  Bank,  and the  Bank's  wholly  owned
     subsidiary, Harrodsburg Savings & Loan Service Corporation. All significant
     intercompany accounts and transactions have been eliminated.

     Loan  Origination  Fees.  The Bank  accounts for loan  origination  fees in
     accordance  with SFAS No. 91 "Accounting for  Nonrefundable  Fees and Costs
     Associated  with  Originating or Acquiring Loans and Initial Direct Cost of
     Leases."  Pursuant  to the  provisions  of SFAS No.  91,  origination  fees
     received  from loans,  net of direct  origination  costs,  are deferred and
     amortized to interest income using the level-yield method, giving effect to
     actual loan  prepayments.  Additionally,  SFAS No. 91 generally  limits the
     definition of loan  origination  costs to the direct costs  attributable to
     originating a loan, i.e., principally actual personnel costs. Fees received
     for loan  commitments  that are  expected  to be drawn  upon,  based on the
     Bank's experience with similar commitments, are deferred and amortized over
     the life of the loan  using the  level-yield  method.  Fees for other  loan
     commitments are deferred and amortized over the loan commitment period on a
     straight-line basis.

     Investment Securities. Investment securities that management has the intent
     and ability to hold to maturity are  classified  as  held-to-maturity,  and
     carried at cost,  adjusted  for  amortization  of premium or  accretion  of
     discount  over the term of the  security,  using  the level  yield  method.
     Included  in this  category  of  investments  is the FHLB stock  which is a
     restricted stock carried at cost. Securities available-for-sale are carried
     at market  value.  Adjustments  from  amortized  cost to  market  value are
     recorded in stockholders' equity net of deferred income tax until realized.
     The  identified  security  method is used to  determine  gains or losses on
     sales of securities.

     Regulations  require  the  Bank to  maintain  an  amount  of cash  and U.S.
     government and other approved  securities equal to a prescribed  percentage
     (4% at  September  30,  1999 and 1998) of  deposit  accounts  (net of loans
     secured by deposits) plus short-term borrowings.  At September 30, 1999 and
     1998, the Bank met these requirements.

     Federal Home Loan  Mortgage  Corporation  Stock.  On December 6, 1984,  the
     Federal Home Loan Mortgage Corporation created a new class of participating
     preferred stock. The preferred stock was distributed to the twelve district
     banks of the Federal Home Loan Banking System for  subsequent  distribution
     to their member  institutions.  The Bank received 1,606 shares of the stock
     and recorded it at its fair value of $40 per share as of December 31, 1984.
     The fair value of the stock recognized as of December 1984 became its cost.
     The  stock  has been  subsequently  classified  as  available-for-sale  and
     carried at market value.

     Office Properties and Equipment. Office properties and equipment are stated
     at cost less accumulated  depreciation.  Depreciation is computed using the
     straight  line  method and the double  declining  balance  method  over the
     estimated useful lives of the related assets. The gain or loss on the sales
     of property and equipment is recorded in the year of disposition.

                                  (continued)

                                       24
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     Real Estate  Owned.  Real estate owned is  generally  comprised of property
     acquired  through  foreclosure or deed in lieu of  foreclosure.  Foreclosed
     real estate is initially  recorded at fair value, net of selling  expenses,
     establishing  a new cost  basis.  Expenses  relating  to holding  property,
     including interest expense, are not capitalized. These expenses are charged
     to operations as incurred.  After foreclosure,  valuations are periodically
     performed  by  management,  and the real  estate is carried at the lower of
     carrying amount or fair value less estimated selling expenses.

     Loans  Receivable.  Loans  receivable  are stated at the  principal  amount
     outstanding  less the allowance for loan losses and net deferred loan fees.
     The  Bank  has  adequate  liquidity  and  capital,   and  it  is  generally
     management's intention to hold such assets to maturity.

     The  allowance  for loan  losses is  increased  by  charges  to income  and
     decreased  by  charge-offs  (net  of  recoveries).   Management's  periodic
     evaluation  of the  adequacy of the  allowance  is based on the Bank's past
     loan loss  experience,  known and inherent risks in the portfolio,  adverse
     situations that may affect the borrower's  ability to pay,  estimated value
     of any  underlying  collateral,  and  current  economic  conditions.  While
     management uses the best information  available,  future adjustments may be
     necessary if  conditions  differ  substantially  from  assumptions  used in
     management's  evaluation.  In addition,  various regulatory agencies, as an
     integral  part  of  their  examination  process,  periodically  review  the
     allowance for loan losses and may require additions to the allowances based
     on their judgment about information  available to them at the time of their
     examination.

     Interest  earned on loans  receivable  is  recorded  in the period  earned.
     Uncollectible  interest on loans that are contractually past due is charged
     off  or  an  allowance  is  established  based  on  management's   periodic
     evaluation.  The allowance is  established  by a charge to interest  income
     equal to all  interest  previously  accrued,  and  income  is  subsequently
     recognized  only  to the  extent  cash  payments  are  received  until,  in
     management's judgment, the borrower's ability to make periodic interest and
     principal payments is back to normal, in which case the loan is returned to
     accrual status.

     The Bank accounts for the impairment of a loan in accordance  with SFAS No.
     114,  Accounting by Creditors for  Impairment of a Loan, as amended by SFAS
     No. 118 as to certain income recognition and disclosure  provisions.  These
     accounting standards require that impaired loans be measured based upon the
     present  value of  expected  future  cash  flows  discounted  at the loan's
     effective  interest rate, or as an  alternative,  at the loan's  observable
     market price or fair value of the collateral. The Bank's current procedures
     for evaluating impaired loans result in carrying such loans at the lower of
     cost or fair value.

     A loan is defined  under SFAS No. 114 as  impaired  when,  based on current
     information  and events,  it is probable  that a creditor will be unable to
     collect all  amounts due  according  to the  contractual  terms of the loan
     agreement.  In applying the  provisions of SFAS No. 114, the Bank considers
     its  investment  in  one-to-four  family  residential  loans  and  consumer
     installment  loans to be homogenous  and  therefore  excluded from separate
     identification  for  evaluation of  impairment.  With respect to the Bank's
     investment in impaired  multi-family and  nonresidential  loans, such loans
     are  collateral  dependent,  and as a result,  are  carried as a  practical
     expedient at the lower of cost or fair value.

                                  (continued)

                                       25
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     Collateral dependent loans when put in non-accrual status are considered to
     constitute  more than a minimum  delay in repayment  and are  evaluated for
     impairment under SFAS No. 114 at that time.

     Deposits. The  Bank's  deposits  are  insured  by the  Savings  Association
     Insurance  Fund  ("SAIF"),  which is  administered  by the Federal  Deposit
     Insurance Corporation ("FDIC").

     Income Taxes.  The Company  accounts for federal income taxes in accordance
     with the  provisions of SFAS No. 109,  "Accounting  for Income Taxes." SFAS
     No. 109 established  financial  accounting and reporting  standards for the
     effects of income taxes that result from the  Company's  activities  within
     the current and previous years. Pursuant to the provisions of SFAS No. 109,
     a deferred tax  liability or deferred tax asset is computed by applying the
     current  statutory  tax  rates to net  taxable  or  deductible  differences
     between the tax basis of an asset or liability  and its reported  amount in
     the financial  statements that will result in taxable or deductible amounts
     in future periods. Deferred tax assets are recorded only to the extent that
     the  amount  of  net  deductible  temporary   differences  or  carryforward
     attributes may be utilized  against current period  earnings,  carried back
     against prior years earnings,  offset against taxable temporary differences
     reversing  in future  periods,  or utilized  to the extent of  management's
     estimate of future taxable  income.  A valuation  allowance is provided for
     deferred  tax  assets  to the  extent  that  the  value  of net  deductible
     temporary  differences and  carryforward  attributes  exceeds  management's
     estimates  of  taxes  payable  on  future  taxable  income.   Deferred  tax
     liabilities  are provided on the total amount of net temporary  differences
     taxable in the future.

     The Company files a  consolidated  federal income tax return with the Bank.
     The current income tax expense or benefit is allocated to each  Corporation
     included  in the  consolidated  tax  return  based on their tax  expense or
     benefit computed on a separate return basis.

     Employee  Stock  Ownership  Plan.  Shares  of  common  stock  issued to the
     Company's  employee stock  ownership plan (ESOP) are initially  recorded as
     unearned ESOP shares in the  stockholders'  equity at the fair value of the
     shares at the date of the issuance of the plan.  As shares are committed to
     be released as compensation to employees,  the Company reduces the carrying
     value of the unearned shares and records  compensation expense equal to the
     current value of the shares.

     Cash and Cash  Equivalents.  For  purposes of reporting  consolidated  cash
     flows,  the Bank considers cash,  balances with banks, and interest bearing
     deposits in other financial  institutions with original maturities of three
     months or less to be cash equivalents.

     Earnings  Per Share.  Earnings  per common  share is  computed  by dividing
     income  available to common  shareholders by the weighted average number of
     common  shares  outstanding  during the period.  Earnings  per common share
     assuming  dilution  reflects  the  potential  dilution  that could occur if
     securities  or other  contracts  to issue  common  stock were  exercised or
     converted  into common stock or resulted in the  issuance of common  stock,
     that then shared in the earnings of the company.

     Comprehensive   Income.   The  Corporation   adopted  SFAS  130,  Reporting
     Comprehensive   Income,  as  of  October  1,  1998.  Accounting  principles
     generally require that recognized  revenue,  expenses,  gains and losses be
     included in net income. Although certain changes in assets and liabilities,
     such

                                  (Continued)

                                       26
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     as  unrealized  gains and  losses  on  available-for-sale  securities,  are
     reported  as a  separate  component  of the equity  section of the  balance
     sheet,  such items,  along with net income are components of  comprehensive
     income.  The  adoption of SFAS 130 had no effect on the  Corporation's  net
     income or  shareholder's  equity.  The  components  of other  comprehensive
     income is presented in the consolidated statements of stockholders' equity.

     Reclassification. Certain  presentations  of accounts  previously  reported
     have been reclassified in these  consolidated  financial  statements.  Such
     reclassifications  had no  effect  on net  income  or  retained  income  as
     previously reported.

2.   Investment Securities

     The cost and  estimated  fair  value of  securities  held by the Bank as of
     September 30, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
                                                                                    1999
                                                           --------------------------------------------------------
                                                               Amortized       Gross        Gross       Fair Value
                                                                 Cost       Unrealized    Unrealized
                                                                               Gains        Losses
                                                           --------------------------------------------------------
<S>                                                          <C>          <C>            <C>           <C>
Securities, available-for-sale:
  Federal Home Loan Mortgage, capital                            $75,482    $3,933,094     $            $4,008,576
    stock, 77,088 shares
                                                           ========================================================
Securities, held-to-maturity:
  Debt Securities:
    U.S. Government and Federal Agencies                      $5,500,000                   $ 77,896     $5,422,104
    Municipal bonds                                              213,467                      3,724        209,743
                                                           --------------------------------------------------------
                                                               5,713,467                     81,620      5,631,847
                                                           --------------------------------------------------------
  Mortgage-backed Securities                                      39,878           714                      40,592
                                                           --------------------------------------------------------
  Federal Home Loan
    Bank of Cincinnati, capital stock - 14,784 shares          1,478,400                                 1,478,400
                                                           --------------------------------------------------------
                                                              $7,231,745          $714     $ 81,620     $7,150,839
                                                           ========================================================
</TABLE>
<TABLE>
<CAPTION>
                                                                                    1998
                                                           --------------------------------------------------------
                                                               Amortized       Gross         Gross      Fair Value
                                                                 Cost       Unrealized    Unrealized
                                                                               Gains        Losses
                                                           --------------------------------------------------------
<S>                                                             <C>        <C>            <C>         <C>
Securities, available-for-sale:
  Federal Home Loan Mortgage, capital                            $75,482    $3,750,010                 $ 3,825,492
    stock, 77,088 shares
                                                           ========================================================
Securities, held-to-maturity:
  Debt Securities:
    U.S. Government and Federal Agencies                      $9,497,073    $   75,502                 $ 9,572,575
    Municipal bonds                                              213,339         8,518                     221,857
                                                           --------------------------------------------------------
                                                               9,710,412        84,020                   9,794,432
                                                           --------------------------------------------------------
  Mortgage-backed Securities                                      51,897         1,933                      53,830
                                                           --------------------------------------------------------
  Federal Home Loan
    Bank of Cincinnati, capital stock - 13,785 shares          1,378,500                                 1,378,500
                                                           --------------------------------------------------------
                                                             $11,140,809    $   85,953                 $11,226,762
                                                           ========================================================
</TABLE>
                                  (Continued)
                                       27
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     The  amortized  cost  and  estimated  market  value of debt  securities  at
     September 30, 1999, by contractual maturity, are as follows:
<TABLE>
<CAPTION>
                                                                                             Estimated
                                                                         Amortized             Market
                                                                            Cost               Value
                                                                      -----------------   -----------------
<S>                                                                       <C>                 <C>
Due after one year through five years                                       $5,604,819          $5,526,064
Due after five through ten years                                               108,648             105,783
                                                                      -----------------   -----------------
                                                                            $5,713,467          $5,631,847
                                                                      =================   =================
</TABLE>

          In accordance  with the  requirements  of SFAS No. 115 "Accounting for
          Certain  Investments  in Debt and Equity  Securities,"  the unrealized
          gain on securities  available-for-sale  of $3,933,094  net of deferred
          income taxes of $1,337,252  has been recorded as a separate  component
          of stockholders' equity as of September 30, 1999.

          For the year ended  September 30, 1999,  the Bank received  $6,500,000
          from the call of thirteen debt securities backed by a U.S.  Government
          Agency, which were classified as held-to-maturity.  For the year ended
          September 30, 1998, the Bank received  $5,000,000 from the call of ten
          debt  securities  backed  by a  U.S.  Government  agency,  which  were
          classified as held-to-maturity. For the year ended September 30, 1997,
          the Bank  received  $3,000,000  from the call of four debt  securities
          backed  by  a  U.S.  Government  agency,   which  were  classified  as
          held-to-maturity.

3.        Loans Receivable

          Loans  receivable,  net at September 30, 1999 and 1998 consists of the
          following:
<TABLE>
<CAPTION>
                                                                             1999               1998
                                                                       -----------------  -----------------
<S>                                                                       <C>                <C>
Loans secured by first lien mortgages on real estate:
One-to-four residential property                                            $70,638,534        $68,813,909
         Multi-family residential property                                    3,720,015          3,500,193
         Commercial properties                                                5,148,023          3,370,033
         Construction                                                         4,121,550          5,241,492
         Agricultural                                                         4,541,585          3,859,698
Consumer loans:
         Home equity                                                          1,830,682          1,831,249
         Home improvement and personal                                        1,398,978          1,660,771
         Loans secured by savings deposits                                      484,317            554,653
                                                                       -----------------  -----------------
                                                                             91,883,684         88,831,998
Loans in process                                                            (2,041,995)        (2,925,287)
Provisions for loan losses                                                    (370,000)          (335,000)
Deferred loan origination fees                                                (410,079)          (299,807)
                                                                       -----------------  -----------------
         Loans receivable, net                                              $89,061,610        $85,271,904
                                                                       =================  =================
</TABLE>
                                  (Continued)
                                       28
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

          The Bank has concentrated its lending activity within a 45 mile radius
          of  Harrodsburg,  Kentucky.  Therefore,  a substantial  portion of its
          debtors'  ability to honor their contracts is dependent on the economy
          of this area.

          The Bank provides an allowance to the extent  considered  necessary to
          provide for losses that may be incurred upon the ultimate  realization
          of loans.  The changes in the  allowance on loan losses is analyzed as
          follows:
<TABLE>
<CAPTION>
                                                                         Year Ended September 30,
                                                              -----------------------------------------------
                                                                  1999            1998             1997
                                                              --------------  --------------   --------------
<S>                                                              <C>             <C>              <C>
Balance at beginning or period                                     $335,000        $308,250         $297,250
Additions charged to operations                                      35,000          96,631           11,000
Charge-offs                                                                        (73,084)
Recoveries                                                                            3,203
                                                              --------------  --------------   --------------
Balance at end of period                                           $370,000        $335,000         $308,250
                                                              ==============  ==============   ==============
</TABLE>

          The following is a summary of  non-performing  loans (in thousands) at
          September 30, 1999, 1998, and 1997, respectively:
<TABLE>
<CAPTION>
                                                                              September 30,
                                                              -----------------------------------------------
                                                                  1999            1998             1997
                                                              --------------  --------------   --------------
<S>                                                          <C>             <C>              <C>
Non-accrual loans                                             $               $                $
Loans past due 90 days or more                                          281             489              520
                                                              --------------  --------------   --------------
Total non-performing loan balances                                     $281            $489             $520
                                                              ==============  ==============   ==============
</TABLE>

        At  September  30, 1999 and 1998,  the Bank had  identified  no impaired
        loans as defined  by SFAS No.  114.  There were no loans in  non-accrual
        status,  and as such,  all  interest  income  earned for the years ended
        September 30, 1999 and 1998 on the loans  outstanding  has been included
        in income.

        Loans to executive officers and directors, including loans to affiliated
        companies  of which  executive  officers  and  directors  are  principal
        owners,  and loans to members of the immediate family of such persons at
        September 30, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
                                                                                       September 30,
                                                                               -------------------------------
                                                                                   1999             1998
                                                                               --------------   --------------
<S>                                                                               <C>              <C>
Balance at beginning of period                                                      $182,796         $187,857
  Additions during year                                                                                 3,886
  Repayments                                                                        (16,089)          (8,947)
                                                                               --------------   --------------
Balance at end of period                                                            $166,707         $182,796
                                                                               ==============   ==============
</TABLE>
                                  (Continued)
                                       29
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

4.   Premises and Equipment

     Office premises and equipment included the following:
<TABLE>
<CAPTION>
                        Description                            Useful Life         1999             1998
------------------------------------------------------------  --------------  ---------------  ---------------
<S>                                                          <C>                <C>              <C>
Land, buildings and improvements                               30-45 years        $1,186,965       $1,086,560
Furniture, fixtures and equipment                               5-10 years           656,874          613,650
                                                                              ---------------  ---------------
                                                                                   1,843,839        1,700,210
         Less accumulated depreciation                                             (788,643)        (848,087)
                                                                              ---------------  ---------------
                                                                                  $1,055,196         $852,123
                                                                              ===============  ===============
</TABLE>

     Depreciation  expense for the years ended September 30, 1999, 1998 and 1997
     amounted to $68,042, $70,809, and $55,017, respectively.

5.   Deposits

     Deposit  account  balances  as of the dates  indicated  are  summarized  as
     follows:
<TABLE>
<CAPTION>
                                                                                      September 30,
                                                                            ----------------------------------
                                                                                 1999              1998
                                                                            ----------------  ----------------
<S>                                                                           <C>               <C>
Demand deposit accounts, non-interest bearing                                      $743,944          $392,679
Passbook accounts with a weighted average rate of 2.82% and 2.79% at              7,485,269         7,402,288
September 30, 1999 and 1998, respectively
NOW and MMDA deposits with a weighted average rate of 2.45%  and 2.40% at         9,255,397         8,498,332
September 30, 1999 and 1998, respectively
                                                                            ----------------  ----------------
                                                                                 17,484,610        16,293,299
Certificate of deposits with a weighted average interest rate of 5.16% and       64,533,707        62,702,345
5.63% at September 30, 1999 and 1998, respectively
                                                                            ----------------  ----------------
          Total Deposits                                                        $82,018,317       $78,995,644
                                                                            ================  ================
Jumbo certificates of deposit (minimum denomination of $100,000)                 $5,780,668        $4,970,710
                                                                            ================  ================
</TABLE>

     Certificates  of deposit by  maturity  at  September  30, 1999 and 1998 (in
     thousands) are as follows:
<TABLE>
<CAPTION>
                                                                                      September 30,
                                                                            ----------------------------------
                                                                                 1999              1998
                                                                            ----------------  ----------------
<S>                                                                               <C>               <C>
Within one year                                                                     $48,310           $38,962
Over 1 to 3 years                                                                    13,232            20,545
Maturing in years thereafter                                                          2,992             3,195
                                                                            ----------------  ----------------
                                                                                    $64,534           $62,702
                                                                            ================  ================
</TABLE>
                                  (Continued)
                                       30
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     Certificates of deposit by maturity and interest rate category at September
     30, 1999 (in thousands) are as follows:
<TABLE>
<CAPTION>
                                                                    Amount Due
                                 ---------------------------------------------------------------------------------
                                   Less Than        1-2 Years       2-3 Years      After 3 Years        Total
                                   One Year
                                 --------------   --------------  ---------------  --------------   --------------
<S>  <C>                             <C>              <C>               <C>             <C>             <C>
     4.01--6.00%                       $46,330          $10,089           $2,336          $2,542          $61,297
     6.01--8.00%                         1,980              152              635             470            3,237
                                 --------------   --------------  ---------------  --------------   --------------
                                       $48,310          $10,241           $2,971          $3,012          $64,534
                                 ==============   ==============  ===============  ==============   ==============
</TABLE>

     Interest  expense on deposits for the periods  indicated is  summarized  as
     follows:
<TABLE>
<CAPTION>
                                                                           Years Ended September 30,
                                                               ---------------------------------------------------
                                                                    1999              1998              1997
                                                               ---------------   ---------------   ---------------
<S>                                                              <C>               <C>               <C>
     Money market and NOW account                                    $222,707          $202,576          $202,209
     Savings Accounts                                                 207,735           211,923           217,967
     Certificates                                                   3,382,184         3,482,884         3,414,630
                                                               ---------------   ---------------   ---------------
                                                                   $3,812,626        $3,897,383        $3,834,806
                                                               ===============   ===============   ===============
</TABLE>

     The Bank maintains arrangements for clearing NOW and MMDA accounts with the
     Federal  Home Loan Bank of  Cincinnati.  The Bank is  required  to maintain
     adequate  collected  funds in its  Demand  Account to cover  average  daily
     clearings.  The Bank was in compliance  with this  requirement at September
     30, 1999 and 1998. At September 30, 1999,  the Bank had pledged  $1,275,000
     of its overnight  deposits held by the FHLB of Cincinnati to secure certain
     customer deposit balances.

6.   Income Taxes

     The  provision  for income taxes for the periods  indicated  consist of the
     following:
<TABLE>
<CAPTION>
                                                                              Years ended September 30,
                                                                    ----------------------------------------------
                                                                        1999            1998            1997
                                                                    --------------  -------------   --------------
<S>                                                                    <C>            <C>              <C>
     Federal income tax expense:
       Current expense                                                   $847,787       $781,830         $762,596
       Deferred expense (benefit)                                        (70,713)         17,790            8,041
                                                                    --------------  -------------   --------------
                                                                         $777,074       $799,620         $770,637
                                                                    ==============  =============   ==============
</TABLE>
                                  (Continued)
                                       31
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     Deferred income taxes result from temporary  differences in the recognition
     of income and expenses for tax and financial statement purposes. The source
     of these temporary differences and the tax effect of each are as follows:
<TABLE>
<CAPTION>
                                                                              Years ended September 30,
                                                                     ---------------------------------------------
                                                                         1999            1998           1997
                                                                     --------------  -------------- --------------
<S>                                                                    <C>             <C>             <C>
     Deferred loan fee income                                            $ (37,492)       $(21,605)       $(2,251)
     Deposit insurance                                                                                    182,261
     FHLB stock                                                             33,966          32,436         29,682
     Allowance for loan losses                                              (7,646)         (9,095)      (196,898)
     Other, net                                                            (59,541)         16,054         (4,753)
                                                                     --------------  -------------- --------------
     Net deferred tax expense (benefit)                                  $(70,713)         $17,790         $8,041
                                                                     ==============  ============== ==============
</TABLE>
     For the  periods  indicated,  total  income tax expense  differed  from the
     amounts  computed by applying  the U.S.  Federal  income tax rate of 34% to
     income before income taxes as follows:
<TABLE>
<CAPTION>
                                                                               Years ended September 30,
                                                                       ------------------------------------------
                                                                           1999           1998           1997
                                                                       ------------  -------------  -------------
<S>                                                                    <C>           <C>          <C>
     Expected income tax expense at federal tax rate                     $ 777,082     $ 757,619    $ 763,947
     Other, net                                                                 (8)       42,001        6,690
                                                                         ---------     ---------    ---------
              Total income tax expense                                   $ 777,074     $ 799,620    $ 770,637
                                                                         =========     =========    =========
     Effective income tax rate                                                34.0%         35.9%        34.3%
                                                                         =========     =========    =========
</TABLE>

     Deferred  tax assets and  liabilities  as of  September  30,  1999 and 1998
     consisted of the following:
<TABLE>
<CAPTION>
                                                                                         1999            1998
                                                                                     -------------   --------------
<S>                                                                                    <C>              <C>
     Deferred tax assets:
       Deferred loan fee income                                                          $139,427         $101,934
       ESOP loan                                                                           61,577
       Allowance for loan losses                                                          120,335          112,688
                                                                                     -------------   --------------
                                                                                          321,339          214,622
                                                                                     -------------   --------------
     Deferred tax liabilities:
       FHLB stock                                                                         306,204          272,237
       Fixed asset basis over tax basis                                                    67,610           65,575
                                                                                     -------------   --------------
                                                                                          373,814          337,812
                                                                                     -------------   --------------
         Net deferred tax liability                                                       $52,475         $123,190
                                                                                     =============   ==============
</TABLE>

     In addition to the net  deferred tax  liability  at  September  30, 1999 of
     $52,475 outlined in the preceding table, the financial statements include a
     deferred  tax  liability  of  $1,337,252   that  was  charged  against  the
     unrealized  gain on securities  available-for-sale  of $3,933,094.  The net
     amount of $2,595,842 is recorded as a separate  component of  stockholders'
     equity.

                                  (Continued)
                                       32
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     Effective  for tax years  ending  December  31, 1996 or after,  fiscal year
     September 30, 1997 for the Bank, all thrift institutions are taxed as other
     banking institutions. Institutions under $500 million in assets are allowed
     to use the reserve method of determining  their bad debt deduction based on
     their actual experience, while larger institutions (over $500 million) must
     use the specific charge off method in determining their deduction.  Tax bad
     debt  reserves  accumulated  since  September  30, 1988 must be included in
     taxable  income of the Bank prorated  over a six year period,  beginning in
     the tax year  effected by the  change.  This change did not have a material
     impact on the Bank as a  deferred  tax  liability  was  provided  for these
     accumulated reserves. The accumulated tax bad debt reserves as of September
     30, 1988,  which  amounts to  approximately  $2,134,000  is only subject to
     being taxed at a later date under certain  circumstances,  such as the Bank
     converting to a type of  institution  that is not considered a bank for tax
     purposes.  These  financial  statements  do not  include any  deferred  tax
     liability  related to the accumulated tax bad debt reserves as of September
     30, 1988.

7.   Stockholders' Equity and Regulatory Capital

     Regulatory  Capital.  The Bank's actual capital and its statutory  required
     capital levels based on the consolidated financial statements  accompanying
     these notes are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                  September 30, 1999
                                    -------------------------------------------------------------------------------
                                                                      For Capital                To be Well
                                                                   Adequacy Purposes          Capitalized Under
                                                                                              Prompt Corrective
                                                                                              Action Provisions
                                    ------------------------    ------------------------   ------------------------
                                            Actual                     Required                   Required
                                    ------------------------    ------------------------   ------------------------
                                      Amount         %            Amount         %           Amount         %
                                    ------------------------    ------------------------   ------------------------
<S>                                   <C>        <C>               <C>       <C>              <C>           <C>
     Core capital                       $22,556    21.2%             $4,260    4.0%             $6,390        6.0%
     Tangible capital                   $22,556    21.2%             $1,598    1.5%                N/A         N/A
     Total Risk based capital           $22,906    36.9%             $4,961    8.0%             $6,201       10.0%
     Leverage                           $22,556    21.2%                N/A     N/A             $5,325        5.0%
</TABLE>

<TABLE>
<CAPTION>

                                                                  September 30, 1998
                                    -------------------------------------------------------------------------------
                                                                      For Capital                To be Well
                                                                   Adequacy Purposes          Capitalized Under
                                                                                              Prompt Corrective
                                                                                              Action Provisions
                                    ------------------------    ------------------------   ------------------------
                                            Actual                     Required                   Required
                                    ------------------------    ------------------------   ------------------------
                                      Amount         %            Amount         %           Amount         %
                                    ------------------------    ------------------------   ------------------------
<S>                                   <C>        <C>               <C>       <C>              <C>           <C>
     Core capital                       $24,912    23.5%             $4,247    4.0%             $6,371        6.0%
     Tangible capital                   $24,912    23.5%             $1,593    1.5%                N/A         N/A
     Total Risk based capital           $25,247    43.8%             $4,612    8.0%             $5,765       10.0%
     Leverage                           $24,912    23.5%                N/A     N/A             $5,309        5.0%
</TABLE>

     The  Federal  Deposit  Insurance   Corporation   Improvement  Act  of  1991
     ("FDICIA")  required  each  federal  banking  agency  to  implement  prompt
     corrective actions for institutions that it regulates.  In response to this
     requirement,  OTS  adopted  final rules based upon  FDICIA's  five  capital
     tiers. The rules

                                  (Continued)
                                       33
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     provide that a savings bank is "well  capitalized" if its total  risk-based
     capital ratio is 10% or greater,  its Tier 1 risk-based capital ratio is 6%
     or  greater,  its  leverage  is 5% or greater  and the  institution  is not
     subject to a capital directive.  Under this regulation, the Bank was deemed
     to be "well  capitalized"  as of September 30, 1999 and 1998 based upon the
     most recent  notifications from its regulators.  There are no conditions or
     events since those  notifications that management believes would change its
     classifications.

     Retained  Earnings  Restriction.  Retained  earnings at September  30, 1998
     includes  tax bad debt  reserves of  approximately  $2,134,000  accumulated
     prior to  September  30,  1988,  for which no  Federal  income tax has been
     provided.  These  tax  bad  debt  reserves  are  only  taxable  in  certain
     circumstances, such as if the Bank converted to an institution that did not
     qualify as a bank for tax purposes (see Note 6).

     Liquidation  Account.  Upon  conversion  to a capital  stock  savings bank,
     eligible  account holders who continued to maintain their deposit  accounts
     in the Bank were granted priority in the event of the future liquidation of
     the Bank through the establishment of a special "Liquidation Account" in an
     amount equal to the  consolidated  net worth of the Bank at March 31, 1995.
     The liquidation account was $10,236,488 at March 31, 1995 and is reduced in
     proportion  to  reductions  in the balance of eligible  account  holders as
     determined  on each  subsequent  fiscal  year  end.  The  existence  of the
     liquidation  account will not restrict the use or  application of net worth
     except  with  respect to the cash  payment of  dividends.  The Bank may not
     declare or pay a cash dividend on or repurchase  any of its common stock if
     the effect thereof would cause its  regulatory  capital to be reduced below
     the amount required for the liquidation account.

     Dividend  Restrictions.  The payment of cash  dividends  by the Bank on its
     Common  Stock is limited by  regulations  of the OTS.  Interest  on savings
     accounts  will be paid prior to  payments  of  dividends  on common  stock.
     Additional  limitation on dividends declared or paid, or repurchases of the
     Bank stock are tied to the Bank's level of compliance  with its  regulatory
     capital requirements.

8.   Retirement Benefits

     Retirement Benefits. The Bank maintained a noncontributory  defined benefit
     pension plan (Pension Trust) for the year ended  September 30, 1993,  which
     covered all full-time  employees  with one year of service who had attained
     the age of 21.  Effective  October 1, 1993,  the Bank's  Board of Directors
     terminated  the Pension  Trust,  and  effective  the same date approved the
     Bank's  participation  in the  Pentegra  Retirement  Fund  ("Pentegra"),  a
     multi-employer  defined benefit  retirement plan. Net assets of the Pension
     Trust were transferred to the Pentegra Plan on October 1, 1993.

     The  multi-employer  pension plan covers all full-time  employees  with one
     year of service who have  attained  the age of 21.  Under a  multi-employer
     defined benefit plan,  pension expense is the amount of the annual required
     contribution,  and a liability  will be recognized  only for  contributions
     which are due but unpaid at the end of the accounting period.  There was no
     pension expense for the years ended September 30, 1999, 1998, and 1997.

                                  (Continued)
                                       34
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     Effective April 1, 1993, the Board of Directors adopted an employee pension
     benefit  plan  (referred  to as a  "401K  Plan")  as  described  under  the
     Employees' Retirement Income Security Act of 1974. Under the Plan, the Bank
     is required to match 25% of employee  contributions up to a maximum of 1.5%
     of eligible compensation. The Plan covers all full-time employees. The Bank
     contributed  $9,428,  $8,614,  and  $7,440 to the Plan for the years  ended
     September 30, 1999, 1998, and 1997, respectively.

     Employee  Stock  Ownership  Plan. In connection  with the stock  conversion
     September  30,  1995,  the  Company  established  an  internally  leveraged
     Employee Stock Ownership Plan (the "ESOP") which covers  substantially  all
     full time  employees.  The ESOP  borrowed  $1,745,700  from the Company and
     purchased  174,570  shares of common  stock of the  Company  at the date of
     conversion.  The loan is to be repaid in annual installments over a 15 year
     period with interest, which is based on the published prime rate (currently
     8.50%) per the Wall Street Journal.

     The Bank makes annual  contributions  to the ESOP Trust equal to the ESOP's
     debt service requirement less dividends, if any, received by the ESOP which
     are used for debt service.  Dividends of $111,312 and $120,671 were used in
     fiscal year 1999 and 1998, respectively, to pay ESOP debt service. The ESOP
     shares are pledged as collateral on the debt. As the debt is repaid, shares
     are released from collateral and allocated to active  participants based on
     a formula specified in the ESOP agreement.

     ESOP  compensation  was $154,109 for the year ended September 30, 1999. For
     1999,  11,407 shares were released from collateral.  At September 30, 1999,
     there  were  127,733  unallocated  ESOP  shares  having  a  fair  value  of
     $1,692,462. ESOP compensation was $198,430 for the year ended September 30,
     1998. For 1998,  12,154 shares were released from collateral.  At September
     30, 1998, there were 139,140 unallocated ESOP shares having a fair value of
     $2,104,493. ESOP compensation was $192,027 for the year ended September 30,
     1997. For 1997,  11,638 shares were released from collateral.  At September
     30, 1997, there were 151,294 unallocated ESOP shares having a fair value of
     $2,458,528.

     Option Plan. On January 21, 1997, the  stockholders of the Company approved
     the  establishment of the Harrodsburg  First Financial  Bancorp,  Inc. 1996
     Stock  Option  Plan.  Under the Option  Plan,  the Company may grant either
     incentive or non-qualified stock options to Directors and key employees for
     an aggregate  of 200,000  shares of the  Company's  common  stock,  with an
     exercise  price equal to the fair market  value of the stock at the date of
     the award. Upon exercise of the options, the Company may issue stock out of
     authorized  shares or purchase the stock in the open market.  The option to
     purchase  shares  expires ten years after the date of the grant.  Effective
     with the approval of the Option Plan, options to purchase 190,000 shares of
     common stock were awarded to key employees  and directors  with an exercise
     price  of  $16.50  per  share.   The  options  vest,   and  thereby  become
     exercisable, at the rate of 20% on the date of grant, January 21, 1997, and
     20% annually thereafter.  The Options become vested immediately in the case
     of death or disability, or upon a change in the control of the Company.

                                  (Continued)
                                       35
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     A summary of option  transactions for the year ended September 30, 1999 are
     as follows:
<TABLE>
<CAPTION>
                                                                                  Year ended September 30,
                                                                 --------------------------------------------------
                                                                          1999                  1998
                                                                 ----------------------   -------------------------
                                                                  Option       Number      Option       Number
                                                                   Price      of Units     Price          of Units
                                                                   -----      --------     -----          --------

<S>                                                            <C>            <C>        <C>          <C>
        Balance outstanding at beginning of year                 $     16.50    190,000    $ 16.50        190,000
        Granted
        Exercised

        Balance outstanding at end of year                       $     16.50    190,000    $ 16.50        190,000
                                                                                =======                   =======
        Shares exercisable                                                      118,000                    82,000
                                                                                =======                   =======

        Shares available for grant                                               10,000                    10,000
                                                                                =======                   =======
</TABLE>

          In October 1995, the Financial  Accounting Standards Board issued SFAS
          No. 123 "Accounting for Stock-Based Compensation," which was effective
          for fiscal years  beginning  after December 15, 1995. The new standard
          defines a fair  value  method of  accounting  for  stock  options  and
          similar equity instruments.  Under the fair value method, compensation
          cost is  measured  at the grant  date,  based on the fair value of the
          award and is recognized over the service period,  which is usually the
          vesting period.

          Companies  are  not  required  to  adopt  the  fair  value  method  of
          accounting for employee stock-based transactions,  and may continue to
          account for such transactions under Accounting  Principles Based (APB)
          Opinion No. 25 "Accounting for Stock Issued to Employees."  Under this
          method the compensation cost is measured by the difference between the
          fair value of the  Company's  stock at the date of the award,  and the
          exercise  price to be paid by the  employee.  If a company  chooses to
          report stock based  compensation  under APB 25, they must disclose the
          pro forma net  income and  earnings  per share as if the  Company  had
          applied the new method of accounting. Accordingly, the following table
          shows the  Company's  net income and earnings per share on a pro forma
          basis as if the  compensation  cost for the stock options awarded were
          accounted  for in  accordance  with  SFAS No.  123 for the year  ended
          September 30, 1999, 1998, and 1997, respectively.
<TABLE>
<CAPTION>
                                               Reported Per Consolidated
                                                   Financial Statements                  Pro Forma Amount
                                      --------------------------------------  -------------------------------------

                                          1999         1998         1997         1999         1998          1997
                                      -----------  -----------   -----------  -----------  -----------  -----------
<S>                                  <C>          <C>           <C>          <C>          <C>          <C>
        Net income                    $ 1,508,462  $ 1,428,674   $ 1,476,266  $ 1,391,102  $ 1,283,604  $ 1,383,356
        Earnings per common share     $       .94  $       .79   $       .78       $  .86       $  .71  $       .73
        Earnings per common share
          assuming dilution           $       .94  $       .79   $       .78       $  .86       $  .71  $       .73

</TABLE>

                                  (Continued)
                                       36
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes  option-pricing model with the following weighted-average
     assumptions:
                                      1999            1998            1997
                                      ----            ----            ----

Dividend yield                        2.4%            2.4%            2.4%
Expected volatility                   .03%            .03%            .03%
Expected life                          10              10              10
Free interest rate                    5.3%            5.3%            5.3%

     Employee  Recognition  Plan. On January 21, 1997, the  stockholders  of the
     Company  approved the  establishment  of the First Federal  Savings Bank of
     Harrodsburg  Restricted  Stock Plan (RSP).  The  objective of the RSP is to
     enable the Bank to attract and retain  personnel of experience  and ability
     in key  positions of  responsibility.  Those  eligible to receive  benefits
     under the RSP will be such  employees as selected by members of a committee
     appointed by the Company's  Board of Directors.  The RSP is a non-qualified
     plan that is managed  through a  separate  trust.  The Bank can  contribute
     sufficient  funds to the RSP Trust for the purchase of up to 85,000  shares
     of common stock.

     Awards  made to  employees  will vest 20% on each  anniversary  date of the
     award.  Shares will be held by the trustee and are voted by the RSP trustee
     as directed by the  participant for those shares earned or by the Committee
     for those shares held,  but unearned or unawarded.  Any assets of the trust
     are subject to the general  creditors  of the Company.  All shares  awarded
     vest immediately in the case of a participant's death, disability,  or upon
     a change in control of the  Company.  The  Company  intends to expense  RSP
     awards over the years  during  which the shares are  payable,  based on the
     fair  market  value of the  common  stock  at the date of the  grant to the
     employee. As of September 30, 1998, no awards had been made under the RSP.

9.   Financial  Instruments  with  Off-Balance  Sheet Risk and  Concentration of
     Credit Risk

     The Bank is party to financial  instruments with off-balance  sheet risk in
     the normal course of business to meet the financing needs of its customers.
     These financial instruments include mortgage commitments  outstanding which
     amounted to approximately $1,467,100 plus unused lines of credit granted to
     customers  totaling  $2,479,469 at September 30, 1999. Of the mortgage loan
     commitments at September 30, 1999 approximately $12,000 were for fixed rate
     loans. At September 30, 1998 mortgage  commitments  outstanding amounted to
     approximately $1,854,000 and unused lines of credit amounted to $2,179,848.
     Of the  mortgage  loan  commitments  at September  30, 1998,  approximately
     $255,000 were in fixed rate loans.  These instruments  involve,  to varying
     degrees,  elements of credit and interest rate risk in excess of the amount
     recognized in the consolidated balance sheets.

     The Bank's  exposure to credit loss in the event of  nonperformance  by the
     other party to the financial  instrument for loan  commitments and consumer
     lines  of  credit  are  represented  by the  contractual  amount  of  those
     instruments.  The Bank uses the same credit policies in making  commitments
     and conditional  obligations as it does for on-balance  sheet  instruments.
     Since many of the loan commitments may expire without being drawn upon, the
     total commitment amount does not necessarily represent future requirements.
     The Bank evaluates each customer's credit worthiness on

                                  (Continued)
                                       37
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     a case-by-case  basis. The amount of collateral  obtained upon extension of
     credit is based on  management's  credit  evaluation  of the  counterparty.
     Collateral held varies, but primarily includes residential real estate.

10.  Disclosures about Fair Value of Financial Instruments

     SFAS No.  107,  "Disclosures  About  Fair Value of  Financial  Instruments"
     extends the existing fair value  disclosure  practices for some instruments
     by  requiring  all  entities  to  disclose  the  fair  value  of  financial
     instruments (as defined),  both assets and  liabilities  recognized and not
     recognized  in the  statements  of  financial  condition,  for  which it is
     practicable to estimate fair value.

     There are inherent limitations in determining fair value estimates, as they
     relate only to specific data based on relevant information at that time. As
     a significant percentage of the Bank's financial instruments do not have an
     active trading market, fair value estimates are necessarily based on future
     expected  cash  flows,  credit  losses,  and other  related  factors.  Such
     estimates are  accordingly,  subjective in nature,  judgmental  and involve
     imprecision.  Future events will occur at levels different from that in the
     assumptions, and such differences may significantly affect the estimates.

     The statement  excludes certain financial  instruments and all nonfinancial
     instruments from its disclosure  requirements.  Accordingly,  the aggregate
     fair value amounts  presented do not represent the underlying  value of the
     Company. Additionally, the tax impact of the unrealized gains or losses has
     not been presented or included in the estimates of fair value.

     The  following  methods  and  assumptions  were  used  by  the  Company  in
     estimating its fair value disclosures for financial instruments.

     Cash and Cash  Equivalents.  The carrying amounts reported in the statement
     of financial  condition  for cash and  short-term  instruments  approximate
     those assets' fair values.

     Investment  Securities.  Fair values for investment securities are based on
     quoted  market  prices,  where  available.  If quoted market prices are not
     available,  fair  values are based on quoted  market  prices of  comparable
     instruments. No active market exists for the Federal Home Loan Bank capital
     stock.  The carrying  value is estimated to be fair value since if the Bank
     withdraws  membership  in the  Federal  Home Loan  Bank,  the stock must be
     redeemed for face value.

     Loans Receivable.  The fair value of loans was estimated by discounting the
     future cash flows using the current  rates at which  similar loans would be
     made to borrowers  with similar  credit  ratings and for the same remaining
     maturities.

     Deposits.  The fair value of savings  deposits  and  certain  money  market
     deposits is the amount  payable on demand at the reporting  date.  The fair
     value of  fixed-maturity  certificates  of deposit is  estimated  using the
     rates currently offered for deposits of similar remaining maturities.

                                  (Continued)
                                       38
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

     Loan Commitments and Unused Home Equity Lines of Credit.  The fair value of
     loan  commitments  and unused  lines of credit is  estimated by taking into
     account   the   remaining   terms  of  the   agreements   and  the  present
     credit-worthiness of the counterparties.

     The  estimated  fair  value  of  the  Company's  financial  instruments  at
     September 30, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
                                                         September 30, 1999             September 30, 1998
                                                   ------------------------------- ------------------------------
                                                      Carrying          Fair          Carrying         Fair
                                                       Amount          Value           Amount         Value
                                                   ------------------------------- ------------------------------
<S>                                                   <C>            <C>             <C>            <C>
     Assets
     Cash and cash equivalents                          $8,350,313     $8,350,313      $8,074,105     $8,074,105
              Securities available-for-sale              4,008,576      4,008,576       3,825,492      3,825,492
              Securities held-to-maturity                7,231,745      7,150,839      11,140,809     11,226,762
              Loans receivable, net                     89,061,610     89,317,215      85,271,904     88,067,824
     Liabilities
              Deposits                                  82,018,317     82,115,268      78,995,644     79,740,918
     Unrecognized Financial Instruments
              Loan commitments                                          1,467,100                      1,854,000
              Unused lines of credit                                    2,479,469                      2,179,848
</TABLE>

                                  (Continued)
                                       39
<PAGE>

11.  Harrodsburg First Financial  Bancorp,  Inc. Financial  Information  (Parent
     Company Only)

     The parent  company's  principal  assets are its investment in the Bank and
     cash  balances  on  deposit  with the Bank.  The  following  are  condensed
     financial statements for the parent company.

                    Harrodsburg First Financial Bancorp, Inc.
                   Condensed Statement of Financial Condition

Harrodsburg First Financial Bancorp,  Inc. Financial Information (Parent Company
Only)

         The parent  company's  principal  assets are its investment in the Bank
         and cash balances on deposit with the Bank. The following are condensed
         financial statements for the parent company.

                    Harrodsburg First Financial Bancorp, Inc.
                   Condensed Statement of Financial Condition
<TABLE>
<CAPTION>

                                                                                September 30,
                                                                              1999            1998
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
Assets:
     Cash and due from banks                                             $  1,321,727    $  1,668,775
     Investment in subsidiary                                              25,152,122      27,387,374
     Other assets                                                             216,532         279,992
                                                                         ------------    ------------

        Total assets                                                     $ 26,690,381    $ 29,336,141
                                                                         ============    ============
Liabilities and Stockholders Equity:
     Accounts payable                                                    $      1,446    $         83
     Dividends payable                                                        468,701         354,445
                                                                         ------------    ------------
        Total liabilities                                                     470,147         354,528
                                                                         ------------    ------------
Stockholders equity
     Common stock                                                             218,213         218,213
     Additional paid-in capital                                            21,194,168      21,154,129
     Retained earnings                                                     11,187,966      11,003,179
     Accumulated other comprehensive income                                 2,595,842       2,475,007
     Treasury stock, 481,250 and 258,607 shares, respectively, at cost     (7,698,625)     (4,477,515)
     Unearned ESOP shares                                                  (1,277,330)     (1,391,400)
                                                                         ------------    ------------
       Total stockholders' equity                                          26,220,234      28,981,613
                                                                         ------------    ------------
        Total liabilities and stockholders' equity                       $ 26,690,381    $ 29,336,141
                                                                         ============    ============
</TABLE>

                                  (Continued)
                                       40
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

                    Harrodsburg First Financial Bancorp, Inc.
                          Condensed Statement of Income
<TABLE>
<CAPTION>
                                                                    For the years ended September 30,
                                                                    1999          1998           1997
                                                                -----------   -----------    -----------
<S>                                                            <C>           <C>            <C>
Income:
   Dividends from Harrodsburg First Federal                     $ 1,569,145   $      --      $         -
                                                                -----------   -----------    -----------
Expense:
   Legal fees                                                        11,940        10,588         24,192
   Franchise and license tax                                         35,650        31,372         60,064
   Transfer agent fees                                               15,465         9,126          9,000
   Accounting fees                                                    5,550         6,550          9,880
   Other operating expenses                                          23,339        26,252         18,496
                                                                -----------   -----------    -----------
                                                                     91,944        83,888        121,632
                                                                -----------   -----------    -----------

   Net income (loss) before tax benefit                           1,477,201       (83,888)      (121,632)
   Income tax benefit                                                31,261        28,522         34,561
                                                                -----------   -----------    -----------
   Net income (loss) before equity in undistributed net
     income of subsidiary                                         1,508,462       (55,366)       (87,071)
   Equity in undistributed net income of subsidiary               1,484,040     1,563,337
                                                                -----------   -----------    -----------

     Net income                                                 $ 1,508,462   $ 1,428,674    $ 1,476,266
                                                                ===========   ===========    ===========
</TABLE>
                                  (Continued)
                                       41
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

                    Harrodsburg First Financial Bancorp, Inc.
                        Condensed Statement of Cash Flows
<TABLE>
<CAPTION>
                                                                For the years ended September 30,
                                                                 1999           1998           1997
                                                             -----------    -----------    -----------
<S>                                                         <C>            <C>            <C>
Cash flows from operating activities:
     Net income                                              $ 1,508,462    $ 1,428,674    $ 1,476,266
     Adjustments to reconcile net income to net cash
        provided by operating activities:
        Equity in undistributed net income of subsidiary      (1,484,040)    (1,563,337)
        Excess distributions from consolidated subsidiary      2,430,855
        Decrease in other receivables                             28,546         92,057         29,406
        Decrease in other liabilities                            115,619         (1,281)          (964)
                                                             -----------    -----------    -----------

          Net cash provided (used) by operating activities     4,083,482         35,410        (58,629)
                                                             -----------    -----------    -----------

Cash flows from investing activities:
          Net cash provided (used) by investing activities          --             --             --
                                                             -----------    -----------    -----------

Cash flows from financing activities:
     Dividends paid                                           (1,209,420)    (1,108,554)    (1,059,469)
     Purchase of common stock                                 (3,221,110)    (1,686,689)    (2,001,331)
                                                             -----------    -----------    -----------

       Net cash used by financing activities                  (4,430,530)    (2,795,243)    (3,060,800)
                                                             -----------    -----------    -----------

   Net decrease in cash and cash equivalents                    (347,048)    (2,759,833)    (3,119,429)
   Cash and cash equivalents at beginning of period            1,668,775      4,428,608      7,548,037
                                                             -----------    -----------    -----------

   Cash and cash equivalents at end of period                $ 1,321,727    $ 1,668,775    $ 4,428,608
                                                             ===========    ===========    ===========
</TABLE>

                                  (Continued)
                                       42
<PAGE>
            HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        --------------------------------

12.  Harrodsburg Savings and Loan Service Corporation

     In 1978, the Bank formed Harrodsburg Savings and Loan Service  Corporation,
     a wholly  owned  subsidiary,  by  purchasing  its  stock for  $15,000.  The
     Subsidiary was created to hold stock in a not for profit  corporation  that
     provides on line computer  processing and inquiry  service for the Bank and
     other savings and loan institutions.

     Summary balance sheets for the wholly owned subsidiary are as follows:

                 Harrodsburg Savings & Loan Service Corporation
                   Balance Sheets, September 30, 1999 and 1998

                            ------------------------
Assets                                            1999            1998
                                             --------------  --------------

Investments                                        $15,000         $15,000
                                             ==============  ==============
Stockholders' Equity

Common stock                                       $15,000         $15,000
                                             ==============  ==============

     The Service  Corporation  did not receive  income nor did it incur  expense
     during the years ended September 30, 1999, 1998, and 1997.

13.  Stock Purchase

     During fiscal year 1997, the Company  repurchased  107,977 shares of common
     stock at a total cost of  $2,001,331.  During fiscal year 1998, the Company
     repurchased  101,238  shares of common stock at a total cost of $1,686,689.
     On September 21, 1998 and December 21, 1998,  the Board of Directors of the
     Company  authorized the repurchase of up to 5% of their outstanding  stock.
     In addition, on March 15, 1999, the Board authorized the repurchase of 2.5%
     of  their  outstanding   stock.   During  fiscal  year  1999,  the  Company
     repurchased 222,643 shares of common stock at a total cost of $3,221,110.

14.  Commitments

     During June of 1999, the Company  entered into a  construction  contract in
     the amount of $456,327 to build a new branch in Lawrenceburg,  Kentucky. As
     of September 30, 1999, this contract was approximately 44% complete.



                                       43
<PAGE>
<TABLE>
<CAPTION>

                              CORPORATE INFORMATION
------------------------------------------------------------------------------------------------------------------------------------

                               BOARD OF DIRECTORS

<S>                                        <C>                                      <C>
                                            *Arthur L. Freeman
                                            Chairman and Chief Executive Officer of
                                            the Bank and the Company
Jack D. Hood                                Jack L. Coleman, Jr.                      W. Dudley Shryock, CPA
President and Chief Operating Officer of    Representative, State of Kentucky;        Sole Practitioner
the Bank and the Company                    Partner, Coleman's Lumber Yard
Elwood Burgin                               Thomas Les Letton                         Wickliffe T. Asbury, Sr.
Retired                                     President, The Letton Company             Vice President of the Bank and the
                                                                                      Company
------------------------------------------------------------------------------------------------------------------------------------

                               EXECUTIVE OFFICERS

*Arthur L. Freeman                          Jack D. Hood                             Charles W. Graves, Jr.
Chairman and Chief Executive Officer of     President and Chief Operating Officer    Vice President of the Bank and the Company
the Bank and the Company                    of the Bank and the Company
Wickliffe T. Asbury, Sr.                    Debbie C. Roach                          Teresa W. Noel
Vice President of the Bank and the Company  Secretary of the Bank and the Company    Treasurer of the Bank and the Company
*Effective 10/1/99

------------------------------------------------------------------------------------------------------------------------------------

                                OFFICE LOCATIONS

104 South Chiles Street                                                              216 South Main Street
Harrodsburg, Kentucky 40330                                                          Lawrenceburg, Kentucky 40342


------------------------------------------------------------------------------------------------------------------------------------

                               GENERAL INFORMATION

Independent Accountants                      Special Counsel                         Annual Report on Form 10K
Miller, Mayer, Sullivan, & Stevens, LLP      Malizia Spidi & Fisch, PC
2365 Harrodsburg Road                        One Franklin Square
Lexington, KY 40504-3399                     1301 K Street, N.W., Suite 700 East     A copy of the company's 1999
                                             Washington, DC 20005                    annual report on form 10-k
                                                                                     without exhibits will be
General Counsel                              Annual Meeting                          furnished without charge to
David Patrick                                The 2000 Annual Meeting of              stockholders upon written
Attorney-at-Law                              Stockholders will be held on            request to:
321 South Main Street                        January 24, 2000 at 5:30 p.m. at:
Harrodsburg, KY 40330
                                                  Ragged Edge Community Theater      Jack D. Hood
                                                  111 S. Main Street                 Harrodsburg First Financial
Walter Patrick                                    Harrodsburg, KY 40330                Bancorp, Inc.
Attorney-at-Law                                                                      POB 384
Gordon Building                              Transfer Agent                          104 South Chiles Street
P.O. Box 178                                 Illinois Stock Transfer                 Harrodsburg, KY 40330
Lawrenceburg, KY 40342                       209 West Jackson Blvd., Suite 903
                                             Chicago, IL 60606
</TABLE>