UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[ x ]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
       ACT OF 1934

                      For Quarter Ended: September 30, 2002
                                         ------------------

[   ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                     For the transition period from ______________ to __________

                        Commission File Number: 000-18464
                                                ---------

                            EMCLAIRE FINANCIAL CORP.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


     Pennsylvania                                       25-1606091
--------------------------------------------------------------------------------
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)


                       612 Main Street, Emlenton, PA 16373
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (724) 867-2311
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by the court. Yes        No
                                                    ------    ------

                      APPLICABLE ONLY TO CORPORATE ISSUERS

Number of shares of issuer's common stock outstanding as of October 31, 2002:

          Common Stock, $1.25 par value                    1,332,835
          -----------------------------                    ---------
                       (Class)                          (Outstanding)

------------------------------------
Transitional Small Business Disclosure Format (Check one):   _ Yes   X   No
                                                          --------   ------

<PAGE>

<TABLE>
<CAPTION>
                            EMCLAIRE FINANCIAL CORP.

                    INDEX TO QUARTERLY REPORT ON FORM 10-QSB



                         PART I - FINANCIAL INFORMATION

Item 1.       Financial Statements

              Consolidated Balance Sheets as of
<S>                     <C> <C>                           <C> <C>                                                      <C>
              September 30, 2002 (Unaudited) and December 31, 2001......................................................1

              Consolidated Income Statements for the three and nine
              months ended September 30, 2002 and 2001 (Unaudited)......................................................2

              Consolidated Statement of Changes in Stockholders'
              Equity for the nine months ended September 30, 2002 (Unaudited)...........................................3

              Consolidated Statements of Cash Flows for the nine
              months ended September 30, 2002 and 2001 (Unaudited)......................................................4

              Notes to Consolidated Financial Statements................................................................5

Item 2.       Management's Discussion and Analysis
              of Financial Condition and Results of Operations..........................................................9

Item 3.       Controls and Procedures..................................................................................17



                           PART II - OTHER INFORMATION

Item 1.       Legal Proceedings........................................................................................18

Item 2.       Changes in Securities....................................................................................18

Item 3.       Defaults Upon Senior Securities..........................................................................18

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

Item 5.       Other Information........................................................................................18

Item 6.       Exhibits and Reports on Form 8-K.........................................................................18

              Signatures...............................................................................................19

              Controls and Procedures Certifications...................................................................20
</TABLE>
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                     Emclaire Financial Corp. and Subsidiary
                           Consolidated Balance Sheets
           As of September 30, 2002 (Unaudited) and December 31, 2001
                (Dollar amounts in thousands, except share data)




                                               September 30, December 31,
                                                    2002         2001
                                                 (unaudited)
                                                  --------------------

                      Assets
                     --------

Cash and due from banks                              $7,790    $7,127
Interest-earning deposits in banks                      148       620
Federal funds sold                                        -     1,410
                                                  --------------------
Cash and cash equivalents                             7,938     9,157
Securities available for sale                        48,572    38,695
Securities held to maturity; fair value of $29 and
 $61                                                     30        60
Loans receivable, net of allowance for loan losses
 of $1,493 and $1,464                               167,517   160,540
Federal bank stocks, at cost                          1,338     1,261
Bank-owned life insurance                             4,000         -
Accrued interest receivable                           1,294     1,251
Premises and equipment                                3,476     3,388
Intangible assets                                     1,628     1,737
Prepaid expenses and other assets                       717       628
                                                  --------------------

Total assets                                       $236,510  $216,717
                                                  ====================

       Liabilities and Stockholders' Equity
       ------------------------------------

Liabilities:
Deposits                                           $203,711  $189,470
Borrowed funds                                        8,761     5,000
Accrued interest payable                                460       480
Accrued expenses and other liabilities                  834       656
                                                  --------------------

Total liabilities                                   213,766   195,606
                                                  --------------------

Stockholders' Equity:
Preferred stock, $1.00 par value,
 3,000,000 shares authorized;
 none issued                                              -         -
Common stock, $1.25 par value, 12,000,000
 shares authorized;
 1,395,852 shares issued and 1,332,835 shares
 outstanding                                          1,745     1,745
Additional paid-in capital                           10,871    10,871
Treasury stock, at cost; 63,017 shares                 (971)     (971)
Retained earnings                                     9,928     9,094
Accumulated other comprehensive income                1,171       372
                                                  --------------------

Total stockholders' equity                           22,744    21,111
                                                  --------------------

Total liabilities and stockholders' equity         $236,510  $216,717
                                                  ====================

See accompanying notes to consolidated financial statements.

                                       1

<PAGE>


<TABLE>
<CAPTION>
                    Emclaire Financial Corp. and Subsidiary
                         Consolidated Income Statements
  For the three and nine months ended September 30, 2002 and 2001 (Unaudited)
                (Dollar amounts in thousands, except share data)

                                                    Three months ended  Nine months ended
                                                      September 30,       September 30,
                                                   ----------------------------------------
                                                        2002      2001      2002      2001
                                                   ----------------------------------------

Interest and dividend income:
<S>                                                   <C>       <C>       <C>       <C>
Loans receivable                                      $3,099    $3,172    $9,346    $9,496
Securities:
Taxable                                                  371       311     1,122       904
Exempt from federal income tax                           146        92       424       267
Federal bank stocks                                       13        21        41        61
Deposits with banks and federal funds sold                24        65        55       236
                                                   ----------------------------------------
Total interest income                                  3,653     3,661    10,988    10,964
                                                   ----------------------------------------

Interest expense:
Deposits                                               1,243     1,494     3,704     4,626
Borrowed funds                                            59         -       176        32
                                                   ----------------------------------------
Total interest expense                                 1,302     1,494     3,880     4,658
                                                   ----------------------------------------

Net interest income                                    2,351     2,167     7,108     6,306
Provision for loan losses                                 90        36       291       118
                                                   ----------------------------------------

Net interest income after provision for loan losses    2,261     2,131     6,817     6,188
                                                   ----------------------------------------

Noninterest income:
Service fees                                             243       237       704       697
Gain on sale of loans held for sale                       39         -        39         -
Other                                                     75       106       252       296
                                                   ----------------------------------------
Total noninterest income                                 357       343       995       993
                                                   ----------------------------------------

Noninterest expense:
Compensation and employee benefits                       986       946     2,985     2,809
Premises and equipment, net                              274       261       862       811
Intangible amortization expense                           12        69       109       207
Other                                                    501       491     1,599     1,491
                                                   ----------------------------------------
Total noninterest expense                              1,773     1,767     5,555     5,318
                                                   ----------------------------------------

Net income before provision for income taxes             845       707     2,257     1,863
Provision for income taxes                               264       216       663       560
                                                   ----------------------------------------

Net income                                              $581      $491    $1,594    $1,303
                                                   ========================================

 Net income per share                                  $0.44     $0.37     $1.20     $0.98
 Dividends per share                                   $0.19     $0.17     $0.57     $0.51

Weighted average common shares outstanding         1,332,835 1,332,835 1,332,835 1,332,835


See accompanying notes to consolidated financial statements.

</TABLE>

                                       2

<PAGE>


<TABLE>
<CAPTION>
                     Emclaire Financial Corp. and Subsidiary
            Consolidated Statement of Changes in Stockholders' Equity
            For the nine months ended September 30, 2002 (Unaudited)
                          (Dollar amounts in thousands)

                                                                                             Accumulated
                                                         Additional                             Other          Total
                                               Common      Paid-in     Treasury   Retained   Comprehensive Stockholders'
                                                Stock      Capital      Stock     Earnings   Income (Loss)    Equity
                                             ------------------------ ----------  --------  -------------- -------------

<S>                                             <C>          <C>          <C>       <C>              <C>        <C>
Balance at December 31, 2001                    $1,745       $10,871      $(971)    $9,094           $372       $21,111

Comprehensive income:
  Net income                                         -             -          -      1,594              -         1,594
  Change in net unrealized gain on
    securities available for sale, net of
    taxes of $411                                    -             -          -          -            799           799
                                                                                                           -------------
Comprehensive income                                                                                              2,393
                                                                                                           -------------

Dividends paid                                       -             -          -       (760)             -          (760)
                                             ---------- ------------- ---------- ---------- -------------- -------------

Balance at September 30, 2002                   $1,745       $10,871      $(971)    $9,928         $1,171       $22,744
                                             ========== ============= ========== ========== ============== =============
</TABLE>


<TABLE>
<CAPTION>

                                                                                                    Accumulated
                                                               Additional                       Other          Total
                                               Common      Paid-in     Treasury   Retained   Comprehensive Stockholders'
                                                Stock      Capital      Stock     Earnings   Income (Loss)    Equity
                                             ------------------------ ----------                           -------------

<S>                                             <C>          <C>          <C>       <C>              <C>        <C>
Balance at December 31, 2001                    $1,745       $10,871      $(971)    $9,094           $372       $21,111

Comprehensive income:
  Net income                                         -             -          -      1,594              -         1,594
  Change in net unrealized gain on
    securities available for sale, net of
    taxes of $411                                    -             -          -          -            799           799
                                                                                                           -------------
Comprehensive income                                                                                              2,393
                                                                                                           -------------

Dividends paid                                       -             -          -       (760)             -          (760)
                                             ---------- ------------- ---------- ---------- -------------- -------------

Balance at September 30, 2002                   $1,745       $10,871      $(971)    $9,928         $1,171       $22,744
                                             ========== ============= ========== ========== ============== =============
</TABLE>

                                       3

          See accompanying notes to consolidated financial statements.

<PAGE>






<PAGE>

<TABLE>
<CAPTION>


                     Emclaire Financial Corp. and Subsidiary
                      Consolidated Statements of Cash Flows
        For the nine months ended September 30, 2002 and 2001 (Unaudited)
                          (Dollar amounts in thousands)


                                                                           For the nine months ended
                                                                                   September 30,
                                                                               2002          2001

Operating activities:
<S>                                                                        <C>          <C>
    Net income                                                             $    1,594   $      1,303
    Adjustments to reconcile net income to net cash provided
        by operating activities:
            Depreciation and amortization for premises and equipment              355            452
            Provision for loan losses                                             291            118
            Amortization of premiums and accretion of discounts, net              173              7
            Gain on sale of loans held for sale                                   (39)             -
            Amortization of intangible assets                                     109            207
            Decrease (increase) in accrued interest receivable                    (43)            20
            Decrease (increase) in prepaid expenses and other assets              (89)           (34)
            Increase (decrease) in accrued interest payable                       (20)             2
            Increase (decrease) in accrued expenses and other liabilities         178            168
            Originations of loans held for sale                                (1,259)             -
            Proceeds from sale of loans held for sale                           1,298              -
            Other                                                                (417)          (400)
                                                                           -----------  -------------
        Net cash provided by operating activities                               2,131          1,843
                                                                           -----------  -------------

Lending and Investing Activities:
    Loan originations, net of principal collections                            (7,367)        (8,211)
    Purchases of securities available for sale                                (28,960)        (7,464)
    Purchases of Federal bank stocks                                              (77)           (22)
    Purchase of Bank-owned life insurance                                      (4,000)             -
    Repayments, maturities and calls of securities available for sale          20,225          7,193
    Principal repayments of securities held to maturity                            30            146
    Purchases of premises and equipment                                          (443)          (286)
                                                                           -----------  -------------
        Net cash used in lending and investing activities                     (20,592)        (8,644)
                                                                           -----------  -------------

Deposit and Financing Activities:
    Net increase in deposits                                                   14,241         12,997
    Net increase (decrease) in borrowed funds                                   3,761         (2,000)
    Dividends paid on common stock                                               (760)          (679)
                                                                           -----------  -------------
        Net cash provided by deposit and  financing activities                 17,242         10,318
                                                                           -----------  -------------

Net increase in cash equivalents                                               (1,219)         3,517
Cash equivalents at beginning of period                                         9,157          8,510
                                                                           -----------  -------------
Cash equivalents at end of period                                          $    7,938   $     12,027
                                                                           ===========  =============
Supplemental information:

    Interest paid                                                          $    3,900   $      4,656
    Income taxes paid                                                             545            699
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                     Emclaire Financial Corp. and Subsidiary
                   Notes to Consolidated Financial Statements

1.       Business and Basis of Presentation

         Emclaire Financial Corp. (the Corporation) is a Pennsylvania
         corporation and bank holding company that provides a full range of
         retail and commercial financial products and services to customers in
         western Pennsylvania through its wholly owned subsidiary bank, the
         Farmers National Bank of Emlenton (the Bank), a national banking
         association. The consolidated financial statements contained herein
         include the accounts of the Corporation and the Bank, which operate as
         one operating segment. All inter-company amounts have been eliminated.

         The accompanying unaudited consolidated financial statements for the
         interim periods include all adjustments, consisting of normal recurring
         accruals, which are necessary, in the opinion of management, to fairly
         reflect the Corporation's financial position and results of operations.
         Additionally, these consolidated financial statements for the interim
         periods have been prepared in accordance with instructions for the
         Securities and Exchange Commission's Form 10-QSB and therefore do not
         include all information or footnotes necessary for a complete
         presentation of financial condition, results of operations and cash
         flows in conformity with accounting principles generally accepted in
         the United States of America. For further information, refer to the
         audited consolidated financial statements and footnotes thereto for the
         year ended December 31, 2001, as contained in the Corporation's 2001
         Annual Report to Stockholders.

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect the reported
         amounts in the consolidated financial statements and accompanying
         notes. Actual results could differ from those estimates. Material
         estimates that are particularly susceptible to significant change in
         the near term relate to the determination of the allowance for loan
         losses and deferred tax assets. The results of operations for interim
         quarterly or year to date periods are not necessarily indicative of the
         results that may be expected for the entire year or any other period.
         Certain amounts previously reported may have been reclassified to
         conform to the current year's financial statement presentation.

2.       Net Income Per Share

         The Corporation maintains a simple capital structure with no common
         stock equivalents. Earnings per share computations are based on the
         weighted average number of common shares outstanding for the respective
         reporting periods.

3.       Comprehensive Income

         Total comprehensive income was comprised of the following for the three
and nine-month periods ended September 30:
<TABLE>
<CAPTION>

                                                          Three Months Ended   Nine months Ended
                                                             September 30,        September 30,
In thousands                                               2002       2001     2002         2001

<S>                                                    <C>        <C>        <C>     <C>
Net income                                             $    581   $    491   $1,594  $     1,303
Change in net unrealized gain on securities available
    for sale, net of taxes                                  355        281      799          490

Comprehensive income                                   $    936   $    772   $2,393  $     1,793

</TABLE>

                                       5

<PAGE>

4.       Securities

         The following table summarizes the Corporation's securities as of the
respective dates:

<TABLE>
<CAPTION>

(In thousands)                              Amortized     Unrealized    Unrealized       Fair
                                               cost         gains         losses        value
--------------------------------------------------------------------------------------------------

Available for sale:
------------------------------------------
September 30, 2002:
<S>                                             <C>              <C>            <C>       <C>
U.S. Government securities                      $17,485          $392           $(5)      $17,872
Municipal securities                             15,416           529           (23)       15,922
Corporate securities                             12,927           392           (15)       13,304
Equity securities                                   971           503             -         1,474
                                          --------------------------------------------------------
                                                $46,799        $1,816          $(43)      $48,572
                                          ========================================================
December 31, 2001:
U.S. Government securities                      $12,978          $441          $(14)      $13,405
Municipal securities                             11,919            24          (176)       11,767
Corporate securities                             12,264           157          (115)       12,306
Equity securities                                   971           246             -         1,217
                                          --------------------------------------------------------
                                                $38,132          $868         $(305)      $38,695
                                          ========================================================
Held to maturity:
------------------------------------------
September 30, 2002:
Mortgage-backed securities                          $30            $-           $(1)          $29
                                          --------------------------------------------------------
                                                    $30            $-           $(1)          $29
                                          ========================================================
December 31, 2001:
Mortgage-backed securities                          $60            $1            $-           $61
                                          --------------------------------------------------------
                                                    $60            $1            $-           $61
                                          ========================================================
</TABLE>

5.       Loans Receivable

         The Corporation's loans receivable as of the respective dates are
summarized as follows:


---------------------------------------------------------------------------
                                           September 30     December 31,
(In thousands)                                 2002             2001
---------------------------------------------------------------------------
Mortgage loans:
Residential first mortgage                   $84,707          $84,974
Home equity                                   18,978           15,445
Commercial real estate                        31,112           26,470
                                         ---------------   ----------------
                                             134,797          126,889
Other loans:
Consumer                                      13,222           16,141
Commercial business                           20,991           18,974
                                         ---------------   ----------------
                                              34,213           35,115
                                         ---------------   ----------------

Total gross loans                            169,010          162,004

Less allowance for loan losses                1,493             1,464
                                         ---------------   ----------------

                                             $167,517        $160,540
                                         ==================================

                                       6

<PAGE>

6.       Deposits

The Corporation's deposits as of the respective dates are summarized as follows:


<TABLE>
<CAPTION>

(Dollar amounts in thousands)                  September 30, 2002                December 31, 2001
                                       -------------------------------------------------------------------
                                         Weighted                             Weighted
                                          average                              average
Type of accounts                           rate      Amount           %         rate       Amount     %
----------------------------------------------------------------------------------------------------------

<S>                                                  <C>             <C>                 <C>         <C>
Noninterest-bearing deposits                  -      $33,338         16.4%         -     $29,237     15.4%
Interest-bearing demand deposits           1.12%      70,888         34.8%      1.32%     69,665     36.8%
Time deposits                              4.08%      99,485         48.8%      4.83%     90,568     47.8%
                                                    ----------------------              ------------------

                                           2.38%    $203,711        100.0%      2.79%   $189,470    100.0%
                                                    ======================              ==================
</TABLE>

7.       Goodwill

         On January 1, 2002, the Corporation adopted the Financial Accounting
         Standards Board (FASB) Statement of Financial Accounting Standards
         (SFAS) No. 142, "Goodwill and Other Intangible Assets." This statement
         changed the accounting for goodwill from an amortization method to an
         impairment-only approach. Thus amortization of goodwill, including
         goodwill recorded in past business combinations, ceased upon adoption
         of this statement. However, this statement did not amend SFAS No. 72,
         "Accounting for Certain Acquisitions of Banking or Thrift
         Institutions," which required recognition and amortization of
         unidentified intangible assets relating to the acquisitions of certain
         financial institutions or branches thereof.

         In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
         Financial Institutions," which amends and reconsiders certain
         provisions of SFAS No. 72. This statement addresses the financial
         accounting and reporting for the acquisition of all or part of a
         financial institution. The statement provides that unidentified
         intangible assets associated with branch acquisitions, considered a
         business combination under the provisions of SFAS No. 141, "Business
         Combinations," should be reclassified as goodwill and accounted for
         under the provisions of SFAS No. 142. This statement is effective on
         October 1, 2002, with earlier application permitted.

         In September 2002, the Corporation adopted SFAS No. 147. At September
         30, 2002, the Corporation had $484,000 in SFAS No. 72 unidentified
         intangible assets that were reclassified to goodwill. In connection
         with the adoption of SFAS No. 147, the Corporation reversed
         amortization expense of $24,000 that was recognized during 2002. This
         previously recognized amortization expense was reversed in the third
         quarter of 2002.

                                       7
<PAGE>


Had SFAS No. 142 and SFAS No. 147 been in effect for all periods presented,
previously reported net income and net income per share would have been as
follows:

<TABLE>
<CAPTION>

                                                     Three Months Ended   Nine months Ended
                                                        September 30,        September 30,
In thousands, except per share data                     2002      2001      2002      2001

Net income:

<S>                                                 <C>       <C>       <C>        <C>
    Reported net income                             $    581  $    491  $   1,594  $  1,303
    Add back goodwill amortization                         -        32          -        97
                                                    --------  --------  ---------  --------
    Adjusted net income                             $    581  $    523  $   1,594  $  1,400
                                                    ========  ========  =========  ========

Net income per share:

    Reported net income per share                   $   0.44  $   0.37  $    1.20  $   0.98
    Add back goodwill amortization                         -      0.02          -      0.07
                                                    --------  --------  ---------  --------
    Adjusted net income per share                   $   0.44  $   0.39  $    1.20  $   1.05
                                                    ========  ========  =========  ========
</TABLE>

                                       8

<PAGE>


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

This section discusses the consolidated financial condition and results of
operations of Emclaire Financial Corp. (the Corporation) and its wholly owned
subsidiary bank, the Farmers National Bank of Emlenton (the Bank), for the three
and nine-month periods ended September 30, 2002 and should be read in
conjunction with the accompanying consolidated financial statements and notes
presented on pages 1 through 8.

Discussions of certain matters in this Report on Form 10-QSB may constitute
forward-looking statements within the meaning of the Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and as such, may involve
risks and uncertainties. Forward-looking statements, which are based on certain
assumptions and describe future plans, strategies, and expectations, are
generally identifiable by the use of words or phrases such as "believe", "plan",
"expect", "intend", "anticipate", "estimate", "project", "forecast", "may
increase", "may fluctuate", "may improve" and similar expressions of future or
conditional verbs such as "will", "should", "would", and "could". These
forward-looking statements relate to, among other things, expectations of the
business environment in which the Corporation operates, projections of future
performance, potential future credit experience, perceived opportunities in the
market, and statements regarding the Corporation's mission and vision. The
Corporation's actual results, performance, and achievements may differ
materially from the results, performance, and achievements expressed or implied
in such forward-looking statements due to a wide range of factors. These factors
include, but are not limited to, changes in interest rates, general economic
conditions, the demand for the Corporation's products and services, accounting
principles or guidelines, legislative and regulatory changes, monetary and
fiscal policies of the US Government, US Treasury, and Federal Reserve, real
estate markets, competition in the financial services industry, attracting and
retaining key personnel, performance of new employees, regulatory actions,
changes in and utilization of new technologies, and other risks detailed in the
Corporation's reports filed with the Securities and Exchange Commission (SEC)
from time to time, including the Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2001. These factors should be considered in evaluating
the forward-looking statements, and undue reliance should not be placed on such
statements. The Corporation does not undertake, and specifically disclaims any
obligation, to update any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such statements.

CHANGES IN FINANCIAL CONDITION

General. The Corporation's total assets increased $19.8 million or 9.1% to
$236.5 million at September 30, 2002 from $216.7 million at December 31, 2001.
This net increase was primarily the result of increases in securities and loans
receivable of $9.9 million and $7.0 million, respectively, as well as the
funding of Bank-owned life insurances premiums totaling $4.0 million, partially
offset by a decrease in cash and cash equivalents of $1.2 million. The increase
in total assets reflects a corresponding increase in total liabilities and total
stockholders' equity of $18.2 million or 9.3% and $1.6 million or 7.7%,
respectively. The increase in total liabilities was primarily the result of an
increase in deposits and borrowed funds of $14.2 million and $3.8million,
respectively. This increase in deposits and borrowings funded the Corporation's
asset growth for the period. The increase in stockholders' equity was primarily
the result of increases in retained earnings and accumulated other comprehensive
income of $834,000 and $799,000, respectively.

Cash and cash equivalents. Cash and cash equivalents decreased $1.2 million or
13.3% to $7.9 million at September 30, 2002 from $9.2 million at December 31,
2001. The net decrease between September 30, 2002 and December 31, 2001 can be
attributed primarily to the increase in the Corporation's securities and loan
portfolios during the period.

Securities. The Corporation's securities portfolio increased $9.9 million or
25.5% to $48.6 million at September 30, 2002 from $38.7 million at December 31,
2001. This net increase was primarily the result of security purchases of $29.0
million, during the nine months ended September 30, 2002. Partially offsetting
the increase in the portfolio resulting from purchases were security maturities
and calls of $20.2 million, during the period.

                                       9
<PAGE>

Security purchases were comprised of U.S. government agency, tax-free municipal
and corporate securities of $11.0 million, $4.2 million and $13.8 million,
respectively. Security maturities and calls were comprised of U.S. government
agency, tax-free municipal and corporate securities of $6.5 million, $700,000
and $13.3 million, respectively. Corporate securities that were purchased and
that matured during the period included primarily short-term commercial paper
utilized to manage interest-earned on funds maintained for liquidity purposes.
At September 30, 2002, the Corporation maintained $3.0 million in commercial
paper that is scheduled to mature within two months.

Loans receivable. Net loans receivable increased $7.0 million or 4.4% to $167.5
million at September 30, 2002 from $160.5 million at December 31, 2001. This
increase was comprised of an increase in mortgage loans of $7.9 million or 6.2%,
partially offset by a decrease in other loans of $902,000 or 2.6% during the
nine months ended September 30, 2002. This overall increase in loans receivable
can be attributed primarily to higher customer demand for loans in the current
lower interest rate environment as well as the introduction of new consumer
mortgage loan products.

During the second quarter of 2002, management identified and designated $1.3
million of residential mortgage loans for sale in the secondary market. These
loans were originated for sale and met certain interest rate and term parameters
established by management in connection with managing the Corporation's asset
and liability mix and interest rate risk. The loans were originated during the
first half of 2002 and the sale of these loans occurred in July 2002.

Non-performing assets. Non-performing assets include non-accrual loans and real
estate acquired through foreclosure. Non-performing assets amounted to $1.6
million or 0.66% and $1.3 million or 0.57% of total assets at September 30, 2002
and December 31, 2001, respectively.

Bank-owned life insurance (BOLI). On September 30, 2002, the Corporation
purchased $4.0 million in BOLI premiums to fund single premium life insurance
policies on twenty officers and employees of the Bank. In addition to providing
life insurance coverage whereby the Bank as well as the officers and employees
receive life insurance benefits, the appreciation of the cash surrender value of
the BOLI will serve to offset and finance existing and future employee benefit
costs. The BOLI premium paid will preliminarily yield approximately 5.40% in
tax-free non-cash appreciation on an annual basis.

Deposits. Total deposits increased $14.2 million or 7.5% to $203.7 million at
September 30, 2002 from $189.5 million at December 31, 2001. This increase was
comprised of increases in noninterest bearing, interest bearing and time
deposits of $4.1 million, $1.2 million, and $8.9 million, respectively. The
general increase in deposits during the period can be attributed primarily to:
(1) an overall movement of funds in the marketplace by customers from mutual
fund and stock investments into FDIC insured bank deposits as a result of recent
national economic instability, and (2) the Corporation's development and
promotion of new depository products including money market accounts and special
certificate of deposit programs, among other initiatives.

Borrowed funds. Borrowed funds increased $3.8 million to $8.8 million at
September 30, 2002 from $5.0 million at December 31, 2002. This increase in
borrowed funds is comprised of overnight advances from the Federal Home Loan
Bank of Pittsburgh (FHLB) used to fund municipal securities purchased during
late September 2002. These overnight advances will be replaced by a $5.0 million
FHLB term advance committed to be funded on October 31, 2002. The Corporation is
utilizing these funds to support $5.0 million in municipal securities purchased
during September and October 2002.

Stockholders' equity. Stockholders' equity increased $1.6 million or 7.7% to
$22.7 million at September 30, 2002 from $21.1 million at December 31, 2001.
This increase was principally the result of an increase in retained earnings of
$834,000, comprised of net income of $1.6 million offset by dividends paid of
$760,000, and an increase in accumulated other comprehensive income of $799,000.

                                       10

<PAGE>

RESULTS OF OPERATIONS

Comparison of Results for the Three-Month Periods Ended September 30, 2002
and 2001

General. The Corporation reported net income of $581,000 and $491,000 for the
three months ended September 30, 2002 and 2001, respectively. The $90,000 or
18.3% increase in net income for the three months ended September 30, 2002, as
compared to the three months ended September 30, 2001, was attributable to an
increase in net interest income and noninterest income of $184,000 and $14,000
respectively, partially offset by increases in the provision for loan losses,
noninterest expense and the provision for income taxes of $54,000, $6,000 and
$48,000, respectively.

Average Balance Sheet and Yield/Rate Analysis. The following table sets forth,
for periods indicated, information concerning the total dollar amounts of
interest income from interest-earning assets and the resultant average yields,
the total dollar amounts of interest expense on interest-bearing liabilities and
the resulting average costs, net interest income, interest rate spread and the
net interest margin earned on average interest-earning assets. For purposes of
this table, average loan balances include non-accrual loans and exclude the
allowance for loan losses, and interest income includes accretion of net
deferred loan fees. Interest and yields on tax-exempt loans and securities
(tax-exempt for federal income tax purposes) are shown on a fully tax equivalent
basis.
<TABLE>
<CAPTION>


(Dollar amounts in thousands)                                   Three months ended September 30,
                                                          2002                             2001
                                          ------------------------------------------------------------------
                                             Average                Yield /    Average              Yield /
                                             Balance    Interest     Rate      Balance   Interest     Rate
------------------------------------------------------------------------------------------------------------

Interest-earning assets:
------------------------
<S>                                          <C>         <C>          <C>    <C>          <C>          <C>
Loans                                        168,163     $3,099       7.37%  $156,767     $3,172       8.09%

Securities, taxable                           31,179        371       4.76%    19,984        311       6.22%
Securities, tax exempt                        12,396        207       6.68%     7,698        134       6.94%
                                          ------------------------------------------------------------------
                                              43,575        578       5.31%    27,682        445       6.42%
                                          ------------------------------------------------------------------

Interest-earning cash equivalents              4,765         24       2.01%     7,547         65       3.45%
Federal bank stocks                            1,338         13       3.89%     1,261         21       6.66%
                                          ------------------------------------------------------------------
                                               6,103         37       2.43%     8,808         86       3.91%
                                          ------------------------------------------------------------------

Total interest-earning assets                217,841      3,714       6.82%   193,257      3,703       7.66%
Cash and due from banks                        6,660                            6,437
Other noninterest-earning assets               6,076                            5,395
                                          ------------------------------------------------------------------

Total assets                                $230,577     $3,714       6.44%  $205,089     $3,703       7.22%
                                          ==================================================================

Interest-bearing liabilities:
-----------------------------
Interest-bearing demand deposits             $72,545       $209       1.15%   $66,623       $225       1.35%
Time deposits                                 95,806      1,034       4.32%    85,949      1,269       5.91%
                                          ------------------------------------------------------------------
                                             168,351      1,243       2.95%   152,572      1,494       3.92%
                                          ------------------------------------------------------------------

Borrowed funds, term                           5,000         57       4.56%         -          -       0.00%
Borrowed funds, overnight                        427          2       1.87%         -          -       0.00%
                                          ------------------------------------------------------------------
                                               5,427         59       4.35%         -          -       0.00%
                                          ------------------------------------------------------------------

Total interest-bearing liabilities           173,778      1,302       3.00%   152,572      1,494       3.92%
Noninterest-bearing demand deposits           32,884          -          -     30,449                     -
                                          ------------------------------------------------------------------

Funding and cost of funds                    206,662      1,302       2.52%   183,021      1,494       3.27%
Other noninterest-bearing liabilities          1,439                            1,171
                                          -----------                      -----------

Total liabilities                            208,101                          184,192
Stockholders' equity                          22,476                           20,897
                                          ------------------------------------------------------------------

Total liabilities and stockholders' equity  $230,577     $1,302       2.52%  $205,089     $1,494       3.27%
                                          ==================================================================

Net interest income                                      $2,412                           $2,209
                                                     ===========                      ===========

Interest rate spread (difference between                              3.82%                            3.74%
                                                                ===========                      ===========
weighted average rate on interest-earning
assets and interest-bearing liabilities)

Net interest margin (net interest                                     4.43%                            4.57%
                                                                ===========                      ===========
income as a percentage of average
interest-earning assets)
</TABLE>

                                       11

<PAGE>

Analysis of Changes in Net Interest Income. The following table analyzes the
changes in interest income and interest expense in terms of: (1) changes in
volume of interest-earning assets and interest-bearing liabilities and (2)
changes in yields and rates. The table reflects the extent to which changes in
the Corporation's interest income and interest expense are attributable to
changes in rate (change in rate multiplied by prior year volume), changes in
volume (changes in volume multiplied by prior year rate) and changes
attributable to the combined impact of volume/rate (change in rate multiplied by
change in volume). The changes attributable to the combined impact of
volume/rate are allocated on a consistent basis between the volume and rate
variances. Changes in interest income on loans and securities reflect the
changes in interest income on a fully tax equivalent basis.

<TABLE>
<CAPTION>

 (In thousands)                                          Three months ended September 30,
                                                                 2002 versus 2001
                                                            Increase (decrease) due to
                                                        ---------------------------------
                                                          Volume      Rate       Total
-----------------------------------------------------------------------------------------
 Interest income:
<S>                                                           <C>       <C>         <C>
    Loans                                                     $221      $(294)      $(73)
    Securities                                                 221        (88)       133
    Interest-earning cash equivalents                          (19)       (22)       (41)
    Federal bank stocks                                          1         (9)        (8)
                                                        ---------------------------------

    Total interest-earning assets                              424       (413)        11
                                                        ---------------------------------

 Interest expense:
    Deposits                                                   143       (394)      (251)
    Borrowed funds                                              59          -         59
                                                        ---------------------------------

    Total interest-bearing liabilities                         202       (394)      (192)
                                                        ---------------------------------

 Net interest income                                          $222       $(19)      $203
                                                        =================================
</TABLE>


Net interest income. Net interest income on a tax equivalent basis increased
$203,000 or 9.2% to $2.4 million for the three months ended September 30, 2002,
compared to $2.2 million for the same period in the prior year. This increase
can be attributed to an increase in interest income of $11,000 and a decrease in
interest expense of $192,000.

Interest income. Interest income on a tax equivalent basis increased $11,000 to
$3.71 million for the three months ended September 30, 2002, compared to $3.70
million for the same period in the prior year. This net increase in interest
income can be attributed to an increase in interest earned on securities of
$133,000, partially offset by a decrease in interest earned on loans, cash
equivalents and federal bank stocks of $73,000, $41,000 and $8,000,
respectively.

Contributing to the increase in net interest income was an increase in average
interest-earning assets of $24.5 million or 12.7% to $217.8 million for the
three months ended September 30, 2002, compared to $193.3 million for the same
period in the prior year. The increase in average interest-earning assets can be
attributed to increases in average loans receivable and average securities of
$11.4 million and $15.9 million, respectively, partially offset by a decrease in
interest-earning cash equivalents of $2.8 million. Average loans receivable
increased to $168.2 million and average securities increased to $43.6 million
during the three months ended September 30, 2002, compared to $156.7 million and
$27.7 million, respectively, during the same period in the prior year. Partially
offsetting the increase in interest income due to the increase in volume of
interest-earning assets was a decrease in the yield on interest earning assets
of 84 basis points to 6.82% for the three months ended September 30, 2002,
compared to 7.66% for the same period in the prior year. The yield on average
loans, securities and interest-earning deposits decreased to 7.37%, 5.31% and
2.01%, respectively, during the three months ended September 30, 2002, compared
to 8.09%, 6.42%, and 3.45%, respectively, for the same period in the prior year.

Interest expense. Interest expense decreased $192,000 or 12.9% to $1.3 million
for the three months ended September 30, 2002, compared to $1.5 million for the
same period in the prior year. This decrease in interest expense can be
attributed to a 92 basis point decline in the interest rate on average
interest-bearing liabilities to 3.00% during the three months ended September
30, 2002, compared to 3.92% for the same period in the prior year. The average
cost of deposits decreased to 2.95% during the three months ended September 30,
2002, compared to 3.92% for the same period in the prior year.

                                       12
<PAGE>

The decrease in interest expense due to rate was partially offset by an increase
in the average balance of interest-bearing liabilities, as average
interest-bearing deposits and borrowed funds increased to $168.3 million and
$5.4 million, respectively, during the three months ended September 30, 2002,
compared to $152.6 million and $-0-, respectively, during the same period in the
prior year.

Provision for loan losses. The Corporation records provisions for loan losses to
bring the total allowance for loan losses to a level deemed adequate to cover
probable losses inherent in the loan portfolio. In determining the appropriate
level of allowance for loan losses, management considers historical loss
experience, the present and prospective financial condition of borrowers,
current and prospective economic conditions (particularly as they relate to
markets where the Corporation originates loans), the status of non-performing
assets, the estimated underlying value of the collateral and other factors
related to the collectibility of the loan portfolio. The $54,000 increase in the
Corporation's provision for loans losses between the three-month periods ended
September 30, 2002 and 2001 was the result of adjusting the allowance for loans
losses to levels adequate to cover probable losses at September 30, 2002 based
on management's periodic review of the collectibility of loans in light of the
factors noted above.

Noninterest income. Noninterest income increased $14,000 or 4.1% to $357,000
during the three months ended September 30, 2002, compared to $343,000 during
the same period in the prior year. This increase can principally be attributed
the $39,000 gain on the sale of loans held for sale during the quarter ended
September 30, 2002, partially offset by a slight decrease in other noninterest
income. Service fees and other noninterest income, comprised primarily of fees
on depository accounts, general transactional income, certain loan transaction
costs and other miscellaneous income, remained relatively stable between the
three months ended September 30, 2002 and the same period in the prior year.

Noninterest expense. Noninterest expense increased $6,000 to $1.773 million
during the three months ended September 30, 2002, compared to $1.767 million
during the same period in the prior year. This increase in noninterest expense
can be attributed to increases in compensation and employee benefits, premises
and equipment and other expenses of $40,000, $13,000 and $10,000, respectively,
partially offset by a decrease in intangible amortization expense of $57,000.
See "Note 7 - Goodwill" on page 7.

Compensation and employee benefits expense increased $40,000 or 4.2% to $986,000
during the three months ended September 30, 2002, compared to $946,000 for the
same period in the prior year. This increase can be attributed primarily to
normal and expected salary and benefit cost increases and increased management
and employee incentive costs between the two periods, partially offset by lower
levels of full-time equivalent employees.

Premises and equipment costs increased $13,000 or 5.0% to $274,000 during the
three months ended September 30, 2002, compared to $261,000 for the same period
in the prior year. This increase can be attributed to the realization of certain
bank equipment repairs and branch office improvement expenditures during the
past year.

Other noninterest expense increased $10,000 or 2.0% to $501,000 during the three
months ended September 30, 2002, compared to $491,000 for the same period in the
prior year. This increase can primarily be attributed to increased professional
fee and telephone cost expenses between the two periods. Professional fees
increased as a result of the Corporation retaining a transfer agent during late
2001, costs associated with the recently announced dividend reinvestment plan
and expanded regulatory financial reporting requirements.

Provision for income taxes. The provision for income taxes increased $48,000 or
22.2% to $264,000 for the three months ended September 30, 2002, compared to
$216,000 for the same period in the prior year. This increase is a direct result
of the increase in net income before taxes between the two periods, partially
offset by a decrease in the Corporation's effective tax rate as a result of
increased investment in tax-free municipal securities.

                                       13
<PAGE>

Comparison of Results for the Nine-month Periods Ended September 30, 2002
and 2001

General. The Corporation reported net income of $1.6 million and $1.3 million
for the nine months ended September 30, 2002 and 2001, respectively. The
$291,000 or 22.3% increase in net income for the nine months ended September 30,
2002, as compared to the nine months ended September 30, 2001, was attributable
to increases in net interest income and noninterest income of $802,000 and
$2,000, respectively, partially offset by increases in the provision for loan
losses, noninterest expense and the provision for income taxes of $173,000,
$237,000 and $103,000, respectively.

<TABLE>
<CAPTION>
Average Balance Sheet and Yield/Rate Analysis.


(Dollar amounts in thousands)                           Nine months ended September 30,
                                                     2002                             2001
                                     ------------------------------------------------------------------
                                       Average                  Yield /   Average              Yield /
                                       Balance    Interest       Rate     Balance   Interest     Rate
-------------------------------------------------------------------------------------------------------

Interest-earning assets:
-------------------------------------
<S>                                    <C>          <C>          <C>    <C>          <C>          <C>
Loans                                  $166,413     $9,346       7.49%  $153,818     $9,496       8.23%

Securities, taxable                      29,160      1,122       5.13%    19,431        904       6.20%
Securities, exempt from Federal tax      11,789        602       6.81%     7,513        387       6.88%
                                     ------------------------------------------------------------------
                                         40,949      1,724       5.61%    26,944      1,291       6.39%
                                     ------------------------------------------------------------------

Interest-earning cash equivalents         4,390         55       1.67%     7,281        236       4.32%
Federal bank stocks                       1,308         41       4.18%     1,250         61       6.51%
                                     ------------------------------------------------------------------
                                          5,698         96       2.25%     8,531        297       4.64%
                                     ------------------------------------------------------------------

Total interest-earning assets           213,060     11,166       6.99%   189,293     11,084       7.81%
Cash and due from banks                   5,554                            6,225
Other noninterest-earning assets          5,493                            5,481
                                     ------------------------------------------------------------------

Total assets                           $224,107    $11,166       6.64%  $200,999    $11,084       7.35%
                                     ==================================================================

Interest-bearing liabilities:
-------------------------------------
Interest-bearing demand deposits        $71,636       $613       1.14%   $64,806       $776       1.60%
Time deposits                            92,628      3,091       4.45%    84,730      3,850       6.06%
                                     ------------------------------------------------------------------
                                        164,264      3,704       3.01%   149,536      4,626       4.12%
                                     ------------------------------------------------------------------

Borrowed funds, term                      5,000        175       4.67%       733         32       5.82%
Borrowed funds, overnight                   115          1       1.16%         -          -       0.00%
                                     ------------------------------------------------------------------
                                          5,115        176       4.59%       733         32       5.82%
                                     ------------------------------------------------------------------

Total interest-bearing liabilities      169,379      3,880       3.05%   150,269      4,658       4.13%
Noninterest-bearing demand deposits      31,390          -          -     29,073          -          -
                                     ------------------------------------------------------------------

Total financial liabilities/cost of
 funds                                  200,769      3,880       2.58%   179,342      4,658       3.46%
Other noninterest-bearing liabilities     1,442                            1,240
                                     -----------                      -----------

Total liabilities                       202,211                          180,582
Stockholders' equity                     21,896                           20,417
                                     ------------------------------------------------------------------

Total liabilities and stockholders'
 equity                                $224,107     $3,880       2.58%  $200,999     $4,658       3.46%
                                     ==================================================================

Net interest income                                 $7,286                           $6,426
                                                ===========                      ===========

Interest rate spread (difference between                         3.94%                            3.68%
                                                           ===========                      ===========
weighted average rate on interest-earning
assets and interest-bearing liabilities)

Net interest margin (net interest                                4.56%                            4.53%
                                                           ===========                      ===========
income as a percentage of average
interest-earning assets)
</TABLE>

                                       14

<PAGE>

Analysis of Changes in Net Interest Income.
<TABLE>
<CAPTION>


(In thousands)                                             Nine months ended September 30,
                                                                   2002 versus 2001
                                                              Increase (decrease) due to
                                                 ---------------------------------------------------
                                                          Volume             Rate             Total
----------------------------------------------------------------------------------------------------
 Interest income:
<S>                                                          <C>             <C>              <C>
    Loans                                                    $744            $(894)           $(150)
    Securities                                                605             (172)             433
    Interest-earning cash equivalents                         (71)            (110)            (181)
    Federal bank stocks                                         3              (23)             (20)
                                                 ---------------------------------------------------

    Total interest-earning assets                           1,281           (1,199)              82
                                                 ---------------------------------------------------

 Interest expense:
    Deposits                                                  423           (1,345)            (922)
    Borrowed funds                                            152               (8)             144
                                                 ---------------------------------------------------

    Total interest-bearing liabilities                        575           (1,353)            (778)
                                                 ---------------------------------------------------

 Net interest income                                         $706             $154             $860
                                                 ===================================================
</TABLE>

Net interest income. Net interest income on a tax equivalent basis increased
$860,000 or 13.4% to $7.3 million for the nine months ended September 30, 2002,
compared to $6.4 million for the same period in the prior year. This increase
can be attributed to an increase in interest income of $82,000 and a decrease in
interest expense of $778,000.

Aside from changes in the volume and rates of interest-earning assets and
interest-bearing liabilities discussed herein, $93,000 of the increase in net
interest income between the periods can be attributed to the payoff of a
previously non-performing commercial real estate loan in March 2002 that had
been on non-accrual status. In connection with the loan payoff, the Corporation
received all principal and interest due under the contractual terms of the loan
agreement and therefore interest collected was recorded as loan interest income
during the current period.

Interest income. Interest income on a tax equivalent basis increased $82,000 to
$11.2 million for the nine months ended September 30, 2002, compared to $11.1
million for the same period in the prior year. This net increase in interest
income can be attributed to the aforementioned $93,000 collection and
recognition of interest on a non-performing commercial real estate loan and an
increase in interest earned on securities of $433,000; partially offset by
decreases in interest earned on loans, cash equivalents and federal bank stocks
of $150,000, $181,000 and $20,000, respectively.

Contributing to the increase in net interest income was an increase in average
interest-earning assets of $23.8 million or 12.6% to $213.1 million for the nine
months ended September 30, 2002, compared to $189.3 million for the same period
in the prior year. The increase in average interest-earning assets can be
attributed to increases in average loans receivable and average securities of
$12.6 million and $14.0 million, respectively, partially offset by a decrease in
interest-earning cash equivalents of $2.9 million. Average loans receivable
increased to $166.4 million and average securities increased to $40.9 million
during the nine months ended September 30, 2002, compared to $153.8 million and
$26.9 million, respectively, during the same period in the prior year. Partially
offsetting the increase in interest income due to the increase in volume of
interest-earning assets was a decrease in the yield on interest earning assets
of 82 basis points to 6.99% for the nine months ended September 30, 2002,
compared to 7.81% for the same period in the prior year. The yield on average
loans, securities and interest-earning cash equivalents decreased to 7.49%,
5.61% and 1.67%, respectively, during the nine months ended September 30, 2002,
compared to 8.23%, 6.39%, and 4.32%, respectively, for the same period in the
prior year.

                                       15
<PAGE>

Interest expense. Interest expense decreased $778,000 or 16.7% to $3.9 million
for the nine months ended September 30, 2002, compared to $4.7 million for the
same period in the prior year. This decrease in interest expense can be
attributed to a 108 basis point decline in the interest rate on average
interest-bearing liabilities to 3.05% during the nine months ended September 30,
2002, compared to 4.13% for the same period in the prior year. The average cost
of deposits and borrowed funds decreased to 3.01% and 4.59%, respectively,
during the nine months ended September 30, 2002, compared to 4.12% and 5.82%,
respectively, for the same period in the prior year.

The decrease in interest expense due to rate was partially offset by an increase
in the average balance of interest-bearing liabilities as average
interest-bearing deposits and borrowed funds increased to $164.3 million and
$5.1 million, respectively, during the nine months ended September 30, 2002,
compared to $149.5 million and $733,000, respectively, during the same period in
the prior year.

Provision for loan losses. The $173,000 increase in the Corporation's provision
for loans losses between the nine-month periods ended September 30, 2002 and
2001 was the result of adjusting the allowance for loans losses to levels
adequate to cover probable losses at September 30, 2002 based on management's
periodic review of the collectibility of loans.

Noninterest income. Noninterest income increased $2,000 to $995,000 for the nine
months ended September 30, 2002 compared to $993,000 for the same period in the
prior year. This increase can be attributed to the aforementioned gain on the
sale of loans held for sale partially offset by a lower volume of customer
service fees between the two periods.

Noninterest expense. Noninterest expense increased $237,000 or 4.5% to $5.6
million during the nine months ended September 30, 2002, compared to $5.3
million during the same period in the prior year. This increase in noninterest
expense can be attributed to increases in compensation and employee benefits,
premises and equipment and other expenses of $176,000, $51,000 and $108,000,
respectively, partially offset by a decrease in intangible amortization expense
of $98,000.

Compensation and employee benefits expense increased $176,000 or 6.3% to $3.0
million during the nine months ended September 30, 2002, compared to $2.8
million for the same period in the prior year. This increase can be attributed
primarily to normal and expected salary and benefit cost increases and increased
management and employee incentive costs between the two periods, partially
offset by lower levels of full-time equivalent employees.

Other noninterest expense increased $108,000 or 7.24% to $1.6 million during the
nine months ended September 30, 2002, compared to $1.5 million for the same
period in the prior year. This increase can primarily be attributed to increased
professional fee and telephone cost expenses between the two periods.
Professional fees increased as a result of the Corporation retaining a transfer
agent during late 2001, costs associated with the recently announced dividend
reinvestment plan and expanded regulatory financial reporting requirements.

Provision for income taxes. The provision for income taxes increased $103,000 or
18.4% to $663,000 for the nine months ended September 30, 2002, compared to
$560,000 for the same period in the prior year. This increase is a direct result
of the increase in net income before taxes between the two periods, partially
offset by a decrease in the Corporation's effective tax rate as a result of
increased investment in tax-free municipal securities during the latter half of
2001.

LIQUIDITY

The Corporation's primary sources of funds generally have been deposits obtained
through the offices of the Bank, borrowings from the FHLB, and amortization and
prepayments of outstanding loans and maturing securities. During the nine months
ended September 30, 2002, the Corporation used its sources of funds primarily to
fund loan commitments and, to a lesser extent, purchase securities. As of such
date, the Corporation had outstanding loan commitments, including undisbursed
loans and amounts available under credit lines, totaling $16.2 million, and
standby letters of credit totaling $636,000.

                                       16
<PAGE>

At September 30, 2002, time deposits amounted to $99.5 million or 48.8% of the
Corporation's total consolidated deposits, including approximately $33.2
million, which were scheduled to mature within the next year. Management of the
Corporation believes that it has adequate resources to fund all of its
commitments, that all of its commitments will be funded as required by related
maturity dates and that, based upon past experience and current pricing
policies, it can adjust the rates of time deposits to retain a substantial
portion of maturing liabilities.

Aside from liquidity available from customer deposits or through sales and
maturities of securities, the Corporation has alternative sources of funds such
as a line of credit and term borrowing capacity from the FHLB and, to a limited
and rare extent, the sale of loans. At September 30, 2002, the Corporation's
borrowing capacity with the FHLB, net of funds borrowed, was $96.4 million.

Management is not aware of any conditions, including any regulatory
recommendations or requirements, which would adversely impact its liquidity or
its ability to meet funding needs in the ordinary course of business.

RECENT REGULATORY DEVELOPMENTS

On July 30, 2002, President Bush signed into law new legislation that addresses
accounting oversight and corporate governance. The new law creates a five-member
oversight board appointed by the Securities and Exchange Commission (SEC) that
will set standards for accountants and have investigative and disciplinary
powers. The new legislation bars accounting firms from providing a number of
consulting services to audit clients and requires accounting firms to rotate
partners among client assignments every five years. The new legislation also
increases penalties for financial crimes, requires expanded disclosure of
corporate operations and internal controls, enhances controls on and reporting
of insider trading, expands the SEC's budget, and places statutory separations
between investment bankers and analysts. Various aspects of the new legislation
are dependent upon subsequent rulemaking by the SEC. Management is currently
evaluating what impacts the new legislation will have upon the Corporation. The
Corporation utilizes its external attestation auditor only for audit services
and assistance with the preparation of tax returns.

Item 3.  Controls and Procedures

(a)   The Corporation maintains disclosure controls and procedures that are
      designed to ensure that information required to be disclosed in the
      Corporation's Exchange Act reports is recorded, processed, summarized and
      reported within the time periods specified in the SEC's rules and forms,
      and that such information is accumulated and communicated to the
      Corporation's management, including its Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow timely decisions regarding
      required disclosure based closely on the definition of "disclosure
      controls and procedures" in Rule 13a-14(c).

      Within 90 days prior to the date of this report, the Corporation carried
      out an evaluation, under the supervision and with the participation of the
      Corporation's management, including the Corporation's Chief Executive
      Officer and the Corporation's Chief Financial Officer, of the
      effectiveness of the design and operation of the Corporation's disclosure
      controls and procedures. Based on the foregoing, the Corporation's Chief
      Executive Officer and Chief Financial Officer concluded that the
      Corporation's disclosure controls and procedures were effective.

(b)   There have been no significant changes in the Corporation's internal
      controls or in other factors that could significantly affect the internal
      controls subsequent to the date the Corporation completed its evaluation

                                       17
<PAGE>
                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

The Corporation is involved in various legal proceedings occurring in the
ordinary course of business. It is the opinion of management, after consultation
with legal counsel, that these matters will not materially effect the
Corporation's consolidated financial position or results of operations.

Item 2.  Changes in Securities

None.

Item 3.  Defaults Upon Senior Securities

None.

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

None.

Item 5.  Other Information

None.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         Exhibit 99.1    CEO Certification Pursuant to 18 U.S.C. Section 1350,
                         As Adopted Pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002

         Exhibit 99.2    CFO Certification Pursuant to 18 U.S.C. Section 1350,
                         As Adopted Pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002

(b)      Reports on Form 8-K

         None.

                                       18

<PAGE>

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


EMCLAIRE FINANCIAL CORP.



Date:  November 8, 2002           By:      /s/ David L. Cox
                                  --------------------------------------------
                                  David L. Cox
                                  Chairman of the Board,
                                  President and Chief Executive Officer

Date:  November 8, 2002           By:      /s/ William C. Marsh
                                  --------------------------------------------
                                  William C. Marsh
                                  Treasurer/Secretary
                                  (Principal Financial and Accounting Officer)

                                       19
<PAGE>

                Certification of the Principal Executive Officer
                 (Section 302 of the Sarbanes-Oxley Act of 2002)

I, David L. Cox, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of Emclaire
         Financial Corp. (the Corporation);

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the Corporation as of, and for, the periods presented in
         this quarterly report;

4.       The Corporation's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the Corporation
         and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Corporation,  including  its
          consolidated  subsidiary,  is made known to us by others  within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the effectiveness of the Corporation's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.       The Corporation's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the Corporation's auditors and the
         audit committee of Corporation's board of directors (or persons
         performing the equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls which could  adversely  affect the  Corporation's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the Corporation's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a significant  role in the  Corporation's  internal
          controls; and

6.       The Corporation's other certifying officer and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date:  November 8, 2002                   By:      /s/ David L. Cox
                                          --------------------------------------
                                          David L. Cox
                                          Chairman of the Board,
                                          President and Chief Executive Officer

                                       20

<PAGE>

                Certification of the Principal Financial Officer
                 (Section 302 of the Sarbanes-Oxley Act of 2002)

I, William C. Marsh, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of Emclaire
         Financial Corp. (the Corporation);

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the Corporation as of, and for, the periods presented in
         this quarterly report;

4.       The Corporation's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the Corporation
         and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Corporation,  including  its
          consolidated  subsidiary,  is made known to us by others  within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the effectiveness of the Corporation's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.       The Corporation's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the Corporation's auditors and the
         audit committee of Corporation's board of directors (or persons
         performing the equivalent function):

     d)   all  significant  deficiencies  in the design or operation of internal
          controls which could  adversely  affect the  Corporation's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the Corporation's  auditors any material  weaknesses in
          internal controls; and

     e)   any fraud, whether or not material,  that involves management or other
          employees who have a significant  role in the  Corporation's  internal
          controls; and

6.       The Corporation's other certifying officer and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date:  November 8, 2002          By:      /s/ William C. Marsh
                                 -----------------------------------------------
                                 William C. Marsh
                                 Treasurer/Secretary
                                 (Principal Financial and Accounting Officer)


                                       21