SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)
[X]  Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
     Act of 1934

For the quarterly period ended December 31, 2003
                               -----------------

| |  Transition  report  pursuant  to  section  13 or  15(d)  of the  Securities
     Exchange Act of 1934

For the transition period from                 to
                               ---------------    ---------------

SEC File Number:   000-25009
                   ---------

                              SKIBO FINANCIAL CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         United States                                           25-1820465
-------------------------------                              ----------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

242 East Main Street, Carnegie, Pennsylvania                15106
--------------------------------------------                -----
(Address of principal executive offices)                  (Zip Code)

                                 (412) 276-2424
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


         Check  whether the  registrant:  (1) filed all  reports  required to be
filed by Sections 13 or 15(d) of the Securities  Exchange Act of 1934 subsequent
to the preceding 12 months (or for such shorter  period that the  registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes   X    No
     ---      ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

                  Number of shares outstanding of common stock
                             as of January 27, 2004


$0.10 Par Value Common Stock                                3,153,344
----------------------------                                ---------
         Class                                         Shares Outstanding

            Transitional Small Business Disclosure Format (check one)
                               Yes      No  X
                                   ---     ---


<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I.             FINANCIAL INFORMATION


Item 1.   Financial Statements


                Consolidated Statements of Financial Condition as of
                December 31, 2003 (unaudited) and March 31, 2003...............1

                Consolidated Statements of (Loss) Income for the three and
                nine months ended December 31, 2003 and 2002 (unaudited))......2

                Consolidated Statement of Stockholders' Equity for the
                nine months ended December 31, 2003 (unaudited)................3

                Consolidated Statements of Cash Flows for the nine
                months ended December 31, 2003 and 2002 (unaudited))...........4

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


Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations..................................7


Item 3.   Controls and Procedures.............................................11


PART II.        OTHER INFORMATION


Item 1.   Legal Proceedings...................................................12
Item 2.   Changes in Securities...............................................12
Item 3.   Defaults Upon Senior Securities ....................................12
Item 4.   Submission of Matters to a Vote of Security-Holders.................12
Item 5.   Other Information...................................................12
Item 6.   Exhibits and Reports on Form 8-K ...................................12


Signatures

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                 Consolidated Statements of Financial Condition

              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                        December 31,  March 31,
                                                                           2003         2003
                                                                         ---------    ---------

                    ASSETS                                              (Unaudited)
                    ------
<S>                                                                   <C>          <C>
Cash and amounts due from depository institutions                        $     521    $     828
Interest-bearing deposits with other institutions                              668        3,800
Investment securities:
     Held-to-maturity (market value $14,683 and $8,465)                     14,991        8,356
Mortgage-backed securities:
     Held-to-maturity (market value $97,338 and $97,570)                    95,831       95,305
Loans receivable, net                                                       34,206       39,672
Real estate owned, net                                                          39           28
Accrued interest receivable:
     Investment securities                                                     154           91
     Mortgage-backed securities                                                424          506
     Loans receivable                                                          305          354
Federal Home Loan Bank stock, at cost                                        2,874        2,879
Premises and equipment, net                                                    495          505
Prepaid expenses and other assets                                            5,183        4,935
                                                                         ---------    ---------
        Total Assets                                                     $ 155,691    $ 157,259
                                                                         =========    =========

                LIABILITIES AND STOCKHOLDERS' EQUITY
                ------------------------------------

Liabilities:
     Deposits                                                            $  80,811    $  81,842
     Federal Home Loan Bank advances                                        48,000       48,000
     Advances from borrowers for taxes and insurance                            39           77
     Accrued expenses and other liabilities                                  3,589        3,863
                                                                         ---------    ---------
        Total Liabilities                                                  132,439      133,782


Stockholders' Equity:
     Preferred stock, 5,000,000 shares authorized; none issued                  --           --
     Common stock, $0.10 par value; 10,000,000 shares authorized;
        3,449,974 shares issued                                                345          345
     Additional paid-in capital                                              9,777        9,777
     Treasury stock, at cost (308,470 shares at both December 31, 2003
        and March 31, 2003)(1)                                              (2,149)      (2,149)
     Retained earnings, substantially restricted                            15,279       15,504
                                                                         ---------    ---------
        Total Stockholders' Equity                                          23,252       23,477
                                                                         ---------    ---------
        Total Liabilities and Stockholders' Equity                       $ 155,691    $ 157,259
                                                                         =========    =========

</TABLE>


(1)  Included are shares held by the Bank's RSP totaling 11,840 at both December
     31, 2003 and March 31, 2003.



See accompanying notes to consolidated financial statements.

                                        1

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                    Consolidated Statements of (Loss) Income

         For the Three and Nine Months Ended December 31, 2003 and 2002

              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                         Three Months Ended          Nine Months Ended
                                                            December 31,               December 31,
                                                       2003           2002          2003           2002
                                                    -----------    -----------   -----------    -----------
                                                            (unaudited)                  (unaudited)
<S>                                               <C>            <C>           <C>            <C>
Interest income:
     Loans receivable                               $       456    $       682   $     1,568    $     2,234
     Mortgage-backed securities                             936          1,119         2,971          3,345
     Investment securities                                  153            135           389            573
     Other                                                   13             36            62            102
                                                    -----------    -----------   -----------    -----------
            Total interest income                         1,558          1,972         4,990          6,254

Interest expense:
     Deposits                                               498            660         1,602          2,071
     Federal Home Loan Bank advances                        670            670         2,004          2,004
                                                    -----------    -----------   -----------    -----------
            Total interest expense                        1,168          1,330         3,606          4,075
                                                    -----------    -----------   -----------    -----------

            Net interest income                             390            642         1,384          2,179

Provision for loan losses                                    --             --            --             --
                                                    -----------    -----------   -----------    -----------
            Net interest income after
              provision for loan losses                     390            642         1,384          2,179

Other income:
     Fees and service charges                                 7             23            31             51
     Other                                                   31             29           562             97
                                                    -----------    -----------   -----------    -----------
            Total other income                               38             52           593            148

Other expenses:
     Compensation and employee benefits                     472            552         1,469          1,622
     Premises and occupancy costs                            45             44           133            136
     Federal insurance premiums                               3              3            10             10
     Other operating expenses                               235             60           433            210
                                                    -----------    -----------   -----------    -----------
            Total other expenses                            755            659         2,045          1,978
                                                    -----------    -----------   -----------    -----------

                (Loss) income before income taxes          (327)            35           (68)           349

(Benefit from) provision for income taxes                  (112)            17          (157)           118
                                                    -----------    -----------   -----------    -----------
            Net (loss) income                              (215)            18            89            231

Other comprehensive (loss) income:
     Unrealized gain on securities available-for-
       sale, net of tax                                      --             --            --             --
                                                    -----------    -----------   -----------    -----------
            Total comprehensive (loss) income       $      (215)   $        18   $        89    $       231
                                                    ===========    ===========   ===========    ===========

Basic (loss) earnings per share                     $      (.07)   $       .01   $       .03    $       .07
Diluted (loss) earnings per share                   $      (.07)   $       .01   $       .03    $       .07

Weighted average shares outstanding - Basic           3,153,344      3,143,673     3,153,344      3,141,231
Weighted average shares outstanding - Diluted         3,238,533      3,212,120     3,230,644      3,212,434
</TABLE>

See accompanying notes to consolidated financial statements.

                                        2

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                 Consolidated Statement of Stockholders' Equity

             For the Nine Months Ended December 31, 2003 (unaudited)

              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>

                                         Additional
                               Common     Paid-in    Treasury    Retained
                                Stock     Capital     Stock      Earnings     Total
                               --------   --------   --------    --------    --------
<S>                          <C>        <C>        <C>         <C>         <C>
Balance at March 31, 2003      $    345   $  9,777   $ (2,149)   $ 15,504    $ 23,477

Cash dividends declared, net
  ($.12 per share regular,
   $.13 per share special)           --         --         --        (314)       (314)

Net income                           --         --         --          89          89
                               --------   --------   --------    --------    --------

Balance at December 31, 2003   $    345   $  9,777   $ (2,149)   $ 15,279    $ 23,252
                               ========   ========   ========    ========    ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        3

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

              For the Nine Months Ended December 31, 2003 and 2002

                          (Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                     2003        2002
                                                                                   --------    --------
                                                                                        (unaudited)
<S>                                                                              <C>         <C>
Operating activities:
     Net income                                                                    $     89    $    231
     Adjustments to reconcile net income to net cash
        (used in) provided by operating activities:
          Depreciation                                                                   32          37
          Compensation expense-RSP                                                       --           4
          Net amortization (accretion) of premiums and discounts                         54        (104)
          Decrease in accrued interest receivable                                        68         204
          Increase in prepaid expenses                                                  (74)       (206)
          Decrease in accrued interest payable                                         (208)       (222)
          (Decrease) increase in accrued income taxes                                  (381)        173
          Other, net                                                                    117         507
                                                                                   --------    --------
           Net cash (used in) provided by operating activities                         (303)        624
                                                                                   --------    --------

Investing activities:
Purchases of premises and equipment                                                     (22)        (22)
Purchases of investment securities held-to-maturity                                 (11,093)     (3,116)
Purchases of mortgage-backed securities held-to-maturity                            (30,177)    (34,075)
Proceeds from maturities/calls and principal repayments of:
     Investment securities held-to-maturity                                           4,433      10,664
     Mortgage-backed securities held-to-maturity                                     29,623      20,672
Loans purchased                                                                      (7,854)     (4,475)
Acquisition of interest in Real Estate Owned                                             28          --
Net principal repayments on loans                                                    13,304      10,142
Decrease (increase) in Federal Home Loan Bank stock                                       5        (342)
                                                                                   --------    --------
             Net cash used in investing activities                                   (1,753)       (552)
                                                                                   --------    --------

Financing activities:
Net (decrease) increase in deposits                                                  (1,031)      2,242
Net decrease in mortgage escrow                                                         (38)        (60)
Treasury stock purchased                                                                 --         (10)
Options exercised, net                                                                   --          87
Cash dividends paid                                                                    (314)     (1,496)
                                                                                   --------    --------
             Net cash (used in) provided by financing activities                     (1,383)        763
                                                                                   --------    --------

Net (decrease) increase in cash and cash equivalents                                 (3,439)        835
Cash and cash equivalents, beginning of period                                        4,628       4,577
                                                                                   --------    --------
Cash and cash equivalents, end of period                                           $  1,189    $  5,412
                                                                                   ========    ========

Supplemental  disclosures of cash flow information:
     Cash paid during the period for:
        Interest                                                                   $  3,814    $  4,297
                                                                                   ========    ========
        Income taxes                                                               $    289    $    136
                                                                                   ========    ========

      Noncash investing activities:
           Loans transferred to real estate owned                                  $     39    $     28
                                                                                   ========    ========
</TABLE>

See accompanying notes to consolidated financial statements

                                                                    4

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)


NOTE 1 -  Basis of Presentation and Principles of Consolidation
          -----------------------------------------------------

The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts of Skibo Financial  Corp.,  its wholly- owned subsidiary First Carnegie
Deposit (the  "Bank"),  and the Bank's  wholly owned  subsidiary,  Fedcar,  Inc.
Fedcar, Inc. is a service corporation that is currently inactive.

These  statements  have been prepared in accordance with  instructions  for Form
10-QSB.  Accordingly,  they do not include all of the  information and footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements.   However,  such  information  presented  reflects  all  adjustments
(consisting solely of normal recurring adjustments) which are, in the opinion of
the  Company's  management,  necessary  for a fair  statement of results for the
interim period. All significant intercompany transactions and balances have been
eliminated in consolidation.

The results of  operations  for the three months and nine months ended  December
31, 2003 are not  necessarily  indicative  of the results to be expected for the
year  ending  March 31, 2004 or any other  period.  The  unaudited  consolidated
financial  statements and notes thereto  should be read in conjunction  with the
audited  financial  statements  and notes  thereto  for the year ended March 31,
2003.

NOTE 2 -  Comprehensive Income
          --------------------

For the three  months ended  December  31, 2003 and 2002,  the Company had total
comprehensive  loss of  $215,000  and total  comprehensive  income  of  $18,000,
respectively.  For the  nine  months  ended  December  31,  2003 and  2002,  the
Company's  total  comprehensive  income was $89,000 and $231,000,  respectively.
Total  comprehensive  (loss)  income is comprised of net (loss) income and other
comprehensive  income.  For both three and nine month periods ended December 31,
2003 and 2002, there was no other comprehensive income.

NOTE 3 -  Earnings Per Share (EPS)
          ------------------------

Basic EPS is computed by dividing net income  applicable  to common stock by the
weighted average number of common shares outstanding during the period,  without
considering any dilutive  items.  Diluted EPS is computed by dividing net income
applicable to common stock by the weighted  average  number of common shares and
common stock  equivalents for items that are dilutive,  net of shares assumed to
be  repurchased  using the treasury  stock method at the average share price for
the Company's  common stock during the period.  Common stock  equivalents  arise
from the assumed conversion of outstanding stock options.

                                        5

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)



The  computation  of basic and diluted  earnings per share is shown in the table
below:

<TABLE>
<CAPTION>
                                       Three Months Ended              Nine Months Ended
                                   ----------------------------     ---------------------------
                                   December 31,    December 31,     December 31,   December 31,
                                      2003            2002             2003           2002
                                   ------------    ------------     ------------   ------------
<S>                               <C>             <C>              <C>            <C>
Basic EPS computation:
 Numerator-Net (Loss) income        $  (215,000)    $    18,000      $    89,000    $   231,000
 Denominator-Wt Avg common
    shares outstanding                3,153,344       3,143,673        3,153 344      3,141,231
Basic (loss) earnings per share     $      (.07)    $       .01      $       .03    $       .07
                                    ===========     ===========      ===========    ===========

Diluted EPS computation:
 Numerator-Net (Loss) income        $  (215,000)    $    18,000      $    89,000    $   231,000
 Denominator-Wt Avg
   common shares outstanding          3,153,344       3,143,673        3,153,344      3,141,231
 Dilutive Stock Options                  85,189          68,447           77,300         71,203
                                    -----------     -----------      -----------    -----------
 Weighted avg common shares
     and common stock
     equivalents                      3,238,533       3,212,120        3,230,644      3,212,434
Diluted EPS                         $      (.07)    $       .01      $       .03    $       .07
                                    ===========     ===========      ===========    ===========
</TABLE>


NOTE 4 -  Income Taxes
          ------------

The Company joins with its wholly owned subsidiary,  First Carnegie Deposit,  in
filing a  consolidated  federal  income tax return and accounts for income taxes
using the asset and liability  method.  The objective of the asset and liability
method is to  establish  deferred  tax  assets  and  liabilities  for  temporary
differences  between  the  financial  reporting  and tax basis of the  Company's
assets and liabilities  based on enacted tax rates expected to be in effect when
such amounts are realized and settled

                                        6

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


General

The Company's  results of operations  are primarily  dependent upon net interest
income,   which  is  the  difference  between  the  interest  income  earned  on
interest-earning  assets,  primarily  loans,   mortgage-backed  securities,  and
investments, and the interest expense on interest-bearing liabilities, primarily
deposits and borrowings.  Net interest income may be affected  significantly  by
general economic and competitive conditions and policies of regulatory agencies,
particularly  those  with  respect  to market  interest  rates.  The  results of
operations  are  also  significantly  influenced  by the  level  of  noninterest
expenses,  such as employee salaries and benefits,  noninterest  income, such as
loan-related  fees  and  fees on  deposit-related  services,  and the  Company's
provision for loan losses.

The  Management  Discussion  and Analysis  section of this Form 10-QSB  contains
certain  forward-looking  statements  (as  defined  in  the  Private  Securities
Litigation  Reform Act of 1995).  These  forward-looking  statements may involve
risks and  uncertainties.  Although  management  believes that the  expectations
reflected in such forward-looking statements are reasonable,  actual results may
differ from the results in these forward-looking statements.

Changes in Financial Condition

The Company's  total assets of $155,691,000 at December 31, 2003, are reflective
of a decrease of $1,568,000 or 1.0%,  as compared to  $157,259,000  at March 31,
2003.  The  decrease in total  assets was  primarily  due to  decreases in loans
receivable,  cash and  interest-bearing  deposits with other institutions,  FHLB
stock, premises and equipment and accrued interest receivable,  partially offset
by increases in mortgage-backed  securities,  investment  securities and prepaid
expenses and other assets.

The  decrease  in the  Company's  liabilities  was due to  decreases  in savings
deposits, accrued expenses and other liabilities and advances from borrowers for
taxes and insurance. Changes in the components of assets, liabilities and equity
are discussed herein.

Cash  and  Cash  Equivalents.  Cash  and  cash  equivalents,  which  consist  of
interest-bearing  and  noninterest-bearing   deposits,   totaled  $1,189,000,  a
decrease of $3.4 million or 74.3% as compared to  $4,628,000  at March 31, 2003.
This decrease was due to decreased  interest-bearing  deposits maintained at the
Federal  Home Loan Bank and  non-interest  bearing  deposits  maintained  at the
Federal  Reserve  Bank of  Cleveland  and a local bank,  partially  offset by an
increase in cash on hand.

Investment Securities. Investment securities totaled $14,991,000 at December 31,
2003, an increase of $6,635,000 or 79.4%, as compared to $8,356,000 at March 31,
2003.  This was primarily a result of purchases of $11.1 million of U.S.  Agency
securities,  offset by proceeds from maturities,  calls and repayments  totaling
$4.4 million.

Mortgage-backed  Securities.  Mortgage-backed  securities totaled $95,831,000 at
December 31, 2003, an increase of $526,000 or 0.6%,  as compared to  $95,305,000
at March 31, 2003. The increase was primarily due to purchases of $30.2 million,
partially offset by principal repayments and maturities totaling $29.6 million.

Loans  Receivable,  net.  Net loans  receivable  at December  31,  2003  totaled
$34,206,000,  a decrease of $5,466,000 or 13.8%,  as compared to  $39,672,000 at
March 31, 2003. The decrease was primarily due to principal  repayments totaling
$13.5 million,  offset by originations of $151,000,  which consisted entirely of
consumer  loans,  and  purchases of $7.9  million.  The Company  purchased  $1.1
million  conventional  one -to four-family  mortgage loans and $160,000  insured
Federal Housing Administration ("FHA") one- to four-family mortgage loans within
its normal lending area. The Company also  purchased  $5.1million  United States
Department  of  Agriculture  ("USDA")  mortgage  loans  and  $27,000  Government
National Mortgage Association ("GNMA")  multi-family project loans, $1.2 million
insured Small Business Administration ("SBA") loans, and a $202,000 USDA insured
operating loan, primarily outside its normal lending area.

Deposits.  Total  deposits  decreased by $1.0 million or 1.3% to  $80,811,000 at
December 31, 2003, as compared to  $81,842,000  at March 31, 2003.  The decrease
was due to  decreases  in  certificates  of deposit,  interest-bearing  checking
accounts  and Money  Market  accounts,  offset by  increases  in  passbooks  and
noninterest-bearing checking accounts.

FHLB Advances.  FHLB advances totaled  $48,000,000 at both December 31, 2003 and
March 31, 2003.  The Company uses FHLB  advances as a supplement  to deposits to
fund its purchase of loans and investments.

                                        7

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION

Stockholders'  Equity.  Stockholders' equity totaled $23,252,000 at December 31,
2003, as compared to  $23,477,000 at March 31, 2003. The decrease of $225,000 or
1.0% was  primarily  due to the payment of a $0.12  regular cash  dividend and a
$0.13 special cash  dividend,  partially  offset by earnings for the nine months
ended December 31, 2003.

Results of Operations for the Three Months Ended December 31, 2003 and 2002

Net (Loss)  Income.  The Company  recorded  net loss of  $215,000  for the three
months ended  December  31,  2003,  as compared to net income of $18,000 for the
three months ended  December 31, 2002.  The $233,000 or 1294.4%  decrease in net
income for the three months ended  December 31, 2003 was the result of decreases
in net  interest  income and other  income and an  increase  in other  expenses,
partially  offset by a decrease  in  provision  for income  tax.  Changes in the
components of income and expense are discussed herein.

Net Interest  Income.  Net interest income  decreased  $252,000 or 39.3% for the
three  months ended  December  31,  2003,  as compared to the three month period
ended December 31, 2002. This decrease was primarily the result of a $488,000 or
0.3% decrease in the average balance of interest-earning  assets and a 110 basis
point  decrease in the average  yield  earned  thereon.  The average  balance of
interest-bearing liabilities decreased $86,000 or 0.1% and the average rate paid
thereon decreased 51 basis points.

The net  interest  rate  spread,  which is the  difference  between the yield on
average  interest-earning  assets  and  the  cost  of  average  interest-bearing
liabilities,  decreased to 0.51% for the three month  period ended  December 31,
2003 from 1.10% for the three month period ended December 31, 2002. The decrease
in the net interest rate spread was primarily the result of decreased  yields on
the average balances of interest  earning assets,  partially offset by decreased
rates paid on the average balance of savings deposits.

Interest Income.  Interest income decreased  $414,000 or 21.0% to $1,558,000 for
the three month period ended  December 31, 2003, as compared to  $1,972,000  for
the three month period ended December 31, 2002.

Interest on loans  receivable  decreased  $226,000 or 33.1% for the three months
ended  December 31, 2003,  as compared to the three month period ended  December
31, 2002.  This decrease was primarily the result of a $7.2 million  decrease in
the average  balance of loans  receivable  and a 124 basis point decrease in the
average yield earned thereon.

Interest income on  mortgage-backed  securities  decreased $183,000 or 16.4% for
the three months ended  December 31, 2003, as compared to the three months ended
December 31, 2002.  This  decrease was primarily the result of a 111 basis point
decrease in the average yield earned on  mortgage-backed  securities,  partially
offset by a $6.6  million  increase  in the average  balance of  mortgage-backed
securities.

Interest  income on  investment  securities  increased  $18,000 or 13.3% for the
three  months ended  December  31,  2003,  as compared to the three months ended
December 31, 2002. The increase in interest income on investment  securities was
primarily  due  to a $2.7  million  increase  in the  average  balance  of  such
securities,  partially  offset by a 48 basis point decrease in the average yield
earned thereon.

Interest income on other interest-earning  assets decreased $23,000 or 63.9% for
the three months ended  December 31, 2003, as compared to the three months ended
December 31, 2002. The decrease was primarily due to a $2.6 million  decrease in
the  average  balance of other  interest-earning  assets  and an 86 basis  point
decrease in the average yield earned thereon.

The average yield on the average  balance of  interest-earning  assets was 4.19%
and 5.29 % for the  three  month  periods  ended  December  31,  2003 and  2002,
respectively.

Interest Expense. Interest expense totaled $1,168,000 for the three months ended
December 31, 2003, as compared to $1,330,000 for the three months ended December
31, 2002. The $162,000 or 12.2%  decrease was due to an $86,000  decrease in the
average balance of interest-bearing liabilities and a 51 basis point decrease in
the average rate paid thereon.

Interest expense on deposits (including escrows) decreased $162,000 or 24.5% for
the three months ended  December 31, 2003, as compared to the three months ended
December  31, 2002.  The decrease was due to an $86,000  decrease in the average
balance of  deposits  and an 82 basis point  decrease  in the average  rate paid
thereon.

                                        8

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION


Interest on FHLB  advances  totaled  $670,000 for both three month periods ended
December 31, 2003 and 2002.  The Company uses FHLB advances as a funding  source
to supplement deposits, which are the Company's primary source of funds.

Allowance for Loan Losses. Based upon management's  evaluation of the underlying
credit risk of the loan  portfolio  and the level of allowance  for loan losses,
the Company  established  no  provisions  for loan losses during the three month
periods ended December 31, 2003 and 2002.

At December 31, 2003, the allowance for loan losses totaled $405,000 or 1.2% and
91.2% of total loans and total non- performing loans, respectively,  as compared
to $425,000 or 1.1% and 904.3%,  respectively,  at March 31, 2003. The Company's
non-performing  loans  (non-accrual  loans  and  accruing  loans 90 days or more
overdue)  totaled  $444,000 and $47,000 at December 31, 2003 and March 31, 2003,
respectively,  which  represented  1.28% and 0.12% of the Company's total loans,
respectively.  The Company's ratio of  non-performing  loans to total assets was
..29% and .03% at December 31, 2003 and March 31, 2003, respectively.

Other  Income.  During the three  months ended  December 31, 2003,  other income
decreased  $14,000 or 26.9%,  as compared to the three months ended December 31,
2002.

Other  Expenses.  Total other expenses  increased by $96,000 or 14.6% during the
three  months ended  December  31,  2003,  as compared to the three months ended
December 31, 2002.  The  increase was  attributable  to increases of $175,000 in
other operating expenses, primarily due to increased legal fees and professional
services  expense,  and $1,000 in premises and  equipment,  offset by an $80,000
decrease in compensation and employee benefits expense.

Income Tax Expense. The income tax benefit totaled $112,000 for the three months
ended  December 31, 2003, as compared to the provision for income tax of $17,000
for the three months ended December 31, 2002. The decrease of $129,000 or 758.8%
was due to decreased income.

Results of Operations for the Nine Months Ended December 31, 2003 and 2002

Net Income. The Company recorded net income of $89,000 for the nine months ended
December  31,  2003,  as compared to net income of $231,000  for the nine months
ended  December 31, 2002.  The $142,000 or 61.5%  decrease in net income for the
nine months ended December 31, 2003 was primarily the result of decreases in net
interest income and increases in other expenses,  offset by an increase in other
income and a decrease in provision for income taxes.  Changes in the  components
of income and expense are discussed herein.

Net Interest  Income.  Net interest income  decreased  $795,000 or 36.5% for the
nine months ended  December 31, 2003, as compared to the nine month period ended
December  31,  2002.  Although the average  balance of  interest-earning  assets
increased $801,000 or 0.5%, the average yield earned thereon decreased 116 basis
points. The average balance of interest- bearing  liabilities  increased by $1.4
million or 1.1%,  however,  the average  rate paid  thereon  decreased  54 basis
points.

The net interest rate spread decreased to 0.69% for the three month period ended
December 31, 2003 from 1.31% for the three month period ended December 31, 2002.
The  decrease  in the net  interest  rate  spread  was  primarily  the result of
decreased yields on the average  balances of interest earning assets,  partially
offset by decreased rates paid on the average balance of savings deposits.

Interest  Income.  Interest income decreased $1.3 million or 20.2% to $4,990,000
for the nine month period ended December 31, 2003, as compared to $6,254,000 for
the nine month period ended December 31, 2002.

Interest  on loans  receivable  decreased  $666,000 or 29.8% for the nine months
ended December 31, 2003, as compared to the nine month period ended December 31,
2002.  This decrease was primarily the result of a $7.5 million  decrease in the
average  balance  of loans  receivable  and a 105 basis  point  decrease  in the
average yield earned thereon.

Interest income on  mortgage-backed  securities  decreased $374,000 or 11.2% for
the nine months ended  December  31, 2003,  as compared to the nine months ended
December 31, 2002.  This  decrease was primarily the result of a 111 basis point
decrease in the average yield earned on  mortgage-backed  securities,  partially
offset by a $10.7  million  increase in the average  balance of  mortgage-backed
securities.

                                        9

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION


Interest  income on investment  securities  decreased  $184,000 or 32.1% for the
nine months  ended  December  31,  2003,  as  compared to the nine months  ended
December 31, 2002. The decrease in interest income on investment  securities was
primarily  due  to a $2.4  million  decrease  in the  average  balance  of  such
securities and a 98 basis point decrease in the average yield earned thereon.

Interest income on other interest-earning  assets decreased $40,000 or 39.2% for
the nine months ended  December  31, 2003,  as compared to the nine months ended
December 31, 2002.  The decrease was primarily due to a 92 basis point  decrease
in the average yield earned on other interest-earning  assets,  partially offset
by an $11,000 increase in the average balance.

The average yield on the average  balance of  interest-earning  assets was 4.45%
and  5.61%  for the nine  month  periods  ended  December  31,  2003  and  2002,
respectively.

Interest Expense.  Interest expense totaled $3,606,000 for the nine months ended
December 31, 2003, as compared to $4,075,000  for the nine months ended December
31, 2002. Although the average balance of interest-bearing liabilities increased
$1.4 million, the average rate paid thereon decreased 54 basis points, resulting
in a  $469,000  or 11.5%  decrease  in  interest  expense.  Interest  expense on
deposits  (including  escrows)  decreased  $469,000 or 22.6% for the nine months
ended December 31, 2003, as compared to the nine months ended December 31, 2002.
Although the average  balance of deposits  increased  $1.4 million,  the average
rate paid thereon decreased 85 basis points.

Interest on FHLB advances totaled $2.0 million for both nine month periods ended
December 31, 2003 and 2002.

Provision for Loan Losses. Based upon management's  evaluation of the underlying
credit risk of the loan  portfolio  and the level of allowance  for loan losses,
the Company  established  no  provision  for loan  losses  during the nine month
periods ended December 31, 2003 and 2002.

Other  Income.  During the nine months ended  December  31,  2003,  other income
increased  $445,000 or 300.7%, as compared to the nine months ended December 31,
2002. In September  2003, the Company  received a taxable cash  distribution  of
approximately  $454,000  from the  parent of  General  American  Life  Insurance
Company  ("GALIC"),  which was sold to  Metropolitan  Life Insurance  Company in
2000. The Company owns various insurance  policies with GALIC. This distribution
was based on the Company's ownership interest in the life insurance policies. It
is possible that additional  distributions  could be made in the future, but are
not able to be estimated at this time.  This cash  distribution  was the primary
cause  for the  increase  in other  income.  The  increase  was  also  partially
attributable  to increases in the cash  surrender  values of insurance  policies
held on the participants of the Supplemental Executive Retirement Plan ("SERP").

Other  Expenses.  Total other  expenses  increased by $67,000 or 3.4% during the
nine months  ended  December  31,  2003,  as  compared to the nine months  ended
December 31, 2002. The increase was  attributable  to an increase of $223,000 in
other operating  expenses,  offset by decreases of $153,000 in compensation  and
employees  benefit  expense,  and $3,000 in premises and  occupancy  costs.  The
increase in other  operating  expenses was primarily due to an increase in legal
fees and  professional  services  expense.  The  decrease  in  compensation  and
employee  benefits  expense was due to decreases of $133,000 in compensation and
employee  benefits  expense,  $16,000 in the Company's  defined benefit plan and
SERP costs and $4,000 in RSP expense due to the  completion of the ESP awards on
April 16, 2002.

Income Tax Expense.  The income tax benefit totaled $157,000 for the nine months
ended December 31, 2003, as compared to the provision for income tax of $118,000
for the nine months ended December 31, 2002. The $275,000 or 233.1% decrease was
due to an  adjustment  made to the tax accrual to reflect  actual taxes paid and
decreased income.

                                       10

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION


Regulatory Capital Requirements

The Bank is subject to federal  regulations  that impose certain minimum capital
requirements. Quantitative measures, established by regulation to ensure capital
adequacy,  require the Bank to maintain  amounts and ratios of tangible and core
capital  to  adjusted  total  assets  and  of  total   risk-basked   capital  to
risk-weighted  assets. On December 31, 2003, the Bank was in compliance with its
three regulatory capital requirements as follows:



                                                            Amount   Percent
                                                            ------   -------
                                                         (Dollars in thousands)

Tangible capital.....................................      $23,138     14.85%
Tangible capital requirement.........................        2,337      1.50
                                                           -------     -----
Excess over requirement..............................      $20,801     13.35%
                                                           =======     =====

Core capital.........................................      $23,138     14.85%
Core capital requirement.............................        4,674      3.00
                                                           -------     -----
Excess over requirement..............................      $18,464     11.85%
                                                           =======     =====

Risk based capital...................................      $23,543     64.62%
Risk based capital requirement.......................        2,931      8.00
                                                           -------     -----
Excess over requirement..............................      $20,612     56.62%
                                                           =======     =====

Management  believes that under current  regulations,  the Bank will continue to
meet its minimum capital  requirements in the foreseeable future.  Events beyond
the control of the Bank,  such as increased  interest rates or a downturn in the
economy  in areas in which  the Bank  operates  could  adversely  affect  future
earnings  and as a result,  the  ability of the Bank to meet its future  minimum
capital requirements.

                             CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures

Based on their  evaluation of the Company's  disclosure  controls and procedures
(as defined in Rule  13a-15(e)  under the  Securities  Exchange Act of 1934 (the
"Exchange  Act")),  the  Company's  principal  executive  officer and  principal
financial  officer have  concluded  that as of the end of the period  covered by
this Quarterly Report on Form 10-QSB such disclosure controls and procedures are
effective to ensure that information  required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded,  processed,
summarized  and reported  within the time periods  specified in  Securities  and
Exchange Commission rules and forms.

Changes in Internal Controls

During the quarter under report,  there was no change in the Company's  internal
control over financial reporting that has materially affected,  or is reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.



                                       11

<PAGE>

                           PART II - OTHER INFORMATION


Item 1.         Legal Proceedings.
                ------------------

                There are  various  claims and  lawsuits in which the Company is
                periodically   involved,   such  as  claims  to  enforce  liens,
                condemnation  proceedings  on  properties  in which the  Company
                holds  security  interests,  claims  involving  the  making  and
                servicing of real  property  loans and other issues  incident to
                the Company's business.

                In February  2003,  the  Company's  subsidiary,  First  Carnegie
                Deposit,  was served as a  defendant  in a lawsuit  regarding  a
                previously  completed sale of foreclosed real estate and sheriff
                sales  of two  other  properties  resulting  from  a  deficiency
                judgment in connection  therewith.  The complaint  (Civil Action
                No.:  GD00-8816)  was filed on February 28, 2003 in the Court of
                Common Pleas of Allegheny County, Pennsylvania,  Civil Division,
                and amended on July 2, 2003.  The complaint  contains  causes of
                action  against First  Carnegie  Deposit for  Statutory  Damages
                Pursuant to 42 PA C.S.A.  Sec.  8104 (Count I),  Wrongful Use of
                Civil Proceedings Pursuant to 42 PA C.S.A. Sec. 8351 (Count II),
                Abuse of Civil Process  (Count III),  Conversion  (Count IV) and
                Civil Conspiracy  (Count V). The plaintiffs seek damages for the
                costs to defend the prior litigation  related to the foreclosure
                and sheriff sales of properties owned by the plaintiffs, loss of
                reputation,   loss  of  use  of  their  properties  and  extreme
                emotional distress,  as well as punitive damages. The Company is
                unable to express an opinion as to the  outcome of this  lawsuit
                or any potential loss to the Company.


Item 2.         Changes in Securities.
                ----------------------

                Not applicable.


Item 3.         Defaults Upon Senior Securities
                -------------------------------

                Not applicable.


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

                Not applicable.


Item 5.         Other Information.
                ------------------

                Not applicable.


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

                a) Not applicable.

                b) Not applicable.


                                       12

<PAGE>

                                   SIGNATURES

          Pursuant to the requirements of Sections 13 or 15(d) 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.





                                  SKIBO FINANCIAL CORP.


Date: January 27, 2004
                                  By: /s/ Walter G. Kelly
                                          -------------------------------------
                                          Walter G. Kelly
                                          President and Chief Executive Officer
                                          (Duly Authorized Representative)

          Pursuant to the  requirement of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

<S>                                         <C>
/s/ Walter G. Kelly                           /s/ Carol A. Gilbert
-------------------------------------         --------------------------------------------
Walter G. Kelly                               Carol A. Gilbert
President and Chief Executive Officer         Chief Financial and Operating Officer,
(Principal Executive Officer)                 Secretary and Treasurer
                                              (Principal Financial and Accounting Officer)

Date: January 27,  2004                       Date: January 27, 2004

</TABLE>


                                       13