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, 2000
                               -----------------

[ ]  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 31, 2001


$0.10 Par Value Common Stock                                    3,157,976
----------------------------                            ------------------------
          Class                                            Shares Outstanding

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

<PAGE>

                      SKIBO FINANCIAL CORP. AND SUBSIDIARY

                                TABLE OF CONTENTS
                                                                           Page
                                                                           ----


PART I.     FINANCIAL INFORMATION
-------     ---------------------


Item 1.     Financial Statements


              Consolidated Statements of Financial Condition as of
              December 31, 2000 (unaudited) and March 31, 2000................1

              Consolidated Statements of Income for the three and
                   nine months ended December 31, 2000 and 1999 (unaudited))..2

              Consolidated Statement of Stockholders' Equity for the
              nine months ended December 31, 2000 (unaudited).................3

              Consolidated Statements of Cash Flows for the nine
              months ended December 31, 2000 and 1999 (unaudited))............4

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


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



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 SUBSIDIARY

                 Consolidated Statements of Financial Condition

              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                  December 31,    March 31,
                                                                      2000          2000
                                                                  ------------    ---------
                    ASSETS                                         (Unaudited)
                    ------
<S>                                                               <C>          <C>
Cash and amounts due from depository institutions                   $     583    $     446
Interest-bearing deposits with other institutions                       2,135        1,280
Investment securities:
     Held-to-maturity (market value $28,178 and $24,928)               28,771       26,696
Mortgage-backed securities:
     Held-to-maturity (market value $55,054 and $57,840)               54,915       59,181
Loans receivable, net                                                  53,045       56,504
Accrued interest receivable:
     Investment securities                                                465          427
     Mortgage-backed securities                                           403          410
     Loans receivable                                                     483          486
     Federal Home Loan Bank stock                                          --           43
Federal Home Loan Bank stock, at cost                                   2,615        2,615
Premises and equipment, net                                               594          626
Prepaid expenses and other assets                                       4,684        3,918
                                                                    ---------    ---------
        Total Assets                                                $ 148,693    $ 152,632
                                                                    =========    =========

                LIABILITIES AND STOCKHOLDERS' EQUITY
                ------------------------------------
Liabilities:
     Deposits                                                       $  72,971    $  75,583
     Federal Home Loan Bank advances                                   48,000       49,000
     Advances from borrowers for taxes and insurance                      112          128
     Accrued expenses and other liabilities                             2,680        2,778
        Total Liabilities                                             123,763      127,489

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                                         9,740        9,740
     Treasury stock, at cost (302,481 shares at December 31, 2000
        and 163,111 shares at March 31, 2000)(1)                       (2,071)      (1,119)
     Unearned Employee Stock Ownership Plan (ESOP) shares                (122)        (267)
     Unearned Restricted Stock Plan (RSP) shares                         (123)        (199)
     Retained earnings, substantially restricted                       17,161       16,643
                                                                    ---------    ---------
        Total Stockholders' Equity                                     24,930       25,143
                                                                    ---------    ---------
        Total Liabilities and Stockholders' Equity                  $ 148,693    $ 152,632
                                                                    =========    =========
</TABLE>

(1)  Included are shares held by the Bank's RSP totaling  10,483 at December 31,
     2000 and 7,863 at March 31, 2000, respectively.

See accompanying notes to consolidated financial statements.

                                        1
<PAGE>

                      SKIBO FINANCIAL CORP. AND SUBSIDIARY

                        Consolidated Statements of Income

         For the Three and Nine months Ended December 31, 2000 and 1999

              (Dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
                                                       Three Months Ended        Nine Months Ended
                                                           December 31,                 December 31,
                                                       2000          1999       2000           1999
                                                       ----          ----       ----           ----
                                                            (unaudited)            (unaudited)
<S>                                               <C>          <C>          <C>          <C>
Interest income:
     Loans receivable                               $      983   $    1,047   $    3,029   $    3,277
     Mortgage-backed securities                            993          993        3,002        2,727
     Investment securities                                 500          437        1,431        1,272
     Other                                                  66           62          197          265
                                                    ----------   ----------   ----------   ----------
            Total interest income                        2,542        2,539        7,659        7,541

Interest expense:
     Deposits                                              840          814        2,487        2,447
     Federal Home Loan Bank advances                       692          683        2,036        1,945
     Bonds payable                                          --           --           --           63
                                                    ----------   ----------   ----------   ----------
            Total interest expense                       1,532        1,497        4,523        4,455
                                                    ----------   ----------   ----------   ----------

            Net interest income                          1,010        1,042        3,136        3,086

Provision for loan losses                                   --            1           --            3
                                                    ----------   ----------   ----------   ----------
            Net interest income after
              provision for loan losses                  1,010        1,041        3,136        3,083
Other income:
     Fees and service charges                                9           10           26           41
     Other                                                  13           12           40           30
                                                    ----------   ----------   ----------   ----------
            Total other income                              22           22           66           71

Other expenses:
     Compensation and employee benefits                    499          475        1,407        1,425
     Premises and occupancy costs                           51           51          158          161
     Federal insurance premiums                              4           12           12           34
     Other operating expenses                               67           61          227          242
                                                    ----------   ----------   ----------   ----------
            Total other expenses                           621          599        1,804        1,862
                                                    ----------   ----------   ----------   ----------

                Income before income taxes                 411          464        1,398        1,292

Provision for income taxes                                 159          184          526          499
                                                    ----------   ----------   ----------   ----------
            Net income                                     252          280          872          793

Other comprehensive income:
     Unrealized gain on securities available-for-
       sale, net of tax                                     --           --           --           --
                                                    ----------   ----------   ----------   ----------
            Total comprehensive income              $      252   $      280   $      872   $      793
                                                    ==========   ==========   ==========   ==========

Basic earnings per share                            $      .08   $      .09   $      .28   $      .24
Diluted earnings per share                          $      .08   $      .09   $      .28   $      .24

Weighted average shares outstanding - Basic          3,120,546    3,282,193    3,166,182    3,327,324
Weighted average shares outstanding - Diluted        3,125,455    3,282,193    3,169,082    3,327,324

</TABLE>

 See accompanying notes to consolidated financial statements.

                                        2
<PAGE>

                      SKIBO FINANCIAL CORP. AND SUBSIDIARY

                 Consolidated Statement of Stockholders' Equity

             For the Nine months Ended December 31, 2000 (unaudited)

              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>

                                                Additional                Unearned     Unearned
                                   Common        Paid-in    Treasury        ESOP          RSP   Retained
                                    Stock        Capital       Stock       Shares       Shares   Earnings          Total
                                   -------------------------------------------------------------------------------------
<S>                                <C>          <C>      <C>             <C>          <C>       <C>            <C>
Balance at March 31, 2000            $345         $9,740   $  (1,119)       $(267)       $(199)   $16,643        $25,143

Cash dividends declared, net
  ($.225 per share regular,
   $.075 per share special)            --             --          --           --           --       (354)          (354)

Amortization of ESOP liability         --             --          --          145           --         --            145

Amortization of RSP liability          --             --          --           --           76         --             76

Treasury stock purchased,
 at cost (136,750 shares)              --             --        (952)          --           --         --           (952)

Net income                             --             --          --           --           --        872            872
                                   -------------------------------------------------------------------------------------
Balance at December 31, 2000         $345         $9,740    $ (2,071)       $(122)       $(123)   $17,161        $24,930
                                ========================================================================================

</TABLE>

See accompanying notes to consolidated financial statements.

                                        3

<PAGE>

                      SKIBO FINANCIAL CORP. AND SUBSIDIARY

                      Consolidated Statements of Cash Flows

              For the Nine months Ended December 31, 2000 and 1999

                          (Dollar amounts in thousands)
<TABLE>
<CAPTION>
                                                                                       2000        1999
                                                                                       ----        ----
                                                                                          (unaudited)
<S>                                                                              <C>         <C>
Operating activities:
     Net income                                                                    $    872    $    793
     Adjustments to reconcile net income to net cash
        (used in) provided by operating activities:
           Provision for loan losses                                                     --           3
           Depreciation                                                                  56          60
           Compensation expense-ESOP and RSP                                            221         284
           Net amortization of premiums and discounts                                    99         210
           Decrease in accrued interest receivable                                       15         242
           Increase in prepaid expenses                                                (766)       (585)
           Decrease in accrued interest payable                                        (138)       (169)
           Decrease in accrued income taxes                                             (11)       (179)
           Other, net                                                                    49         (63)
                                                                                   --------    --------
               Net cash provided by operating activities                                397         596
                                                                                   --------    --------

Investing activities:
     Purchases of premises and equipment                                                (24)        (10)
     Purchases of investment securities held-to-maturity                             (3,133)     (5,446)
     Purchases of mortgage-backed securities held-to-maturity                        (3,510)    (17,287)
     Proceeds from maturities/calls and principal repayments of:
        Investment securities held-to-maturity                                        1,059       3,819
        Mortgage-backed securities held-to-maturity                                   7,719      11,325
     Loans purchased                                                                 (2,346)     (3,424)
     Net principal repayments on loans                                                5,764      10,944
     Increase in Federal Home Loan Bank stock                                            --        (150)
                                                                                   --------    --------
              Net cash provided by (used in) investing activities                     5,529        (229)
                                                                                   --------    --------
Financing activities:
     Net decrease  in deposits                                                       (2,612)       (806)
     Proceeds from Federal Home Loan Bank advances                                   24,000      14,400
     Repayment of Federal Home Loan Bank advances                                   (25,000)    (11,400)
     Principal repayment of bonds payable                                                --      (1,299)
     Net decrease in mortgage escrow                                                    (16)        (10)
     Treasury stock purchased                                                          (952)       (878)
     Cash dividends paid                                                               (354)       (311)
                                                                                   --------    --------
        Net cash used in financing activities                                        (4,934)       (304)
                                                                                   --------    --------
Net increase in cash and cash equivalents                                               992          63
Cash and cash equivalents, beginning of period                                        1,726       2,499
                                                                                   --------    --------
Cash and cash equivalents, end of period                                           $  2,718    $  2,562
                                                                                   ========    ========

Supplemental disclosures of cash flow information:
     Cash paid during the period for:
        Interest                                                                   $  4,661    $  4,624
                                                                                   ========    ========
        Income taxes                                                               $    643    $    715
                                                                                   ========    ========
</TABLE>

See accompanying notes to consolidated financial statements

                                        4

<PAGE>
                      SKIBO FINANCIAL CORP. AND SUBSIDIARY
                   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 subsidiaries, Fedcar, Inc. and
Carnegie  Federal  Funding  Corporation  ("CFFC").  Fedcar,  Inc.  is a  service
corporation that is currently  inactive.  CFFC was a special purpose  subsidiary
that was formed for the  issuance of  collateralized  mortgage  obligations.  In
September 1999, CFFC fully repaid the remaining  obligation and subsequently was
dissolved.

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, 2000 are not  necessarily  indicative  of the results to be expected for the
year  ending  March 31, 2001 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,
2000.

NOTE 2 -  Dividends on Common Stock
          -------------------------

On December  14, 2000,  the Board of Directors of the Company  declared a $0.075
per share cash  dividend on the  Company's  outstanding  shares of common stock,
payable to  stockholders  of record as of December 31, 2000.  Skibo  Bancshares,
M.H.C.  (the "M.H.C.") waived the receipt of dividends on its 1,897,500  shares.
The cash  dividends  on the  outstanding  shares held by persons  other than the
M.H.C. were paid on January 12, 2001. Under the interim final rule of the Office
of Thrift  Supervision  (the  "OTS")  effective  July 12,  2000,  any  waiver of
dividends by the M.H.C. will no longer result in the OTS requiring an adjustment
to the ratio  pursuant to which shares of Company common stock are exchanged for
shares of a stock holding  company should the M.H.C.  convert from the mutual to
stock  form of  organization.  Such an  adjustment  would have had the effect of
diluting the minority stockholders of the Company.

Skibo Financial  Corp.'s common stock is currently listed on the Nasdaq SmallCap
Market,  traded under the symbol of "SKBO" and listed in the Wall Street Journal
as "SkiboFn".

NOTE 3 -  Comprehensive Income
          --------------------

For the three  months  ended  December 31, 2000 and 1999,  the  Company's  total
comprehensive income was $252,000 and $280,000,  respectively,  and $872,000 and
$793,000,  respectively,  for the nine months ended  December 31, 2000 and 1999.
Total  comprehensive  income is comprised of net income and other  comprehensive
income. For both three and nine month periods ended December 31, 2000, there was
no other comprehensive income.

NOTE 4 -  Recent Accounting, Regulatory and Other Matters
          -----------------------------------------------

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as
amended by SFAS No. 137,  "Accounting  for  Derivative  Instruments  and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133", requires
that derivative  instruments be carried at fair value on the balance sheet.  The
statement continues to allow derivative  instruments to be used to hedge various
risks and sets  forth  specific  criteria  to be used to  determine  when  hedge
accounting can be used.  The statement  also provides for offsetting  changes in
fair  value  or cash  flows  of both  the  derivative  and the  hedged  asset or
liability to be recognized in earnings in the same period;  however, any changes
in fair value or cash flow that represent the ineffective portion of a hedge are
required to be  recognized  in earnings and cannot be deferred.  For  derivative
instruments  not accounted for as hedges,  changes in fair value are required to
be recognized in earnings.

The  provisions of this  statement as amended will be adopted by the Company for
its  quarterly  and  annual  reporting  beginning  April 1,  2001.  The  Company
anticipates, based on current activities, that the adoption of SFAS No. 133 will
not have a material effect on its financial position or results of operations.

                                        5
<PAGE>
                      SKIBO FINANCIAL CORP. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

NOTE 5 -  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 and  unvested  RSP
shares.


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,
                                    2000             1999              2000             1999
                                    ----             ----              ----             ----
<S>                          <C>              <C>               <C>              <C>
Basic EPS computation:
 Numerator-Net Income          $     252,000    $     280,000     $     872,000    $     793,000
 Denominator-Wt Avg common
 shares outstanding                3,120,546        3,382,193         3,166,182        3,327,324
Basic EPS                      $         .08    $         .09     $         .28    $         .24
                                         ===              ===               ===              ===

Diluted EPS computation:
 Numerator-Net Income          $     252,000    $     280,000     $     872,000    $     793,000
                                     =======          =======           =======          =======
 Denominator-Wt Avg
   common shares outstanding       3,120,546        3,282,193         3,166,182        3,327,324
 Dilutive Stock Options                4,909               --             2,900               --
 Dilutive Unvested RSP                    --             --                  --               --
                               -------------    -------------     -------------    -------------
 Weighted avg common shares
  and common stock
    equivalents                    3,125,455        3,282,193         3,169,082        3,327,324
Diluted EPS                    $         .08    $         .09     $         .28    $         .24
                                         ===              ===               ===              ===
</TABLE>


For both the three and nine month  periods  ended  December  31,  2000 and 1999,
15,366 and 30,946 RSP shares,  respectively,  were excluded from the diluted EPS
computation due to their anti-dilutive effect. For both the three and nine month
periods ended  December 31, 1999,  155,246  Option shares were excluded from the
diluted EPS computation due to their  anti-dilutive  effect.  Shares outstanding
for the three and nine months  ended  December  31, 2000 and 1999 do not include
ESOP shares that were  unallocated  in  accordance  with  Statement  of Position
("SOP") 93-6,  "Employers'  Accounting  for Employees  Stock  Ownership  Plans".
Unallocated  ESOP shares  amounted to 18,235 and 47,046 at December 31, 2000 and
1999, respectively.

NOTE 6 -  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 $148,693,000 at December 31, 2000, are reflective
of a decrease of $3,939,000 or 2.6%,  as compared to  $152,632,000  at March 31,
2000.  The  decrease in total  assets was due to  decreases  in  mortgage-backed
securities,  loans  receivable,  accrued interest  receivable,  and premises and
equipment,  offset  by  increases  in  cash  and  amounts  due  from  depository
institutions,  investment  securities,   interest-bearing  deposits  with  other
financial institutions, and prepaid expenses and other assets.

The  decrease  in the  Company's  liabilities  was due to  decreases  in savings
deposits,  Federal  Home Loan  Bank  ("FHLB")  advances,  escrows,  and  accrued
expenses and other liabilities. 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  $2,718,000,  an
increase of $992,000 or 57.5% as compared to $1,726,000 at March 31, 2000.  This
increase was primarily due to increases in interest-bearing  deposits maintained
at the FHLB and cash on hand.

Investment Securities. Investment securities totaled $28,771,000 at December 31,
2000, an increase of $2,075,000 or 7.8%, as compared to $26,696,000 at March 31,
2000.  This was  primarily a result of purchases of $3.1 million of U.S.  Agency
securities,  offset  by the  proceeds  from  maturities,  calls  and  repayments
totaling $1.1 million.

Mortgage-backed  Securities.  Mortgage-backed  securities  were  $54,915,000  at
December 31, 2000, a decrease of $4,266,000 or 7.2%, as compared to  $59,181,000
at March 31, 2000.  The decrease was due to principal  repayments and maturities
totaling $7.7 million, offset by purchases of $3.5 million.

Loans  Receivable,  net.  Net loans  receivable  at December  31,  2000  totaled
$53,045,000,  a decrease of $3,459,000 or 6.1%,  as compared to  $56,504,000  at
March 31, 2000. The decrease was primarily due to principal  repayments totaling
$6.3 million,  offset by  originations of $533,000,  which includes  $167,000 of
consumer,  $90,000 of one-to-four  family and $276,000 of multi-family  mortgage
loans,  and  purchases  of $2.3  million.  The  Company  purchased  $335,000  of
government-guaranteed     multi-family     project     loans,     $326,000    of
government-guaranteed agricultural non-mortgage loans, and $1.7 million of Small
Business  Administration  (SBA) loans outside its normal lending area, primarily
in Pennsylvania.

Deposits. Total deposits, after interest credited,  decreased by $2.6 million or
3.5% to  $72,971,000  at December 31, 2000, as compared to  $75,583,000 at March
31, 2000.  The  decrease was  primarily  due to  decreases  in  certificates  of
deposit, Money Market and passbook accounts.

FHLB  Advances.  FHLB advances,  at December 31, 2000,  totaled  $48,000,000,  a
decrease of $1,000,000 or 2.0%,  as compared to  $49,000,000  at March 31, 2000.
The Company uses FHLB  advances as a supplement to deposits to fund its purchase
of loans and investments.

Stockholders'  Equity.  Stockholders' equity totaled $24,930,000 at December 31,
2000, as compared to  $25,143,000 at March 31, 2000. The decrease of $213,000 or
0.8% was primarily due to the purchase of 136,750 shares of treasury stock at an
average  cost of $6.85 per share,  and the payment of three $.075  regular  cash
dividends and one $.075 special cash dividend,  partially offset by earnings for
the nine months ended December 31, 2000.

                                        7
<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION


Results of Operations for the Three Months Ended December 31, 2000 and 1999

Net Income.  The Company  recorded  net income of $252,000  for the three months
ended  December  31,  2000,  as compared to net income of $280,000 for the three
months ended  December 31, 1999. The $28,000 or 10.0% decrease in net income for
the three months ended  December 31, 2000 was primarily the result of a decrease
in net interest income and an increase in other expenses,  partially offset by 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 $32,000 or 3.1% for the three
months  ended  December  31,  2000,  as compared to the three month period ended
December 31, 1999. The average balance of interest-earning assets decreased $7.3
million or 4.9%,  however,  the average yield earned thereon  increased 36 basis
points.  Although the average balance of interest-bearing  liabilities decreased
$7.0 million or 5.5%, the average rate paid thereon increased 39 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 2.04% for the three month  period ended  December 31,
2000 from 2.07% for the three month period ended December 31, 1999. The decrease
in the net interest  rate spread was  primarily the result of an increase in the
average  rate paid on the average  balance of  certificates  of deposit and FHLB
advances,  partially  offset by an increase in the average yield earned on loans
receivable and mortgage-backed and investment securities.

Interest Income.  Interest income increased $3,000 or 0.1% to $2,542,000 for the
three month period ended  December 31, 2000, as compared to  $2,539,000  for the
three month period ended December 31, 1999.

Interest  on loans  receivable  decreased  $64,000 or 6.1% for the three  months
ended  December 31, 2000,  as compared to the three month period ended  December
31, 1999.  This decrease was primarily the result of a $5.1 million  decrease in
the average balance of loans receivable,  offset by a 21 basis point increase in
the average yield earned thereon.

Interest income on  mortgage-backed  securities  remained the same for the three
months ended December 31, 2000 and December 31, 1999.

Interest income on investment  securities  increased by $63,000 or 14.4% for the
three  months ended  December  31,  2000,  as compared to the three months ended
December 31, 1999. The increase in interest income on investment  securities was
primarily due to a $2.0 million higher average  balance of such securities and a
41 basis point increase in the average yield earned thereon.

Interest income on other interest-earning assets increased by $4,000 or 6.5% for
the three months ended  December 31, 2000, as compared to the three months ended
December  31, 1999.  The increase was due to a $386,000  increase in the average
balance of other  interest-earning  assets, offset by an 18 basis point decrease
in the average yield earned thereon.

The average yield on the average  balance of  interest-earning  assets was 7.14%
and 6.78 % for the  three  month  periods  ended  December  31,  2000 and  1999,
respectively.

Interest Expense. Interest expense totaled $1,532,000 for the three months ended
December 31, 2000, as compared to $1,497,000 for the three months ended December
31, 1999. Although the average balance of interest-bearing liabilities decreased
$7.0 million, the average rate paid thereon increased 39 basis points, resulting
in a $35,000 or 2.3% increase in interest expense.

Interest expense on deposits  (including  escrows) increased $26,000 or 3.2% for
the three months ended  December 31, 2000, as compared to the three months ended
December  31, 1999.  The  increase  was due to a 35 basis point  increase in the
average  rate paid  thereon,  offset by a $3.4  million  decrease in the average
balance of deposits.

Interest on FHLB  advances  increased  $9,000 or 1.3% for the three months ended
December 31, 2000, as compared to the three months ended  December 31, 1999. The
increase was due to a 47 basis point  increase in the rate paid thereon,  offset
by a $3.6 million decrease in the average balance of advances.  The Company uses
FHLB  advances  as a  funding  source  and has in the past  used  borrowings  to
supplement deposits, which are the Company's primary source of funds.

                                        8
<PAGE>

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


Allowance for Loan Losses.  During the three month  periods  ended  December 31,
2000 and 1999,  the  Company  established  provisions  for loan losses of $0 and
$1,000,  respectively.  This reflected management's evaluation of the underlying
credit risk of the loan portfolio and the level of allowance for loan losses.

At December 31, 2000, the allowance for loan losses totaled $425,000 or .79% and
276.0% of total loans and total non-performing loans, respectively,  as compared
to $425,000 or 0.8% and 885.4%,  respectively,  at March 31, 2000. The Company's
non-performing  loans  (non-accrual  loans  and  accruing  loans 90 days or more
overdue)  totaled  $154,000 and $48,000 at December 31, 2000 and March 31, 2000,
respectively,  which  represented  0.29% and 0.08% of the Company's total loans,
respectively.  The Company's ratio of  non-performing  loans to total assets was
 .10% and .03% at December 31, 2000 and March 31, 2000, respectively.

Other Income.  During the three months ended  December 31, 2000 and 1999,  other
income remained the same.

Other  Expenses.  Total other  expenses  increased by $22,000 or 3.7% during the
three  months ended  December  31,  2000,  as compared to the three months ended
December 31, 1999. The increase was attributable to increases of $24,000 or 5.1%
in  compensation  and  employee  benefits  expense,  and $6,000 or 9.8% in other
operating expenses, offset by a decrease of $8,000 or 66.7% in federal insurance
premiums.

Income Tax Expense.  The provision for income tax totaled $159,000 for the three
months ended  December  31,  2000,  as compared to $184,000 for the three months
ended  December  31,  1999.  The $25,000 or 13.6%  decrease was due to decreased
income.

Results of Operations for the Nine Months Ended December 31, 2000 and 1999

Net Income.  The  Company  recorded  net income of $872,000  for the nine months
ended  December  31,  2000,  as compared to net income of $793,000  for the nine
months ended  December 31, 1999. The $79,000 or 10.0% increase in net income for
the nine months ended December 31, 2000 was primarily the result of increases in
net interest  income and  decreases in other  expenses  and  provision  for loan
losses,  partially offset by an increase in provision for income taxes.  Changes
in the components of income and expense are discussed herein.

Net Interest Income.  Net interest income increased $50,000 or 1.6% for the nine
months  ended  December  31,  2000,  as compared to the nine month  period ended
December  31,  1999.  Although the average  balance of  interest-earning  assets
decreased $5.7 million or 3.8%,  the average yield earned  thereon  increased 38
basis points. The average balance of interest-bearing  liabilities  decreased by
$5.3 million or 4.2%, however,  the average rate paid thereon increased 28 basis
points.

The net interest rate spread  increased to 2.13% for the nine month period ended
December 31, 2000 from 2.03% for the nine month period ended  December 31, 1999.
The  increase  in the net  interest  rate  spread  was  primarily  the result of
increased  yields  on the  average  balances  of all  interest  earning  assets,
partially  offset by increased  rates paid on  certificates  of deposit and FHLB
advances.

Interest Income.  Interest income  increased  $118,000 or 1.6% to $7,659,000 for
the nine month period ended December 31, 2000, as compared to $7,541,000 for the
nine month period ended December 31, 1999.

Interest  on loans  receivable  decreased  $248,000  or 7.6% for the nine months
ended December 31, 2000, as compared to the nine month period ended December 31,
1999.  This decrease was primarily the result of a $5.7 million  decrease in the
average  balance  of loans  receivable,  partially  offset  by a 15 basis  point
increase in the average yield earned thereon.

Interest income on  mortgage-backed  securities  increased $275,000 or 10.1% for
the nine months ended  December  31, 2000,  as compared to the nine months ended
December 31, 1999. This increase was primarily the result of a $153,000 increase
in the average  balance of such  securities  and 63 basis point  increase in the
average yield earned thereon.

Interest  income on investment  securities  increased  $159,000 or 12.5% for the
nine months  ended  December  31,  2000,  as  compared to the nine months  ended
December 31, 1999. The increase in interest income on investment  securities was
primarily  due  to a $1.9  million  increase  in the  average  balance  of  such
securities and an increase in the average yield of 31 basis points.

Interest income on other  interest-earning  assets decreased by $68,000 or 25.7%
for the nine months  ended  December  31,  2000,  as compared to the nine months
ended December 31, 1999. The decrease was due to a $2.1 million  decrease in the
average  balance of other  interest-earning  assets,  offset by a 76 basis point
increase in the average yield earned thereon.

The average yield on the average  balance of  interest-earning  assets was 7.11%
and  6.73%  for the nine  month  periods  ended  December  31,  2000  and  1999,
respectively.

                                        9
<PAGE>

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


Interest Expense.  Interest expense totaled $4,523,000 for the nine months ended
December 31, 2000, as compared to $4,455,000  for the nine months ended December
31, 1999. Although the average balance of interest-bearing liabilities decreased
$5.3 million, the average rate paid thereon increased 28 basis points, resulting
in a $68,000 or 1.5% increase in interest expense.

Interest expense on deposits  (including  escrows) increased $40,000 or 1.6% for
the nine months ended  December  31, 2000,  as compared to the nine months ended
December  31, 1999.  The  increase  was due to a 26 basis point  increase in the
average  rate paid  thereon,  offset by a $3.0  million  decrease in the average
balance of deposits.

Interest on FHLB  advances  increased  $91,000 or 4.7% for the nine months ended
December 31, 2000, as compared to the nine months ended  December 31, 1999.  The
increase was due to a 42 basis point  increase in the average rate paid thereon,
offset by a $1.6 million decrease in the average balance of advances.

Interest on bonds payable decreased by $63,000 or 100.0% due to the repayment of
the bond in its entirety.

Provision for Loan Losses. During the nine month periods ended December 31, 2000
and 1999, the Company  established  provisions for loan losses of $0 and $3,000,
respectively.  This reflected  management's  evaluation of the underlying credit
risk of the loan portfolio and the level of allowance for loan losses.

Other  Income.  During the nine months ended  December  31,  2000,  other income
decreased  $5,000 or 7.0%,  as compared to the nine months  ended  December  31,
1999.

Other  Expenses.  Total other  expenses  decreased by $58,000 or 3.1% during the
nine months  ended  December  31,  2000,  as  compared to the nine months  ended
December 31, 1999.  The  decrease  was  attributable  to decreases of $22,000 in
federal  insurance  premiums,  $18,000 in  compensation  and  employees  benefit
expense,  $15,000 in other expenses, and $3,000 in premises and occupancy costs.
The decrease in compensation and employee  benefits expense was due to decreases
of $69,000 in RSP expense,  offset by increases of $30,000 in  compensation  and
employee benefits  expense,  $14,000 in the Company's defined benefit plan, SERP
and DRP costs, and $7,000 in ESOP expense.

Income Tax Expense.  The provision for income tax totaled  $526,000 for the nine
months  ended  December  31,  2000,  as compared to $499,000 for the nine months
ended  December  31,  1999.  The $27,000 or 5.4%  increase  was due to increased
income.

Liquidity and Capital Requirements

The Company's  subsidiary  bank, First Carnegie  Deposit,  is subject to various
requirements  administered by the federal banking agencies. The Bank is required
by Section 6 of the Home Owners'  Loan Act ("HOLA") to hold a prescribed  amount
of  statutorily  defined  liquid  assets.  The  Director  of  the  OTS  may,  by
regulation,  vary the  amount  of the  liquidity  requirement,  but only  within
pre-established  statutory  limits.  The  requirement  must be no less than four
percent and no greater than ten percent of the Bank's net withdrawable  accounts
and  borrowings  payable on demand or with  unexpired  maturities of one year or
less.  The  minimum  required  liquidity  is  currently  4%. The Bank's  average
liquidity  ratio was 143.97%  and  154.76%,  at December  31, 2000 and March 31,
2000, respectively.

                                       10
<PAGE>

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



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, 2000, the Bank was in compliance with its
three regulatory capital requirements as follows:


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

Tangible capital........................        $24,408          16.44%
Tangible capital requirement............          2,227           1.50%
                                                -------         ------
Excess over requirement.................        $22,181          14.94%
                                                 ======          =====

Core capital............................        $24,408          16.44%
Core capital requirement................          4,454           3.00%
                                                -------         ------
Excess over requirement.................        $19,954          13.44%
                                                 ======          =====

Risk based capital......................        $24,833          55.60%
Risk based capital requirement..........          3,573           8.00%
                                                -------         ------
Excess over requirement.................        $21,260          47.60%
                                                 ======          =====


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.

                                       11
<PAGE>

                           PART II - OTHER INFORMATION


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

               The Company's  subsidiary  First Carnegie Deposit and other third
               parties have been informed of an impending legal action regarding
               a previously  completed sale of foreclosed real estate.  Although
               First Carnegie  Deposit has not been served as a defendant in any
               lawsuit,  the Company has notified its insurance  carrier of this
               potential action.  At this time management  believes this action,
               if commenced, will not result in significant loss to the Company.

               The Company and its counsel are not in a position at this time to
               express an opinion as to the outcome of this action.


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 31, 2001
                                   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 and Treasurer
(Principal Executive Officer)                  (Principal Financial and Accounting Officer)

Date: January 31,  2001                        Date: January 31, 2001

</TABLE>


                                       13