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 June 30, 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 July 28, 2000


$0.10 Par Value Common Stock                                  3,214,826  Shares
----------------------------                                  -----------------
 Class                                                          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
               June 30, 2000 (unaudited) and March 31, 2000) .............  1

               Consolidated Statements of Income (For the three
               months ended June 30, 2000 and 1999 (unaudited)) ..........  2

               Consolidated Statement of Stockholders' Equity (For the
               three months ended June 30, 2000 (unaudited)) .............  3

               Consolidated Statements of Cash Flows (For the three
               months ended June 30, 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 .............................................. 10
Item 2.   Changes in Securities .......................................... 10
Item 3.   Defaults Upon Senior Securities ................................ 10
Item 4.   Submission of Matters to a Vote of Security-Holders ............ 10
Item 5.   Other Information .............................................. 10
Item 6.   Exhibits and Reports on Form 8-K ............................... 10


Signatures





<PAGE>


                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                 Consolidated Statements of Financial Condition

              (Dollar amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                                                     June 30,         March 31,
                                                                       2000             2000
                                                                     --------          -------
          ASSETS                                                   (Unaudited)
          ------
<S>                                                              <C>              <C>
Cash and amounts due from depository institutions                  $     423        $     446
Interest-bearing deposits with other institutions                      1,401            1,280
Investment securities:
    Held-to-maturity (market value $24,974 and $24,928)               26,731           26,696
Mortgage-backed securities:
    Held-to-maturity (market value $56,827 and $57,840)               58,157           59,181
Loans receivable, net                                                 55,508           56,504
Accrued interest receivable:
    Investment securities                                                381              427
    Mortgage-backed securities                                           410              410
    Loans receivable                                                     483              486
    FHLB stock                                                            --               43
Federal Home Loan Bank stock, at cost                                  2,615            2,615
Premises and equipment, net                                              608              626
Prepaid expenses and other assets                                      4,388            3,918
                                                                   ---------        ---------
        Total Assets                                               $ 151,105        $ 152,632
                                                                   =========        =========

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

Liabilities:
    Deposits                                                       $  74,300        $  75,583
    Federal Home Loan Bank advances                                   48,500           49,000
    Advances from borrowers for taxes and insurance                      180              128
    Accrued expenses and other liabilities                             3,252            2,778
                                                                   ---------        ---------
        Total Liabilities                                            126,232          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                                         9,735            9,740
    Treasury stock, at cost (229,631 shares at June 30, 2000
      and 163,111 shares at March 31, 2000)(1)                        (1,560)          (1,119)
    Unearned Employee Stock Ownership Plan (ESOP) shares                (220)            (267)
    Unearned Restricted Stock Plan (RSP) shares                         (171)            (199)
    Retained earnings, substantially restricted                       16,744           16,643
                                                                   ---------        ---------
        Total Stockholders' Equity                                    24,873           25,143
                                                                   ---------        ---------

        Total Liabilities and Stockholders' Equity                 $ 151,105        $ 152,632
                                                                   =========        =========

</TABLE>

(1)Included are shares held by the Bank's RSP totaling 10,483 at June 30, 2000
and 7,863 at March 31, 2000, respectively.




See accompanying notes to consolidated financial statements.

                                       1
<PAGE>




                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                        Consolidated Statements of Income

                For the Three Months Ended June 30, 2000 and 1999

              (Dollar amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                                                        2000        1999
                                                                        ----        ----
                                                                           (Unaudited)
<S>                                                               <C>           <C>
Interest income:
    Loans receivable                                                  $1,025       $1,149
    Mortgage-backed securities                                         1,007          835
    Investment securities                                                463          404
    Other                                                                 66           98
                                                                      ------       ------
        Total interest income                                          2,561        2,486

Interest expense:
    Savings deposits                                                     815          816
    Federal Home Loan Bank advances                                      672          626
    Bonds payable                                                         --           31
                                                                      ------       ------
        Total interest expense                                         1,487        1,473
                                                                      ------       ------

        Net interest income                                            1,074        1,013

Provision for loan losses                                                 --            1
                                                                      ------       ------
        Net interest income after provision for loan losses            1,074        1,012
Other income:
    Fees and service charges                                               8           19
    Other                                                                 18            9
                                                                      ------       ------
        Total other income                                                26           28

Other expenses:
    Compensation and employee benefits                                   460          490
    Premises and occupancy costs                                          53           54
    Federal insurance premiums                                             4           11
    Other operating expenses                                               8           84
                                                                      ------       ------
        Total other expenses                                             605          639
                                                                      ------       ------

    Income before income taxes                                           495          401

Provision for income taxes                                               212          174
                                                                      ------       ------
        Net income                                                       283          227

Other comprehensive income:
    Unrealized gain on securities available-for-sale, net of tax          --           --
                                                                      ------       ------
        Total comprehensive income                                    $  283       $  227
                                                                      ======       ======

Basic earnings per share                                              $  .09       $  .07
Diluted earnings per share                                            $  .09       $  .07

Weighted average shares outstanding - Basic                        3,230,863    3,348,686
Weighted average shares outstanding - Diluted                      3,230,863    3,348,686

</TABLE>


 See accompanying notes to consolidated financial statements.

                                        2
<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                 Consolidated Statement of Stockholders' Equity

              For the Three Months Ended June 30, 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
  ($.075 per share regular,
   $.075 per share special)                   --              --            --            --          --          (182)       (182)

Excess of fair value above cost of
 ESOP shares released or
 committed to be released                     --              (5)           --            --          --            --          (5)


Amortization of ESOP liability                --              --            --            47          --            --          47

Amortization of RSP liability                 --              --            --            --          28            --          28

Treasury stock purchased,
 at cost (66,520 shares)                      --              --          (441)           --          --            --        (441)

Net income                                    --              --            --            --          --           283         283
                                        -------------------------------------------------------------------------------------------


Balance at June 30, 2000                    $345          $9,735       $(1,560)        $(220)      $(171)      $16,744     $24,873
                                        ===========================================================================================

</TABLE>






See accompanying notes to consolidated financial statements.


                                       3

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                For the Three Months Ended June 30, 2000 and 1999

                          (Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                          2000       1999
                                                                          ----       ----
                                                                            (Unaudited)
<S>                                                                   <C>        <C>
Operating activities:
   Net income                                                           $   283    $   227
   Adjustments to reconcile net income to net cash
     (used in) provided by operating activities:
        Provision for loan losses                                            --          1
        Depreciation                                                         19         20
        Compensation expense-ESOP and RSP                                    70        101
        Net amortization of premiums and discounts                           25         71
        Decrease in accrued interest receivable                              92        252
        Increase in prepaid expenses                                       (470)       (31)
        Increase in accrued interest payable                                137        175
        Decrease in accrued income taxes                                    (53)      (110)
        Other, net                                                          389       (155)
                                                                        -------    -------
         Net cash provided by operating activities                          492        551
                                                                        -------    -------

Investing activities:
   Purchases of premises and equipment                                       (1)        (5)
   Purchases of investment securities held-to maturity                     (300)      (720)
   Purchases of mortgage-backed securities held-to-maturity              (1,459)    (4,117)
   Proceeds from maturities/calls and principal repayments of:
    Investment securities held-to-maturity                                  264      1,503
    Mortgage-backed securities held-to-maturity                           2,468      5,201
   Loans purchased                                                         (653)      (547)
   Net principal repayments on loans                                      1,641      4,962
                                                                        -------    -------
    Net cash provided by investing activities                             1,960      6,277
                                                                        -------    -------

Financing activities:
   Net decrease in savings deposits                                      (1,283)      (401)
   Proceeds from Federal Home Loan Bank advances                          8,500         --
   Repayment of Federal Home Loan Bank advances                          (9,000)        --
   Net increase in mortgage escrow                                           52         55
   Treasury stock purchased                                                (441)       (17)
   Cash dividends paid                                                     (182)      (107)
                                                                        -------    -------
    Net cash used in financing activities                                (2,354)      (470)
                                                                        -------    -------

Net increase in cash and cash equivalents                                    98      6,358
Cash and cash equivalents, beginning of period                            1,726      2,499
                                                                        -------    -------
Cash and cash equivalents, end of period                                $ 1,824    $ 8,857
                                                                        =======    =======
Supplemental disclosures of cash flow information:
   Cash paid during the period for:
    Interest                                                            $ 1,349    $ 1,298
                                                                        =======    =======

    Income taxes                                                        $   346    $   330
                                                                        =======    =======

</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  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  ended June 30,  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 June 8, 2000,  the Board of  Directors  of the Company  declared a $0.075 per
share  regular cash dividend and a $0.075 per share special cash dividend on the
Company's  outstanding shares of common stock, payable to stockholders of record
as of June 30, 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 July 14, 2000.  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  June  30,  2000 and  1999,  the  Company's  total
comprehensive   income  was   $283,000   and   $227,000,   respectively.   Total
comprehensive income is comprised of net income and other comprehensive  income.
For both three month periods, 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  January 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 SUBSIDIARIES
                   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
                                                                    ---------------------------

                                                                    June 30,           June 30,
                                                                      2000               1999
                                                                    ---------          --------

<S>                                                              <C>                <C>
Basic EPS computation:
 Numerator-Net Income                                              $ 283,000          $ 227,000
 Denominator-Wt Avg common shares outstanding                      3,230,863          3,348,686
Basic EPS                                                          $     .09          $     .07
                                                                         ===                ===

Diluted EPS computation:
 Numerator-Net Income                                              $ 283,000          $ 227,000
                                                                    ========           ========
 Denominator-Wt Avg common shares outstanding                      3,230,863          3,348,686
 Dilutive Stock Options                                                   --                 --
 Dilutive Unvested RSP                                                    --                 --
                                                                   ---------          ---------
Weighted avg common shares and common stock
   equivalents                                                     3,230,863          3,348,686
Diluted EPS                                                        $     .09          $     .07
                                                                         ===                ===
</TABLE>

For the  quarters  ended June 30,  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 the quarters  ended June 30, 2000 and 1999,  155,246
Option  shares  were  excluded  from the diluted  EPS  computation  due to their
anti-dilutive  effect.  Shares  outstanding  for the three months ended June 30,
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 33,046 and 60,585 at
June 30, 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 $151,105,000 at June 30, 2000, are reflective of a
decrease of $1,527,000 or 1.0%, as compared to  $152,632,000  at March 31, 2000.
The  decrease  in total  assets was due to  decreases  in cash,  mortgage-backed
securities,  loans  receivable,  premises and  equipment  and accrued  interest,
partially offset by increases in interest-bearing  deposits with other financial
institutions, investment securities and prepaid expenses.

The  decrease  in the  Company's  liabilities  was due to  decreases  in savings
deposits and FHLB advances, offset by an increase in advances from borrowers for
taxes and insurance and accrued  expenses.  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  $1,824,000,  an
increase of $98,000 or 5.7% from the prior quarter.  This increase was primarily
due to increased  interest-bearing  deposits maintained at the Federal Home Loan
Bank ("FHLB").

Investment  Securities.  Investment  securities totaled  $26,731,000 at June 30,
2000,  an increase of $35,000 or 0.1%, as compared to  $26,696,000  at March 31,
2000.  The increase was  primarily  due to purchases of $300,000 of U.S.  Agency
securities  offset by proceeds  received  from  maturities,  calls and  payments
totaling $264,000.

Mortgage-backed  Securities.  Mortgage-backed  securities totaled $58,157,000 at
June 30, 2000, a decrease of $1,024,000 or 1.7%, as compared to  $59,181,000  at
March 31, 2000.  The decrease was due to  principal  repayments  and  maturities
totaling $2.5 million, partially offset by purchases of $1.5 million.

Loans   Receivable,   net.  Net  loans  receivable  at  June  30,  2000  totaled
$55,508,000, a decrease of $996,000 or 1.8%, as compared to $56,504,000 at March
31, 2000. The decrease was primarily due to principal  repayments  totaling $1.8
million,  partially  offset by the origination of $90,000 in one- to four-family
and $37,000 in  consumer  loans,  and  purchases  of  $326,000  of  agricultural
non-mortgage and $327,000 of Small Business Administration (SBA) loans.

Deposits.  Total deposits,  after interest credited,  decreased by $1,283,000 or
1.7% to  $74,300,000  at June 30, 2000, as compared to  $75,583,000 at March 31,
2000. The decrease was primarily due to decreases in certificates of deposit and
NOW  accounts,  partially  offset by an increase in  passbook  and Money  Market
accounts.

FHLB Advances. FHLB advances totaled $48,500,000 at June 30, 2000, a decrease of
$500,000 or 1.0%, 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 $24,873,000 at June 30, 2000,
as compared to  $25,143,000  at March 31, 2000. The decrease of $270,000 or 1.1%
was  primarily  due to the  purchase of 63,900  shares of  treasury  stock at an
average cost of $6.67 per share,  and the payment of a $0.075 regular  quarterly
and $0.075  special cash  dividend,  partially  offset by earnings for the three
months ended June 30, 2000.

                                       7

<PAGE>

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


Results of Operations for the Three Months Ended June 30, 2000 and 1999

Net Income.  The Company  recorded  net income of $283,000  for the three months
ended June 30, 2000,  as compared to net income of $227,000 for the three months
ended June 30, 1999.  The $56,000 or 24.7%  increase in net income for the three
months  ended  June 30,  2000 was  primarily  the result of an  increase  in net
interest  income and a decrease  in other  expenses,  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 $61,000 or 6.0% for the three
months ended June 30, 2000, as compared to the three month period ended June 30,
1999.  Although the average balance of  interest-earning  assets  decreased $4.5
million or 3.0%, the average yield earned thereon increased 42 basis points. The
average  balance of  interest-bearing  liabilities  decreased by $4.3 million or
3.4%, however, the average rate paid thereon increased 21 basis points.

The interest rate spread,  which is the difference  between the yield on average
interest-earning  assets and the cost of average  interest-bearing  liabilities,
increased to 2.21% for the three month period ended June 30, 2000 from 2.00% for
the three month period ended June 30,  1999.  The increase in the interest  rate
spread was primarily the result of increased  yields on the average  balances of
mortgage-backed  and investment  securities and other interest  earning  assets,
offset by increased rates paid on the average  balances of savings  deposits and
FHLB advances.

Interest Income. Interest income increased $75,000 or 3.0% to $2,561,000 for the
three month period ended June 30, 2000, as compared to $2,486,000  for the three
month period ended June 30, 1999.

Interest on loans  receivable  decreased  $124,000 or 10.8% for the three months
ended June 30, 2000,  as compared to the three month period ended June 30, 1999.
This decrease was primarily the result of a $6.7 million decrease in the average
balance of loans  receivable  and a single  basis point  decrease in the average
yield earned thereon.

Interest income on  mortgage-backed  securities  increased $172,000 or 20.6% for
the three months ended June 30, 2000, as compared to the three months ended June
30, 1999.  This increase was primarily the result of a $4.6 million  increase in
the average balance of mortgage-backed  securities and a 68 basis point increase
in the average yield earned thereon.

Interest income on investment  securities  increased by $59,000 or 14.6% for the
three months ended June 30, 2000, as compared to the three months ended June 30,
1999. The increase in interest income on investment securities was primarily due
to an increase of $2.1 million in the average  balance of such  securities and a
36 basis point increase in the average yield earned thereon..

Interest income on other  interest-earning  assets decreased by $32,000 or 32.7%
for the three months ended June 30, 2000,  as compared to the three months ended
June 30, 1999.  The decrease was  primarily  due a $4.6 million  decrease in the
average  interest-earning  assets,  offset by a 211 basis point  increase in the
average yield earned thereon.

The average yield on the average  balance of  interest-earning  assets was 7.08%
and  6.66%  for  the  three  month   periods  ended  June  30,  2000  and  1999,
respectively.

Interest Expense. Interest expense totaled $1,487,000 for the three months ended
June 30,  2000,  as compared to  $1,473,000  for the three months ended June 30,
1999.  The  $14,000  or 1.0%  increase  was  primarily  due to a 21 basis  point
increase  in the  average  rate  paid  on  the  total  average  interest-bearing
liabilities, partially offset by decreased average balances in savings deposits,
bonds payable and other borrowings, and FHLB advances.

Interest expense on deposits  (including escrows) totaled $815,000 for the three
months ended June 30,  2000,  as compared to $816,000 for the three months ended
June 30, 1999.  The $1,000 or 0.1%  decrease was primarily due to a $2.5 million
decrease  in the average  balance of  deposits,  partially  offset by a 15 basis
point increase in the average rate paid on deposits and escrows.

Interest on FHLB advances  increased  $46,000 or 7.3% for the three months ended
June 30, 2000, as compared to the three months ended June 30, 1999. The increase
was  primarily  due to a 42  basis  point  increase  in the rate  paid  thereon,
partially  offset by a decrease of $467,000 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 OPERATIONS


Interest on bonds payable and other  borrowings,  a less significant  portion of
interest  expense,  decreased  by $31,000 or 100.0%,  as the  average  principal
amount of other  borrowings  decreased by $1.3 million,  due to the repayment of
the bond in its entirety.

Allowance  for Loan Losses.  During the three month  periods ended June 30, 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 June 30, 2000,  the allowance for loan losses  totaled  $425,000 or 0.76% and
2023.8% 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  $21,000  and  $48,000  at June 30,  2000 and March  31,  2000
respectively,  which  represented  0.04% and 0.08% of the Company's total loans,
respectively.  The Company's ratio of  non-performing  loans to total assets was
0.01% and 0.03% at June 30, 2000 and March 31, 2000, respectively.

Other  Income.  During  the three  months  ended  June 30,  2000,  other  income
decreased $2,000 or 7.1%, as compared to the three months ended June 30, 1999.

Other  Expenses.  Total other  expenses  decreased by $34,000 or 5.3% during the
three months ended June 30, 2000, as compared to the three months ended June 30,
1999.  The  decrease  was  primarily  attributable  to a decrease  of $30,000 in
compensation and employee benefits  expense.  Compensation and employee benefits
expense  decreased  due to the  reduction of $20,000 in RSP expense,  $11,000 in
ESOP expense,  and $9,000 in the Company's  defined  benefit plan,  Supplemental
Employee  Retirement  Plan (SERP) and  Director's  Retirement  Plan (DRP) costs,
offset  by a $10,000  increase  in  compensation  and  other  employee  benefits
expense.

Income Tax Expense.  The provision for income tax totaled $212,000 for the three
months ended June 30,  2000,  as compared to $174,000 for the three months ended
June 30, 1999. The $38,000 or 21.8% 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 139.13% and  154.76%,  at June 30, 2000 and March 31, 2000,
respectively.

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 June 30, 2000,  the Bank was in  compliance  with its
three regulatory capital requirements as follows:

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

           Tangible capital ........................  $24,749      16.41%
           Tangible capital requirement ............    2,262       1.50
                                                      -------      -----
           Excess over requirement .................  $22,487      14.91%
                                                      =======      =====

           Core capital ............................  $24,749      16.41%
           Core capital requirement ................    4,524       3.00
                                                      -------      -----
           Excess over requirement .................  $20,225      13.41%
                                                      =======      =====

           Risk based capital ......................  $25,174      54.94%
           Risk based capital requirement ..........    3,666       8.00
                                                      -------      -----
           Excess over requirement .................  $21,508      46.94%
                                                      =======      =====

                                       9
<PAGE>

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


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.



                          PART II - OTHER INFORMATION



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

           The  Company's  subsidiary  First  Carnegie  Deposit  and other third
           parties  were  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)  On April 18, 2000,  the Company filed a current report on Form
               8-K announcing the adoption of a stock  repurchase plan whereby
               the Company was  authorized to purchase up to 10% of the shares
               of common stock held by persons  other  than  Skibo  Bancshares,
               M.H.C., the Company's majority stockholder and mutual holding
               company.



                                       10

<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: August 9, 2000                   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: August 9, 2000                      Date: August 9, 2000

</TABLE>