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 September 30, 2003
                               ------------------

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

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

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

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

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

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

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


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


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

                  Number of shares outstanding of common stock
                             as of October 31, 2003


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

            Transitional Small Business Disclosure Format (check one)

                            Yes          No   X
                                ------      ------

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

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


Item 1.     Financial Statements


               Consolidated Statements of Financial Condition as of
               September 30, 2003 (unaudited) and March 31, 2003...............1

               Consolidated Statements of Income for the three and
                    six months ended September 30, 2003 and 2002 (unaudited)...2

               Consolidated Statement of Stockholders' Equity for the
               six months ended September 30, 2003 (unaudited).................3

               Consolidated Statements of Cash Flows for the six
               months ended September 30, 2003 and 2002 (unaudited)............4

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


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


Item 3.     Controls and Procedures...........................................12


PART II.          OTHER INFORMATION
--------          -----------------


Item 1.     Legal Proceedings.................................................13
Item 2.     Changes in Securities.............................................13
Item 3.     Defaults Upon Senior Securities ..................................13
Item 4.     Submission of Matters to a Vote of Security-Holders...............13
Item 5.     Other Information.................................................13
Item 6.     Exhibits and Reports on Form 8-K .................................13


Signatures

<PAGE>




                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                 Consolidated Statements of Financial Condition

              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                         September 30,  March 31,
                                                                             2003         2003
                                                                        -------------- ----------
                    ASSETS                                               (Unaudited)
                    ------
<S>                                                                     <C>          <C>
Cash and amounts due from depository institutions                         $     687    $     828
Interest-bearing deposits with other institutions                             1,897        3,800
Investment securities:
     Held-to-maturity (market value $12,600 and $8,465)                      12,664        8,356
Mortgage-backed securities:
     Held-to-maturity (market value $98,179 and $97,570)                     96,094       95,305
Real estate owned, net                                                            -           28
Loans receivable, net                                                        35,420       39,672
Accrued interest receivable:
     Investment securities                                                      132           91
     Mortgage-backed securities                                                 460          506
     Loans receivable                                                           313          354
Federal Home Loan Bank stock, at cost                                         2,926        2,879
Premises and equipment, net                                                     486          505
Prepaid expenses and other assets                                             5,019        4,935
                                                                          ---------    ---------
        Total Assets                                                      $ 156,098    $ 157,259
                                                                          =========    =========

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

Liabilities:
------------
     Deposits                                                             $  80,550    $  81,842
     Federal Home Loan Bank advances                                         48,000       48,000
     Advances from borrowers for taxes and insurance                             12           77
     Accrued expenses and other liabilities                                   4,069        3,863
                                                                          ---------    ---------
        Total Liabilities                                                   132,631      133,782


Stockholders' Equity:
     Preferred stock, 5,000,000 shares authorized; none issued                    -            -
     Common stock, $0.10 par value; 10,000,000 shares authorized;
        3,449,974 shares issued                                                 345          345
     Additional paid-in capital                                               9,777        9,777
     Treasury stock, at cost (308,470 shares at both September 30, 2003
         and March 31, 2003)(1)                                              (2,149)      (2,149)
     Retained earnings, substantially restricted                             15,494       15,504
                                                                          ---------    ---------
        Total Stockholders' Equity                                           23,467       23,477
                                                                          ---------    ---------

        Total Liabilities and Stockholders' Equity                        $ 156,098    $ 157,259
                                                                          =========    =========

</TABLE>

(1)Included are shares held by the Bank's RSP totaling  11,840 at both September
     30, 2003 and March 31, 2003.

See accompanying notes to consolidated financial statements.

                                        1

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                        Consolidated Statements of Income

         For the Three and Six Months Ended September 30, 2003 and 2002

              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                        Three Months Ended             Six Months Ended
                                                             September 30,              September 30,
                                                          2003           2002          2003           2002
                                                      -----------    -----------   -----------    -----------
                                                             (unaudited)                   (unaudited)
<S>                                                 <C>            <C>           <C>            <C>
Interest income:
     Loans receivable                                 $       519    $       768   $     1,112    $     1,552
     Mortgage-backed securities                               990          1,112         2,035          2,226
     Investment securities                                    131            193           236            438
     Other                                                     21             36            49             66
                                                      -----------    -----------   -----------    -----------
            Total interest income                           1,661          2,109         3,432          4,282

Interest expense:
     Deposits                                                 527            701         1,104          1,411
     Federal Home Loan Bank advances                          671            671         1,334          1,334
                                                      -----------    -----------   -----------    -----------
            Total interest expense                          1,198          1,372         2,438          2,745
                                                      -----------    -----------   -----------    -----------

            Net interest income                               463            737           994          1,537

Provision for loan losses                                       -              -             -              -
                                                      -----------    -----------   -----------    -----------
            Net interest income after
              provision for loan losses                       463            737           994          1,537

Other income:
     Fees and service charges                                  13             12            24             28
     Other                                                    492             33           531             68
                                                      -----------    -----------   -----------    -----------
            Total other income                                505             45           555             96

Other expenses:
     Compensation and employee benefits                       508            534           997          1,070
     Premises and occupancy costs                              44             43            88             92
     Federal insurance premiums                                 4              3             7              7
     Other operating expenses                                  83             74           198            150
                                                      -----------    -----------   -----------    -----------
            Total other expenses                              639            654         1,290          1,319
                                                      -----------    -----------   -----------    -----------

               Income before income taxes                     329            128           259            314

(Benefit from) Provision for income taxes                     (25)            30           (45)           101
                                                      -----------    -----------   -----------    -----------
            Net income                                        354             98           304            213

Other comprehensive income:
       Unrealized gain on securities available-for-
          sale, net of tax                                      -              -             -              -
                                                      -----------    -----------   -----------    -----------
               Total comprehensive income             $       354    $        98   $       304    $       213
                                                      ===========    ===========   ===========    ===========


Basic earnings per share                              $       .11    $       .03   $       .10    $       .07
Diluted earnings per share                            $       .11    $       .03   $       .09    $       .07

Weighted average shares outstanding - Basic             3,153,344      3,140,633     3,153,344      3,140,004
Weighted average shares outstanding - Diluted           3,227,437      3,212,631     3,226,338      3,212,585
</TABLE>

See accompanying notes to consolidated financial statements.

                                        2

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES

                 Consolidated Statement of Stockholders' Equity

             For the Six Months Ended September 30, 2003 (unaudited)

              (Dollar amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                             Additional
                                  Common      Paid-in    Treasury    Retained
                                   Stock      Capital       Stock    Earnings    Total
                                   -----      -------       -----    --------    -----

<S>                               <C>        <C>       <C>          <C>      <C>
Balance at March 31, 2003           $345       $9,777    $(2,149)     $15,504  $23,477

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

Net income                             -            -          -          304      304
                                    --------------------------------------------------

Balance at September 30, 2003       $345       $9,777    $(2,149)     $15,494  $23,467
                                    ==================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                        3

<PAGE>

                     SKIBO FINANCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
              For the Six Months Ended September 30, 2003 and 2002
                          (Dollar amounts in thousands)
<TABLE>
<CAPTION>
                                                                                     2003        2002
                                                                                   --------    --------
                                                                                        (Unaudited)
<S>                                                                              <C>         <C>
Operating activities:
     Net income                                                                    $    304    $    213
     Adjustments to reconcile net income to net cash
       (used in) provided by operating activities:
        Depreciation                                                                     21          26
        Compensation expense - RSP                                                        -           4
        Net accretion of premiums and discounts                                         (54)        (97)
        Decrease in accrued interest receivable                                          46          86
        Increase in prepaid expenses                                                    (84)       (212)
        Increase in accrued interest payable                                            270         268
        (Decrease) increase in accrued income taxes                                    (136)         84
        Other, net                                                                       49         526
                                                                                   --------    --------
           Net cash provided by operating activities                                    416         898
                                                                                   --------    --------

Investing activities:
Purchases of premises and equipment                                                      (2)         (2)
Purchases of investment securities held-to maturity                                  (7,665)       (715)
Purchases of mortgage-backed securities held-to-maturity                            (20,892)    (21,919)
Proceeds from maturities/calls and principal repayments of:
     Investment securities held-to-maturity                                           3,355       5,887
     Mortgage-backed securities held-to-maturity                                     20,129      13,145
Loans purchased                                                                      (7,103)     (4,259)
Acquisition of interest in Real Estate Owned                                             28           -
Net principal repayments on loans                                                    11,408       4,940
Increase in Federal Home Loan Bank stock                                                (47)        (35)
                                                                                   --------    --------
           Net cash used in investing activities                                       (789)     (2,958)
                                                                                   --------    --------

Financing activities:
Net (decrease) increase in deposits                                                  (1,292)      1,514
Net decrease in mortgage escrow                                                         (65)       (113)
Treasury stock purchased                                                                  -         (10)
Cash dividends paid                                                                    (314)       (845)
                                                                                   --------    --------
           Net cash (used in) provided by financing activities                       (1,671)        546
                                                                                   --------    --------

Net decrease in cash and cash equivalents                                            (2,044)     (1,514)
Cash and cash equivalents, beginning of period                                        4,628       4,577
                                                                                   --------    --------
Cash and cash equivalents, end of period                                           $  2,584    $  3,063
                                                                                   ========    ========

Supplemental  disclosures of cash flow information:
     Cash paid during the period for:
        Interest                                                                   $  2,168    $  2,477
                                                                                   ========    ========
        Income taxes                                                               $    177    $    136
                                                                                   ========    ========
</TABLE>

See accompanying notes to consolidated financial statements

                                        4

<PAGE>

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



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

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

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

The results of  operations  for the three months and six months ended  September
30, 2003 are not  necessarily  indicative  of the results to be expected for the
year  ending  March 31, 2004 or any other  period.  The  unaudited  consolidated
financial  statements and notes thereto  should be read in conjunction  with the
audited  financial  statements  and notes  thereto  for the year ended March 31,
2003.

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

On July 10, 2003,  the Board of  Directors  of the Company  declared a $0.12 per
share  regular cash  dividend and a $0.13 per share special cash dividend on the
Company's  outstanding shares of common stock, payable to stockholders of record
as of July 21, 2003. 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 30, 2003.  Under
current  regulations of the Office of Thrift Supervision (the "OTS"), any waiver
of  dividends  by the M.H.C.  will no longer  cause 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  September  30, 2003 and 2002,  the  Company's  total
comprehensive  income was $354,000 and $98,000,  respectively,  and $304,000 and
$213,000,  respectively,  for the six months ended  September 30, 2003 and 2002.
Total  comprehensive  income is comprised of net income and other  comprehensive
income.  For both three and six month periods ended September 30, 2003 and 2002,
there was no other comprehensive income.

NOTE 4 -  Earnings Per Share (EPS)
          -----------------------

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

                                        5

<PAGE>

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


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

<TABLE>
<CAPTION>
                                  Three Months Ended               Six Months Ended
                             -----------------------------   -----------------------------

                             September 30,   September 30,   September 30,   September 30,
                                 2003           2002             2003           2002
                             -------------   -------------   -------------   --------------
<S>                           <C>              <C>            <C>             <C>
Basic EPS computation:
 Numerator-Net Income             $354,000         $98,000        $304,000        $213,000
 Denominator-Wt Avg common
   shares outstanding            3,153,344       3,140,633       3,153,344       3,140,004
Basic EPS                             $.11            $.03            $.10            $.07
                                       ===              ==             ===             ===

Diluted EPS computation:
 Numerator-Net Income             $354,000         $98,000        $304,000        $213,000
 Denominator-Wt Avg
   common shares outstanding     3,153,344       3,140,633       3,153,344       3,140,004
 Dilutive Stock Options             74,093          71,998          72,994          72,581
                                    ------          ------          ------          ------
 Weighted avg common shares
    and common stock
    equivalents                  3,227,437       3,212,631       3,226,338       3,212,585
Diluted EPS                           $.11            $.03            $.09            $.07
                                       ===             ===             ===             ===
</TABLE>



NOTE 5 -  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 $156,098,000 at September 30, 2003, are reflective
of a decrease of $1,161,000 or 0.7%,  as compared to  $157,259,000  at March 31,
2003.  The decrease in total  assets was due to  decreases in loans  receivable,
cash and amounts due from depository institutions,  accrued interest receivable,
real estate owned and premises and equipment,  offset by increases in investment
securities, mortgage-backed securities, Federal Home Loan Bank stock and prepaid
expenses and other assets.

The  decrease  in the  Company's  liabilities  was due to  decreases  in savings
deposits and  advances  from  borrowers  for taxes and  insurance,  offset by an
increase in 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  $2,584,000,  a
decrease of  $2,044,000  or 44.2%,  as compared to $4,628,000 at March 31, 2003.
This decrease was due to decreased  interest-bearing  deposits maintained at the
Federal  Home Loan Bank and  non-interest  bearing  deposits  maintained  at the
Federal  Reserve  Bank  of  Cleveland,   partially  offset  by  an  increase  of
non-interest bearing deposits at a local bank and cash on hand.

Investment  Securities.  Investment  securities totaled $12,664,000 at September
30, 2003, an increase of $4,308,000 or 51.6%, as compared to $8,356,000 at March
31, 2003.  The increase was  primarily  due to purchases of $7.7 million of U.S.
Agency  securities,  REMICs and  certificates of deposits,  partially  offset by
proceeds from maturities, calls and payments totaling $3.4 million.

Mortgage-backed  Securities.  Mortgage-backed  securities totaled $96,094,000 at
September 30, 2003, an increase of $789,000 or 0.8%, as compared to  $95,305,000
at March 31, 2003. The increase was primarily due to purchases of $20.9 million,
partially offset by principal repayments and maturities totaling $20.1 million.

Loans  Receivable,  net.  Net loans  receivable  at  September  30, 2003 totaled
$35,420,000,  a decrease of $4.3 million or 10.7%, as compared to $39,672,000 at
March 31, 2003. The decrease was primarily due to principal  repayments totaling
$11.5 million,  offset by originations of $64,000 and purchases of $7.1 million.
The Company  originated  $64,000  consumer loans within its normal lending area.
The Company  purchased $3.6 million  conventional  one- to four-family  mortgage
loans and  $160,000  insured  Federal  Housing  Administration  ("FHA")  one- to
four-family  mortgage  loans within its normal  lending  area.  The Company also
purchased  $27,000  Government  National Mortgage  Association  ("GNMA") project
loans and $4.6 million United States Department of Agriculture ("USDA") mortgage
loans primarily outside its normal lending area.

Deposits.  Total deposits,  after interest  credited,  decreased $1.3 million or
1.6% to  $80,550,000  at September 30, 2003, as compared to $81,842,000 at March
31, 2003. The decrease was due to decreases in  certificates  of deposit,  Money
Market and non-interest bearing checking accounts, partially offset by increases
in passbook and interest bearing checking accounts.

                                        7

<PAGE>

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


FHLB Advances.  FHLB advances totaled $48,000,000 at both September 30, 2003 and
March 31, 2003.  The Company uses FHLB  advances as a supplement  to deposits to
fund its purchase of loans and investments.

Stockholders' Equity.  Stockholders' equity totaled $23,467,000 at September 30,
2003, as compared to  $23,477,000  at March 31, 2003. The decrease of $10,000 or
0.04% was  primarily  due to the payment of a $0.12  regular cash dividend and a
$.13  special  cash  dividend,  partially  offset by earnings for the six months
ended September 30, 2003.

Results of Operations for the Three Months Ended September 30, 2003 and 2002

Net Income.  The Company  recorded  net income of $354,000  for the three months
ended  September  30,  2003,  as compared to net income of $98,000 for the three
months ended  September 30, 2002. The $256,000 or 261.2%  increase in net income
for the three months ended  September  30, 2003 was the result of an increase in
other income and decreases in other expenses and the provision for income taxes,
partially offset by a decrease in net interest income. Changes in the components
of income and expense are discussed herein.

Net Interest  Income.  Net interest income  decreased  $274,000 or 37.2% for the
three months  ended  September  30, 2003,  as compared to the three month period
ended  September 30, 2002.  Although there was a slight  increase in the average
balance of  interest-earning  assets, the average yield earned thereon decreased
121 basis points. The average balance of interest-bearing  liabilities increased
by $1.0 million or 0.8%,  however,  the average  rate paid thereon  decreased 58
basis points.

The net  interest  rate  spread,  which is the  difference  between the yield on
average  interest-earning  assets  and  the  cost  of  average  interest-bearing
liabilities,  decreased to 0.70% for the three month period ended  September 30,
2003 from  1.33% for the three  month  period  ended  September  30,  2002.  The
decrease in the net interest  rate spread was  primarily the result of decreased
yields on the average balances of interest  earning assets,  partially offset by
decreased rates paid on the average balance of deposits.

Interest Income.  Interest income decreased  $448,000 or 21.2% to $1,661,000 for
the three month period ended  September 30, 2003, as compared to $2,109,000  for
the three month period ended September 30, 2002.

Interest on loans  receivable  decreased  $249,000 or 32.4% for the three months
ended  September 30, 2003, as compared to the three month period ended September
30, 2002.  This decrease was primarily the result of a $9.2 million  decrease in
the average  balance of loans  receivable  and a 103 basis point decrease in the
average yield earned thereon.

Interest income on  mortgage-backed  securities  decreased $122,000 or 11.0% for
the three months ended September 30, 2003, as compared to the three months ended
September 30, 2002.  Although the average balance of mortgage-backed  securities
increased  $11.3 million,  the average yield earned thereon  decreased 113 basis
points.

Interest  income on  investment  securities  decreased  $62,000 or 32.1% for the
three months  ended  September  30, 2003,  as compared to the three months ended
September 30, 2002. The decrease in interest income on investment securities was
primarily  due  to a $2.0  million  decrease  in the  average  balance  of  such
securities and a 115 basis point decrease in the average yield earned thereon.

Interest income on other interest-earning  assets decreased $15,000 or 41.7% for
the three months ended September 30, 2003, as compared to the three months ended
September  30,  2002.  Although  the average  balance of other  interest-earning
assets increased $241,000,  the average yield earned thereon decreased 114 basis
points.

The average yield on the average  balance of  interest-earning  assets was 4.45%
and  5.66%  for the three  month  periods  ended  September  30,  2003 and 2002,
respectively.

Interest Expense. Interest expense decreased $174,000 or 12.7% to $1,198,000 for
the three month period ended  September 30, 2003, as compared to $1,372,000  for
the three month period ended September 30, 2002. Although the average balance of
interest-bearing  liabilities  increased  $1.0  million,  the average  rate paid
thereon decreased 58 basis points.

Interest expense on deposits  (including escrows) totaled $527,000 for the three
months  ended  September  30, 2003 as compared to $701,000  for the three months
ended September 30, 2002. The $174,000 or 24.8% decrease was primarily due

                                        8

<PAGE>

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



to a 92 basis point  decrease in the average  rate paid on  deposits,  partially
offset by a $1.0  million  increase  in the  average  balance  of  deposits  and
escrows.

Interest on FHLB  advances  totaled  $671,000 for both three month periods ended
September 30, 2003 and 2002.  The Company uses FHLB advances as a funding source
and to supplement deposits, which are the Company's primary source of funds.

Allowance for Loan Losses. Based upon management's  evaluation of the underlying
credit risk of the loan  portfolio  and the level of allowance  for loan losses,
the Company  established  no  provisions  for loan losses during the three month
periods ending September 30, 2003 and 2002.

At September 30, 2003,  the allowance for loan losses  totaled  $405,000 or 1.1%
and 125.0% of total  loans and total non-  performing  loans,  respectively,  as
compared to $425,000 or 1.1% and 904.3%,  respectively,  at March 31, 2003.  The
Company's  non-performing loans (non-accrual loans and accruing loans 90 days or
more overdue)  totaled  $325,000 and $47,000 at September 30, 2003 and March 31,
2003,  respectively,  which  represented  0.9% and 0.12% of the Company's  total
loans at September  30, 2003 and March 31,  2003,  respectively.  The  Company's
ratio of  non-performing  loans to total  assets was 0.2% and 0.03% at September
30, 2003 and March 31, 2003, respectively.

Other Income.  During the three months ended  September  30, 2003,  other income
increased  $460,000 or 1022.2%,  as compared to the three months ended September
30, 2002. In September 2003, the Company received a taxable cash distribution of
approximately  $454,000  from the  parent of  General  American  Life  Insurance
Company  ("GALIC"),  which was sold to  Metropolitan  Life Insurance  Company in
2000.  The Company  owns  various  life  insurance  policies  with  GALIC.  This
distribution  represented the Company's ownership interest in the life insurance
policies.  It is possible  that  additional  distributions  could be made in the
future,  but are not able to be estimated at this time.  This cash  distribution
was the primary  cause for the increase in other  income.  The increase was also
partially  attributable  to increases in the cash surrender  values of insurance
policies held on the participants of the Supplemental  Executive Retirement Plan
("SERP").

Other  Expenses.  Total other  expenses  decreased by $15,000 or 2.3% during the
three months  ended  September  30, 2003,  as compared to the three months ended
September 30, 2002.  The decrease was  attributable  to a decrease of $26,000 in
compensation and employee benefits expense,  offset increases of $9,000 in other
operating expense,  $1,000 in premises and occupancy costs and $1,000 in federal
insurance premiums.

Income Tax Expense.  The benefit  from income tax totaled  $25,000 for the three
months ended  September  30, 2003,  as compared to a provision for income tax of
$30,000 for the three months  ended  September  30, 2002.  The $55,000 or 183.3%
decrease  was due to an  adjustment  made to the tax  accrual to reflect  actual
taxes paid.

Results of Operations for the Six Months Ended September 30, 2003 and 2002

Net Income. The Company recorded net income of $304,000 for the six months ended
September  30,  2003,  as compared to net income of $213,000  for the six months
ended  September 30, 2002.  The $91,000 or 42.7%  increase in net income for the
six months  ended  September  30,  2003 was the result of an  increase  in other
income and  decreases in other  expenses  and the  provision  for income  taxes,
partially offset by a decrease in net interest income. Changes in the components
of income and expense are discussed herein.

Net Interest Income. Net interest income decreased $543,000 or 35.3% for the six
months  ended  September  30,  2003,  as compared to the six month  period ended
September  30, 2002.  Although the average  balance of  interest-earning  assets
increased $1.4 million or 1.0%,  the average yield earned thereon  decreased 119
basis points. The average balance of interest-bearing  liabilities  increased by
$2.2 million or 1.7%, however,  the average rate paid thereon decreased 55 basis
points.

The net interest  rate spread  decreased to 0.78% for the six month period ended
September 30, 2003 from 1.42% for the six month period ended September 30, 2002.
The  decrease  in the net  interest  rate  spread  was  primarily  the result of
decreased yields on the average  balances of interest earning assets,  partially
offset by  decreased  rates  paid on the  average  balance  of  interest-bearing
liabilities.

                                        9

<PAGE>

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

Interest Income.  Interest income decreased  $850,000 or 19.9% to $3,432,000 for
the six month period ended September 30, 2003, as compared to $4,282,000 for the
six month period ended September 30, 2002.


Interest  on loans  receivable  decreased  $440,000  or 28.4% for the six months
ended  September 30, 2003,  as compared to the six month period ended  September
30, 2002.  This decrease was primarily the result of a $7.6 million  decrease in
the average  balance of loans  receivable  and a 96 basis point  decrease in the
average yield earned thereon.

Interest income on mortgage-backed securities decreased $191,000 or 8.6% for the
six months  ended  September  30,  2003,  as  compared  to the six months  ended
September 30, 2002.  Although the average balance of mortgage-backed  securities
increased  $12.7 million,  the average yield earned thereon  decreased 112 basis
points.

Interest income on investment securities decreased $202,000 or 46.1% for the six
months ended  September 30, 2003, as compared to the six months ended  September
30, 2002. The decrease in interest income on investment securities was primarily
due to a $5.0 million  decrease in the average  balance of such securities and a
117 basis point decrease in the average yield earned thereon.

Interest income on other interest-earning  assets decreased $17,000 or 25.8% for
the six months ended  September  30,  2003,  as compared to the six months ended
September 30, 2002. The decrease was primarily due to a 109 basis point decrease
in the average yield earned on those assets,  partially offset by a $1.3 million
increase in their average balance.

The average yield on the average  balance of  interest-earning  assets was 4.58%
and  5.77%  for the six  month  periods  ended  September  30,  2003  and  2002,
respectively.

Interest Expense. Interest expense decreased $307,000 or 11.2% to $2,438,000 for
the six months ended  September 30, 2003, as compared to $2,745,000  for the six
months  ended  September  30, 2002.  Although  the average  balance of interest-
bearing  liabilities  increased  $2.2  million,  the average  rate paid  thereon
decreased 55 basis points.

Interest expense on deposits  (including escrows) totaled $1,104,000 for the six
months ended  September 30, 2003,  as compared to $1,411,000  for the six months
ended September 30, 2002. The $307,000 or 21.8% decrease was primarily due to an
86 basis point  decrease in the average rate paid on deposits,  offset by a $2.2
million increase in the average balance of deposits and escrows.

Interest on FHLB advances  totaled  $1,334,000  for both six month periods ended
September 30, 2003 and 2002.

Provision for Loan Losses. Based upon management's  evaluation of the underlying
credit risk of the loan  portfolio  and the level of allowance  for loan losses,
the Company  established  no  provisions  for loan  losses  during the six month
periods ending September 30, 2003 and 2002.

Other  Income.  During the six months ended  September  30,  2003,  other income
increased  $459,000 or 478.1%, as compared to the six months ended September 30,
2002. In September  2003, the Company  received a taxable cash  distribution  of
approximately  $454,000  from the  parent of  General  American  Life  Insurance
Company  ("GALIC"),  which was sold to  Metropolitan  Life Insurance  Company in
2000.  The Company  owns  various  life  insurance  policies  with  GALIC.  This
distribution  represented the Company's ownership interest in the life insurance
policies.  It is possible  that  additional  distributions  could be made in the
future,  but are not able to be estimated at this time.  This cash  distribution
was the primary  cause for the increase in other  income.  The increase was also
partially  attributable  to increases in the cash surrender  values of insurance
policies held on the participants of the Supplemental  Executive Retirement Plan
("SERP").

Other Expenses. Total other expenses decreased by $29,000 or 2.2% during the six
months ended  September 30, 2003, as compared to the six months ended  September
30, 2002.  The decrease  was  attributable  primarily to decreases of $73,000 in
compensation and employee  benefits expense and $4,000 in premises and occupancy
costs,  offset by an  increase  of $48,000 in other  expenses.  The  decrease in
compensation  and employee  benefits  expense was due to decreases of $56,000 in
compensation and employee  benefits  expense,  $13,000 in the Company's  defined
benefit plan and SERP costs,  and $4,000 in RSP expense due to the completion of
the RSP awards on April 16, 2002.  The increase in other  expense was  primarily
due to an $85,000  increase in legal expense,  partially  offset by decreases of
$14,000 in professional services expense and $3,000 in stationary,  printing and
office supplies.

                                       10

<PAGE>

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

Income Tax  Expense.  The benefit  from  income tax totaled  $45,000 for the six
months ended  September  30, 2003,  as compared to a provision for income tax of
$101,000 for the six months  ended  September  30, 2002.  The $146,000 or 144.6%
decrease  was due to an  adjustment  to the tax accrual to reflect  actual taxes
paid.



Regulatory Capital Requirements

The Bank is subject to federal  regulations  that impose certain minimum capital
requirements. Quantitative measures, established by regulation to ensure capital
adequacy,  require the Bank to maintain  amounts and ratios of tangible and core
capital  to  adjusted  total  assets  and  of  total   risk-basked   capital  to
risk-weighted assets. On September 30, 2003, the Bank was in compliance with its
three regulatory capital requirements as follows:


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

Tangible capital.........................   $23,400           14.98%
Tangible capital requirement.............     2,343            1.50
                                            -------           -----
Excess over requirement..................   $21,057           13.48%
                                            =======           =====

Core capital.............................   $23,400           14.98%
Core capital requirement.................     4,685            3.00
                                            -------           -----
Excess over requirement..................   $18,715           11.98%
                                            =======           =====

Risk based capital.......................   $23,805           63.34%
Risk based capital requirement...........     3,006            8.00
                                            -------           -----
Excess over requirement..................   $20,799           55.34%
                                            =======           =====

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>

                             CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures

Based on their evaluation as of a date within 90 days of the filing date of this
Quarterly Report on Form 10-QSB,  the Registrant's  principal  executive officer
and principal financial officer have concluded that the Registrant's  disclosure
controls and procedures (as defined in Rules  13a-14(c) and 15d-14(c)  under the
Securities  Exchange Act of 1934 (the  "Exchange  Act")) are effective to ensure
that  information  required to be  disclosed  by the Company in reports  that it
files or submits under the Exchange Act is recorded,  processed,  summarized and
reported within the time periods specified in Securities and Exchange Commission
rules and forms.

Changes in Internal Controls

There were no significant  changes in the Registrant's  internal  controls or in
other factors that could  significantly  affect these controls subsequent to the
date of their  evaluation,  including  any  corrective  actions  with  regard to
significant deficiencies and material weaknesses.

                                       12

<PAGE>

                           PART II - OTHER INFORMATION


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

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

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

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

               Not applicable.

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

               Not applicable.

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

               Not applicable.

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

               Not applicable.

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

               a)   Not applicable.

               a)   On  September  12,  2003,  the  Company  filed a Form 8-K to
                    announce that on September  11, 2003 a merger  agreement had
                    been entered into with Northwest  Bancorp,  Inc. under which
                    Northwest Bancorp,  MHC would acquire Skibo Bancshares,  MHC
                    and First Carnegie Deposit.

                                       13

<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: October 31, 2003
                                      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.


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

Date: October 31, 2003                    Date: October 31, 2003