<PAGE>

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

                                    FORM 10-Q
(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

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

                         Commission File Number 1-14671



                             WORONOCO BANCORP, INC.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


 Delaware                                                            04-3444269
-------------------------------------------------------------------------------
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                             Identification No.)


31 Court Street, Westfield, Massachusetts                                 01085
-------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)


                                 (413) 568-9141
-------------------------------------------------------------------------------
                (Issuer's telephone number, including area code)


                                 Not Applicable
-------------------------------------------------------------------------------
         (Former name, former address and former fiscal year, if changes
                               since last report)


         Indicate by check mark whether the registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during 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

         The issuer had 4,733,018 shares of common stock, par value $0.01 per
share, outstanding as of August 4, 2000.
<PAGE>

                             WORONOCO BANCORP, INC.
                                    FORM 10-Q

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                           Page
PART I.  FINANCIAL INFORMATION                                                                             ----
<S>     <C>                                                                                               <C>
Item 1.    Financial Statements (unaudited)

           Consolidated Balance Sheets at
           June 30, 2000 and December 31, 1999............................................................    1

           Consolidated Statements of Operations for the Three
           and Six Months Ended June 30, 2000 and 1999..................................................      2

           Consolidated Statements of Changes in Stockholders' Equity
           for the Six Months Ended June 30, 2000 and 1999...............................................     3

           Consolidated Statements of Cash Flows for the
           Six Months Ended June 30, 2000 and 1999......................................................      4

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


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

Item 3.    Quantitative and Qualitative Disclosures About Market Risk...................................      25

PART II:   OTHER INFORMATION

Item 1.    Legal Proceedings..............................................................................    26
Item 2.    Changes in Securities and Use of Proceeds.....................................................     26
Item 3.    Defaults Upon Senior Securities................................................................    26
Item 4.    Submission of Matters to a Vote of Security Holders............................................    26
Item 5.    Other Information .............................................................................    27
Item 6.    Exhibits and Reports on Form 8-K..............................................................     27

SIGNATURES................................................................................................    28

</TABLE>
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements (unaudited)

                     WORONOCO BANCORP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars In Thousands)

<TABLE>
<CAPTION>
                                                                                            Unaudited
                                                                                             June 30,            December 31,
Assets                                                                                         2000                  1999
                                                                                        -------------------    ------------------
<S>                                                                                                <C>                   <C>
Cash and due from banks                                                                            $10,942               $13,569
Interest-bearing balances                                                                            3,970                 2,616
                                                                                        -------------------    ------------------
         Total cash and cash equivalents                                                            14,912                16,185

Securities available for sale, at fair value                                                       181,873               149,957
Federal Home Loan Bank stock, at cost                                                               10,850                 7,542
Loans, net of allowance for loan losses ($2,347 at
   June 30, 2000 and $2,309 at December 31, 1999)                                                  357,789               307,407
Other real estate owned, net                                                                            96                   883
Banking premises and equipment, net                                                                  8,589                 8,859
Accrued interest receivable                                                                          2,796                 2,263
Net deferred tax asset                                                                               5,007                 4,922
Cash surrender value of life insurance                                                               2,157                 2,075
Other assets                                                                                         1,287                   855
                                                                                        -------------------    ------------------
         Total assets                                                                             $585,356              $500,948
                                                                                        ===================    ==================
Liabilities and Stockholders' Equity

Deposits                                                                                          $311,548              $263,196
Federal Home Loan Bank advances                                                                    198,930               152,147
Repurchase agreements                                                                                   53                   170
Mortgagors' escrow accounts                                                                            783                   883
Accrued expenses and other liabilities                                                               2,009                 3,657
                                                                                        -------------------    ------------------
         Total liabilities                                                                         513,323               420,053
                                                                                        -------------------    ------------------
Commitments and contingencies

Stockholders' Equity:
    Preferred stock ($.01 par value; 2,000,000 shares
      authorized; no shares issued and outstanding)                                                      -                     -
    Common stock ($.01 par value; 16,000,000 shares authorized;
      shares issued: 5,998,860 at June 30, 2000 and December 31,
      1999; shares outstanding: 4,812,018 at June 30, 2000 and
      5,822,360 at December 31, 1999)                                                                   60                    60
    Additional paid-in capital                                                                      57,880                57,874
    Unearned compensation                                                                           (6,176)               (6,604)
    Retained earnings                                                                               36,765                35,230
    Accumulated other comprehensive loss - net unrealized
      loss on securities available-for-sale, net of tax effects                                     (4,366)               (3,875)
    Treasury stock, at cost (1,186,842 shares at June 30, 2000
      and 176,500 shares at December 31, 1999)                                                     (12,130)               (1,790)
                                                                                        -------------------    ------------------
         Total stockholders' equity                                                                 72,033                80,895
                                                                                        -------------------    ------------------
         Total liabilities and stockholders' equity                                               $585,356              $500,948
                                                                                        ===================    ==================
</TABLE>

See accompanying notes to unaudited consolidated financial statements

                                       3
<PAGE>

                 WORONOCO BANCORP, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollars In Thousands Except Per Share Amounts)

<TABLE>
<CAPTION>

                                                                   Unaudited                              Unaudited
                                                              Three Months Ended                       Six Months Ended
                                                                    June 30,                                June 30,
                                                        ----------------------------------    -----------------------------------
                                                             2000               1999               2000                1999
                                                        ---------------    ---------------    ---------------     ---------------
Interest and dividend income:
<S>                                                    <C>                <C>               <C>                 <C>
    Interest and fees on loans                                  $6,531             $5,398            $12,492             $10,780
    Interest and dividends on investment securities:
      Interest                                                   2,406              1,310              4,584               2,798
      Dividends                                                    780                335              1,510                 619
    Interest on federal funds sold                                  24                 17                 24                 323
    Other interest income                                           89                 10                126                  24
                                                        ---------------    ---------------    ---------------     ---------------
          Total interest and dividend income                     9,830              7,070             18,736              14,544
                                                        ---------------    ---------------    ---------------     ---------------

Interest expense:
    Interest on deposits                                         2,437              2,343              4,508               4,729
    Interest on borrowings                                       3,233                839              5,753               2,186
                                                        ---------------    ---------------    ---------------     ---------------
          Total interest expense                                 5,670              3,182             10,261               6,915
                                                        ---------------    ---------------    ---------------     ---------------

Net interest income                                              4,160              3,888              8,475               7,629
Provision for loan losses                                           40                 60                 60                 120
                                                        ---------------    ---------------    ---------------     ---------------

Net interest income, after provision for loan losses             4,120              3,828              8,415               7,509
                                                        ---------------    ---------------    ---------------     ---------------
Other income:
    Fee income                                                     542                478              1,026                 920
    Insurance commissions                                          122                  -                239                   -
    Gain on sales and disposition of securities, net               321                355                639                 803
    Other income                                                    77                 66                114                  95
                                                        ---------------    ---------------    ---------------     ---------------
          Total other income                                     1,062                899              2,018               1,818
                                                        ---------------    ---------------    ---------------     ---------------
Other expenses:
    Salaries and employee benefits                               1,925              1,539              3,881               2,938
    Occupancy and equipment                                        460                430                947                 880
    Marketing                                                      236                206                382                 409
    Professional services                                          235                246                427                 391
    Data processing                                                191                190                394                 366
    Contributions                                                    6                  1                 10               4,446
    Other general and administrative                               602                498              1,255                 964
                                                        ---------------    ---------------    ---------------     ---------------
          Total other expenses                                   3,655              3,110              7,296              10,394
                                                        ---------------    ---------------    ---------------     ---------------

Income (loss) before income tax expense (benefit)                1,527              1,617              3,137              (1,067)

Income tax expense (benefit)                                       528                609              1,093                (427)
                                                        ---------------    ---------------    ---------------     ---------------

          Net income (loss)                                       $999             $1,008             $2,044               ($640)
                                                        ===============    ===============    ===============     ===============
Earnings per share:
     Basic                                                       $0.22              $0.18              $0.42                  NA
     Diluted                                                     $0.22              $0.18              $0.41                  NA

Weighted average shares outstanding:
     Basic                                                   4,568,297          5,519,062          4,923,695                  NA
     Diluted                                                 4,597,900          5,519,062          4,936,317                  NA

</TABLE>


See accompanying notes to unaudited consolidated financial statements

                                       4
<PAGE>

                     WORONOCO BANCORP, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     Six Months Ended June 30, 2000 and 1999
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                              Accumulated
                                                                                                  Other
                                                                Additio-                        Comprehe-
                                                                  nal      Unearned              nsive
                                                     Common     Paid-in     Compen-  Retained    (Loss)      Treasury
                                                     Stock      Capital     sation   Earnings    Income       Stock       Total
                                                    --------   ----------  --------- --------  -----------  ---------- ----------

<S>                                                <C>      <C>         <C>       <C>        <C>          <C>         <C>
Balance at December 31, 1999                          $ 60     $57,874     (6,604)   $35,230    $ (3,875)    $ (1,790)   $80,895
                                                                                                                        ---------
Comprehensive income:
Net income                                               -           -          -      2,044           -            -      2,044
Change in net unrealized loss on securities
   available for sale, net of reclassification
   adjustment and tax effects                            -           -          -          -        (491)           -       (491)
                                                                                                                        ---------
           Total comprehensive income                                                                                      1,553
                                                                                                                        ---------

Decrease in unearned compensation                        -           6        428          -           -            -        434

Cash dividends declared                                  -           -          -       (509)          -            -       (509)

Treasury stock purchased                                 -           -          -          -           -      (10,340)   (10,340)
                                                    -------    --------    -------   --------   ---------   ----------  ---------

Balance at June 30, 2000                              $ 60     $57,880     (6,176)   $36,765    $ (4,366)   $ (12,130)   $72,033
                                                    =======    ========    =======   ========   =========   ==========  =========

Balance at December 31, 1998                           $ -         $ -        $ -    $34,060     $ 1,713          $ -    $35,773
                                                                                                                        ---------

Comprehensive income (loss):
Net loss                                                 -           -          -       (640)          -            -       (640)
Change in net unrealized gain on securities
   available for sale, net of reclassification
   adjustment and tax effects                            -           -          -          -      (1,689)           -     (1,689)
                                                                                                                        ---------
           Total comprehensive loss                                                                                       (2,329)
                                                                                                                        ---------
Issuance of common stock in connection with
   Bank's conversion from mutual to stock-
   owned savings bank                                   60      57,891     (4,609)         -           -            -     53,342

Decrease in unearned compensation                        -           -        136          -           -            -        136
                                                    -------    --------    -------   --------   ---------   ----------  ---------

Balance at June 30, 1999                              $ 60     $57,891     (4,473)   $33,420        $ 24          $ -    $86,922
                                                    =======    ========    =======   ========   =========   ==========  =========
</TABLE>

See accompanying notes to unaudited consolidated financial statements

                                       5
<PAGE>

                      WORONOCO BANCORP, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (In Thousands)
<TABLE>
<CAPTION>
                                                                                         Unaudited
                                                                                  Six Months Ended June 30,
                                                                                   2000              1999
                                                                               ------------      ------------
Cash flows from operating activities:
<S>                                                                           <C>               <C>
    Net income (loss)                                                               $2,044             ($640)
    Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
          Provision for loan losses                                                     60               120
          Charitable contribution in the form of equity securities                       -             4,444
          Net (accretion) amortization of investments                                  (35)               36
          Depreciation and amortization                                                448               351
          Employee stock ownership plan expense                                        202               136
          Stock-based incentive plan expense                                           232                 -
          Deferred tax benefit                                                           -            (1,511)
          Gain on sales and disposition of securities, net                            (639)             (803)
          Gain on sale of other real estate owned                                       (5)                -
          Amortization of goodwill                                                      39                 -
          Changes in operating assets and liabilities:
               Accrued interest receivable                                            (533)             (243)
               Accrued expenses and other liabilities                               (1,648)           (1,162)
               Other, net                                                              234               596
                                                                               ------------      ------------
                          Net cash provided by operating activities                    399             1,324
                                                                               ------------      ------------
Cash flows from investing activities:
    Proceeds from sales of securities available for sale                             4,072             6,200
    Purchases of securities available for sale                                     (41,620)          (18,252)
    Proceeds from maturities of securities available for sale                            -               433
    Principal payments on mortgage-backed investments                                5,743             7,009
    Purchases of Federal Home Loan Bank stock                                       (3,308)              (85)
    Loans originated/purchased, net of loan payments received                      (50,503)           (9,702)
    Purchases of banking premises and equipment                                       (178)             (971)
    Proceeds from sales of foreclosed real estate                                      853                81
    Payment to purchase A.J. Agan Insurance Agency, Inc.                              (800)                -
    Loan to fund employee stock ownership plan                                           -            (4,609)
                                                                               ------------      ------------
                          Net cash used in investing activities                    (85,741)          (19,896)
                                                                               ------------      ------------

Cash flows from financing activities:
    Net increase in deposits                                                        48,352             2,339
    Net increase (decrease) in Federal Home Loan Bank Advances                      46,783           (36,163)
    Net (decrease) increase in repurchase agreements                                  (117)               54
    Net (decrease) increase in mortgagors' escrow accounts                            (100)               12
    Net proceeds from initial public offering                                            -            53,507
    Cash dividends paid                                                               (509)                -
    Treasury stock purchased                                                       (10,340)                -
                                                                               ------------      ------------
                          Net cash provided by financing activities                 84,069            19,749
                                                                               ------------      ------------

Net (decrease) increase in cash and cash equivalents                                (1,273)            1,177

Cash and cash equivalents at beginning of period                                    16,185            11,978

                                                                               ------------      ------------
Cash and cash equivalents at end of period                                         $14,912           $13,155
                                                                               ============      ============
Supplemental cash flow information:
    Interest paid on deposits                                                       $4,559            $4,732
    Interest paid on borrowings                                                      5,641             2,279
    Income taxes paid                                                                1,040             1,094
    Transfer from loans to other real estate owned                                      61                51
</TABLE>


See accompanying notes to unaudited consolidated financial statements

                                       6
<PAGE>

                     WORONOCO BANCORP, INC. AND SUBSIDIARIES
              Notes to Unaudited Consolidated Financial Statements
                                  June 30, 2000
                 (Dollars in thousands except per share amounts)

1.  Consolidated Financial Statements
The Consolidated Financial Statements of Woronoco Bancorp, Inc. and its
subsidiaries (the "Company") included herein are unaudited, and in the opinion
of management all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of the financial condition, results of
operations and cash flows, as of and for the periods covered herein, have been
made. Certain information and note disclosures normally included in the
Consolidated Financial Statements have been omitted as they are included in the
most recent Securities and Exchange Commission ("SEC") Form 10-K and
accompanying Notes to the Financial Statements (the "Form 10-K") filed by the
Company for the year ended December 31, 1999. Management believes that the
disclosures contained herein are adequate to make a fair presentation.

These unaudited consolidated financial statements should be read in conjunction
with the Form 10-K.

The results for the three and six month interim periods covered hereby are not
necessarily indicative of the operating results for a full year.

2.  New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which as amended by SFAS 137, is effective
for all fiscal years beginning after June 15, 2000. This Statement establishes
accounting and reporting standards for derivative instruments and hedging
activities, including certain derivative instruments embedded in other
contracts, and requires that an entity recognize those items as assets or
liabilities in the balance sheet and measure them at fair value. If certain
conditions are met, an entity may elect to designate a derivative as follows:
(a) a hedge of the exposure to changes in the fair market value of a recognized
asset or liability, or of an unrecognized firm commitment that is attributable
to a particular risk, (b) a hedge of the exposure to variable cash flows of a
forecasted transaction, or (c) a hedge of the foreign currency exposure of an
unrecognized firm commitment, an available-for-sale security, a foreign currency
denominated forecasted transaction, or a net investment in a foreign operation.
The Statement generally provides for matching the timing of the recognition of
the gain or loss on derivatives designated as hedging instruments with the
recognition of the changes in the fair value of the item being hedged. Depending
on the type of hedge, such recognition will be in either net income or other
comprehensive income. For a derivative not designated as a hedging instrument,
changes in fair value will be recognized in net income in the period of change.
Management is currently evaluating the impact of adopting this Statement on the
consolidated financial statements, but does not anticipate that it will have a
material impact.

3.  Earnings Per Share
Basic earnings per share represents net income divided by the weighted-average
number of common shares outstanding during the period. Diluted earnings per
share reflects additional common shares that would have been outstanding if
potential dilutive shares, such as stock options or restricted stock, had been
issued. However, options will have a dilutive effect only when the average
market price of the common stock exceeds the exercise price of the options.
Earnings per share data is not presented in these financial statements for the
six months ended June 30, 1999 since shares of common stock were not issued
until March 19, 1999.

                                       7
<PAGE>

The following table sets forth the calculation of basic and diluted earnings per
share for the periods indicated (dollars in thousands except per share amounts).

<TABLE>
<CAPTION>
                                                          Unaudited                            Unaudited
                                                   Three Months Ended June 30,         Six Months Ended June 30,
                                                       2000            1999              2000              1999
                                                  -------------   -------------     -------------     -------------
<S>                                               <C>           <C>               <C>                <C>
Net income                                                $999          $1,008            $2,044                NA

Weighted average shares outstanding:
     Weighted average shares outstanding             5,998,860       5,998,860         5,998,860                NA
     Less: unearned ESOP shares                       (429,808)       (479,798)         (434,862)               NA
     Less: treasury shares                          (1,000,755)              -          (640,303)               NA
                                                  -------------   -------------     -------------
         Basic                                       4,568,297       5,519,062         4,923,695                NA

               Effect of dilutive stock options         29,603               -            12,622                NA

                                                  -------------   -------------     -------------
         Diluted                                     4,597,900       5,519,062         4,936,317                NA
                                                  =============   =============     =============

Net income per share:
     Basic                                               $0.22           $0.18             $0.42                NA
     Diluted                                             $0.22           $0.18             $0.41                NA
</TABLE>

4.  Dividends
On July 20, 2000, the Company declared a cash dividend of $0.06 per share
payable on August 24, 2000 to shareholders of record as of the close of business
on August 4, 2000.

5.  Loan commitments
Outstanding commitments for all loans totaled $15.1 million at June 30, 2000
compared to $7.7 million at December 31, 1999.

                                       8
<PAGE>

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

The following analysis discusses changes in the financial condition and results
of operations at and for the three and six months ended June 30, 2000 and 1999,
and should be read in conjunction with the Company's Unaudited Consolidated
Financial Statements and the notes thereto, appearing in Part I, Item 1 of this
document.

Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of the Company, are
generally identified by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project," or similar expressions. The Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors which could have a material adverse effect on the
operations of the Company include, but are not limited to: changes in interest
rates, general economic conditions, legislative/regulatory changes, monetary and
fiscal policies of the U.S. Government, including policies of the U.S. Treasury
and the Federal Reserve Board, the quality or composition of the loan or
investment portfolios, demand for loan products, deposit flows, competition,
demand for financial services in the Company's market area and accounting
principles and guidelines. These risks and uncertainties should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. Examples of these assumptions may be found in the discussion of
Allowance for Loan Losses, Provision for Loan Losses, Liquidity and Regulatory
Capital.

The Company does not undertake - and specifically disclaims any obligation - to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.

                                       9
<PAGE>

Comparison of Financial Condition at June 30, 2000 and December 31, 1999

Total assets increased $84.5 million, or 16.8%, to $585.4 million at June 30,
2000, from $500.9 million at December 31, 1999 primarily reflecting increases in
securities available for sale and loans. Asset growth was funded primarily by
increases in deposits and Federal Home Loan Bank advances. Stock repurchases
totaling $10.3 million, offset by net income of $2.0 million, contributed to a
net decrease in stockholders' equity of $8.9 million to $72.0 million at June
30, 2000 from $80.9 million at December 31, 1999.

Investments
At June 30, 2000, the Company's securities portfolio totaled $181.9 million, or
31.1% of assets, all of which was categorized as available-for-sale. The
following table sets forth information regarding the amortized cost and market
values of the Company's investment securities.

<TABLE>
<CAPTION>
                                                               June 30, 2000                         December 31, 1999
                                                    ------------------------------------  ---------------------------------------
                                                        Amortized            Fair           Amortized              Fair
                                                          Cost               Value            Cost                 Value
                                                    ------------------  ----------------  ---------------   ---------------------
                                                                               (Dollars In Thousands)
Equity securities:
<S>                                                <C>                <C>                <C>                 <C>
    Preferred stock                                           $ 4,540            $ 4,110          $ 4,358                $ 3,924
    Common stock                                               15,677             14,173           14,270                 13,683
    Trust preferred                                            19,444             17,865           13,353                 12,345
                                                    ------------------  ----------------- ----------------   --------------------
       Total equity securities                                 39,661             36,148           31,981                 29,952
                                                    ------------------  ----------------- ----------------   --------------------
Mortgage-backed and mortgage-related securities:
    Freddie Mac                                                22,544             22,141           23,502                 23,081
    Fannie Mae                                                 81,599             80,913           54,001                 52,916
    Ginnie Mae                                                 38,287             35,960           39,912                 37,049
    REMICS                                                      6,496              6,711            6,712                  6,959
                                                    ------------------  ----------------- ----------------   --------------------
       Total mortgage-backed securities                       148,926            145,725          124,127                120,005
                                                    ------------------  ----------------- ----------------   --------------------
          Total securities (1)                              $ 188,587          $ 181,873        $ 156,108              $ 149,957
                                                    ==================  ================= ================   ====================
</TABLE>
1) Does not include $10.9 million and $7.5 million of FHLB-Boston stock held at
June 30, 2000 and December 31, 1999, respectively.

Securities available for sale increased $31.9 million, or 21.3%, primarily due
to purchases of $30.5 million of mortgage-backed securities, mainly from Fannie
Mae, and $6.1 million of trust preferred securities.

                                       10
<PAGE>

Lending Activities
At June 30, 2000, the Company's gross loan portfolio was $364.1 million, or
62.2%, of total assets. The following table sets forth the composition of the
Company's loan portfolio in dollar amounts and as a percentage of the respective
portfolio.

<TABLE>
<CAPTION>
                                                         June 30, 2000                       December 31, 1999
                                               -----------------------------------   ----------------------------------
                                                                      Percent                              Percent
                                                   Amount            of Total            Amount            of Total
                                               ----------------   ----------------   ----------------   ---------------
                                                                          (Dollars In Thousands)
Real estate loans
<S>                                           <C>                  <C>              <C>                 <C>
    One- to four-family                               $199,738             54.86%           $170,808            54.83%
    Multi-family                                        32,687              8.98%             26,104             8.38%
    Commercial                                          27,611              7.58%             23,796             7.64%
    Construction and development                         4,973              1.37%              2,873             0.92%
                                               ----------------   ----------------   ----------------   ---------------
          Total real estate loans                      265,009             72.79%            223,581            71.77%
                                               ----------------   ----------------   ----------------   ---------------
Consumer loans
    Home equity loans                                   78,849             21.66%             69,821            22.41%
    Automobile                                          11,159              3.06%              9,653             3.10%
    Other                                                3,635              1.00%              3,551             1.14%
                                               ----------------   ----------------   ----------------   ---------------
          Total consumer loans                          93,643             25.72%             83,025            26.65%
                                               ----------------   ----------------   ----------------   ---------------

Commercial loans                                         5,439              1.49%              4,907             1.58%
                                               ----------------   ----------------    ----------------   ---------------

          Total loans                                  364,091            100.00%            311,513           100.00%
                                                                  ================                      ===============
Less:
    Unadvanced loan funds (1)                           (4,670)                               (2,350)
    Deferred loan origination costs                        715                                   553
    Allowance for loan losses                           (2,347)                               (2,309)
                                               ----------------                      ----------------

          Net loans                                  $ 357,789                             $ 307,407
                                               ================                      ================
</TABLE>

(1)  Includes committed but unadvanced loan amounts.

Total gross loans rose $52.6 million, or 16.9%, during the six months ended
June 30, 2000. Loan growth was strong across several categories, with increases
of 16.9% in one- to four-family residential real estate loans, 25.2% in multi-
family real estate loans, 16.0% in commercial real estate loans and 12.9% in
home equity loans. The increase in one- to four-family residential real estate
loans is primarily due to loan purchases and, to a lesser extent, loan
originations, partially offset by prepayments and amortization of the existing
portfolio. Solid origination volume, partially offset by prepayments and
amortization of the existing portfolio, was mainly responsible for the increases
in multi-family real estate, commercial real estate and home equity loans.

                                       11
<PAGE>

Non-performing Assets
The following table sets forth information regarding nonaccrual loans, real
estate owned and restructured loans.

<TABLE>
<CAPTION>
                                                                     June 30,          December 31,
                                                                       2000                1999
                                                                  ----------------   ----------------
                                                                         (Dollars in Thousands)
Nonaccruing loans:
    Real estate:
<S>                                                              <C>                <C>
       One- to four- family                                                  $ 53               $ 49
       Commercial                                                              12                 12
    Home equity loans and lines of credit                                      67                114
                                                                  ----------------   ----------------
       Total                                                                  132                175
Other real estate owned, net (1)                                               96                879
Other repossessed assets                                                        -                  4
                                                                  ----------------   ----------------
    Total non-performing assets                                               228              1,058
Troubled debt restructurings                                                    -                  -
Troubled debt restructurings and
                                                                  ----------------   ----------------
    total non-performing assets                                             $ 228            $ 1,058
                                                                  ================   ================
Total non-performing loans and
    troubled debt restructurings as a
    percentage of total loans (2) (3)                                       0.04%              0.06%
Total non-performing assets and
    troubled debt restructurings as a
    percentage of total assets (3)                                          0.04%              0.21%
</TABLE>

(1)  Other real estate owned balances are shown net of related allowances.

(2)  Total loans includes loans, less unadvanced loan funds, plus net deferred
     loan costs.

(3)  Non-performing assets consist of nonperforming loans and other real estate
     owned, net. Nonperforming loans consist of nonaccruing loans and all loans
     90 days or more past due and other loans which have been identified by the
     Company as presenting uncertainty with respect to the collectibility of
     interest or principal.

The reduction in other real estate owned from December 31, 1999 primarily
reflects the sale of an office/retail building with a book value of $738,000 for
$737,000 in the first quarter of 2000.

                                       12
<PAGE>

Allowance for Loan Losses

The following table sets forth activity in the allowance for loan losses for the
periods set forth in the table.

<TABLE>
<CAPTION>

                                                                           At or for the Six Months
                                                                                 Ended June 30,
                                                                      ------------------------------------
                                                                          2000                  1999
                                                                      --------------        --------------
                                                                            (Dollars in Thousands)

<S>                                                                  <C>                   <C>
Allowance for loan losses, beginning of period                               $2,309                $2,166

Charged-off loans:
    Real estate                                                                   -                     7
    Consumer                                                                     56                    23
                                                                      --------------        --------------
       Total charged-off loans                                                   56                    30
                                                                      --------------        --------------

Recoveries on loans previously charged-off:
    Real estate                                                                  14                     9
    Consumer                                                                     20                    16
                                                                      --------------        --------------
       Total recoveries                                                          34                    25
                                                                      --------------        --------------
Net loans charged off                                                            22                     5
Provision for loan losses                                                        60                   120
                                                                      --------------        --------------
Allowance for loan losses, end of period                                     $2,347                $2,281
                                                                      ==============        ==============
Net loans charged-off to average
    interest-earning loans                                                    0.01%                     -
Allowance for loan losses to total loans (1)                                  0.65%                 0.77%
Allowance for loan losses to non-performing
    loans and troubled debt restructurings (2)                             1778.03%               247.40%
Net loans charged-off to allowance for loan losses                            1.87%                 0.44%
Recoveries to charge-offs                                                    60.71%                83.33%
</TABLE>

(1)  Total loans includes loans, less unadvanced loan funds, plus deferred loan
     costs (fees), net.
(2)  Nonperforming loans consist of nonaccruing loans and all loans 90 days or
     more past due and other loans which have been identified by the Company as
     presenting uncertainty with respect ot the collectibility of interest or
     principal.

                                       13
<PAGE>

Deposits
The following table sets forth the distribution of deposit accounts for the
periods indicated.

<TABLE>
<CAPTION>
                                                         June 30, 2000                  December 31, 1999
                                                  -----------------------------    -----------------------------
                                                                    Percent                          Percent
                                                                    of Total                         of Total
                                                     Balance        Deposits          Balance        Deposits
                                                  --------------  -------------    --------------  -------------
                                                                      (Dollars In Thousands)
<S>                                              <C>              <C>             <C>              <C>
Demand deposits                                         $14,008          4.50%           $11,975          4.55%
Savings                                                  66,755         21.43%            67,169         25.52%
Money market                                             26,752          8.59%            30,321         11.52%
NOW                                                      45,811         14.70%            35,076         13.33%
Brokered deposits                                        30,000          9.63%                 -              -
Certificates of deposit                                 128,222         41.15%           118,655         45.08%
                                                  --------------  -------------    --------------  -------------
    Total deposits                                    $ 311,548        100.00%         $ 263,196        100.00%
                                                  ==============  =============    ==============  =============
</TABLE>

Core deposits, excluding brokered deposits and certificates of deposit,
increased $8.8 million, or 6.1%, to $153.3 million at June 30, 2000 from $144.5
million at December 31, 1999 primarily due to growth in total number of deposit
accounts, and to a lesser extent, the introduction of a new interest checking
product, the Premium Investment Account. The growth in number of accounts was
mainly due to the active promotion of demand and NOW products as well as new
customers gained as a result of ongoing consolidation in the banking industry.
During the six months ended June 30, 2000, the introduction of the Premium
Investment Account resulted in approximately $2.5 million in new deposits.

The Company acquired $30.0 million of brokered certificates of deposit during
the six months ended June 30, 2000. The Company from time to time utilizes
brokered deposits as an alternate source of funding and to reduce dependence on
FHLB Advances when such funds have a competitive interest rate. These brokered
deposits have maturities of five and ten years and are callable, at the option
of the Company, beginning after one year.

                                       14
<PAGE>

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

General
The Company reported net income of $1.0 million or $0.22 per diluted share for
the quarter ended June 30, 2000 compared to $1.0 million or $0.18 per diluted
share for the same period last year. Results for the second quarter of 2000
included nonrecurring severance expenses totaling $113,000 associated with a
restructuring of certain management positions completed in the second quarter of
2000. Excluding the severance expenses and the related tax benefit of $40,000,
operating income would have been $1.1 million or $0.23 per diluted share.

Analysis of Net Interest Income
Net interest income represents the difference between income on interest-earning
assets and expense on interest-bearing liabilities. Net interest income depends
on the relative amounts of interest-earning assets and interest-bearing
liabilities and the interest rate earned or paid on them.

The following table sets forth, for the periods indicated, average balances,
interest income and expense, and yields earned or rates paid on the major
categories of assets and liabilities. The average yields and costs are derived
by dividing income or expense by the average balance of interest-earning assets
or interest-bearing liabilities, respectively, for the periods shown. The yields
and costs are annualized. Average balances are derived from average daily
balances. The yields and costs include fees which are considered adjustments to
yields. Loan interest and yield data does not include any accrued interest from
nonaccruing loans.

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                                          For the Three Months Ended June 30,
                                                        ------------------------------------------------------------------------
                                                                       2000                                  1999
                                                        ----------------------------------    ----------------------------------
                                                                                  Average                               Average
                                                         Average                  Yield/       Average                  Yield/
                                                         Balance      Interest     Rate        Balance     Interest      Rate
                                                        -----------  ----------  ---------    ----------- ----------  ----------
                                                                                  (Dollars in Thousands)
Interest-earning assets: (1)
    Investments:
<S>                                                   <C>           <C>          <C>         <C>         <C>           <C>
       Mortgage-backed securities                        $ 135,974     $ 2,406      7.08%       $ 82,329    $ 1,310       6.36%
       Equity securities                                    36,882         630      6.83%         23,695        245       4.14%
    FHLB stock                                              10,337         150      5.80%          5,733         90       6.28%
    Loans: (2)
       Residential real estate loans                       219,058       4,017      7.34%        186,766      3,382       7.24%
       Commercial real estate loans                         29,676         610      8.22%         23,494        531       9.04%
       Consumer loans                                       90,534       1,795      7.97%         75,737      1,390       7.36%
       Commercial loans                                      5,269         109      8.18%          5,154         95       7.29%
                                                        -----------  ----------               ----------- ----------
         Loans, net                                        344,537       6,531      7.59%        291,151      5,398       7.42%
    Other                                                    8,561         113      5.22%          3,109         27       3.44%
                                                        -----------  ----------               ----------- ----------
         Total interest-earning assets                     536,291       9,830      7.34%        406,017      7,070       6.97%
                                                                     ----------                           ----------

Noninterest-earning assets                                  33,801                                27,089
                                                        -----------                           -----------

         Total assets                                    $ 570,092                             $ 433,106
                                                        ===========                           ===========

Interest-bearing liabilities:
    Deposits:
       Money market accounts                              $ 27,811       $ 213      3.08%       $ 28,487      $ 217       3.06%
       Savings accounts (3)                                 68,496         339      1.99%         69,452        350       2.02%
       NOW accounts                                         42,121         119      1.14%         33,711         88       1.05%
       Certificates of deposit                             136,696       1,766      5.20%        134,343      1,688       5.04%
                                                        -----------  ----------               ----------- ----------
         Total interest-bearing deposits                   275,124       2,437      3.56%        265,993      2,343       3.53%
    Borrowings                                             203,913       3,233      6.27%         68,115        839       4.87%
                                                        -----------  ----------               ----------- ----------

         Total interest-bearing liabilities                479,037       5,670      4.72%        334,108      3,182       3.81%
                                                                     ----------  ---------                ----------  ----------

    Demand deposits                                         12,784                                 8,278
    Other noninterest-bearing liabilities                    4,017                                 3,114
                                                        -----------                           -----------

         Total liabilities                                 495,838                               345,500
    Total stockholders' equity                              74,254                                87,606
                                                        -----------                           -----------

         Total liabilities and stockholders' equity      $ 570,092                             $ 433,106
                                                        ===========                           ===========

    Net interest-earning assets                           $ 57,254                              $ 71,909
                                                        ===========                           ===========
    Net interest income/interest
       rate spread (4)                                                 $ 4,160      2.62%                   $ 3,888       3.16%
                                                                     ==========  =========                ==========  ==========
    Net interest margin as a percentage
       of interest-earning assets (5)                                               3.10%                                 3.83%
                                                                                 =========                            ==========
    Ratio of interest earning assets
       to interest-bearing liabilities                                            111.95%                               121.52%
                                                                                 =========                            ==========
</TABLE>

(1)  Includes related assets available-for-sale and unamortized discounts and
     premiums.
(2)  Amount is net of deferred loan origination fees, unadvanced loan funds,
     allowance for loan losses and includes nonaccrual loans. The Company
     records interest income on nonaccruing loans on a cash basis.
(3)  Savings accounts include mortgagors' escrow deposits.
(4)  Net interest rate spread represents the difference between the weighted
     average yield on interest-earning assets and the weighted average cost of
     interest-bearing liabilities.
(5)  Net interest margin represents net interest income divided by average
     interest-earning assets.

                                       16
<PAGE>

The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and interest expense
during the periods indicated. Information is provided in each category with
respect to: (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate); (ii) changes attributable to changes in rate (changes
in rate multiplied by prior volume); and (iii) the net change. The changes
attributable to the combined impact of volume and rate have been allocated
proportionately to the changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
                                                                 Three Months Ended June 30,
                                                                    2000 compared to 1999
                                                     -----------------------------------------------------
                                                            Increase (Decrease)
                                                                  Due to
                                                     -----------------------------------------------------
                                                         Volume              Rate                Net
                                                     ---------------    ---------------     --------------
                                                                     (Dollars in Thousands)
Interest-earning assets:
<S>                                                           <C>                <C>              <C>
      Mortgage-backed securities                              $ 935              $ 161            $ 1,096
      Equity securities                                         177                208                385
      FHLB stock                                                 66                 (6)                60
      Loans:
           Residential real estate loans                        592                 43                635
           Commercial real estate loans                         120                (41)                79
           Consumer loans                                       284                121                405
           Commercial loans                                       2                 12                 14
                                                     ---------------    ---------------     --------------
                 Total loans                                    998                135              1,133
      Other                                                      66                 20                 86
                                                     ---------------    ---------------     --------------
                 Total interest-earning assets              $ 2,242              $ 518            $ 2,760
                                                     ---------------    ---------------     --------------
Interest-bearing liabilities:
      Deposits:
           Money market accounts                               $ (7)               $ 3               $ (4)
           Savings accounts (1)                                  (6)                (5)               (11)
           NOW accounts                                          24                  7                 31
           Certificates of deposit                               28                 50                 78
                                                     ---------------    ---------------     --------------
                 Total deposits                                  39                 55                 94
      Borrowings                                              2,093                301              2,394
                                                     ---------------    ---------------     --------------
                 Total interest-bearing liabilities           2,132                356              2,488
                                                     ---------------    ---------------     --------------
Increase in net interest income                               $ 110              $ 162              $ 272
                                                     ===============    ===============     ==============
</TABLE>
(1) Includes interest on mortgagors' escrow deposits.

                                       17
<PAGE>

Net interest income totaled $4.2 million for the three months ended June 30,
2000 compared to $3.9 million for the same period in 1999. This increase in net
interest income of $272,000, or 7.0%, resulted from a significant increase in
average interest-earning assets offset by a lower net interest margin. Net
interest margin declined 73 basis points to 3.10% in the second quarter of 2000
from the same period in 1999 due to increased funding costs related to stock
repurchases, increased rates on FHLB advances and narrower spreads.

Interest and dividend income increased $2.8 million, or 39.0%, to $9.8 million
for the three months ended June 30, 2000 reflecting growth in average
interest-earning assets and a higher yield on interest-earning assets. Average
interest-earning assets totaled $536.3 million for the second quarter of 2000
compared to $406.0 million for the same period last year, an increase of $130.3
million, or 32.1%. Average investments increased $66.8 million, or 63.0%,
resulting from the use of additional borrowings to fund the purchases of
mortgage-backed and trust preferred equity securities. Average loans increased
$53.4 million, or 18.3%, primarily due to originations of residential real
estate, commercial real estate and home equity loans as well as purchases of
residential real estate loans, partially offset by amortization and prepayments
of the existing loan portfolio. The yield on interest-earning assets rose 37
basis points to 7.34% in the second quarter of 2000 mainly due to the purchase
of higher-yielding trust preferred securities, and to a lesser extent, the
higher interest rate environment which led to improved yields on new assets as
well as the repricing of existing residential real estate, consumer and
commercial loans.

Total interest expense increased $2.5 million, or 78.2%, to $5.7 million for the
three months ended June 30, 2000 resulting primarily from an increase in average
borrowings and higher rates paid on borrowings due to the higher interest rate
environment. Average borrowings grew $135.8 million reflecting management's
decision to increase its utilization of borrowings to fund asset growth and
share repurchases.

Provision for Loan Losses
The Company's provision for loan losses decreased by $20,000, or 33.3%, to
$40,000 for the second quarter of 2000 from $60,000 for the same period in 1999.
Management determined that a decrease in the provision was warranted based upon
the reserve coverage ratios, a decrease in total nonperforming loans and
troubled debt restructurings and an analysis of the adequacy of the balance in
the allowance for loan losses. At June 30, 1999, the Company's allowance for
loan losses was $2.3 million, or 0.77% of total loans, and 247.40% of
nonperforming loans and troubled debt restructurings as compared to $2.3
million, or 0.65% of total loans, and 1778.03% of nonperforming loans and
troubled debt restructurings as of June 30, 2000. Total nonperforming loans and
troubled debt restructurings decreased $790,000, or 86%, from $922,000 at June
30, 1999 compared to $132,000 at June 30, 2000.

Management of the Company assesses the adequacy of the allowance for loan losses
based on known and inherent risks in the loan portfolio and upon management's
continuing analysis of the factors underlying the quality of the loan portfolio.
While management believes that, based on information currently available, the
Company's allowance for loan losses is sufficient to cover losses inherent in
its loan portfolio at this time, no assurances can be given that the Company's
level of allowance for loan losses will be sufficient to cover loan losses
inherent in the portfolio or that future adjustments to the allowance for loan
losses will not be necessary if economic and other conditions differ
substantially from the economic and other conditions used by management to
determine the current level of the allowance for loan losses. Management may in
the future increase its level of allowance for loan losses as a percentage of
total loans and non-performing loans in the event it increases the level of
commercial real estate, multi-family, commercial, construction and development
or consumer lending as a percentage of its total loan portfolio. In addition,
various regulatory agencies, as an integral part of their examination process,
periodically review the Company's allowance for loan losses. Such agencies may
require the Company to provide additions to the allowance based upon judgments
different from management.

                                       18
<PAGE>

Other Income
Total other income increased $163,000, or 18.1%, to $1.1 million for the quarter
ended June 30, 2000 from $899,000 in the 1999 period as a result of growth in
fee income and insurance commissions, partially offset by lower gain on sales of
securities. Fee income increased $64,000, or 13.4%, for the three months ended
June 30, 2000 reflecting solid growth in core deposits. During the period from
June 30, 1999 through June 30, 2000, the Company experienced a 12% increase in
net new transaction accounts. The increase in insurance commissions was due to
the purchase of Agan Insurance Agency in January 2000.

Other Expenses
Other expenses totaled $3.7 million for the second quarter of 2000 compared to
$3.1 million for the 1999 period. Excluding the one-time severance expenses
totaling $113,000, other expenses for the three months ended June 30, 2000
increased $432,000, or 13.9%. Salaries and benefits, excluding severance
expenses, increased $273,000, or 17.7%, primarily due to expenses related to the
Company's employee stock ownership and stock-based incentive plans, additional
staff required to support the growth of the Company and costs to staff Agan
Insurance Agency. Other general and administrative expenses grew $104,000, or
20.9%, principally due to expenses associated with the Company's larger deposit
base, costs attributable to the purchase and initial operations of Agan
Insurance Agency, including goodwill amortization, increased expenditures as a
result of significant growth in customers using Woronoco Online Link, our online
banking product, and telemarketing costs related to home equity loan products.

Income Taxes
Total income tax expense decreased $81,000, or 13.3%, for the three months ended
June 30, 2000 compared to the same period in 1999 primarily reflecting lower
income before taxes and a lower effective tax rate.

                                       19
<PAGE>

Comparison of Operating Results for the Six Months Ended June 30, 2000 and 1999

General
The Company reported net income of $2.0 million or $0.41 per diluted share for
the six months ended June 30, 2000 compared to a net loss of $640,000 in 1999.
Excluding the nonrecurring severance expenses totaling $113,000 and the related
tax benefit of $40,000, operating net income was $2.1 million or $0.43 per
diluted share during the six months ended June 30, 2000. Excluding a $4.4
million contribution to establish the Woronoco Savings Charitable Foundation and
the related tax benefit of $1.5 million, operating net income was $2.3 million
for the six months ended June 30, 1999.

Analysis of Net Interest Income
Net interest income represents the difference between income on interest-earning
assets and expense on interest-bearing liabilities. Net interest income depends
on the relative amounts of interest-earning assets and interest-bearing
liabilities and the interest rate earned or paid on them.

The following table sets forth, for the periods indicated, average balances,
interest income and expense, and yields earned or rates paid on the major
categories of assets and liabilities. The average yields and costs are derived
by dividing income or expense by the average balance of interest-earning assets
or interest-bearing liabilities, respectively, for the periods shown. The yields
and costs are annualized. Average balances are derived from average daily
balances. The yields and costs include fees which are considered adjustments to
yields. Loan interest and yield data does not include any accrued interest from
nonaccruing loans.

                                       20
<PAGE>

<TABLE>
<CAPTION>
                                                                          For the Six Months Ended June 30,
                                                        -----------------------------------------------------------------------
                                                                       2000                                1999
                                                        ---------------------------------    ----------------------------------
                                                                                 Average                              Average
                                                         Average                  Yield/       Average                 Yield/
                                                         Balance     Interest      Rate        Balance   Interest       Rate
                                                        ----------  ----------  ---------    ----------  ---------   ----------
                                                                                 (Dollars in Thousands)
Interest-earning assets: (1)
    Investments:
<S>                                                   <C>           <C>        <C>         <C>          <C>         <C>
       Mortgage-backed securities                       $ 130,117     $ 4,584      7.05%      $ 84,543    $ 2,798        6.62%
       Equity securities                                   36,117       1,241      6.87%        22,860        474        4.15%
    FHLB stock                                              9,485         269      5.67%         5,719        145        5.07%
    Loans: (2)
       Residential real estate loans                      208,884       7,645      7.32%       183,946      6,744        7.33%
       Commercial real estate loans                        27,996       1,183      8.45%        23,776      1,045        8.79%
       Consumer loans                                      87,717       3,450      7.91%        76,383      2,802        7.40%
       Commercial loans                                     5,241         214      8.08%         5,051        189        7.44%
                                                        ----------  ----------               ----------  ---------
         Loans, net                                       329,838      12,492      7.58%       289,156     10,780        7.47%
    Other                                                   6,502         150      4.56%        15,851        347        4.35%
                                                        ----------  ----------               ----------  ---------
         Total interest-earning assets                    512,059      18,736      7.32%       418,129     14,544        6.97%
                                                                    ----------                           ---------

Noninterest-earning assets                                 33,215                               27,538
                                                        ----------                           ----------

         Total assets                                   $ 545,274                            $ 445,667
                                                        ==========                           ==========

Interest-bearing liabilities:
    Deposits:
       Money market accounts                             $ 28,987       $ 445      3.09%      $ 28,058      $ 425        3.05%
       Savings accounts (3)                                67,977         655      1.94%        85,014        680        1.61%
       NOW accounts                                        38,629         172      0.90%        32,412        165        1.03%
       Certificates of deposit                            128,289       3,236      5.07%       136,175      3,459        5.12%
                                                        ----------  ----------               ----------  ---------
         Total interest-bearing deposits                  263,882       4,508      3.44%       281,659      4,729        3.39%
    Borrowings                                            187,925       5,753      6.06%        86,213      2,186        5.04%
                                                        ----------  ----------               ----------  ---------

         Total interest-bearing liabilities               451,807      10,261      4.53%       367,872      6,915        3.77%
                                                                    ----------  ---------                ---------   ----------

    Demand deposits                                        12,358                                9,058
    Other noninterest-bearing liabilities                   3,862                                3,068
                                                        ----------                           ----------

         Total liabilities                                468,027                              379,998
    Total stockholders' equity                             77,247                               65,669
                                                        ----------                           ----------

         Total liabilities and stockholders' equity     $ 545,274                            $ 445,667
                                                        ==========                           ==========

    Net interest-earning assets                          $ 60,252                            $  50,257
                                                        ==========                           ==========
    Net interest income/interest
       rate spread (4)                                                $ 8,475      2.79%                  $ 7,629        3.20%
                                                                    ==========  =========                =========   ==========
    Net interest margin as a percentage
       of interest-earning assets (5)                                              3.31%                                 3.65%
                                                                                =========                            ==========
    Ratio of interest earning assets
       to interest-bearing liabilities                                           113.34%                               113.66%
                                                                                =========                            ==========
</TABLE>

(1)  Includes related assets  available-for-sale  and unamortized  discounts and
     premiums.
(2)  Amount is net of deferred loan  origination  fees,  unadvanced  loan funds,
     allowance  for loan  losses and  includes  nonaccrual  loans.  The  Company
     records interest income on nonaccruing loans on a cash basis.
(3)  Savings accounts include mortgagors' escrow deposits.
(4)  Net interest rate spread  represents  the  difference  between the weighted
     average yield on  interest-earning  assets and the weighted average cost of
     interest-bearing liabilities.
(5)  Net  interest  margin  represents  net interest  income  divided by average
     interest-earning assets.

                                       21
<PAGE>

The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and interest expense
during the periods indicated. Information is provided in each category with
respect to: (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate); (ii) changes attributable to changes in rate (changes
in rate multiplied by prior volume); and (iii) the net change. The changes
attributable to the combined impact of volume and rate have been allocated
proportionately to the changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
                                                                  Six Months Ended June 30,
                                                                    2000 compared to 1999
                                                     -----------------------------------------------------
                                                            Increase (Decrease)
                                                                  Due to
                                                     -----------------------------------------------------
                                                         Volume              Rate                Net
                                                     ---------------    ---------------     --------------
                                                                     (Dollars in Thousands)
Interest-earning assets:
<S>                                                <C>                  <C>              <C>
      Mortgage-backed securities                            $ 1,596              $ 190            $ 1,786
      Equity securities                                         360                407                767
      FHLB stock                                                105                 19                124
      Loans:
           Residential real estate loans                        913                (12)               901
           Commercial real estate loans                         176                (38)               138
           Consumer loans                                       442                206                648
           Commercial loans                                       8                 17                 25
                                                     ---------------    ---------------     --------------
                 Total loans                                  1,539                173              1,712
      Other                                                    (215)                18               (197)
                                                     ---------------    ---------------     --------------
                 Total interest-earning assets              $ 3,385              $ 807            $ 4,192
                                                     ---------------    ---------------     --------------

Interest-bearing liabilities:
      Deposits:
           Money market accounts                               $ 15                $ 5               $ 20
           Savings accounts (1)                                (150)               125                (25)
           NOW accounts                                          20                (13)                 7
           Certificates of deposit                             (191)               (32)              (223)
                                                     ---------------    ---------------     --------------
                 Total deposits                                (306)                85               (221)
      Borrowings                                              3,049                518              3,567
                                                     ---------------    ---------------     --------------
                 Total interest-bearing liabilities           2,743                603              3,346
                                                     ---------------    ---------------     --------------
Increase in net interest income                               $ 642              $ 204              $ 846
                                                     ===============    ===============     ==============
</TABLE>
(1) Includes interest on mortgagors' escrow deposits.

                                       22
<PAGE>

Net interest income totaled $8.5 million for the six months ended June 30, 2000
compared to $7.6 million for the same period in 1999. The increase of $846,000,
or 11.1%, in net interest income was primarily due to an increase in average
interest-earning assets, partially offset by a lower net interest margin. The
net interest margin fell 34 basis points to 3.31% for the six months ended June
30, 2000 mainly resulting from increased funding costs related to stock
repurchases, increased rates on FHLB advances and narrower spreads.

Interest and dividend income increased $4.2 million, or 28.8%, to $18.7 million
for the six months ended June 30, 2000 largely reflecting growth in average
interest-earning assets and, to a lesser extent, a higher yield on
interest-earning assets. Average interest-earning assets totaled $512.1 million
for the six months ended June 30, 2000 compared to $418.1 million for the same
period last year, an increase of $93.9 million, or 22.5%. Average investments
increased $58.8 million, or 54.8%, mainly due to the use of additional
borrowings to fund the purchases of mortgage-backed and trust preferred equity
securities. Average loans increased $40.7 million, or 14.1%, primarily
reflecting originations of residential real estate, commercial real estate and
home equity loans as well as purchases of residential real estate loans,
partially offset by amortization and prepayments of the existing loan portfolio.
Growth in average investments and loans was offset to some extent by a decrease
in other interest-earning assets attributable to the absence in 2000 of the
temporary savings deposits by subscribers to purchase stock associated with the
Company's initial public offering in 1999. The yield on interest-earning assets
rose 35 basis points to 7.32% for the six months ended June 30, 2000 mainly due
to the purchase of higher-yielding trust preferred securities, and to a lesser
extent, the higher interest rate environment which led to improved yields on new
assets as well as the repricing of existing consumer and commercial loans.

Total interest expense increased $3.3 million, or 48.4%, to $10.3 million for
the six months ended June 30, 2000 resulting primarily from an increase in
average borrowings and higher rates paid on borrowings as a result of the higher
interest rate environment, offset by decreased average interest-bearing
deposits. Average borrowings increased $101.7 million resulting from
management's decision to increase its utilization of borrowings to fund asset
growth and share repurchases. The reduction in average interest-bearing deposits
primarily reflects approximately $18 million of average balances held in
temporary savings deposits associated with the Company's initial public offering
in 1999 and lower certificates of deposit balances. The maturing of
previously-offered premium-rate "specials" as well as the inability to retain
other certificates of deposit due to competitive pricing pressures, contributed
to the reduction in certificates of deposits.

Provision for Loan Losses
The Company's provision for loan losses decreased by $60,000, or 50.0%, to
$60,000 for the six months ended June 30, 2000 from $120,000 for the same period
in 1999. Management determined that a decrease in the provision was warranted
based upon the reserve coverage ratios, a decrease in total nonperforming loans
and troubled debt restructurings and an analysis of the adequacy of the balance
in the allowance for loan losses.

Management of the Company assesses the adequacy of the allowance for loan losses
based on known and inherent risks in the loan portfolio and upon management's
continuing analysis of the factors underlying the quality of the loan portfolio.
While management believes that, based on information currently available, the
Company's allowance for loan losses is sufficient to cover losses inherent in
its loan portfolio at this time, no assurances can be given that the Company's
level of allowance for loan losses will be sufficient to cover loan losses
inherent in the portfolio or that future adjustments to the allowance for loan
losses will not be necessary if economic and other conditions differ
substantially from the economic and other conditions used by management to
determine the current level of the allowance for loan losses. Management may in
the future increase its level of allowance for loan losses as a percentage of
total loans and non-performing loans in the event it increases the level of
commercial real estate, multi-family, commercial, construction and development
or consumer lending as a percentage of its total loan portfolio. In addition,
various regulatory agencies, as an integral part of their

                                       23
<PAGE>

examination  process,  periodically  review  the  Company's  allowance  for loan
losses.  Such  agencies  may  require the  Company to provide  additions  to the
allowance based upon judgments different from management.

Other Income
Total other income increased $200,000, or 11.0%, to $2.0 million for the six
months ended June 30, 2000 from $1.8 million in the 1999 period as a result of
growth in fee income and insurance commissions, partially offset by lower gain
on sales of securities. Fee income increased $106,000, or 11.5%, for the six
months ended June 30, 2000 reflecting solid growth in core deposits. During the
period from June 30, 1999 through June 30, 2000, the Company experienced a 12%
increase in net new transaction accounts. The increase in insurance commissions
was due to the purchase of Agan Insurance Agency in January 2000.

Other Expenses
Other expenses totaled $7.3 million for the six months ended June 30, 2000
compared to $10.4 million for the 1999 period. Excluding severance expenses
totaling $113,000 in 2000 and the $4.4 million contribution to establish the
Woronoco Savings Charitable Foundation in 1999, other expenses for the six
months ended June 30, 2000 increased $1.2 million, or 20.7%. Salaries and
benefits, excluding the severance expenses, increased $830,000, or 28.3%,
primarily due to expenses associated with the Company's employee stock ownership
and stock-based incentive plans, additional staff required to support the growth
of the Company and expenses associated with Agan Insurance Agency. Other general
and administrative expenses rose $291,000, or 30.2%, principally due to
increased investor-related expenses, expenses associated with the Company's
larger deposit base, increased expenditures attributable to significant growth
in customers using Woronoco Online Link, our online banking product, costs
attributed to the purchase and initial operations of Agan Insurance Agency,
including goodwill amortization, telemarketing costs related to home equity loan
products and Delaware franchise taxes.

Income Taxes
Total income tax expense was $1.1 million for the six months ended June 30,
2000, compared to an income tax benefit of $427,000 in 1999. Excluding the $1.5
million tax effect related to the 1999 contribution to establish Woronoco
Savings Charitable Foundation, income tax expense would have totaled $1.1
million.


Liquidity
Liquidity and funding strategies are the responsibility of the Asset/Liability
Management Committee (the "ALCO"). The ALCO is responsible for establishing
liquidity targets and implementing strategies to meet desired goals. Liquidity
is measured by the Company's ability to raise cash within 30 days at a
reasonable cost and with a minimum of loss. The Company's primary sources of
funds are deposits, principal and interest payments on loans and investment
securities and borrowings from the FHLB-Boston. While maturities and scheduled
amortization of loans and securities are predictable sources of funds, deposit
outflows and mortgage prepayments are greatly influenced by general interest
rates, economic conditions and competition.

The primary investing activities of the Company are the origination of
residential one-to four-family mortgage loans and consumer loans, primarily home
equity loans and lines of credit, and, to a lesser extent, multi-family and
commercial real estate loans, construction and development loans, commercial
business loans and other types of consumer loans, as well as the purchase of
adjustable rate one-to four-family residential mortgage loans and the investment
in mortgage-backed and equity securities. These activities are funded primarily
by principal and interest payments on loans and investment securities, deposit
growth and the utilization of FHLB advances. During the six months ended June
30, 2000, the Company's loan originations and purchases totaled $54.4 million
and $26.3 million, respectively. At June 30, 2000, the Company's investments in
mortgage-backed and equity securities totaled $181.9 million. During the six
months ended June 30, 2000, total deposits increased

                                       24
<PAGE>

$48.4  million.  The Company  issued $30.0 million of brokered  certificates  of
deposit  during the first six  months of 2000,  which  contributed  to growth in
deposits. Deposit flows are affected by the overall level of interest rates, the
interest rates and products offered by the Company and its local competitors and
other factors.  The Company closely  monitors its liquidity  position on a daily
basis.  If the  Company  requires  funds  beyond its  ability to  generate  them
internally,  additional sources of funds are available through FHLB advances. At
June 30, 2000, the Company had $198.9 million of FHLB borrowings.

Outstanding commitments for all loans totaled $15.1 million at June 30, 2000.
Management of the Company anticipates that it will have sufficient funds
available to meet its current loan commitments. Certificates of deposit, which
are scheduled to mature in one year or less from June 30, 2000, totaled $104.7
million. The Company relies primarily on competitive rates, customer service,
and long-standing relationships with customers to retain deposits. From time to
time, the Company will also offer competitive special products to its customers
to increase retention and to attract new deposits. Based upon the Company's
experience with deposit retention and current retention strategies, management
believes that, although it is not possible to predict future terms and
conditions upon renewal, a significant portion of such deposits will remain with
the Company.

Regulatory Capital
The Company and the Bank are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the Company's consolidated financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Company and the Bank must meet specific capital guidelines that
involve quantitative measures of the Company's and the Bank's assets,
liabilities and certain off-balance-sheet items as calculated under regulatory
accounting practices. The capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings, and
other factors. Prompt corrective action provisions are not applicable to savings
and loan holding companies.

Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios (set
forth in the table below) of total and Tier I capital (as defined) to risk
weighted assets (as defined) and to average assets (as defined). As of June 30,
2000, the Company and the Bank met all capital adequacy requirements to which
they were subject.

As of June 30, 2000 and December 31, 1999, the most recent notification from the
Federal Deposit Insurance Corporation categorized the Bank as well capitalized
under the regulatory framework for prompt corrective action. To be categorized
as well capitalized, the Bank must maintain minimum total risk-based, Tier 1
risk-based and Tier 1 leverage ratios as set forth in the following table. There
are no conditions or events since that notification that management believes
have changed the Bank's category.

The Company's and Bank's actual capital amounts and ratios as of June 30, 2000
and December 31, 1999 are also presented in the table.

<TABLE>
<CAPTION>
                                                                                                                Minimum
                                                                                                               to be Well
                                                                                                            Capitalized Under
                                                                             Minimum for Capital            Prompt Corrective
                                                     Actual                   Adequacy Purposes             Action Provisions
                                         -----------------------------------------------------------    --------------------------
                                             Amount           Ratio         Amount          Ratio         Amount          Ratio
                                         ---------------    ----------    ------------    ----------    ------------    ----------

As of June 30, 2000:
--------------------

Total Capital to Risk Weighted Assets
<S>                                      <C>              <C>             <C>             <C>           <C>             <C>
    Company                                 $76,065           20.5%         $29,731          8.0%             N/A           N/A
    Bank                                    $57,953           15.7%         $29,609          8.0%         $37,012         10.0%

Tier 1 Capital to Risk Weighted Assets
    Company                                 $73,718           19.8%         $14,865          4.0%         $22,298          6.0%
    Bank                                    $55,606           15.0%         $14,805          4.0%         $22,207          6.0%

Tier 1 Capital to Average Assets
    Company                                 $73,718           12.8%         $22,987          4.0%         $28,733          5.0%
    Bank                                    $55,606            9.7%         $17,219          3.0% -       $28,698          5.0%
                                                                            $28,698          5.0%
</TABLE>
<TABLE>
<CAPTION>

As of December 31, 1999:
------------------------

Total Capital to Risk Weighted Assets
<S>                                     <C>             <C>             <C>               <C>           <C>             <C>
    Company                                 $86,046           27.0%         $25,520          8.0%              N/A          N/A
    Bank                                    $58,976           18.6%         $25,399          8.0%          $31,749        10.0%

Tier 1 Capital to Risk Weighted Assets
    Company                                 $83,737           26.2%         $12,760          4.0%          $19,140         6.0%
    Bank                                    $56,667           17.8%         $12,700          4.0%          $19,049         6.0%

Tier 1 Capital to Average Assets
    Company                                 $83,737           17.9%         $18,728          4.0%          $23,410         5.0%
    Bank                                    $56,667           12.1%         $14,003          3.0% -        $23,338         5.0%
                                                                            $23,338          5.0%
</TABLE>


The reduction in the Company's capital amounts and ratios from December 31, 1999
primarily reflects stock repurchases and growth in assets during the six months
ended June 30, 2000.

                                       25
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Information regarding quantitative and qualitative disclosure about market risk
is presented in the Securities and Exchange Commission Form 10-K filed by the
Company for the year ended December 31, 1999. Since December 31, 1999, the
Company has entered into several interest rate swap agreements with notional
values totaling $40 million. The Company utilizes interest rate swaps to manage
the risk associated with interest rate volatility. Under the terms of the swap
agreements, the Company exchanges payments based on the one month or three month
LIBOR rate for payments based on a fixed rate. The first swap, with a notional
value of $10 million, has a maturity of 13 months and is not callable. The other
swaps, with notional values of $5 million and $10 million each, have maturities
of five and ten years and are callable after one year.

                                       26
<PAGE>

                           PART II. OTHER INFORMATION

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

The Company is not involved in any pending legal proceedings other than routine
legal proceedings occurring in the ordinary course of business. Such routine
legal proceedings, in the aggregate, are believed by management to be immaterial
to the financial condition and results of operations of the Company.

Item 2.  Changes in Securities and Use of Proceeds.
         -----------------------------------------

None.

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

None.

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

         a.   An annual meeting of shareholders of the Company was held on
              April 26, 2000 (the "Annual Meeting").

         b.   Not applicable.

         c.   There were 5,698,860 shares of Common Stock of the Company
              eligible to be voted at the Annual Meeting and 4,841,152 shares
              were represented at the meeting by the holders thereof, which
              constituted a quorum. The items voted upon at the Annual Meeting
              and the vote for each proposal were as follows:

              1.  Election of directors for a three-year term

                  Director Nominees Elected
                  For Three Year Term:               For             Withheld
                  -------------------------         -----            --------

                  James A. Adams                  4,767,647           73,505
                  Francis J. Ehrhardt             4,761,139           80,013
                  Cornelius D. Mahoney            4,763,089           78,063
                  D. Jeffrey Templeton            4,763,375           77,777

              2.  The approval of certain amendments to the Woronoco Bancorp,
                  Inc. 1999 Stock-Based Incentive Plan

                     For            Against        Abstain
                  ---------        ---------      ---------

                  4,318,223         492,006        30,923

              3.  The ratification of the appointment of Wolf & Company,  P.C.
                  as independent auditors of Woronoco Bancorp, Inc. for the
                  fiscal year ending December 31, 2000.

                     For            Against        Abstain
                  ---------        ---------      ---------

                  4,747,856         17,917         75,379



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

                                       27
<PAGE>

None.

Item 6. Exhibits and Reports on Form 8-K (ss.249.308 of this Chapter).
        --------------------------------------------------------------

         (a) Exhibits

             3.1      Certificate of Incorporation of Woronoco Bancorp, Inc. (1)
             3.2      Amended Bylaws of Woronoco Bancorp, Inc. (2)
             4.0      Stock Certificate of Woronoco Bancorp, Inc. (1)
             10.1     Woronoco Bancorp, Inc. 1999 Stock-Based Incentive Plan (3)
             11.0     Statement Re:  Computation of Per Share Earnings
                      Incorporated  Herein By Reference to Part 1 - Earnings Per
                      Share
             27.0     Financial Data Schedule
         ------------------------------------
             (1)      Incorporated  by reference  into this document from the
                      Exhibits filed with the Registration Statement on
                      Form S-1, and any amendments thereto, Registration No.
                      333-67255.
             (2)      Incorporated by reference into this document from the
                      Exhibit filed with the Company's Form 10-Q on
                      May 15, 2000.
             (3)      Incorporated by reference into this document from the
                      Proxy Statement for the Company's 2000 Annual Meeting of
                      Stockholders filed on March 20, 2000.


         (b) Reports on Form 8-K

             On April 6, 2000, the Company filed an 8-K relating to the press
             release issued on April 6, 2000 which announced the completion of
             its plan to repurchase up to 10% of its outstanding shares of
             common stock. A press release announcing the stock repurchase was
             filed by exhibit.

             On April 17, 2000, the Company filed an 8-K relating to the press
             release issued on April 14, 2000 which announced its intention to
             repurchase up to 10% of its 5,128,968 outstanding shares of common
             stock. A press release announcing the stock repurchase was filed by
             exhibit.

                                       28
<PAGE>

                                   SIGNATURES

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


                                          WORONOCO BANCORP, INC.


Dated: August 14, 2000          By:  /s/ Cornelius D. Mahoney
                                     ------------------------
                                           Cornelius D. Mahoney
                                           Chairman of the Board, President and
                                           Chief Executive Officer
                                           (principal executive officer)

Dated: August 14, 2000          By:  /s/ Debra L. Murphy
                                     -------------------
                                           Debra L. Murphy
                                           Senior Vice President and
                                           Chief Financial Officer
                                           (principal financial and accounting
                                           officer)

                                       29