<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)
  X      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
-----    OF 1934


                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000

                                       OR

         TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
-----    EXCHANGE ACT OF 1934

                         Commission File No.: 000-29949
                                              ---------

                         PEOPLES COMMUNITY BANCORP, INC
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

               DELAWARE                                   31-1686242
---------------------------------------         ----------------------------
     (State or Other Jurisdiction of                   (I.R.S. Employer
     Incorporation or Organization)                  Identification Number)

    11 SOUTH BROADWAY, LEBANON, OHIO                        45036
-----------------------------------------       ----------------------------
       (Address of Principal                             (Zip Code)
         Executive Offices)

                                 (513) 932-3876
         ---------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:
                                 NOT APPLICABLE

         Securities registered under Section 12(g) of the Exchange Act:

                     COMMON STOCK (PAR VALUE $.01 PER SHARE)
              ----------------------------------------------------
                                (Title of Class)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
                                                             -----     ------

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.
                  -----

Issuer's revenues for its most recent fiscal year: $15.5 million.

As of December 15, 2000, the aggregate value of the 1,882,533 shares of Common
Stock of the Registrant issued and outstanding on such date, which excludes
95,200 shares held by all directors and executives officers of the Registrant
and the Registrant's Employee Stock Ownership Plan ("ESOP") as a group, was
approximately $28.5 million. This figure is based on the closing sales price of
$15.13 per share of the Registrant's Common Stock on December 15, 2000. Although
directors and executive officers and the ESOP were assumed to be "affiliates" of
the Registrant for purposes of this calculation, the classification is not to be
interpreted as an admission of such status.

<PAGE>

Number of shares of Common Stock outstanding as of December 15, 2000:  1,977,733
Transitional Small Business Disclosure Format:  Yes      No  X
                                                   -----   -----

                       DOCUMENTS INCORPORATED BY REFERENCE

         List hereunder the following documents incorporated by reference and
the Part of the Form 10-KSB into which the document is incorporated.

(1)      Portions of the Annual Report to Stockholders for the year ended
         September 30, 2000 are incorporated into Part II, Items 5 through 8 of
         this Form 10-KSB.

(2)      Portions of the definitive proxy statement for the 2000 Annual Meeting
         of Stockholders to be filed within 120 days of the registrants fiscal
         year end are incorporated into Part III, Items 9 through 12 of this
         Form 10-KSB.


<PAGE>


                                     PART I

ITEM 1. BUSINESS

GENERAL

         Peoples Community Bancorp, Inc. ("Peoples") was organized in December
1999 at the direction of the Board of Directors of Peoples Community Bank,
formerly, The People's Building, Loan and Savings Company (the "Bank") for the
purpose of holding all of the capital stock of the Bank and in order to
facilitate the conversion of the Bank from an Ohio-chartered mutual savings and
loan association to a federally-chartered stock savings bank (the "Conversion").
(Unless the context otherwise requires, reference to Peoples includes the Bank
and its other subsidiaries). Peoples is a unitary savings and loan holding
company whose assets consist primarily of the outstanding shares of common stock
of the Bank, investments made with the portion of the net proceeds from the
issuance of Peoples shares to the public (the "Offering") retained by Peoples
and Peoples' loan to the employee stock ownership plan (the "ESOP"). Peoples has
no significant liabilities. The management of Peoples and the Bank are
substantially identical and Peoples neither owns nor leases any property but
instead uses the premises, equipment and furniture of the Bank. The Bank is a
federally-chartered stock savings bank that was originally organized in 1889.
The Bank conducts its business from six offices in Hamilton, Warren and Clinton
Counties in Ohio. The Bank is primarily engaged in attracting deposits from the
general public and using those funds to originate loans and invest in
securities. The Bank's primary lending emphasis has been, and continues to be,
loans secured by first liens on single-family (one- to-four units) residential
properties located in Hamilton, Warren and Clinton Counties in Ohio. The Bank
also originates construction and land development loans, multi-family
residential real estate loans, commercial real estate loans, home equity loans
and other loans. At September 30, 2000, Peoples had $320.5 million in total
assets, $151.4 million in deposits and $31.7 million of stockholders' equity.

         Immediately prior to the Conversion, The Oakley Improved Building and
Loan Company, an Ohio-chartered mutual savings and loan association ("Oakley"),
merged with and into the Bank (the "Oakley merger"). No consideration was
exchanged in the Oakley merger. The Oakley merger was accounted for on a pooling
of interests basis whereby prior year amounts are restated to include the assets
and liabilities of Oakley. Simultaneously with the Conversion, Harvest Home
Financial Corporation, an Ohio corporation with its principal place of business
in Ohio ("Harvest Home Financial"), merged with and into Peoples (the "Harvest
Home merger"). In connection with the Harvest Home merger, each outstanding
share of Harvest Home Financial common stock, no par value per share, was
converted into the right to receive 0.9 of a share of Peoples Community Common
Stock and $9.00 in cash. The Harvest Home merger was accounted for using the
purchase method of accounting and as such, prior period amounts are not
restated. The Conversion, the Oakley merger and the Harvest Home merger were
interdependent transactions.




                                       2
<PAGE>


         On September 19, 2000, Peoples entered into an Agreement and Plan of
Reorganization with Market Financial Corp. Market Financial Corp. is an
Ohio-chartered bank holding company for Market Bank. Market Bank is an
Ohio-chartered savings and loan association. The Agreement and Plan of
Reorganization provides for the merger of Market Financial Corp. with and into
Peoples and Market Bank with and into the Bank. Under the terms of the
agreement, Peoples will pay $13.00 in either cash or Peoples common stock for
each of the 1,259,439 outstanding shares of common stock of Market Financial.
The merger is currently expected to be completed in the first quarter of 2001.
At September 30, 2000, Market Financial had $56.1 million in total assets, $40.3
million in deposits and $14.8 million in stockholders' equity.

         The Bank is subject to examination and comprehensive regulation by the
Office of Thrift Supervision, which is the Bank's chartering authority and
primary federal regulator. The Bank is also regulated by the Federal Deposit
Insurance Corporation (the "FDIC"), administrator of the Savings Association
Insurance Fund. The Bank is also subject to certain reserve requirements
established by the Federal Reserve Board (the "FRB") and is a member of the
Federal Home Loan Bank (the "FHLB") of Cincinnati, which is one of the 12
regional banks comprising the FHLB System.

PEOPLES LENDING ACTIVITIES

         GENERAL. At September 30, 2000, the net loan portfolio of Peoples
totaled $196.5 million, representing approximately 61.3% of total assets at that
date. The principal lending activity of Peoples is the origination of one- to
four-family (which are also known as single-family) residential loans. At
September 30, 2000, conventional first mortgage, one- to four-family residential
loans amounted to $153.6 million, or 78.1% of the net loan portfolio. To a
lesser extent, Peoples originates commercial real estate and land loans and
multi-family residential mortgage loans and residential construction loans. At
September 30, 2000, commercial real estate and land loans totaled $20.4 million,
or 10.4% of the net loan portfolio, multi-family residential mortgage loans
amounted to $9.0 million, or 4.6% of the net loan portfolio and construction
loans amounted to $27.1 million, or 13.8% of the net loan portfolio.

         The types of loans that Peoples may originate are subject to federal
and state laws and regulations. Interest rates charged on loans are affected
principally by the demand for such loans and the supply of money available for
lending purposes and the rates offered by its competitors. These factors are
affected by general and economic conditions, the monetary policy of the federal
government, including the Federal Reserve Board, legislative and tax policies,
and governmental budgetary matters.

         A savings institution generally may not make loans to one borrower and
related entities in an amount which exceeds 15% of its unimpaired capital and
surplus. However, loans in an amount equal to an additional 10% of unimpaired
capital and surplus may be made to a borrower if the loans are fully secured by
readily marketable securities. At September 30, 2000, Peoples' regulatory limit
on loans-to-one borrower was $4.0 million and its five largest loans or groups
of loans-to-one borrower, including related entities, aggregated $3.1 million,
$2.5 million, $2.4 million, $2.1 million and $1.8 million. All of Peoples' five
largest loans or groups of loans were performing in accordance with their terms
at September 30, 2000. See "Asset Quality - Classified Assets."




                                       3
<PAGE>


         LOAN PORTFOLIO COMPOSITION. The following table sets forth the
composition of Peoples' loans at the dates indicated.

<TABLE>
<CAPTION>

                                                                           SEPTEMBER 30,
                                          --------------------------------------------------------------------------------
                                                   2000                      1999                        1998
                                          ------------------------ -------------------------- ----------------------------
                                                       PERCENT OF                PERCENT OF                  PERCENT OF
                                            AMOUNT       TOTAL        AMOUNT        TOTAL       AMOUNT         TOTAL
                                           ----------  --------      ---------   ---------      ---------     ------
                                                                      (Dollars in Thousands)
<S>                                       <C>            <C>       <C>             <C>        <C>               <C>
Mortgage loans:
  Single-family residential.......          $153,627     78.1%       $87,574        92.6%       $80,191        88.6%
  Multi-family residential........             8,999      4.6          1,588         1.7          1,611         1.8
  Commercial real estate and land.            20,440     10.4          5,935         6.3          6,143         6.8
  Construction loans..............            27,056     13.8          3,473         3.7          5,217         5.8
                                           ----------  --------      ---------   ---------      ---------     ------
     Total mortgage loans.........           210,122    106.9         98,570       104.3         93,162       103.0
Other loans.......................             1,307      0.7            133         0.1            141         0.2
                                           ----------  --------      ---------   ---------      ---------     ------
     Total loans receivable.......           211,429    107.6         98,703       104.4         93,303       103.2
Less:
  Undisbursed portion of loans in            (13,546)    (6.9)        (3,337)       (3.6)        (2,214)       (2.5)
   process........................
  Allowance for loan losses.......              (762)    (0.4)          (415)       (0.4)          (235)       (0.3)
  Deferred loan fees..............              (636)    (0.3)          (400)       (0.4)          (406)       (0.4)
                                           ----------  --------      ---------   ---------      ---------     ------

Loans receivable, net.............          $196,485    100.0%       $94,551       100.0%       $90,448       100.0%
                                           ==========  ========      =========   =========      =========     ======
</TABLE>


         ORIGINATION OF LOANS. The lending activities of Peoples are subject to
the written underwriting standards and loan origination procedures established
by the Board of Directors and management. Loan originations are obtained through
a variety of sources, including referrals from real estate brokers, builders and
existing customers. Written loan applications are taken by loan officers. The
loan officers also supervise the procurement of credit reports, appraisals and
other documentation involved with a loan. Property valuations are performed by
independent outside appraisers approved by the Board of Directors of Peoples.

         Under the real estate lending policy of Peoples, a title opinion must
be obtained for each real estate loan. Peoples also requires fire and extended
coverage casualty insurance, in order to protect the properties securing its
real estate loans. Borrowers must also obtain flood insurance policies when the
property is in a flood hazard area as designated by the Department of Housing
and Urban Development. Peoples does not require borrowers to advance funds to an
escrow account for the payment of real estate taxes or hazard insurance
premiums.

         Peoples' loan approval process is intended to assess the borrower's
ability to repay the loan, the viability of the loan and the adequacy of the
value of the property that will secure the loan. The Board of Directors has
granted authority to approve loans as follows: loans up to $500,000 must be
approved by two senior executive officers; loans between $500,000 and $1.0
million must be approved by the executive committee; and loans greater than $1.0
million must be approved by the Board of Directors.





                                       4
<PAGE>


         ACTIVITY IN LOANS. The following table shows the activity in Peoples'
loans during the periods indicated.

<TABLE>
<CAPTION>
                                                                                 YEAR ENDED SEPTEMBER 30,
                                                                 ----------------------------------------------------------
                                                                        2000                1999               1998
                                                                 ------------------- ------------------- ------------------
                                                                                      (In Thousands)
<S>                                                              <C>                 <C>                 <C>
Total loans held at beginning of period..................             $ 98,703             $93,303             $91,846
Originations of loans:
  Mortgage loans:
     Single-family residential (1).......................               58,271              28,236              21,552
     Multi-family residential............................                6,362                 484                 900
     Commercial real estate and land.....................               17,255               2,514               1,914
  Other loans............................................                2,044                  50                  55
                                                                 ------------------- ------------------- ------------------
        Total originations (2)...........................               83,932              31,284              24,421
Increase due to Harvest Home Financial Corp. acquisition.               62,334               -                   -
                                                                 ------------------- ------------------- ------------------
        Total increases..................................              146,266              31,284              24,421
Loans sold...............................................                    -                   -                   -
Transfers to real estate owned...........................                (110)                   -                   -
Charge-offs..............................................                  (4)                   -                (15)
Other....................................................                  563                 121               (268)
Repayments...............................................             (33,989)            (26,005)            (22,681)
                                                                 ------------------- ------------------- ------------------
Net activity in loans....................................              112,726               5,400               1,457
                                                                 ------------------- ------------------- ------------------
Gross loans held at end of period........................             $211,429             $98,703             $93,303
                                                                 =================== =================== ==================
</TABLE>

-----------------------
(1)    Includes construction loan originations made during the fiscal year.
(2)    Undisbursed  portions  of loans in  process  totaled  $13.6  million,
       $3.3  million  and $2.2  million at September 30, 2000, 1999 and 1998,
       respectively.

         Although federal laws and regulations permit savings institutions to
originate and purchase loans secured by real estate located throughout the
United States, Peoples generally confines its lending activity to its primary
market area of Warren, Clinton and Hamilton Counties, Ohio. Subject to its
loans-to-one borrower limitation, Peoples is permitted to invest without
limitation in residential mortgage loans and up to 400% of its capital in loans
secured by non-residential or commercial real estate. Peoples may also invest in
secured and unsecured consumer loans in an amount not exceeding 35% of total
assets. This 35% limitation may be exceeded for certain types of consumer loans,
such as home equity and property improvement loans secured by residential real
property. In addition, Peoples may invest up to 10% of its total assets in
secured and unsecured loans for commercial, corporate, business or agricultural
purposes. At September 30, 2000, Peoples was well within each of the above
lending limits.

         ONE- TO FOUR-FAMILY RESIDENTIAL REAL ESTATE LOANS. The primary real
estate lending activity of Peoples is the origination of loans secured by first
mortgage liens on one- to four-family residences. At September 30, 2000, $153.6
million or 72.7% of the total loan portfolio of Peoples, before net items,
consisted of conventional first mortgage, one- to four-family residential loans
compared to $87.6 million or 88.7% at September 30, 1999.



                                       5
<PAGE>


         The loan-to-value ratio, maturity and other provisions of the loans
made by Peoples generally have reflected the policy of making less than the
maximum loan permissible under applicable regulations, in accordance with sound
lending practices, market conditions and underwriting standards established by
Peoples. Peoples' lending policies on one- to four-family residential mortgage
loans generally limit the maximum loan-to-value ratio to 80% of the lesser of
the appraised value or purchase price of the property. Residential mortgage
loans are amortized on a monthly basis with principal and interest due each
month. The loans generally include "due-on-sale" clauses.

         The residential mortgage loans originated by Peoples consist of fixed
rate and adjustable rate loans. Presently, the single-family fixed rate
residential mortgage loans originated by Peoples have terms of up to 30 years.
Previously, these loans contained a three-year demand provision which permitted
Peoples to accelerate the due date of a mortgage loan at any time at or after
three years from the date of origination (although Peoples has never utilized
this provision). In addition, Peoples originates adjustable rate mortgage loans
on which the interest rate adjusts every one or three years based upon the
one-year or three-year rate on T-bills plus a specified margin. At September 30,
2000, $150.6 million, or 98.1% of our single-family residential loans were
adjustable rate (including those fixed rate loans with a three year call
provision), and $3.0 million, or 1.9% were fixed-rate. The single-family
residential mortgage loans presently being originated by Peoples generally
conform to Fannie Mae and Freddie Mac requirements.

         COMMERCIAL REAL ESTATE AND LAND LOANS. Peoples' commercial real estate
and land loan portfolio primarily consists of loans secured by professional
offices and churches located within Peoples' primary market area. Commercial
real estate and land loans amounted to $20.4 million, or 9.7% of the total loan
portfolio at September 30, 2000, with an average loan balance of approximately
$151,000. This compares to $5.9 million, or 6.0% at September 30, 1999, with an
average loan balance of approximately $60,000.

         The commercial real estate loans of Peoples typically have a
loan-to-value ratio of 75% or less and generally have higher interest rates than
single-family residential mortgage loans. The maximum term of Peoples'
commercial real estate loans is 25 years. Otherwise, the commercial real estate
loans of Peoples have terms which are substantially similar to its single-family
residential mortgage loans, including the three-year demand provision. The land
loans of Peoples also have a loan-to-value ratio of 75% or less and are
amortized over a five-year period or over a 15-year period with a balloon
payment of the remaining principal amount due at five years from the date of
origination. Land loans generally are secured by single-family residential lots
or undeveloped land being held for residential development. Peoples expects to
increase the amount of commercial real estate loans that Peoples originates
because they generally have higher yields and shorter terms to maturity than
single-family residential mortgage loans. In addition, Peoples believes that it
can be a niche lender to small and medium sized businesses in its market area.

         Commercial real estate lending is generally considered to involve a
higher degree of risk than one- to four-family residential lending. Such lending
typically involves large loan balances concentrated in a single borrower or
groups of related borrowers for rental or business properties. In addition, the
payment experience on loans secured by income-producing properties is typically
dependent on the success of the operation of the related project and thus is
typically affected by adverse conditions in the real estate market and in the
economy. Peoples generally attempts to



                                       6
<PAGE>


mitigate the risks associated with its commercial real estate lending by, among
other things, lending primarily in its market area and using low loan-to-value
ratios in the underwriting process.

         Land development and acquisition loans involve significant additional
risks when compared with loans on existing residential properties. These loans
may involve larger loan balances to single borrowers, and the payment experience
may be dependent on the successful development of the land and the sale of the
lots. These risks can be significantly impacted by supply and demand conditions.

         MULTI-FAMILY RESIDENTIAL LOANS. Peoples also has a relatively small
amount of multi-family (over four units) residential loans. The multi-family
residential mortgage loans of Peoples are underwritten on substantially the same
basis as its commercial real estate loans, although loan-to-value ratios are
limited to 80%. At September 30, 2000, Peoples had $9.0 million in multi-family
residential mortgage loans which amounted to 4.3% of Peoples' total portfolio
compared to $1.6 million, or 1.6% at September 30, 1999.

         CONSTRUCTION LOANS. At September 30, 2000, Peoples had approximately
$27.1 million in construction loans compared to $3.5 million at September 30,
1999. The increase in construction loans during fiscal 2000, was due primarily
to increased originations of construction loans to builders and individuals and
to a lesser extent to the acquisition of Harvest Home. The construction loans of
Peoples are comprised largely of loans made to builders on a pre-sold basis, as
well as to borrowers to construct their homes. Generally, the construction loan
and the permanent mortgage loan are originated at one closing as a
construction/permanent loan. Peoples' construction loans to builders are
generally with terms not to exceed twelve months. Interest-only payments are
required during the construction period, which is typically six to twelve
months. Peoples also originates a limited amount of construction loans to local
developers to build homes on a speculative or unsold basis. Peoples generally
limits the number of unsold homes under construction to its builders. This
number is dependent on the reputation of the builder, the present exposure of
the builder, the location of the property and the financial strength of the
builder.

         Peoples also originates loans for the construction of commercial real
estate such as small office buildings and warehouses. These loans are typically
originated as construction/permanent loans with interest only payments during
the construction period and converting to a permanent loan at the end of the
construction period. The loan to value ratio is generally limited to 75% on
these loans.

         Prior to making a commitment to fund a construction loan, Peoples
requires an appraisal of the property. Peoples' also reviews and inspects each
project at the commencement of construction and prior to every disbursement of
funds during the term of the construction loan. Loan proceeds are disbursed
after inspections of the project based on a percentage of completion.

         Construction lending is generally considered to involve a higher degree
of risk of loss than long-term financing on improved, owner-occupied real estate
because of the uncertainties of construction, including the possibility of costs
exceeding the initial estimates and the need to obtain a tenant or purchaser if
the property will not be owner-occupied. Peoples generally attempts to mitigate
the risks associated with construction lending by, among other things, lending
in its market area, using conservative underwriting guidelines, and monitoring
the construction process.



                                       7
<PAGE>


         OTHER LOANS. Peoples' other loans consist of loans secured by deposit
accounts and home equity line of credit loans. At September 30, 2000, other
loans amounted to $1.3 million, or 0.6% of Peoples' total loan portfolio.

         LOAN ORIGINATION AND OTHER FEES. In addition to interest earned on
loans, Peoples receives loan origination fees or "points" for originating loans.
Loan points are a percentage of the principal amount of the mortgage loan and
are charged to the borrower in connection with the origination of the loan. In
accordance with Statement of Financial Accounting Standards No. 91, loan
origination fees and certain related direct loan origination costs are offset,
and the resulting net amount is deferred and amortized as interest income over
the contractual life of the related loans as an adjustment to the yield of such
loans. At September 30, 2000, Peoples had $636,000 of deferred loan fees
compared to $400,000 of deferred loan fees at September 30, 1999.

         CONTRACTUAL PRINCIPAL REPAYMENTS AND INTEREST RATES. The following
table sets forth scheduled contractual amortization of Peoples loans at
September 30, 2000 as well as the dollar amount of such loans which are
scheduled to mature after one year which have fixed or adjustable interest
rates. Demand loans, loans having no schedule of repayments and no stated
maturity and overdraft loans are reported as due in one year or less.


<TABLE>
<CAPTION>
                                                                   PRINCIPAL REPAYMENTS CONTRACTUALLY DUE
                                                                       IN YEAR(S) ENDED SEPTEMBER 30,
                                                      -----------------------------------------------------------------------------
                                          TOTAL AT
                                          SEPTEMBER                                          2004-     2006-     2012-     THERE-
                                          30, 2000        2001        2002       2003        2005      2011      2017      AFTER
                                         ------------------------------------------------------------------------------------------
                                                                               (In Thousands)
<S>                                     <C>            <C>         <C>         <C>        <C>        <C>        <C>        <C>
Mortgage loans:
  Single-family residential......         $153,627       $ 3,458     $ 3,738    $ 4,041    $ 9,091    $37,554   $58,908   $36,837
  Multi-family residential.......            8,999           369         399        431        970      4,008     2,822      -
  Commercial real estate and land           20,440           611         718        776      1,747      7,215     8,735       638
  Construction loans.............           27,056         5,807       6,295      6,805      8,149       -          -        -
Other loans......................            1,307         1,030         208         69        -         -          -        -
                                        -----------     ---------    --------   --------   -------    -------   --------- ----------

     Total (1)                            $211,429       $11,275     $11,358    $12,122    $19,957    $48,777   $70,465   $37,475
                                        ===========     =========    ========   ========   =======    =======   ========= ==========

</TABLE>


(1)      Of the $200.2 million of loan principal payments contractually due
         after September 30, 2001, $95.9 million have fixed rates of interest
         (including those with a call provision after three years) and $104.3
         million have adjustable rates of interest.

         Scheduled contractual maturities of loans do not necessarily reflect
the actual expected term of the loan portfolio. The average life of mortgage
loans is substantially less than their average contractual terms because of
prepayments. The average life of mortgage loans tends to increase when current
mortgage loan rates are higher than rates on existing mortgage loans and,
conversely, decrease when rates on current mortgage loans are lower than
existing mortgage loan rates (due to refinancing of adjustable-rate and
fixed-rate loans at lower rates). Under the latter circumstance, the
weighted-average yield on loans decreases as higher yielding loans are repaid or
refinanced at lower rates.




                                       8
<PAGE>


ASSET QUALITY

         GENERAL. Peoples mails delinquent notices to borrowers when a borrower
fails to make a required payment within 15 days of the date due. Additional
notices begin when a loan becomes 30 days past due. If a loan becomes 60 days
past due, Peoples refers it to an attorney to commence foreclosure. In most
cases, deficiencies are cured promptly. While Peoples generally prefers to work
with borrowers to resolve such problems, Peoples will institute foreclosure or
other collection proceedings when necessary to minimize any potential loss.

         Loans are placed on non-accrual status when management believes the
probability of collection of interest is insufficient to warrant further
accrual. When a loan is placed on non-accrual status, previously accrued but
unpaid interest is deducted from interest income. As a matter of policy, Peoples
generally discontinues the accrual of interest income when the loan becomes 90
days past due as to principal or interest.

         Real estate acquired by Peoples as a result of foreclosure or by
deed-in-lieu of foreclosure are classified as real estate owned until sold.
Peoples had $110,000 in real estate owned at September 30, 2000, and none at
September 30, 1999 or 1998.

         DELINQUENT LOANS. The following table sets forth information concerning
delinquent mortgage loans at the dates indicated, in dollar amounts and as a
percentage of each category of Peoples' loan portfolio. The amounts presented
represent the total outstanding principal balances of the related loans, rather
than the actual payment amounts which are past due.


<TABLE>
<CAPTION>
                                                                            AT SEPTEMBER 30,
                                            ----------------------------------------------------------------------------------
                                                       2000                        1999                       1998
                                            ----------------------------------------------------------------------------------
                                                    60-89 DAYS                  60-89 DAYS                 60-89 DAYS
                                                    DELINQUENT                  DELINQUENT                 DELINQUENT
                                            ----------------------------------------------------------------------------------
                                                           PERCENT OF                  PERCENT OF                 PERCENT OF
                                                              LOAN                        LOAN                       LOAN
                                               AMOUNT       CATEGORY       AMOUNT       CATEGORY      AMOUNT       CATEGORY
                                               ------      ----------      ------       --------      ------       --------
                                                                         (Dollars in Thousands)
<S>                                           <C>       <C>           <C>            <C>         <C>           <C>
Mortgage loans:
     Single-family................             $1,486         1.06%        $1,112        1.32%        $1,044         1.22%
     Multi-family.................                124         1.38%             -         -  %             -          -  %
     Commercial real estate and land             -             -  %           111         .54%           126         2.05%
                                              -------                      ------                     ------
     Total........................             $1,610          .81%        $1,223        1.28%        $1,170         1.28%
                                              =======                      ======                     ======

</TABLE>



                                       9
<PAGE>


         NON-PERFORMING  ASSETS.  The following table sets forth information
with respect to non-performing  assets identified by Peoples,  including
non-accrual  loans, loans more than 90 days past due and still accruing
interest and other real estate owned.

<TABLE>
<CAPTION>
                                                                                     AT SEPTEMBER 30,
                                                                     -----------------------------------------------
                                                                          2000            1999             1998
                                                                          ----            ----             ----
                                                                                  (Dollars in Thousands)
<S>                                                                      <C>               <C>              <C>
Loans past due 90 days or more and still accruing:
  Single-family residential............................                  $ -              $  223            $147
  Commercial real estate and land......................                    -                 166             -
                                                                     -----------        ----------       ----------
     Total.............................................                    -                 389             147
Non-accrual loans:
  Single-family residential............................                    1,062             690             557
  Multi-family residential.............................                      194           -                 -
  Commercial real estate and land......................                    -               -                 -
  Construction loans...................................                    -               -                 -
  Other loans..........................................                    -               -                 -
                                                                     -----------        ----------       ----------
     Total non-accruing loans..........................                    1,256             690             557
                                                                     -----------        ----------       ----------
  Total non-performing loans...........................                    1,256           1,079             704
Other real estate owned, net...........................                      110           -                 -
                                                                     -----------        ----------       ----------
  Total non-performing assets..........................                   $1,366          $1,079            $704
                                                                     ===========        ==========       ==========
Non-performing assets to total assets..................                     0.43%           1.01%           0.66%
Non-performing loans to total loans....................                     0.65%           1.09%           0.75%
</TABLE>


         If the $1.3 million of non-accruing and nonperforming loans of Peoples
had been current in accordance with their terms during fiscal 2000, the gross
income on such loans would have been approximately $47,000. A total of
approximately $29,000 of interest income was actually recorded by Peoples on
such loans in the fiscal year ended September 30, 2000.

         CLASSIFIED ASSETS. Federal regulations require that each insured
savings institution classify its assets on a regular basis. In addition, in
connection with examinations of insured institutions, federal examiners have
authority to identify problem assets and, if appropriate, classify them. There
are three classifications for problem assets: "substandard," "doubtful" and
"loss." Substandard assets have one or more defined weaknesses and are
characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected. Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that the
weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a higher
possibility of loss. An asset classified loss is considered uncollectible and of
such little value that continuance as an asset of the institution is not
warranted. Another category designated "special mention" also must be
established and maintained for assets which do not currently expose an insured
institution to a sufficient degree of risk to warrant classification as
substandard, doubtful or loss. Assets classified as substandard or doubtful
require the institution to establish general allowances for loan losses. If an
asset or portion thereof is classified loss, the insured institution must either
establish specific allowances for loan losses in the amount of 100% of the
portion of the asset classified loss, or charge-off such amount. General loss
allowances established to cover possible losses related to assets classified
substandard or doubtful may be included in determining an institution's
regulatory capital, while specific valuation allowances for loan losses do not
qualify as regulatory capital. Federal examiners may disagree with an insured
institution's classifications and amounts reserved.



                                       10
<PAGE>


         Peoples' total classified assets at September 30, 2000 (excluding loss
assets specifically reserved for) amounted to $3.0 million, of which $1.7
million and $1.3 million were classified as substandard and special mention,
respectively. The largest classified asset at September 30, 2000 consisted of a
$194,000 residential loan. The remaining $2.8 million of classified assets at
September 30, 2000 consisted of approximately $2.7 million of residential real
estate loans and $160,000 of commercial real estate and lot loans.

         ALLOWANCE FOR LOAN LOSSES. At September 30, 2000, Peoples' allowance
for loan losses amounted to $762,000 or .36% of the total loan portfolio. The
loan portfolio of Peoples consists primarily of residential mortgage loans. Due
to the predominance of residential mortgage loans, Peoples does not allocate its
respective allowance for loan losses to particular types of loans. The
allocation of the loan loss reserve based on portfolio percentages at September
30, 2000 was as follows:

<TABLE>
<CAPTION>

                                                                                  BALANCE             PERCENT
                                                                              ---------------     -------------
<S>                                                                                 <C>                <C>
  Residential real estate..............................................             $688,000           90.3%
  Non-residential real estate..........................................               74,000            9.7
                                                                              ---------------     -------------
                                                                                    $762,000           100.0%
                                                                              ===============     =============
</TABLE>

         The loan loss allowance is maintained by management at a level
considered adequate to cover estimated losses inherent in the existing portfolio
based on prior loan loss experience, known and probable risks in the portfolio,
adverse situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral, general economic conditions, and
other factors and estimates which are subject to change over time. Peoples
increased its allowance for loan losses in fiscal 2000 by recording a $156,000
provision for losses on loans due to an increase in the volume of loans, as well
as an increase in commercial real estate and land loans and construction loans
which are generally considered to involve a higher degree of risk than
residential lending. Such increase in the provision for losses on loans by
Peoples in fiscal 2000 was also due to the $177,000 increase in total
non-performing loans during the year. The allowance for loan losses was further
increased by $195,000 as a result of the acquisition of Harvest Home Financial
Corporation. Peoples intends to continue to increase its allowance for loan
losses as its loan portfolio increases and the composition of the portfolio
changes. While management believes that it determines the size of the allowance
based on the best information available at the time, the allowance will need to
be adjusted as circumstances change and assumptions are updated. Future
adjustments to the allowance could significantly affect net earnings.



                                       11
<PAGE>

         The following table sets forth the activity in Peoples' allowance for
loan losses during the periods indicated.

<TABLE>
<CAPTION>

                                                                                      YEAR ENDED SEPTEMBER 30,
                                                                           ------------------------------------------------
                                                                                 2000             1999           1998
                                                                                 ----             ----           ----
                                                                                       (Dollars in Thousands)
<S>                                                                               <C>               <C>              <C>
Allowance at beginning of period...................................               $415              $240             $207
Increase due to Harvest Home Financial Corp. acquisition...........                195             -                -
Provisions.........................................................                156               175               48
  Charge-offs:
     Single-family residential.....................................                  4             -                   15
     Multi-family residential......................................              -                 -                -
     Commercial real estate and land...............................              -                 -                -
     Construction..................................................              -                 -                -
     Other loans...................................................              -                 -                -
                                                                             -----------      ------------     -----------
        Total charge-offs..........................................                  4             -                   15
Recoveries:
     Single-family residential.....................................              -                 -                -
     Multi-family residential......................................              -                 -                -
     Commercial real estate and land...............................              -                 -                -
     Construction..................................................              -                 -                -
     Other loans...................................................              -                 -                -
                                                                             -----------      ------------     -----------
       Total recoveries............................................              -                 -                -
Net loans charged-off to allowance for losses on loans.............                 (4)            -                  (15)
                                                                             -----------      ------------     -----------
Allowance at end of period.........................................               $762              $415             $240
                                                                             ===========      ============     ===========
Allowance for loans losses to total nonperforming loans at end of period         60.67%            38.46%           34.09%
Allowance for loan losses to total loans at end of period..........               0.36%             0.42%            0.26%
</TABLE>


INVESTMENT SECURITIES

         Peoples has authority to invest in various types of securities,
including mortgage-backed securities, United States Treasury obligations,
securities of various federal agencies and of state and municipal governments,
certificates of deposit at federally-insured banks and savings institutions,
certain bankers' acceptances and federal funds. Each significant purchase of an
investment security is approved by the Board of Directors.

         At September 30, 2000, Peoples' investment securities portfolio
consisted of $94.1 million of mortgage-backed securities, $8.2 million of
investment securities and $6.9 million in stock of the Federal Home Loan Bank.

                                   12

<PAGE>



         The following table sets forth information regarding the carrying and
fair value of Peoples' securities at the dates indicated.

<TABLE>
<CAPTION>
                                                                              SEPTEMBER 30,
                                                ---------------------------------------------------------------------------
                                                         2000                      1999                     1998
                                                ------------------------ ------------------------- ------------------------
                                                 AMORTIZED       FAIR      AMORTIZED       FAIR     AMORTIZED      FAIR
                                                   COST         VALUE        COST         VALUE       COST        VALUE
                                                -----------  ----------- ------------   ----------- ----------  ------------
                                                                              (In Thousands)
<S>                                                 <C>          <C>           <C>         <C>          <C>         <C>
Available for sale:
  Mortgage-backed securities.................      $ 93,943     $ 94,050       $1,190      $1,185       $1,225      $1,220
  U.S. Government and agency obligations.....         6,169        6,166        1,301       1,300        1,796       1,805
  Federal Home Loan Mortgage Corp. stock....             48        2,045           48       1,950           48       1,940
                                                -----------  ----------- ------------   ----------- ----------  ------------
       Total.................................      $100,160     $102,261       $2,539      $4,435       $3,069      $4,965
                                                ===========  =========== ============   =========== ==========  ============
Held to maturity:
  Certificates of deposit....................      $  -         $  -           $  400      $  400       $  900      $  900
  Federal Home Loan Bank stock...............         6,852        6,852        1,021       1,021          949         949
                                                -----------  ----------- ------------   ----------- ----------  ------------
       Total.................................      $  6,852     $  6,852       $1,421      $1,421       $1,849      $1,849
                                                ===========  =========== ============   =========== ==========  ============
</TABLE>

         The following table sets forth the activity in Peoples' aggregate
securities portfolio during the periods indicated.

<TABLE>
<CAPTION>
                                                                              YEAR ENDED SEPTEMBER 30,
                                                                 ------------------------------------------------
                                                                       2000             1999             1998
                                                                       ----             ----             ----
                                                                                   (In Thousands)
<S>                                                                   <C>               <C>              <C>
Securities at beginning of period...........................         $  5,856           $6,814           $6,755
Purchases(1)................................................           66,591              566            1,068
Sales of available for sale securities......................           (2,122)           -                  (93)
Amortization of premiums and discounts......................             (552)           -                -
Repayments, prepayments and maturities......................          (14,305)          (1,527)          (1,445)
Securities acquired through acquisition - net...............           53,509            -                -
Increase in unrealized gains on available-for-sale securities             136                3              529
                                                                    ---------         ---------         --------
Securities at end of period(2)..............................         $109,113           $5,856           $6,814
                                                                    =========         =========         ========
</TABLE>

-----------

(1) Includes increases in Federal Home Loan Bank stock from purchases and
dividends.

(2) At September 30, 2000, $89.9 million or 82.4% of Peoples' securities
portfolio consisted of adjustable rate securities, as compared to no adjustable
rate securities at September 30, 1999 and 1998, respectively.

         Mortgage-backed securities represent a participation interest in a
pool of one-to four-family or multi-family mortgages. The mortgage
originators use intermediaries (generally U.S. Government agencies and
government-sponsored enterprises) to pool and repackage the participation
interests in the form of securities, with investors receiving the principal
and interest payments on the mortgages. Such U.S. Government agencies and
government-sponsored enterprises guarantee the payment of principal and
interest to investors.

                                       13
<PAGE>


         Mortgage-backed securities are typically issued with stated principal
amounts, and the securities are backed by pools of mortgages that have loans
with interest rates that are within a range and have varying maturities. The
underlying pool of mortgages, i.e., fixed-rate or adjustable-rate, as well as
prepayment risk, are passed on to the certificate holder. The life of a
mortgage-backed pass-through security approximates the life of the underlying
mortgages.

         The mortgage-backed securities of Peoples consist of Government
National Mortgage Association ("Ginnie Mae"), Federal Home Loan Mortgage
Corporation ("FHLMC") and Federal National Mortgage Association ("FNMA")
securities. Ginnie Mae is a government agency within the Department of Housing
and Urban Development which is intended to help finance government-assisted
housing programs. Ginnie Mae securities are backed by loans insured by the
Federal Housing Administration, or guaranteed by the Veterans Administration,
and the timely payment of principal and interest on Ginnie Mae securities are
guaranteed by Ginnie Mae and backed by the full faith and credit of the U.S.
Government.

         Mortgage-backed securities generally yield less than the loans which
underlie such securities because of their payment guarantees or credit
enhancements which offer nominal credit risk. In addition, mortgage-backed
securities are more liquid than individual mortgage loans and may be used to
collateralize borrowings or other obligations of Peoples.

         The following table sets forth certain information regarding the
maturities of Peoples' investment and mortgage-backed securities at September
30, 2000.


<TABLE>
<CAPTION>
                                                                     CONTRACTUALLY MATURING
                              ------------------------------------------------------------------------------------------------------
                                            WEIGHTED                 WEIGHTED                 WEIGHTED                   WEIGHTED
                                UNDER 1      AVERAGE                  AVERAGE                  AVERAGE      OVER 10       AVERAGE
                                 YEAR         YIELD     1-5 YEARS      YIELD     6-10 YEARS     YIELD        YEARS         YIELD
                              ------------ ----------- ------------ ------------ ----------- ------------ ------------- ------------
                                                                     (Dollars in Thousands)
<S>                                <C>       <C>           <C>         <C>          <C>        <C>            <C>         <C>
Mortgage-backed
   securities............        $   269      6.00%        $2,951      6.18%        $4,123      6.47%         $86,707      5.83%
U.S. Government and
   federal agency
   obligations...........          6,166      5.52          -            -           -           -              -           -
FHLMC stock..............          2,045      1.23          -            -           -           -              -           -
Federal Home Loan
   Bank stock............          6,852      1.71          -            -           -           -              -           -
                              ------------ ----------- ------------ ------------ ----------- ------------ ------------- ------------
                                 $15,332      3.27%        $2,951       6.18%       $4,123      6.47%         $86,707      5.83%
                              ============ =========== ============ ============ =========== ============ ============= ============
</TABLE>

SOURCES OF FUNDS

         GENERAL. Deposits are the primary source of Peoples' funds for lending
and other investment purposes. In addition to deposits, principal and interest
payments on loans and mortgage-backed securities are a source of funds. Loan
repayments are a relatively stable source of funds, while deposit inflows and
outflows are significantly influenced by general interest rates and money market
conditions. Borrowings may also be used on a short-term basis to compensate for
reductions in the availability of funds from other sources and on a longer-term
basis for general business purposes.

         DEPOSITS. Deposits are attracted by Peoples principally from within its
primary market area. Deposit account terms vary, with the principal differences
being the minimum balance required, the time periods the funds must remain on
deposit and the interest rate. Peoples offers traditional passbook savings
accounts, money market accounts, checking accounts and certificates of deposit.




                                       14
<PAGE>

         Peoples obtains deposits primarily from residents of southwestern Ohio.
Peoples has not solicited deposits from outside Ohio or paid fees to brokers to
solicit funds for deposit.

         Interest rates paid, maturity terms, service fees and withdrawal
penalties are established on a periodic basis. Management determines the rates
and terms based on rates paid by competitors, the need for funds or liquidity,
growth goals and federal and state regulations.

         The following table sets forth the activity in Peoples deposits during
the periods indicated.


<TABLE>
<CAPTION>
                                                                                YEAR ENDED SEPTEMBER 30,
                                                                      --------------------------------------------
                                                                          2000           1999            1998
                                                                          ----           ----            ----
                                                                                     (In Thousands)
<S>                                                                        <C>           <C>             <C>
Beginning balance.................................................        $ 91,018       $87,324        $85,435
Net increase (decrease) before interest credited..................          54,384         1,416           (464)
Interest credited.................................................           5,951         2,278          2,353
                                                                      ------------   -----------    -----------
Net increase in deposits..........................................          60,335         3,694          1,889
                                                                      ------------   -----------    -----------
Ending balance....................................................        $151,353       $91,018        $87,324
                                                                      ============   ===========    ===========
</TABLE>

         The following table sets forth by various interest rate categories the
certificates of deposit with Peoples at the dates indicated.

<TABLE>
<CAPTION>
                                                                                    SEPTEMBER 30,
                                                                  --------------------------------------------------
                                                                       2000             1999             1998
                                                                       ----             ----             ----
                                                                                   (In Thousands)
<C>      <C>                                                          <C>                <C>             <C>
0.00% to 2.99%...............................................         $  -             $   198           $ -
3.00% to 3.99%...............................................            -               -                 -
4.00% to 4.99%...............................................            4,300          20,958             2,973
5.00% to 6.99%...............................................           93,195          44,330            48,759
7.00% to 8.99%...............................................            9,561             768            10,703
                                                                  ---------------- ---------------- ----------------
     Total...................................................         $107,056         $66,254           $62,435
                                                                  ================ ================ ================
</TABLE>


         The following table sets forth the amount and remaining maturities of
Peoples certificates of deposit at September 30, 2000.


<TABLE>
<CAPTION>

                                                            OVER SIX        OVER ONE       OVER TWO
                                                             MONTHS            YEAR         YEARS
                                            SIX MONTHS     THROUGH ONE     THROUGH TWO     THROUGH      OVER THREE
                                             AND LESS         YEAR            YEARS      THREE YEARS      YEARS
                                           -----------   ------------     -----------    ----------    ------------
                                                                        (In Thousands)
<S>                                       <C>            <C>              <C>           <C>              <C>
4.00% to 4.99%........................         $ 1,954        $ 1,379         $   619        $  320          $   28
5.00% to 6.99%........................          34,319         31,838          12,136         6,571           8,331
7.00% to 8.99%........................           -              1,752           7,420         -                 389
                                           -----------   ------------     -----------    ----------    ------------
    Total.............................         $36,273        $34,969         $20,175        $6,891          $8,748
                                           ===========   ============     ===========    ==========    ============
</TABLE>




                                       15
<PAGE>



         As of September 30, 2000, the aggregate amount of outstanding time
certificates of deposit at Peoples in amounts greater than or equal to $100,000,
was approximately $27.1 million. The following table presents the maturity of
these time certificates of deposit at such dates.

<TABLE>
<CAPTION>

                                                                                SEPTEMBER 30, 2000
                                                                              ----------------------
                                                                                  (In Thousands)
<C>                                                                           <C>
3 months or less.....................................................                        $   224
Over 3 months through 6 months.......................................                          4,533
Over 6 months through 12 months......................................                          8,791
Over 12 months.......................................................                         13,584
                                                                                            --------
                                                                                             $27,132
                                                                                            ========
</TABLE>

         The following table sets forth the dollar amount of deposits in various
types of deposits offered by Peoples at the dates indicated.


<TABLE>
<CAPTION>
                                                                          AT SEPTEMBER 30,
                                        --------------------------------------------------------------------------------------
                                                   2000                          1999                         1998
                                        ---------------------------- ----------------------------- ---------------------------
                                           AMOUNT       PERCENTAGE      AMOUNT       PERCENTAGE      AMOUNT      PERCENTAGE
                                        -------------- ------------- -------------- -------------- ------------ --------------
                                                                       (Dollars in Thousands)
<S>                                     <C>            <C>            <C>           <C>            <C>          <C>
Passbook and NOW accounts...........       $ 19,787      13.07%          $ 5,408        5.94%          $ 6,462       7.40%
Certificates of deposit.............        107,056      70.73            66,254       72.79            62,435      71.50
Money market accounts...............         24,510      16.20            19,356       21.27            18,427      21.10
                                        -------------- ------------- -------------- -------------- ------------ --------------
    Total...........................       $151,353     100.00%          $91,018      100.00%          $87,324     100.00%
                                        ============== ============= ============== ============== ============ ==============
</TABLE>

         Peoples attempts to control the flow of deposits by pricing its
accounts to remain generally competitive with other financial institutions in
its market area.

         BORROWINGS. Peoples may obtain advances from the Federal Home Loan Bank
of Cincinnati upon the security of the common stock Peoples owns in that bank
and certain of its residential mortgage loans and mortgage-backed securities,
provided certain standards related to creditworthiness have been met. These
advances are made pursuant to several credit programs, each of which has its own
interest rate and range of maturities. Federal Home Loan Bank advances are
generally available to meet seasonal and other withdrawals of deposit accounts
and to permit increased lending. As of September 30, 2000, Peoples was permitted
to borrow up to $137.0 million from the Federal Home Loan Bank of Cincinnati.



                                       16
<PAGE>



         The following table shows certain information regarding the borrowings
of Peoples at or for the dates indicated:

<TABLE>
<CAPTION>
                                                                                        AT OR FOR THE YEAR
                                                                                        ENDED SEPTEMBER 30,
                                                                                ------------------------------------
                                                                                      2000              1999
                                                                                ----------------- ------------------
                                                                                      (Dollars in Thousands)
<S>                                                                             <C>                <C>
Federal Home Loan Bank advances:
     Average balance outstanding...........................................          $ 61,321             $  710
     Maximum amount outstanding at any month-end during the period.........          $134,500             $4,000
     Balance outstanding at end of period..................................          $134,500             $  -
     Average interest rate during the period...............................              6.82%              5.49%
     Weighted average interest rate at end of period.......................              6.67%               N/A
</TABLE>

SUBSIDIARIES

         At September 30, 2000, other than the Bank, Peoples did not have any
subsidiaries.

TOTAL EMPLOYEES

         Peoples had 40 full-time employees and 7 part-time employees at
September 30, 2000. None of these employees are represented by a collective
bargaining agent, and Peoples believes that it enjoys good relations with its
personnel.

COMPETITION

         Peoples faces significant competition both in attracting deposits and
in making loans. Its most direct competition for deposits has come historically
from commercial banks, credit unions and other savings institutions located in
its primary market area, including many large financial institutions which have
greater financial and marketing resources available to them. In addition, it
faces significant competition for investors' funds from short-term money market
securities, mutual funds and other corporate and government securities. Peoples
does not rely upon any individual group or entity for a material portion of its
deposits. The ability of Peoples to attract and retain deposits depends on its
ability to generally provide a rate of return, liquidity and risk comparable to
that offered by competing investment opportunities.

         Peoples' competition for real estate loans comes principally from
mortgage banking companies, commercial banks, other savings institutions and
credit unions. It competes for loan originations primarily through the interest
rates and loan fees it charges, and the efficiency and quality of services it
provides borrowers. Factors which affect competition include general and local
economic conditions, current interest rate levels and volatility in the mortgage
markets. Competition may increase as a result of the continuing reduction of
restrictions on the interstate operations of financial institutions and the
anticipated slowing of refinancing activity.



                                       17
<PAGE>



                                   REGULATION

         The following is a summary of certain statutes and regulations
affecting Peoples and the Bank. This summary is qualified in its entirety by
such statutes and regulations. A change in applicable laws or regulations may
have a material effect on Peoples, the Bank and the business of Peoples and the
Bank.

GENERAL

         Financial institutions and their holding companies are extensively
regulated under federal and state law. Consequently, the growth and earnings
performance of Peoples and the Bank can be affected not only by management
decisions and general economic conditions, but also by the statutes administered
by, and the regulations and policies of, various governmental regulatory
authorities. Those authorities include, but are not limited to, the Office of
Thrift Supervision, the Federal Reserve Board, the FDIC, the Internal Revenue
Service, and state taxing authorities. The effect of such statutes, regulations
and policies can be significant, and cannot be predicted with a high degree of
certainty.

         Federal and state laws and regulations generally applicable to
financial institutions and their holding companies regulate, among other things,
the scope of business, investments, reserves against deposits, capital levels
relative to operations, lending activities and practices, the nature and amount
of collateral for loans, the establishment of branches, mergers, consolidations
and dividends. The system of supervision and regulation applicable to Peoples
and the Bank establishes a comprehensive framework for their respective
operations and is intended primarily for the protection of the FDIC's deposit
insurance funds, the depositors of the Bank and the public, rather than
shareholders of the Bank or Peoples.

         Federal law and regulations establish supervisory standards applicable
to the lending activities of the Bank, including internal controls, credit
underwriting, loan documentation and loan-to-value ratios for loans secured by
real property.

PEOPLES COMMUNITY BANCORP

         HOLDING COMPANY ACQUISITIONS. Peoples is a registered savings and loan
holding company within the meaning of Section 10 of the Home Owners' Loan Act,
and is subject to Office of Thrift Supervision examination and supervision as
well as certain reporting requirements. Federal law generally prohibits a
savings and loan holding company, without prior Office of Thrift Supervision
approval, from acquiring the ownership or control of any other savings
institution or savings and loan holding company, or all, or substantially all,
of the assets or more than 5% of the voting shares thereof. These provisions
also prohibit, among other things, any director or officer of a savings and loan
holding company, or any individual who owns or controls more than 25% of the
voting shares of such holding company, from acquiring control of any savings
institution not a subsidiary of such savings and loan holding company, unless
the acquisition is approved by the Office of Thrift Supervision.



                                       18
<PAGE>



         HOLDING COMPANY ACTIVITIES. Peoples operates as a unitary savings and
loan holding company. As a result of recently enacted legislation, the
activities of a new unitary savings and loan holding company like Peoples and
its non-savings institution subsidiaries are restricted to activities
traditionally permitted to multiple savings and loan holding companies and to
financial holding companies under newly added provisions of the Bank Holding
Company Act. Multiple savings and loan holding companies may:

         -        furnish or perform management services for a savings
                  association subsidiary of a savings and loan holding company;

         -        hold, manage or liquidate assets owned or acquired from a
                  savings association subsidiary of a savings and loan holding
                  company;

         -        hold or manage properties used or occupied by a savings
                  association subsidiary of a savings and loan holding company;

         -        engage in activities determined by the Federal Reserve to be
                  closely related to banking and a proper incident thereto; and

         -        engage in services and activities previously determined by the
                  Federal Home Loan Bank Board by regulation to be permissible
                  for a multiple savings and loan holding company as of March 5,
                  1987.

         The activities financial holding companies may engage in include:

         -        lending, exchanging, transferring or investing for others, or
                  safeguarding money or securities;

         -        insuring, guaranteeing or indemnifying others, issuing
                  annuities, and acting as principal, agent or broker for
                  purposes of the foregoing;

         -        providing financial, investment or economic advisory services,
                  including advising an investment company;

         -        issuing or selling interests in pooled assets that a bank
                  could hold directly;

         -        underwriting, dealing in or making a market in securities; and

         -        merchant banking activities.




                                       19
<PAGE>


         If the Office of Thrift Supervision determines that there is reasonable
cause to believe that the continuation by a savings and loan holding company of
an activity constitutes a serious risk to the financial safety, soundness or
stability of its subsidiary savings institution, the Office of Thrift
Supervision may impose such restrictions as deemed necessary to address such
risk. These restrictions include limiting the following:

         -        the payment of dividends by the savings institution;

         -        transactions between the savings institution and its
                  affiliates; and

         -        any activities of the savings institution that might create a
                  serious risk that the liabilities of the holding company and
                  its affiliates may be imposed on the savings institution.

         Every savings institution subsidiary of a savings and loan holding
company is required to give the Office of Thrift Supervision at least 30 days'
advance notice of any proposed dividends to be made on its guarantee, permanent
or other non-withdrawable stock, or else such dividend will be invalid. See
"Peoples Community Bank - Capital Distributions."

         RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES. Transactions between a
savings institution and its "affiliates" are subject to quantitative and
qualitative restrictions under Sections 23A and 23B of the Federal Reserve Act
and Office of Thrift Supervision regulations. Affiliates of a savings
institution generally include, among other entities, the savings institution's
holding company and companies that are controlled by or under common control
with the savings institution.

         In general, a savings institution or its subsidiaries may engage in
certain "covered transactions" with affiliates up to certain limits. In
addition, a savings institution and its subsidiaries may engage in covered
transactions and certain other transactions only on terms and under
circumstances that are substantially the same, or at least as favorable to the
savings institution or its subsidiary, as those prevailing at the time for
comparable transactions with nonaffiliated companies. A "covered transaction" is
defined to include a loan or extension of credit to an affiliate; a purchase of
investment securities issued by an affiliate; a purchase of assets from an
affiliate, with certain exceptions; the acceptance of securities issued by an
affiliate as collateral for a loan or extension of credit to any party; or the
issuance of a guarantee, acceptance or letter of credit on behalf of an
affiliate. In addition, a savings institution may not:

         -        make a loan or extension of credit to an affiliate unless the
                  affiliate is engaged only in activities permissible for bank
                  holding companies;

         -        purchase or invest in securities of an affiliate other than
                  shares of a subsidiary;

         -        purchase a low-quality asset from an affiliate; or




                                       20
<PAGE>


         -        engage in covered transactions and certain other transactions
                  between a savings institution or its subsidiaries and an
                  affiliate except on terms and conditions that are consistent
                  with safe and sound banking practices.

         With certain exceptions, each loan or extension of credit by a savings
institution to an affiliate must be secured by collateral with a market value
ranging from 100% to 130% (depending on the type of collateral) of the amount of
the loan or extension of credit.

         FEDERAL SECURITIES LAWS. Peoples registered its common stock with the
Securities and Exchange Commission under Section 12(g) of the Securities
Exchange Act of 1934. Peoples is subject to the proxy and tender offer rules,
insider trading reporting requirements and restrictions, and certain other
requirements under the Exchange Act. Pursuant to Office of Thrift Supervision
regulations and the Plan of Conversion, Peoples has agreed to maintain such
registration for a minimum of three years following the conversion in March
2000.

PEOPLES COMMUNITY BANK

         GENERAL. The Bank is a federally chartered stock savings bank. The
Office of Thrift Supervision is the chartering authority and primary federal
regulator of the Bank. The Office of Thrift Supervision has extensive authority
over the operations of federally chartered savings institutions. As part of this
authority, federally chartered savings institutions are required to file
periodic reports with the Office of Thrift Supervision and are subject to
periodic examinations by the Office of Thrift Supervision and the FDIC. The Bank
also is subject to regulation and examination by the FDIC and to requirements
established by the Federal Reserve Board. The investment and lending authority
of savings institutions are prescribed by federal laws and regulations, and such
institutions are prohibited from engaging in any activities not permitted by
such laws and regulations. Such regulation and supervision is primarily intended
for the protection of depositors and the Savings Association Insurance Fund.

         The Office of Thrift Supervision's enforcement authority over all
savings institutions and their holding companies includes, among other things,
the ability to assess civil money penalties, to issue cease and desist or
removal orders and to initiate injunctive actions. In general, these enforcement
actions may be initiated for violations of laws and regulations and unsafe or
unsound practices. Other actions or inactions may provide the basis for
enforcement action, including misleading or untimely reports filed with the
Office of Thrift Supervision.

         INSURANCE OF ACCOUNTS. The deposits of the Bank are insured to the
maximum extent permitted by the Savings Association Insurance Fund, which is
administered by the FDIC, and are backed by the full faith and credit of the
U.S. Government. As insurer, the FDIC is authorized to conduct examinations of,
and to require reporting by, FDIC-insured institutions. It also may prohibit any
FDIC-insured institution from engaging in any activity the FDIC determines by
regulation or order to pose a serious threat to the FDIC. The FDIC also has the
authority to initiate enforcement actions against savings institutions, after
giving the Office of Thrift Supervision an opportunity to take such action.
Currently, FDIC deposit insurance rates generally range from zero basis points
to 27 basis points, depending on the assessment risk classification assigned to
the depository institution.



                                       21
<PAGE>



         The FDIC may terminate the deposit insurance of any insured depository
institution, including the Bank, if it determines after a hearing that the
institution has engaged or is engaging in unsafe or unsound practices, is in an
unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, order or any condition imposed by an agreement with
the FDIC. It also may suspend deposit insurance temporarily during the hearing
process for the permanent termination of insurance, if the institution has no
tangible capital. If insurance of accounts is terminated, the accounts at the
institution at the time of the termination, less subsequent withdrawals, shall
continue to be insured for a period of six months to two years, as determined by
the FDIC. Management is aware of no existing circumstances which would result in
termination of the deposit insurance of the Bank.

         REGULATORY CAPITAL REQUIREMENTS. Federally insured savings institutions
are required to maintain minimum levels of regulatory capital. The Office of
Thrift Supervision has established capital standards applicable to all savings
institutions. These standards generally must be as stringent as the comparable
capital requirements imposed on national banks. The Office of Thrift Supervision
also is authorized to impose capital requirements in excess of these standards
on individual institutions on a case-by-case basis.

         Current Office of Thrift Supervision capital standards require savings
institutions to satisfy three different capital requirements. Under these
standards, savings institutions must maintain "tangible" capital equal to at
least 1.5% of adjusted total assets, "core" capital equal to at least 4.0% of
adjusted total assets and "total" capital (a combination of core and
"supplementary" capital) equal to at least 8.0% of "risk-weighted" assets. Core
capital generally consists of common stockholders' equity (including retained
earnings). Tangible capital generally equals core capital minus intangible
assets, with only a limited exception for purchased mortgage servicing rights.

         In determining compliance with the risk-based capital requirement, a
savings institution is allowed to include both core capital and supplementary
capital in its total capital, provided that the amount of supplementary capital
included does not exceed the savings institution's core capital. Supplementary
capital generally consists of general allowances for loan losses up to a maximum
of 1.25% of risk-weighted assets, together with certain other items. In
determining the required amount of risk-based capital, total assets, including
certain off-balance sheet items, are multiplied by a risk weight based on the
risks inherent in the type of assets. The risk weights range from 0% for cash
and securities issued by the U.S. Government or unconditionally backed by the
full faith and credit of the U.S. Government to 100% for loans (other than
qualifying residential loans weighted at 80%) and repossessed assets.

         In August 1993, the Office of Thrift Supervision adopted a final rule
incorporating an interest-rate risk component into the risk-based capital
regulation. Under the rule, an institution with greater than "normal" interest
rate risk will be subject to a deduction of its interest rate risk component
from total capital for purposes of calculating its risk-based capital. As a
result, such an institution will be required to maintain additional capital in
order to comply with the risk-based


                                       22
<PAGE>


capital requirement. An institution has greater than "normal" interest rate risk
if it would suffer a loss of net portfolio value exceeding 2.0% of the estimated
market value of its assets in the event of a 200 basis point increase or
decrease in interest rates. The interest rate risk component will be calculated,
on a quarterly basis, as one-half of the difference between an institution's
measured interest rate risk and 2.0% multiplied by the market value of its
assets. The rule also authorizes the Office of Thrift Supervision to waive or
defer an institution's interest rate risk component on a case-by-case basis.
Because of continuing delays by the Office of Thrift Supervision, the interest
rate risk component has never been operative.

         Savings institutions must value securities available for sale at
amortized cost for regulatory capital purposes. This means that in computing
regulatory capital, savings institutions should add back any unrealized losses
and deduct any unrealized gains, net of income taxes, on debt securities
reported as a separate component of generally accepted accounting principles
capital.

         At September 30, 2000, the Bank exceeded all of its regulatory capital
requirements, with tangible, core and risk-based capital ratios of 8.1%, 8.1%
and 18.1%, respectively.

         Any savings institution that fails any of the capital requirements is
subject to possible enforcement actions by the Office of Thrift Supervision or
the FDIC. Such actions could include a capital directive, a cease and desist
order, civil money penalties, the establishment of restrictions on the
institution's operations, termination of federal deposit insurance and the
appointment of a conservator or receiver. The Office of Thrift Supervision's
capital regulation provides that such actions, through enforcement proceedings
or otherwise, could require one or more of a variety of corrective actions.

         PROMPT CORRECTIVE ACTION. The following table shows the amount of
capital associated with the different capital categories set forth in the prompt
corrective action regulations.

<TABLE>
<CAPTION>
CAPITAL CATEGORY                                     TOTAL                   TIER 1                  TIER 1
----------------                               RISK-BASED CAPITAL      RISK-BASED CAPITAL       LEVERAGE CAPITAL
                                               ------------------      ------------------       ----------------
<S>                                          <C>                    <C>                      <C>
Well capitalized...........................  10% or more            6% or more               5% or more
Adequately capitalized.....................  8% or more             4% or more               4% or more
Undercapitalized...........................  Less than 8%           Less than 4%             Less than 4%
Significantly undercapitalized.............  Less than 6%           Less than 3%             Less than 3%
</TABLE>

         In addition, an institution is "critically undercapitalized" if it has
a ratio of tangible equity to total assets that is equal to or less than 2.0%.
Under specified circumstances, a federal banking agency may reclassify a well
capitalized institution as adequately capitalized and may require an adequately
capitalized institution or an undercapitalized institution to comply with
supervisory actions as if it were in the next lower category (except that the
FDIC may not reclassify a significantly undercapitalized institution as
critically undercapitalized).



                                       23
<PAGE>



         An institution generally must file a written capital restoration plan
which meets specified requirements within 45 days of the date that the
institution receives notice or is deemed to have notice that it is
undercapitalized, significantly undercapitalized or critically undercapitalized.
A federal banking agency must provide the institution with written notice of
approval or disapproval within 60 days after receiving a capital restoration
plan, subject to extensions by the agency. An institution which is required to
submit a capital restoration plan must concurrently submit a performance
guaranty by each company that controls the institution. In addition,
undercapitalized institutions are subject to various regulatory restrictions,
and the appropriate federal banking agency also may take any number of
discretionary supervisory actions.

         At September 30, 2000, the Bank was deemed a well capitalized
institution for purposes of the above regulations and as such is not subject to
the above mentioned restrictions.

         SAFETY AND SOUNDNESS GUIDELINES. The Office of Thrift Supervision and
the other federal banking agencies have established guidelines for safety and
soundness, addressing operational and managerial standards, as well as
compensation matters for insured financial institutions. Institutions failing to
meet these standards are required to submit compliance plans to their
appropriate federal regulators. The Office of Thrift Supervision and the other
agencies have also established guidelines regarding asset quality and earnings
standards for insured institutions. The Bank believes that it is in compliance
with these guidelines and standards.

         LIQUIDITY REQUIREMENTS. All savings institutions are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. The liquidity requirement may vary from
time to time (between 4% and 10%) depending upon economic conditions and savings
flows of all savings institutions. At the present time, the required minimum
liquid asset ratio is 4%. The Bank is in compliance with the liquidity
requirements.

         CAPITAL DISTRIBUTIONS. Office of Thrift Supervision regulations govern
capital distributions by savings institutions, which include cash dividends,
stock repurchases and other transactions charged to the capital account of a
savings institution to make capital distributions. A savings institution must
file an application for Office of Thrift Supervision approval of the capital
distribution if either (1) the total capital distributions for the applicable
calendar year exceed the sum of the institution's retained net income for that
year to date plus the institution's retained net income for the preceding two
years, (2) the institution would not be at least adequately capitalized
following the distribution, (3) the distribution would violate any applicable
statute, regulation, agreement or OTS-imposed condition, or (4) the institution
is not eligible for expedited treatment of its filings. If an application is not
required to be filed, savings institutions which are a subsidiary of a holding
company (as well as certain other institutions) must still file a notice with
the Office of Thrift Supervision at least 30 days before the board of directors
declares a dividend or approves a capital distribution.



                                       24
<PAGE>

         COMMUNITY REINVESTMENT ACT AND THE FAIR LENDING LAWS. Savings
institutions have a responsibility under the Community Reinvestment Act of 1977
and related regulations of the Office of Thrift Supervision to help meet the
credit needs of their communities, including low- and moderate-income
neighborhoods. In addition, the Equal Credit Opportunity Act and the Fair
Housing Act prohibit lenders from discriminating in their lending practices on
the basis of characteristics specified in those statutes. An institution's
failure to comply with the provisions of the Community Reinvestment Act could,
at a minimum, result in regulatory restrictions on its activities. Failure to
comply with fair lending laws could result in enforcement actions by the Office
of Thrift Supervision, as well as other federal regulatory agencies, and the
Department of Justice.

         QUALIFIED THRIFT LENDER TEST. All savings institutions are required to
meet a qualified thrift lender test to avoid certain restrictions on their
operations. A savings institution can comply with the qualified thrift lender
test by either qualifying as a domestic building and loan association as defined
in the Internal Revenue Code or by maintaining at least 65% of its portfolio
assets in certain housing and consumer-related assets such as:

         -        loans made to purchase, refinance, construct, improve or
                  repair domestic residential housing;

         -        home equity loans;

         -        most mortgage-backed securities;

         -        stock issued by the Federal Home Loan Bank of Cincinnati; and

         -        direct or indirect obligations of the FDIC.

         A savings institution that does not meet the qualified thrift lender
test must either convert to a bank charter or comply with certain restrictions
on its operations.

         At September 30, 2000, the qualified thrift investments of the Bank
were approximately 78.2% of its portfolio assets.

         FEDERAL HOME LOAN BANK SYSTEM. The Bank is a member of the Federal Home
Loan Bank of Cincinnati, which is one of 12 regional Federal Home Loan Banks
that administers the home financing credit function of savings institutions.
Each Federal Home Loan Bank serves as a reserve or central bank for its members
within its assigned region. It is funded primarily from proceeds derived from
the sale of consolidated obligations of the Federal Home Loan Bank System. It
makes loans to members (i.e., advances) in accordance with policies and
procedures established by the Board of Directors of the Federal Home Loan Bank.



                                       25
<PAGE>


         As a member, the Bank is required to purchase and maintain stock in the
Federal Home Loan Bank of Cincinnati in an amount equal to at least 1% of its
aggregate unpaid residential mortgage loans or similar obligations at the
beginning of each year. At September 30, 2000, the Bank had $6.9 million in
Federal Home Loan Bank stock, which was in compliance with this requirement.

         The Federal Home Loan Banks are required to provide funds for the
resolution of troubled savings institutions and to contribute to affordable
housing programs through direct loans or interest subsidies on advances targeted
for community investment and low- and moderate-income housing projects. These
contributions have adversely affected the level of Federal Home Loan Bank
dividends paid in the past and could do so in the future. These contributions
also could have an adverse effect on the value of Federal Home Loan Bank stock
in the future.

         FEDERAL RESERVE SYSTEM. The Federal Reserve Board requires all
depository institutions to maintain reserves against their transaction accounts
(primarily NOW and Super NOW checking accounts) and non-personal time deposits.
Because required reserves must be maintained in the form of vault cash or a
noninterest-bearing account at a Federal Reserve Bank, the effect of this
reserve requirement is to reduce an institution's earning assets.

                                    TAXATION

FEDERAL TAXATION

         GENERAL. Peoples and the Bank are subject to the corporate tax
provisions of the Internal Revenue Code, and the Bank is subject to certain
additional provisions which apply to thrifts and other types of financial
institutions. The following discussion of federal taxation is intended only to
summarize certain pertinent federal income tax matters relevant to the taxation
of Peoples and the Bank and is not a comprehensive discussion of the tax rules
applicable to Peoples and the Bank.

         FISCAL YEAR. Peoples and the Bank file federal income tax returns on
the basis of a calendar year ending on December 31.

         BAD DEBT RESERVES. In 1996, legislation was enacted that repealed the
reserve method of accounting (including the percentage of taxable income method)
previously used by many savings institutions to calculate their bad debt reserve
for federal income tax purposes. Savings institutions with $500 million or less
in assets may, however, continue to use the experience method. The Bank must
recapture that portion of its reserve which exceeds the amount that could have
been taken under the experience method for post-1987 tax years. At December 31,
1995, the Bank's post-1987 excess reserves amounted to approximately $1.1
million. The recapture will occur over a six-year period, which commenced
January 1, 1998. The legislation also requires savings institutions to account
for bad debts for federal income tax purposes on the same basis as commercial
banks for tax years beginning after December 31, 1995. This change in accounting
method and recapture of excess bad debt reserves is adequately provided for in
the Bank's deferred tax liability.




                                       26
<PAGE>


         At September 30, 2000, the federal income tax reserves of the Bank
included $2.6 million for which no federal income tax has been provided. Because
of these federal income tax reserves and the liquidation account established for
the benefit of certain depositors of the Bank in connection with the recent
conversion, the retained earnings of the Bank are substantially restricted.

         DISTRIBUTIONS. If Peoples were to distribute cash or property to its
stockholders, and the distribution was treated as being from its accumulated bad
debt reserves, the distribution would cause Peoples to have additional taxable
income. A distribution is from accumulated bad debt reserves if (a) the reserves
exceed the amount that would have been accumulated on the basis of actual loss
experience, and (b) the distribution is a "non-qualified distribution." A
distribution with respect to its stock is a non-qualified distribution to the
extent that, for federal income tax purposes,

         -        it is in redemption of its shares,

         -        it is pursuant to a liquidation of the institution, or

         -        in the case of a current distribution, together with all other
                  such distributions during the taxable year, it exceeds the
                  institution's current and post-1951 accumulated earnings and
                  profits.

         The amount of additional taxable income created by a non-qualified
distribution is an amount that when reduced by the tax attributable to it is
equal to the amount of the distribution.

         MINIMUM TAX. The Code imposes an alternative minimum tax at a rate of
20%. The alternative minimum tax generally applies to a base of regular taxable
income plus certain tax preferences ("alternative minimum taxable income") and
is payable to the extent such alternative minimum taxable income is in excess of
an exemption amount. Tax preference items include the following:

         -        depreciation, and

         -        75% of the excess (if any) of:

                  (1)      alternative minimum taxable income determined without
                           regard to this preference and prior to reduction by
                           net operating losses, over

                  (2)      adjusted current earnings as defined in the Code.

         Peoples has not been subject to the alternative minimum tax or had any
such amounts available as credits for carry over.




                                       27
<PAGE>


         CAPITAL GAINS AND CORPORATE DIVIDENDS-RECEIVED DEDUCTION. Corporate net
capital gains are taxed at a maximum rate of 35%. Corporations which own 20% or
more of the stock of a corporation distributing a dividend may deduct 80% of the
dividends received. Corporations which own less than 20% of the stock of a
corporation distributing a dividend may deduct 70% of the dividends received.
However, a corporation that receives dividends from a member of the same
affiliated group of corporations may deduct 100% of the dividends received.

         OTHER MATTERS. Federal legislation is introduced from time to time that
would limit the ability of individuals to deduct interest paid on mortgage
loans. Individuals are currently not permitted to deduct interest on consumer
loans. Significant increases in tax rates or further restrictions on the
deductibility of mortgage interest could adversely affect Peoples.

         Peoples' federal income tax returns for the tax years ended 1999, 1998
and 1997 are open under the statute of limitations and are subject to review by
the IRS. Peoples has not been audited by the IRS during the last five years.

STATE TAXATION

         OHIO TAXATION. People's is subject to the Ohio corporation franchise
tax, which is a tax measured by both net earnings and net worth. The rate of tax
is the greater of (i) 5.1% on the first $50,000 of computed Ohio taxable income
and 8.9% of computed Ohio taxable income in excess of $50,000 or (ii) 0.582%
times taxable net worth.

         In computing Peoples' tax under the net worth method, 100% of the
investment in the capital stock of the Bank after the conversion may be
excluded, as reflected on the balance sheet, in computing taxable net worth as
long as Peoples owns at least 25% of the issued and outstanding capital stock of
the Bank. The calculation of the exclusion from net worth is based on the ratio
of the excludable investment (net of any appreciation or goodwill included in
such investment) to total assets multiplied by the net value of the stock. As a
holding company, Peoples may be entitled to various other deductions in
computing taxable net worth that are not generally available to operating
companies.

         A special litter tax is also applicable to all corporations, including
Peoples, subject to the Ohio corporation franchise tax other than "financial
institutions." If the franchise tax is paid on the net income basis, the litter
tax is equal to 0.11% of the first $50,000 of computed Ohio taxable income and
0.22% of computed Ohio taxable income in excess of $50,000. If the franchise tax
is paid on the net worth basis, the litter tax is equal to 0.014% times taxable
net worth.

         The Bank is a "financial institution" for State of Ohio tax purposes.
As such, it is subject to the Ohio corporate franchise tax on "financial
institutions," which is imposed annually at a rate of 1.5% of the Bank's book
net worth determined in accordance with generally accepted accounting
principles. As a "financial institution", the Bank is not subject to any tax
based upon net income or net profits imposed by the State of Ohio.




                                       28
<PAGE>


         DELAWARE TAXATION. As a Delaware holding company not earning income in
Delaware, Peoples is exempt from Delaware corporate income tax but is required
to file an annual report with and pay an annual franchise tax to the State of
Delaware. The tax is imposed as a percentage of the capital base of Peoples with
an annual maximum of $150,000.

ITEM 2. PROPERTIES

         At September 30, 2000, Peoples conducted its business from its main
office in Lebanon, Ohio and branch offices in Blanchester and Cheviot and three
branch offices in Cincinnati. The following table sets forth the net book value
(including leasehold improvement, furnishings and equipment) and certain other
information with respect to the offices and other properties of Peoples at
September 30, 2000.

<TABLE>
<CAPTION>
                                                                             Net Book Value of
                                                                               Property and
                                                                Lease            Leasehold
                                             Owned or         Expiration      Improvements at       Deposits at
Location                                      Leased             Date       September 30, 2000   September 30, 2000
--------                                     --------         ----------    ------------------   ------------------
<S>               <C>                                                             <C>                 <C>
MAIN OFFICE:                                                                            (In Thousands)
11 South Broadway
    Lebanon, Ohio 45036..............          Owned             N/A              $1,246              $64,178
BRANCH OFFICES:
112 E. Main Street
    Blanchester, Ohio 45107..........         Leased            06/03                  7               8,234
3924 Isabella
    Cincinnati, Ohio 45209...........          Owned             N/A                  15               12,887
3621 Harrison Avenue
    Cheviot, Ohio 45211..............          Owned             N/A                 664               39,505
3663 Ebenezer Road
    Cincinnati, Ohio 45248...........          Owned             N/A                 282               10,647
7030 Hamilton Avenue
    Cincinnati, Ohio 45231...........          Owned             N/A                  81               15,902
Union Centre Boulevard
     West Chester, Ohio..............          Owned             N/A                 949                 -
</TABLE>


ITEM 3. LEGAL PROCEEDINGS

         The Bank and Peoples are not involved in any pending legal proceedings
other than nonmaterial legal proceedings occurring in the ordinary course of
business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable

                                     PART II


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



                                       29
<PAGE>


         The information required herein is incorporated by reference from page
3 of Peoples' 2000 Annual Report to Stockholders filed as Exhibit 13 hereto
("2000 Annual Report").











                                       30
<PAGE>


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The information required herein is incorporated by reference from pages
6 to 15 of the 2000 Annual Report.

ITEM 7. FINANCIAL STATEMENTS

         The information required herein is incorporated by reference from pages
17 to 46 of the 2000 Annual Report.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         Not applicable

                                    PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

         The information required herein is incorporated by reference from the
Registrant's Proxy Statement to be filed within 120 days after the end of the
fiscal year covered by this Form 10-KSB ("Proxy Statement").

ITEM 10. EXECUTIVE COMPENSATION

         The information required herein is incorporated by reference from the
Proxy Statement.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required herein is incorporated by reference from the
Proxy Statement.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required herein is incorporated by reference from the
Proxy Statement.

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

         (a) The following documents are filed as part of this report and are
incorporated herein by reference from the Registrant's 2000 Annual Report:

                  Independent Auditors' Report.



                                       31
<PAGE>


         Consolidated Statements of Financial Condition as of September 30, 2000
         and 1999.

         Consolidated Statements of Earnings for the Years Ended September 30,
         2000, 1999 and 1998.

         Consolidated Statements of Stockholders' Equity for the Years Ended
         September 30, 2000, 1999 and 1998.

         Consolidated Statements of Cash Flows for the Years Ended September 30,
         2000, 1999 and 1998.

         Notes to Consolidated Financial Statements.

The following exhibits are filed as part of the Form 10-KSB, and this list
includes the Exhibit Index:

<TABLE>
<CAPTION>
      NO.         EXHIBITS
      ---         --------
<S>               <C>
      3.1         Certificate of Incorporation of Peoples Community Bancorp, Inc.*
      3.2         Bylaws of Peoples Community Bancorp, Inc.*
        4         Stock Certificate of Peoples Community Bancorp, Inc.*

       13         Annual Report to Stockholders for the Year Ended September 30, 2000
       21         List of Subsidiaries
                  (See "Item I. Business - Subsidiaries" in this Form 10-KSB)
       27         Financial Data Schedule
</TABLE>
-------------
         * Incorporated herein by reference from Peoples' Registration Statement
on Form S-1 filed with the SEC on December 17, 1999.

         (b) Reports filed on Form 8-K.

         On September 20, 2000, Peoples filed a Current Report on Form 8-K under
Item 5 to announce that it had entered into an Agreement and Plan of
Reorganization with Market Financial Corp. on September 19, 2000. No financial
statements were filed.



                                       32
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                PEOPLES COMMUNITY BANCORP, INC.

                                By: /s/ Jerry D. Williams
                                   ---------------------------------------------
                                       Jerry D. Williams
                                       President, Chief Executive Officer
                                         and Director


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


<TABLE>
<S>                                                <C>
/s/ Jerry D. Williams                              December 28, 2000
-------------------------------
Jerry D. Williams
President, Chief Executive
  Officer and Director
(principal executive officer)



/s/ Thomas J. Noe                                  December 28, 2000
-------------------------------
Thomas J. Noe
Chief Financial Officer and Director
(principal financial and accounting officer)


                                                    December 28, 2000
-------------------------------
Paul E. Hasselbring
Chairman of the Board and
Director



/s/ John E. Rathkamp                                December 28, 2000
-------------------------------
John E. Rathkamp
Chief Lending Officer, Secretary and Director
</TABLE>




<PAGE>


<TABLE>
<S>                                                <C>

                                                    December 28, 2000
-------------------------------
Richard S. Johnston
Director



/s/ Zane M. Brant                                   December 28, 2000
-------------------------------
Zane M. Brant
Director



/s/ John L. Buchanan                                December 28, 2000
-------------------------------
John L. Buchanan
Director



/s/ Donald L. Hawke                                 December 28, 2000
-------------------------------
Donald L. Hawke
Director



/s/ James R. Van DeGrift                            December 28, 2000
-------------------------------
James R. Van DeGrift
Director



/s/ Nicholas N. Nelson                              December 28, 2000
-------------------------------
Nicholas N. Nelson
Director
</TABLE>