`SECURITIES & EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

      (Mark One)

 x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
 of 1934

                     For the fiscal year ended June 30, 2000

                                       or

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

           For the transition period from ___________ to _____________

                         Commission file number: 0-18847

                              HOME FEDERAL BANCORP

             (Exact name of registrant as specified in its charter)

                            United States 35-1807839

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

                 222 West Second Street, Seymour, Indiana 47274

               (Address of Principal Executive Offices) (Zip Code)

        Registrant's telephone number including area code: (812) 522-1592
                                 --------------

           Securities registered pursuant to Section 12(b) of the Act:

                                      None

          Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, no par value

                                       and

                          Common Share Purchase Rights

                                (Title of Class)

Indicate by check mark whether the Registrant (l) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports)  and (2) has been  subject to such  filing
requirements for the past 90 days. YES __X___ NO ______

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (229.405 of this chapter) is not contained  herein,  and will
not 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-K X
or any amendment to this Form 10-K.

The aggregate market value of the issuer's voting stock held by  non-affiliates,
as of September 15, 2000, was $69,763,786.

The number of shares of the Registrant's Common Stock, no par value, outstanding
as of September 15, 2000, was 4,497,856 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders  for the year ended June 30, 2000,
are  incorporated  into Part II.  Portions of the Proxy  Statement  for the 2000
annual meeting of shareholders are incorporated into Part I and Part III.

                            Exhibit Index on Page 39

                               Page 2 of 42 Pages

                              HOME FEDERAL BANCORP

                                    FORM 10-K

                                      INDEX

Forward Looking Statements                                                             4

Item 1.  Business .................................................................    4

Item 2.  Properties ...............................................................   31

Item 3.  Legal Proceedings ........................................................   33

Item 4.  Submission of Matters to a Vote of Security Holders ......................   33

Item 4.5 Executive Officers of Home Federal Bancorp ...............................   33

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters ....   33

Item 6.  Selected Financial Data ..................................................   35

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of
         Operations ...............................................................   35

Item 7. A  Quantitative and Qualitative Disclosures About Market Risk .............   35

Item 8.  Financial Statements and Supplementary Data ..............................   36

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial
         Disclosure ...............................................................   36

Item 10. Directors and Executive Officers of the Registrant .......................   36

Item 11. Executive Compensation ...................................................   36

Item 12. Security Ownership of Certain Beneficial Owners and Management ...........   36

Item 13. Certain Relationships and Related Transactions ...........................   36

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K .........   37

SIGNATURES ........................................................................   38











                           FORWARD LOOKING STATEMENTS

         This Annual Report on Form 10-K ("Form 10-K") contains statements which
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-K and include  statements  regarding the intent,  belief,
outlook,  estimate  or  expectations  of the Company  (as  defined  below),  its
directors or its officers primarily with respect to future events and the future
financial  performance  of the Company.  Readers of this Form 10-K are cautioned
that any such forward looking  statements are not guarantees of future events or
performance  and involve risks and  uncertainties,  and that actual  results may
differ  materially from those in the forward  looking  statements as a result of
various  factors.  The  accompanying  information  contained  in this  Form 10-K
identifies  important factors that could cause such  differences.  These factors
include  changes in interest  rates,  loss of deposits  and loan demand to other
savings and financial  institutions,  substantial  changes in financial markets;
changes in real estate values and the real estate market; regulatory changes, or
unanticipated results in pending legal proceedings.

                                     PART I

Item 1.  Business

General

         Home Federal Bancorp (the "Company" or "HFB") is an Indiana corporation
organized in August,  1990 to become a unitary savings and loan holding company.
The  principal  asset  of  the  Company  consists  of  100%  of the  issued  and
outstanding  capital stock of Home Federal  Savings Bank ("Home  Federal" or the
"Bank" or "HFSB").

         Home Federal began  operations  in Seymour,  Indiana under the name New
Building and Loan  Association  in 1908,  and  received its federal  charter and
changed  its name to Home  Federal  Savings  and Loan  Association  in 1950.  On
November 9, 1983,  Home Federal  Savings and Loan  Association  became a federal
savings bank and its name was changed to Home Federal  Savings  Bank. On January
14,  1988,  Home  Federal  converted  to stock form and on March 1,  1993,  Home
Federal  reorganized by converting  each  outstanding  share of its common stock
into one share of common stock of the Company, thereby causing the Company to be
the holding company of Home Federal.  Home Federal  currently  provides services
through its main office at 222 West Second Street in Seymour,  Indiana,  fifteen
full service branches  located in south central Indiana,  and the MAC network of
automated teller machines at nine locations in Seymour,  Columbus,  North Vernon
and Batesville. On line banking and telephone banking are also available to Home
Federal  Savings Bank  customers.  As a result,  Home Federal  serves  primarily
Bartholomew, Jackson, Jefferson, Jennings, Scott, Ripley, Decatur and Washington
Counties in Indiana. Home Federal also participates in the nationwide electronic
funds transfer networks known as Plus System, Inc. and Cirrus System.

         Management  analyzes the operation of Home Federal Bancorp assuming one
operating  segment,  community  banking  services.  Home Federal  directly  and,
through its service  corporation  subsidiary,  indirectly offers a wide range of
consumer and commercial community banking services.  These services include: (i)
residential and commercial real estate loans;  (ii) NOW accounts;  (iii) regular
and term savings accounts and savings certificates; (iv) full-service securities
brokerage  services;  (v) consumer loans; (vi) debit cards;  (vii) credit cards;
(viii) annuity and life insurance products;  (ix) Individual Retirement Accounts
and Keogh plans; (x) commercial loans; (xi) real estate development; (xii) trust
services: and (xiii) commercial demand deposit accounts.

         Home  Federal's  primary  source of revenue is  interest  from  lending
activities.  Its principal  lending  activity is the origination of conventional
mortgage loans to enable  borrowers to purchase or refinance one- to four-family
residential real property.  These loans are generally secured by first mortgages
on the  property.  Virtually  all of the real estate  loans  originated  by Home
Federal are secured by properties located in Indiana,  although Home Federal has
authority to make or purchase real estate loans throughout the United States. In
addition,  Home Federal  makes  secured and  unsecured  consumer  related  loans
(including  consumer auto loans,  second  mortgage,  home equity,  credit cards,
mobile  home,  and  savings  account  loans)  and  commercial  loans  secured by
mortgages on the underlying property.  At June 30, 2000,  approximately 19.2% of
its loans were  consumer-related  loans and 15.1% of its loans  were  commercial
mortgage and multi-family  loans.  Home Federal also makes  construction  loans,
which constituted 13.0% of Home Federal's loans at June 30, 2000. Finally,  Home
Federal makes commercial loans,  which constituted 8.9% of its loans at June 30,
2000.

Lending Activities

      Loan Portfolio Data

      The following two tables set forth the composition of Home Federal's loan porfolio by loan type and security type as of the dates indicated.
      The third table represents a reconciliation of gross loans receivable after consideration of undisbursed portions of loans in process, deferred
      loans, the allowance for loan losses, unearned discounts on loans and purchase discounts.
                                                                                                      At June 30,
                                             ---------------------------------------------------------------------------------------------------------------------
                                                  2000                     1999                    1998                   1997                  1996
                                                 Amount      Percent      Amount    Percent       Amount     Percent     Amount    Percent     Amount    Percent
TYPE OF LOAN                                                                                                          (Dollars in Thousands)
First mortgage loans:
      One-to-four family residential loans $        282,555     41.3% $    248,846     41.0% $      268,133     43.6% $   300,531     50.1% $   278,118     51.3%
      Commercial and multi-family                   102,974     15.1%      107,908     17.8%         97,469     15.8%      79,696     13.3%      73,853     13.6%
      Loans on property under construction           89,248     13.0%       65,997     10.9%         77,227     12.5%      54,504      9.1%      40,407      7.4%
      Loans on unimproved acreage                    17,440      2.5%       11,611      1.9%          4,664      0.8%       4,192      0.7%       3,252      0.6%
Second mortgage, home equity                         85,300     12.5%       68,873     11.3%         65,321     10.6%      63,658     10.6%      50,372      9.3%
Commercial loans                                     60,948      8.9%       56,956      9.4%         50,890      8.3%      43,112      7.2%      40,609      7.5%
Consumer loans                                        9,446      1.4%        9,250      1.5%         10,347      1.7%      11,017      1.8%      11,952      2.2%
Auto loans                                           22,587      3.3%       21,764      3.6%         23,194      3.8%      23,086      3.8%      20,883      3.8%
Mobile home loans                                     9,963      1.5%       12,048      2.0%         14,349      2.3%      16,613      2.8%      18,833      3.5%
Savings accounts loans                                3,625      0.5%        3,826      0.6%          4,071      0.7%       3,989      0.7%       4,199      0.8%
                                             -------------------------  ---------------------  -----------------------  --------------------  --------------------
      Gross loans receivable               $        684,086    100.0% $    607,079    100.0% $      615,665    100.0% $   600,398    100.0% $   542,478    100.0%
                                             =========================  =====================  =======================  ====================  ====================

TYPE OF SECURITY
Residential:
      One-to-four family                   $        409,174     59.9% $    347,049     57.2% $      366,319     59.5% $   397,962     66.3% $   358,003     66.0%
      Multi-dwelling units                           32,937      4.8%       30,358      5.0%         19,003      3.1%      22,166      3.7%      23,807      4.4%
Commercial real estate                              117,966     17.2%      114,217     18.8%        122,828     20.0%      78,261     13.0%      60,940     11.2%
Commercial                                           60,948      8.9%       56,956      9.4%         50,890      8.3%      43,112      7.2%      40,609      7.5%
Mobile home                                           9,963      1.5%       12,048      2.0%         14,349      2.3%      16,613      2.8%      18,833      3.5%
Savings account                                       3,625      0.5%        3,826      0.6%          4,071      0.7%       3,989      0.7%       4,199      0.8%
Auto                                                 22,587      3.3%       21,764      3.6%         23,194      3.8%      23,086      3.8%      20,883      3.8%
Other consumer                                        9,446      1.4%        9,250      1.5%         10,347      1.7%      11,017      1.8%      11,952      2.2%
Land acquisition                                     17,440      2.5%       11,611      1.9%          4,664      0.8%       4,192      0.7%       3,252      0.6%
                                             -------------------------  ---------------------  -----------------------  --------------------  --------------------
      Gross loans receivable               $        684,086    100.0% $    607,079    100.0% $      615,665    100.0% $   600,398    100.0% $   542,478    100.0%
                                             =========================  =====================  =======================  ====================  ====================

LOANS RECEIVABLE-NET
Gross loans receivable                     $        684,086    104.9% $    607,079    103.4% $      615,665    105.8% $   600,398    104.3% $   542,478    104.3%
Deduct:
Undisbursed portion of loans in process             (26,628)    -4.1%      (15,285)    -2.6%        (28,691)    -4.9%     (20,519)    -3.6%     (18,249)    -3.5%
Deferred net loan fees                                 (502)    -0.1%         (527)    -0.1%           (690)    -0.1%        (560)    -0.1%        (963)    -0.2%
Allowance for loan losses                            (4,949)    -0.8%       (4,349)    -0.7%         (4,243)    -0.7%      (3,649)    -0.6%      (3,061)    -0.6%
Unearned discounts                                        -      0.0%            -      0.0%             (1)     0.0%          (5)     0.0%         (19)     0.0%
Purchase discount                                         -      0.0%            -      0.0%              -      0.0%         (41)     0.0%         (89)     0.0%
                                             -------------------------  ---------------------  -----------------------  --------------------  --------------------
      Net loans receivable                 $        652,007    100.0% $    586,918    100.0% $      582,040    100.0% $   575,624    100.0% $   520,097    100.0%
                                             =========================  =====================  =======================  ====================  ====================


                 The following tables summarize the contractual maturities for Home Federal's loan portfolio (including participations and
     mortgage-backed certificates) for the fiscal periods indicated and the interest rate sensitivity of loans due after one year:

                                    Balance                                                         Maturites in Fiscal
                                  Outstanding                                                       2004          2006           2011           2015
                                  At June 30,                                                        to            to             to             and
                                     2000             2001            2002           2003           2005          2010           2015        thereafter
                                                                                         (In Thousands)

Real estate                   $         402,969 $        38,429  $         689  $       7,651  $       7,417 $      92,094  $      70,400  $     186,289
     Mortgage-backed
     certificates,
     collateralized
     mortgage obligations                43,454              22            367          1,961            718         4,379          2,811         33,196
Construction Loans                       89,248          62,705          7,633          2,008            279         3,277          4,735          8,611
Commercial loans                         60,948          20,723         11,760          3,697          8,215        11,663          2,420          2,470
Other loans                             130,921          15,249          4,900         11,512         48,581        36,692         13,058            929
                                ----------------  --------------   ------------   ------------   ------------  ------------   ------------   ------------
     Total                    $         727,540 $       137,128  $      25,349  $      26,829  $      65,210 $     148,105  $      93,424  $     231,495
                                ================  ==============   ============   ============   ============  ============   ============   ============



Interest Rate Sensitivity:


                                              Due After June 30, 2001
                                         ---------------------------------------
                                             Fixed           Variable Rate
                                             Rate            and Balloon
                                                (In Thousands)

Real estate                              $    73,069     $    291,471
     Mortgage-backed certificates,
     collateralized mortgage obligations      18,341           25,091
Construction Loans                               315           26,228
Commercial loans                              13,670           26,555
Other loans                                   67,387           48,285
                                             --------         --------
     Total                               $   172,782     $    417,630
                                             ========         ========




Residential Mortgage Loans

         Approximately  98.6% of Home  Federal's  residential  mortgage  lending
activity,  exclusive of refinances,  involve the origination of loans secured by
one-to four-family  residential  properties.  Home Federal is authorized to make
one-to four-family residential loans without any limitation as to interest rate,
amount, or number of interest rate adjustments. Pursuant to federal regulations,
if the interest rate is  adjustable,  the interest rate must be correlated  with
changes in a readily  verifiable  index.  Home  Federal  also makes  residential
mortgage  loans secured by mid-size  multi-family  dwelling  units and apartment
complexes.  The residential  mortgage loans included in Home Federal's portfolio
are primarily conventional loans. As of June 30, 2000, $326.5 million, or 47.7%,
of Home Federal's total loan portfolio  consisted of residential  first mortgage
loans,  $282.6  million,  or 41.3%, of which were secured by one- to four-family
homes.

         Many  of the  residential  mortgage  loans  currently  offered  by Home
Federal have adjustable  rates.  These loans generally have interest rates which
adjust (up or down)  semi-annually  or annually,  with maximum  rates which vary
depending  upon when the loans are written.  The  adjustment for the majority of
these loans is currently based upon the weekly average of the one-year  Treasury
constant maturity rate.

         The rates  offered on Home  Federal's  adjustable-rate  and  fixed-rate
residential  mortgage loans are generally  competitive with the rates offered by
other financial institutions in its south central Indiana market area.

         Although  Home  Federal's  residential  mortgage  loans are written for
amortization  terms up to 30 years,  due to prepayments  and  refinancings,  its
residential mortgage loans in the past have generally remained outstanding for a
substantially  shorter  period  of time  than  the  maturity  terms  of the loan
contracts.

         All of the  residential  mortgages  Home Federal  currently  originates
include  "due on sale"  clauses,  which give Home Federal the right to declare a
loan  immediately  due and payable in the event that,  among other  things,  the
borrower  sells or  otherwise  disposes  of the  real  property  subject  to the
mortgage and the loan is not repaid.  Qualified  borrowers  are not permitted to
assume  mortgages at rates below the current market rate,  unless the instrument
does not include a due on sale provision.  Home Federal utilizes the due on sale
clause  as a means of  increasing  the rate of  interest  on  existing  loans by
negotiating with the buyer new interest rates at the time of sale.

         The Office of Thrift  Supervision (the "OTS") requires  institutions it
regulates to establish loan- to-value ratios  consistent with their  supervisory
loan-to-value  limits. The supervisory limits adopted by the OTS are 65% for raw
land  loans,  75%  for  land  development  loans,  80%  for  construction  loans
consisting of commercial,  multi-family and other non-residential  construction,
and 85% for improved property.  Multi-family  construction includes condominiums
and cooperatives.  A loan-to-value  limit has not been established for permanent
mortgage or home equity loans on owner-occupied  one-to four-family  residential
property.  However,  for any such loan with a loan-to-value ratio that equals or
exceeds 90 percent at  origination,  an institution  should require  appropriate
credit  enhancement  in  the  form  of  either  mortgage  insurance  or  readily
marketable  collateral.  The Board of  Directors  of Home  Federal  Savings Bank
approved a set of loan-to-value ratios consistent with these supervisory limits.

         It may be  appropriate  in  individual  cases to  originate  loans with
loan-to-value  ratios in excess of the OTS limits based on the support  provided
by other credit  factors.  The aggregate  amount of all loans in excess of these
limits should not exceed 100 percent of total capital.  Moreover,  loans for all
commercial,   agricultural,   multi-family  or  other   non-one-to   four-family
residential properties should not exceed 30 percent of total capital.

         Commercial Mortgage Loans

         At  June  30,  2000,  17.2%  of Home  Federal's  total  loan  portfolio
consisted of mortgage loans secured by commercial real estate.  These properties
consisted  primarily  of  apartment  buildings,  office  buildings,  warehouses,
motels,  shopping centers,  nursing homes,  manufacturing  plants,  and churches
located in central or south central Indiana.  The commercial  mortgage loans are
generally  adjustable-rate  loans, are written for terms not exceeding 20 years,
and require an 80% loan-to-value ratio. Commitments for these loans in excess of
$1 million must be approved in advance by Home Federal's Board of Directors. The
largest such loan as of June 30, 2000,  had a balance of $3.4  million.  At that
date,  all of Home  Federal's  commercial  real estate loans  consisted of loans
secured by real estate located in Indiana.

         Under the Financial Institutions Reform,  Recovery, and Enforcement Act
of 1989  ("FIRREA"),  a thrift's  portfolio of  commercial  real estate loans is
limited to 400% of its capital.  Also,  FIRREA's  Qualified  Thrift  Lender test
limits  the  amount  of  commercial  real  estate  loans  made by  thrifts.  See
"Regulation --Qualified Thrift Lender." Home Federal currently complies with the
commercial  real estate loan  limitation,  and neither that  limitation  nor the
Qualified Thrift Lender test significantly limits the ability of Home Federal to
make commercial real estate loans in its market area.

         Generally,  commercial  mortgage  loans  involve  greater  risk to Home
Federal than do residential loans.  Commercial  mortgage loans typically involve
large loan  balances  to single  borrowers  or groups of related  borrowers.  In
addition, the payment experience on loans secured by income-producing properties
is typically  dependent on the successful  operation of the related  project and
thus may be subject to adverse  conditions  in the real estate  market or in the
general economy.

         Construction Loans

         Home Federal offers conventional short-term construction loans. At June
30, 2000, 13.0% of Home Federal's total loan portfolio consisted of construction
loans.   Normally,   a  95%  or  less  loan-to-value   ratio  is  required  from
owner-occupants of residential  property, an 80% loan-to-value ratio is required
from persons building residential property for sale or investment purposes,  and
an 80%  loan-to-value  ratio is required for commercial  property.  Construction
loans  are  also  made  to  builders  and  developers  for the  construction  of
residential or commercial  properties on a to-be-occupied or speculative  basis.
Construction normally must be completed in six months for residential loans. The
largest such loan on June 30, 2000, was $3.2 million.

         Consumer Loans

         Federal  laws  and  regulations  permit  federally   chartered  savings
institutions to make secured and unsecured consumer loans in an aggregate amount
of up to 35%  of the  institution's  total  assets.  In  addition,  a  federally
chartered  savings  institution  has lending  authority  above the 35% limit for
certain consumer loans, such as property  improvement loans and loans secured by
savings  accounts.  However,  the  Qualified  Thrift  Lender  test  places  some
restrictions on the ability of thrifts to make consumer  loans.  See "Regulation
-- Qualified Thrift Lender."

         Consumer-related  loans,  consisting of second mortgage and home equity
loans,  mobile home loans,  automobile loans,  loans secured by savings accounts
and consumer loans were $130.9 million on June 30, 2000, or approximately  19.2%
of Home Federal's total loan portfolio.

         Second  mortgage  loans  are made for  terms of 1 - 15  years,  and are
fixed-rate and variable rate line of credit loans.  Home  Federal's  minimum for
such  loans is $5,000,  and Home  Federal  will loan up to 90% of the  appraised
value of the  property,  less the existing  mortgage  amount(s).  As of June 30,
2000,  Home Federal had $35.7 million of second  mortgage  loans,  which equaled
5.2% of its total loan portfolio.  Home Federal aggressively markets home equity
credit lines, which are adjustable-rate loans. As of June 30, 2000, Home Federal
had $49.6  million  drawn on its home  equity  loans,  or 7.2% of its total loan
portfolio,  with $61.8 million of additional  credit  available to its borrowers
under existing home equity loans.

         Automobile  loans are generally made for terms of up to five years. The
vehicles  are  required to be for  personal  or family use only.  As of June 30,
2000, $22.6 million,  or 3.3%, of Home Federal's total loan portfolio  consisted
of automobile loans.

         As of June 30, 2000,  $10.0 million,  or 1.5%, of Home Federal's  total
loan portfolio consisted of mobile home loans.  Generally,  these loans are made
for terms of one year for each $1,000 of the sales price, with a maximum term of
15 years. On new mobile home loans, Home Federal requires a loan-to- value ratio
of 125% of the manufacturer's  invoice price plus sales tax or 90% of the actual
sales price,  whichever is lower.  Also, Home Federal makes loans for previously
occupied  mobile  homes up to a 90%  loan-to-value  ratio  based upon the actual
sales price or value as appraised, whichever is lower.

         Loans secured by savings account  deposits may be made up to 95% of the
pledged  savings  collateral at a rate 2% above the rate of the pledged  savings
account or a rate equal to Home  Federal's  highest  seven-year  certificate  of
deposit  rate,  whichever is higher.  The loan rate will be adjusted as the rate
for the pledged savings account changes.  As of June 30, 2000, $3.6 million,  or
0.5%, of Home Federal's total loan portfolio consisted of savings account loans.

         Although  consumer-related  loans  generally  involve a higher level of
risk than one-to four-family residential mortgage loans, their relatively higher
yields  and  shorter  terms to  maturity  are  believed  to be  helpful  in Home
Federal's asset/liability management.

         Commercial Loans

         Collateral for Home Federal's  commercial loans includes  manufacturing
equipment, real estate, inventory, accounts receivable, and securities. Terms of
these loans are normally for up to ten years and have  adjustable  rates tied to
the reported prime rate and treasury  indexes.  Generally,  commercial loans are
considered  to  involve a higher  degree of risk than  residential  real  estate
loans. However, commercial loans generally carry a higher yield and are made for
a shorter term than real estate loans.  As of June 30, 2000,  $60.9 million,  or
8.9%, of Home Federal's total loan portfolio consisted of commercial loans.

Origination, Purchase and Sale of Loans

         Home Federal  originates  residential loans in conformity with standard
underwriting  criteria of the Federal Home Loan Mortgage  Corporation  ("FHLMC")
and the  Federal  National  Mortgage  Association  ("FNMA")  to  assure  maximum
eligibility for possible resale in the secondary  market.  Although Home Federal
currently has authority to lend anywhere in the United  States,  it has confined
its loan  origination  activities  primarily  to the central  and south  central
Indiana area.  Home Federal's  loan  originations  are generated  primarily from
referrals from real estate brokers, builders, developers and existing customers,
newspaper,   radio  and  periodical  advertising  and  walk-in  customers.  Home
Federal's 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.

         Home Federal studies the employment, credit history, and information on
the historical and projected income and expenses of its individual and corporate
mortgagors  to assess their ability to repay its mortgage  loans.  Additionally,
HFSB utilizes Freddie Mac's Loan Prospector as an origination,  processing,  and
underwriting  tool. It uses its staff  appraisers or  independent  appraisers to
appraise  the  property  securing  its loans.  It requires  title  insurance  or
abstracts  accompanied by an attorney's  opinion evidencing Home Federal's valid
lien on its mortgaged  real estate and a mortgage  survey or survey  coverage on
all first  mortgage  loans and on other  loans when  appropriate.  Home  Federal
requires fire and extended  coverage  insurance in amounts at least equal to the
principal amount of the loan. It may also require flood insurance to protect the
property  securing its interest.  When private  mortgage  insurance is required,
borrowers  must make  monthly  payments  to an escrow  account  from  which Home
Federal makes  disbursements  for taxes and  insurance.  Otherwise,  such escrow
arrangements are optional.

         The procedure for approval of loans on property under  construction  is
the same as for residential  mortgage loans,  except that the appraisal obtained
evaluates  the building  plans,  construction  specifications  and  estimates of
construction  costs,  in  conjunction  with the land value.  Home  Federal  also
evaluates the  feasibility  of the  construction  project and the experience and
track record of the builder or developer.

         Consumer loans are  underwritten on the basis of the borrower's  credit
history and an analysis of the borrower's income and expenses,  ability to repay
the loan and the value of the collateral, if any.

In order to  generate  loan fee and  servicing  income  and  recycle  funds  for
additional lending activities, Home Federal seeks to sell loans in the secondary
market.  Loan sales can enable Home Federal to recognize  significant fee income
and to reduce interest rate risk while meeting local market demand. Home Federal
sold $46.1 million of  fixed-rate  loans in the fiscal year ended June 30, 2000.
Home Federal's current lending policy is to sell fixed-rate residential mortgage
loans  exceeding  15  year  maturities.  In  addition,  when in the  opinion  of
management cash flow demands and asset/liability  concerns warrant, Home Federal
will  consider  keeping  fixed-rate  loans  with 15 year  maturities  as well as
adjustable-rate  loans.  Home  Federal  may  sell  participating   interests  in
commercial  real  estate  loans in order to share the risk with  other  lenders.
Mortgage  loans  held for sale are  carried  at lower of cost or  market  value,
determined on an aggregate  basis.  The servicing is retained on most loan sales
except Veteran's  Administration  ("VA"), Federal Housing Administration ("FHA")
and Indiana Housing Finance Authority ("IHFA") loans.

         When loans are sold, Home Federal typically retains the  responsibility
for collecting and remitting loan payments,  inspecting the properties  securing
the loans,  making certain that monthly principal and interest payments and real
estate tax payments are made on behalf of borrowers, and otherwise servicing the
loans. Home Federal receives a servicing fee for performing these services.  The
amount of fees received by Home Federal varies,  but is generally  calculated as
an amount equal to 25 basis points per annum on the outstanding principal amount
of the loans  serviced.  The servicing fee is recognized as income over the life
of the loans.  At June 30, 2000,  Home Federal  serviced $451.8 million of loans
sold to other parties.  Gains and losses on sale of loans,  loan  participations
and mortgage-backed securities are recognized at the time of sale.

         Management believes that purchases of loans and loan participations may
be desirable and evaluates  potential  purchases as  opportunities  arise.  Such
purchases can enable Home Federal to take advantage of favorable lending markets
in other  parts of the state,  diversify  its  portfolio  and limit  origination
expenses. Any participation it acquires in commercial real estate loans requires
a review of financial  information on the borrower, a review of the appraisal on
the property by a local designated appraiser, an inspection of the property by a
senior loan officer,  and a financial  analysis of the loan.  Servicing of loans
purchased is generally  done by the seller.  At June 30, 2000,  others  serviced
approximately 1.7%, or $11.9 million, of Home Federal's gross loan portfolio.

     The following table shows loan activity for Home Federal during the periods indicated:

                                                                              Year Ended June 30,
                                                                            2000               1999               1998
                                                                                             (Dollars in Thousands)

Gross loans receivable at beginning of periods                       $       607,079    $       615,665    $       600,398
                                                                        -------------      -------------      -------------
     Loans Originated:
     Mortgage loans and contracts:
         Construction:
             Residential                                                      51,992             39,624             45,857
             Commercial                                                       18,889             14,547             38,310
         Purchases:
             Residential                                                     127,636            122,428            117,474
             Commercial                                                       13,936             27,219             22,206
         Refinancing                                                          32,104            169,425            169,202
         Other                                                                   844              1,527              3,188
                                                                         -------------      -------------      -------------
             Total                                                           245,401            374,770            396,237

     Commercial                                                               45,816             73,439             39,274
     Consumer                                                                 36,555             34,501             38,166
                                                                         -------------      -------------      -------------
         Total loans originated                                              327,772            482,710            473,677

     Loans purchased:
         Residential                                                              --                 --                 --
         Other                                                                 4,044              4,917              6,815
                                                                         -------------      -------------      -------------
             Total loans originated and purchased                            331,816            487,627            480,492


     Real estate loans sold                                                   46,082            217,530            211,365
     Loan repayments and other deductions                                    208,727            278,683            253,860
                                                                         -------------      -------------      -------------
         Total loans sold, loan repayments and other deductions              254,809            496,213            465,225

     Net loan activity                                                        77,007             (8,586)            15,267
                                                                         -------------      -------------      -------------
     Gross loans receivable at end of period                                 684,086            607,079            615,665
     Adjustments                                                             (32,079)           (20,161)           (33,625)
                                                                         -------------      -------------      -------------
     Net loans receivable at end of period                           $       652,007    $       586,918    $       582,040




         Under FIRREA, a savings association  generally may not make any loan to
a borrower or its related entities if the total of all such loans by the savings
association  exceeds 15% of its capital (plus up to an additional 10% of capital
in the case of loans fully  collateralized  by readily  marketable  collateral);
provided,  however,  that loans up to $500,000  irrespective  of the  percentage
limitations  may be made  and  certain  housing  development  loans of up to $30
million or 30% of capital,  whichever is less, are permitted. The maximum amount
which Home Federal could have loaned to one borrower and the borrower's  related
entities at June 30, 2000 under the 15% of capital limitation was $11.8 million.
At that date,  the highest  outstanding  balance of loans by Home Federal to one
borrower and related entities was approximately  $7.9 million,  an amount within
such loans-to-one borrower limitations.

Origination and Other Fees

         Home Federal  realizes  income from fees for  originating  loans,  late
charges,  NOW  account  fees and fees for  other  miscellaneous  services.  Home
Federal charges  origination fees that range from 0% to 3.5% of the loan amount.
In  addition  Home  Federal  charges   processing  fees  of  $150  to  $225  and
underwriting  fees of from $0 to $150.  Late charges are  assessed  fifteen days
after  payment is due. Home Federal also receives  commissions  on  full-service
securities   brokerage   transactions   which  its   subsidiary,   Home  Savings
Corporation, offers to its customers.

Non-performing Assets

         Home Federal  assesses  late charges on mortgage  loans if a payment is
not received by the 16th day following its due date.  Any borrower whose payment
was not received by this time is mailed a past due notice.  At the same time the
notice is mailed, the delinquent account is downloaded to a PC- based collection
system and assigned to a specific loan service representative.  The loan service
representative  will  attempt to make contact with the customer via a phone call
to efficiently and effectively  resolve any problem that might exist. If contact
by phone is not possible, mail, in the form of preapproved form letters, will be
used commencing on the 16th day following a specific due date.  Between the 30th
and 60th day following  any due date,  or at the time a second  payment has come
due, if no contact  has been made with the  customer,  a personal  visit will be
conducted by a Loan Service  Department  employee to interview  the customer and
inspect the  property to  determine  the  borrower's  ability to repay the loan.
Prompt  follow  up is a goal of the  Loan  Service  Department  with any and all
delinquencies.

         When an advanced stage of  delinquency  appears  (generally  around the
90th day of delinquency) and if repayment cannot be expected within a reasonable
amount of time,  Home  Federal  will make a  determination  of how to proceed to
protect the interests of both the customer and Home Federal. It may be necessary
for the borrower to attempt to sell the property at Home Federal's request. If a
resolution  cannot be arranged,  Home Federal will consider avenues necessary to
obtain  title to the  property  which  include  foreclosure  and/or  accepting a
deed-in-lieu of foreclosure,  whichever may be most appropriate.  However,  Home
Federal attempts to avoid taking title to the property if at all possible.

         Home Federal has acquired certain real estate in lieu of foreclosure by
acquiring title to the real estate and then reselling it. Home Federal  performs
an updated  title check of the  property  and, if needed,  an  appraisal  on the
property before accepting such deeds.

         On June 30,  2000,  Home  Federal  held $1.2 million of real estate and
other  repossessed  collateral  acquired as a result of  foreclosure,  voluntary
deed,  or other means.  Such assets are  classified as "real estate owned" until
sold. When property is so acquired,  it is recorded at the lower of cost or fair
market  value less  estimated  cost to sell at the date of  acquisition  and any
subsequent write down resulting therefrom is charged to the allowance for losses
on real estate owned. Interest accrual ceases on the date of acquisition and all
costs incurred from that date in maintaining the property are expensed.

         Consumer  loan  borrowers  who  fail to  make  payments  are  contacted
promptly  by the  Loan  Service  Department  in an  effort  to  effectively  and
efficiently cure any delinquency.  A notice of delinquency is sent 10 days after
any specific due date when no payment has been received.  The delinquent account
is  downloaded to a PC-based  collection  system and assigned to a specific loan
service  representative.  The loan service  representative  will then attempt to
contact the borrower via a phone call.

         Continued follow-up in the form of phone calls,  letters,  and personal
visits (when necessary) will be conducted to resolve delinquency.  If a consumer
loan  delinquency  continues  and advances to the 60-90 days past due status,  a
determination  will be made by Home  Federal on how to proceed.  When a consumer
loan reaches 90 days past due Home Federal determines the loan to value ratio by
performing an inspection of the collateral  (if any).  Home Federal may initiate
action to obtain  collateral  (if any) or  collect  the debt  through  the legal
remedies available.  Collateral obtained as a result of loan default is retained
by Home Federal as an asset until sold or otherwise disposed.

The table  below  sets  forth  the  amounts  and  categories  of Home  Federal's
non-performing  assets  (non-accrual loans, loans past due 90 days or more, real
estate owned and other  repossessed  assets) for the last five years.  It is the
policy of Home Federal that all earned but uncollected  interest on conventional
loans be  reviewed  monthly  to  determine  if any  portion  thereof  should  be
classified as  uncollectible  for any portion that is due but  uncollected for a
period in excess of 90 days. The determination is based upon factors such as the
amount  outstanding  of the loan as a percentage of the  appraised  value of the
property and the delinquency record of the borrower.

                                                                                    At June 30,

                                                            2000          1999         1998          1997          1996
                                                            ----          ----         ----          ----          ----
Non-performing Assets:
     Loans:
          Non-accrual                                   $       2,422 $       3,509 $        3,992 $       2,930 $       2,871
          Past due 90 days or more                                  -             -              -            40            89
     Restructured loans                                           632            61              -             1             1
     Total non-performing loans                                 3,054         3,570          3,992         2,971         2,961
     Real estate owned, net (1)                                 1,210         1,936            117            51             -
     Other repossessed assets, net                                 25           114            125            88            48
                                                           -----------   -----------   ------------  ------------  ------------
          Total non-performing assets                   $       4,289$        5,620 $        4,234 $       3,110 $       3,009
                                                           ===========   ===========   ============  ============  ============

     Total non-performing assets to total assets (2)             .52%          .75%          0.59%         0.46%         0.48%

     Loans with allowance for uncollected interest      $       2,422 $       3,509 $        3,993 $       2,930 $       2,872


(1)  Refers  to real  estate  acquired  by  Home  Federal  through  foreclosure,
     voluntary deed, or insubstance foreclosure, net of reserve.

(2)  At June 30, 2000, 41.2% of Home Federal's  non-performing  assets consisted
     of residential  mortgage  loans,  1.4% consisted of commercial  real estate
     loans,   3.8%   consisted  of   commercial   loans,   10.1%   consisted  of
     consumer-related loans, 14.7% consisted of restructured  residential loans,
     28.8% consisted of real estate owned and other repossessed assets.

         For the year  ended  June 30,  2000,  the  income  that would have been
recorded under original terms on the above  non-accrual and  restructured  loans
was $268,000  compared to actual income recorded of $227,000.  At June 30, 2000,
Home Federal had  approximately  $4.4 million in loans that were 30-89 days past
due.

         The allowance for loan losses  represents  amounts  available to absorb
losses inherent in the loan portfolio.  Loans or portions thereof are charged to
the  allowance  when  losses  are  considered  probable.  Recoveries  of amounts
previously charged off are added to the allowance and provisions for loan losses
are charged or credited to earnings to bring the allowance to a level considered
appropriate by management.

         For the year  ended  June 30,  2000,  Home  Federal  charged  off loans
totaling $937,000 and realized  recoveries of $96,000 on previously  charged-off
loans. Based on management's continuing review of the loan portfolio, historical
charge-offs and current economic  conditions,  Home Federal recorded a charge to
earnings of $1.4 million to adjust the  allowance to $4.9 million as of June 30,
2000.

Investments

Home  Federal's  investment  portfolio  consists  primarily  of  mortgage-backed
securities,  collateralized mortgage obligations,  overnight funds with the FHLB
of Indianapolis,  U.S. Treasury obligations, U.S. Government agency obligations,
corporate  debt and municipal  bonds.  At June 30, 2000,  1999,  and 1998,  Home
Federal had  approximately  $107.2  million,  $90.0 million and $72.2 million in
investments, respectively.

              Home Federal's  investment portfolio is managed by its officers in
accordance  with an investment  policy  approved by the Board of Directors.  The
Board reviews all transactions  and activities in the investment  portfolio on a
monthly basis.  Home Federal does not purchase  corporate debt securities  which
are not  rated  in one of the top four  investment  grade  categories  by one of
several  generally  recognized  independent  rating  agencies.   Home  Federal's
investment  strategy  has enabled it to (i) shorten the average term to maturity
of its assets,  (ii)  improve the yield on its  investments,  (iii) meet federal
liquidity  requirements and (iv) maintain  liquidity at a level that assures the
availability of adequate funds.

         The OTS  requires  savings  associations  to maintain an average  daily
balance of liquid assets (cash, certain time deposits, bankers' acceptances, and
specified  United  States  government,  state  or  federal  agency  obligations,
corporate debt  securities,  commercial  paper,  certain  mutual funds,  certain
mortgage related securities,  and certain first lien residential mortgage loans)
equal to a monthly  average of not less than a specified  percentage  of its net
withdrawable  savings  deposits  plus  short-term  borrowings.   This  liquidity
requirement may be changed from time to time by the OTS to any amount within the
range of 4% to 10%, and is currently 4%.  Monetary  penalties may be imposed for
failure to meet the liquidity  requirement.  At June 30, 2000,  Home Federal had
liquid assets of $117.6 million,  and a liquidity ratio of 19.0%, which exceeded
its liquidity requirement.

Source Of Funds

         General

         Deposits have  traditionally  been the primary  source of funds of Home
Federal for use in lending and investment  activities.  In addition to deposits,
Home Federal derives funds from loan amortization,  prepayments, borrowings from
the FHLB of Indianapolis and income on earning assets.  While loan  amortization
and income on earning  assets are relatively  stable  sources of funds,  deposit
inflows and outflows can vary widely and are  influenced by prevailing  interest
rates, money market conditions and levels of competition. Borrowings may be used
to  compensate  for  reductions  in  deposits  or  deposit  inflows at less than
projected  levels and may be used on a  longer-term  basis to  support  expanded
activities. See "-- Borrowings."

         Deposits

         Consumer and commercial deposits are attracted  principally from within
Home Federal's  primary market area through the offering of a broad selection of
deposit  instruments  including  checking accounts,  fixed-rate  certificates of
deposit, NOW accounts,  individual  retirement  accounts,  passbook accounts and
commercial  demand deposit  accounts.  Home Federal does not actively solicit or
advertise  for  deposits  outside  of the  counties  in which its  branches  are
located.  Deposit account terms vary, with the principal  differences  being the
minimum balance required, the amount of time the funds remain on deposit and the
interest  rate.  To attract  funds,  Home  Federal  pays higher  rates on larger
balances within the same maturity class.

         Under  regulations  adopted  by  the  FDIC,   well-capitalized  insured
depository  institutions  (those with a ratio of total capital to  risk-weighted
assets of not less  than  10%,  with a ratio of core  capital  to  risk-weighted
assets of not less than 6%, with a ratio of core  capital to total assets of not
less  than 5% and  which  have  not been  notified  that  they  are in  troubled
condition) may accept brokered  deposits without  limitations.  Undercapitalized
institutions  (those that fail to meet minimum regulatory capital  requirements)
are  prohibited  from  accepting  brokered  deposits.   Adequately   capitalized
institutions (those that are neither  well-capitalized nor undercapitalized) are
prohibited  from accepting  brokered  deposits unless they first obtain a waiver
from  the  FDIC.  Under  these  standards,   Home  Federal  would  be  deemed  a
well-capitalized institution.

         An  undercapitalized  institution may not solicit  deposits by offering
rates of interest that are  significantly  higher than the  prevailing  rates of
interest on insured  deposits (i) in such  institution's  normal market areas or
(ii) in the market area in which such deposits would otherwise be accepted.

         Home  Federal on a periodic  basis  establishes  interest  rates  paid,
maturity terms,  service fees and withdrawal  penalties.  Determination of rates
and terms are predicated on funds acquisition and liquidity requirements,  rates
paid by  competitors,  growth  goals,  federal  regulations,  and market area of
solicitation.

         The following table sets forth by nominal  interest rate categories the
composition of deposits of Home Federal at the dated indicated:

                                                      At June 30,

                                              2000      1999      1998
                                              ----      ----      ----
                                               (Dollars in Thousands)

Non-interest bearing and below 2.99%       $ 138,205 $ 136,598 $ 123,348
3.00% - 4.99%                                 65,983   225,362   119,234
5.00% - 6.99%                                347,428   216,808   298,774
7.00% - 9.00%                                 21,277     1,114     2,633
                                             --------  --------  --------

Total                                      $ 572,893 $ 579,882 $ 543,989

                                             ========  ========  ========



      The following table sets forth the change in dollar amount of deposits in the various accounts offered by Home Federal for the periods indicated.

                                                                                                    DEPOSIT ACTIVITY
                                                                                                  (Dollars in Thousands)

                                          Balance                                      Balance                                      Balance
                                             at                                           at                                           at
                                          June 30,       % of          Increase        June 30,       % of          Increase        June 30,       % of          Increase
                                            2000       Deposits       (Decrease)         1999       Deposits       (Decrease)         1998       Deposits       (Decrease)

Withdrawable:
Non-interest bearing                  $       39,495          6.9% $         3,963 $       35,532          6.1% $        10,430 $       25,102          4.6% $         1,596
Passbook                                      44,783          7.8%          (3,243)        48,026          8.3%             387         47,639          8.8%            (804)
Money market savings                         108,430         19.0%           1,844        106,586         18.4%          29,453         77,133         14.2%          12,370
NOW                                           53,937          9.4%             897         53,040          9.1%           2,855         50,185          9.2%           4,952
                                        ---------------------------  --------------  ---------------------------  --------------  ---------------------------  --------------
      Total Withdrawable                     246,645         43.1%           3,461        243,184         41.9%          43,125        200,059         36.8%          18,114
                                        ---------------------------  --------------  ---------------------------  --------------  ---------------------------  --------------
Certificates:
Less than one year                            57,143         10.0%         (30,356)        87,499         15.1%         (16,421)       103,920         19.1%           6,619
12 to 23 months                              126,302         22.0%          11,394        114,908         19.8%          (9,158)       124,066         22.8%          13,824
24 to 35 months                               94,594         16.5%          18,680         75,914         13.1%          23,618         52,296          9.6%          (7,561)
36 to 59 months                               10,208          1.8%          (1,700)        11,908          2.1%          (2,893)        14,801          2.7%          (7,795)
60 to 120 months                              38,011          6.6%          (8,458)        46,469          8.0%          (2,378)        48,847          9.0%          (7,000)
                                        ---------------------------  --------------  ---------------------------  --------------  ---------------------------  --------------
      Total certificate accounts             326,258         56.9%         (10,440)       336,698         58.1%          (7,232)       343,930         63.2%          (1,913)
                                        ---------------------------  --------------  ---------------------------  --------------  ---------------------------  --------------
          Total deposits              $      572,903        100.0% $        (6,979)$      579,882        100.0% $        35,893 $      543,989        100.0% $        16,201
                                        ===========================  ==============  ===========================  ==============  ===========================  ==============

The following table represents, by various interest rate categories, the amounts of deposits maturing during each of the
three years following June 30, 2000, and the percentage of such maturities to total deposits.  Matured certificates which have
not been renewed as of June 30, 2000 have been allocated based upon certain rollover assumptions.

                                                           DEPOSITS MATURITIES
                                                           (Dollars in Thousands)

                                     3.99%        4.00         5.00         6.00        7.00
                                       or          to           to           to          to                         Percent of
                                      less       4.99%        5.99%        6.99%       9.00%        Total        Total

Certificate accounts maturing in
the twelve-month period ending:

June 30, 2001                           $ 521     $ 52,338     $ 93,190     $ 60,454    $ 9,327      $215,830        66.2%
June 30, 2002                               -        7,468       25,484       38,877      4,602        76,431        23.4%
June 30, 2003                             100        2,071        3,860        6,520      6,852        19,403         5.9%
Thereafter                                  -        3,485        6,729        3,884        496        14,594         4.5%
                                   ----------------------------------------------------------------------------------------
                                        $ 621     $ 65,362    $ 129,263    $ 109,735   $ 21,277      $326,258       100.0%
                                   ========================================================================================



Included in the deposit totals in the above table are savings certificates of deposit with balances of over $100,000.  The
majority of these deposits are from regular customers of Home Federal. None of these were brokered deposits.  The following
table provides a breakdown at  June 30, 2000 of certificates of greater than $100,000 by maturity.



                                                           ACCOUNTS GREATER THAN $100,000
                                                                        (Dollars in Thousands)

                                                  4.00         5.00         6.00        7.00
                                                   to           to           to          to                    Percent of
                                                 4.99%        5.99%        6.99%       7.99%        Total        Total

Certificate accounts maturing in
the twelve-month period ending:

June 30, 2001                                      $ 2,546     $ 21,480     $ 48,234    $ 9,013      $ 81,273        81.7%
June 30, 2002                                          531        2,531        5,711      1,842        10,615        10.7%
June 30, 2003                                          256          909          998      1,444         3,607         3.6%
Thereafter                                               -        1,165        2,326        456         3,947         4.0%
                                              -----------------------------------------------------------------------------
                                                   $ 3,333     $ 26,085     $ 57,269   $ 12,755      $ 99,442       100.0%
                                              =============================================================================











         Borrowings

         Home  Federal  relies  upon  advances  (borrowings)  from  the  FHLB of
Indianapolis to supplement its supply of lendable funds, meet deposit withdrawal
requirements  and to  extend  the term of its  liabilities.  This  facility  has
historically  been Home Federal's major source of borrowings.  Advances from the
FHLB of Indianapolis  are typically  secured by Home Federal's stock in the FHLB
of  Indianapolis  and a  portion  of Home  Federal's  first  mortgage  loans and
mortgage-backed securities.

         Each FHLB credit program has its own interest rate,  which may be fixed
or variable,  and range of maturities.  Subject to the express limits in FIRREA,
the FHLB of  Indianapolis  may  prescribe  the  acceptable  uses to which  these
advances  may be put, as well as  limitations  on the size of the  advances  and
repayment  provisions.  At June 30, 2000,  Home  Federal had  advances  totaling
$175.5 million outstanding from the FHLB of Indianapolis.

         On June 1, 2000,  the Company  entered  into a revolving  note with
LaSalle Bank N.A.  whereby the Company may borrow up to $12.5  million  ("Senior
Debt").  The note accrues  interest at a variable  rate based on the  ninety-day
LIBOR index, on the date of the draw, plus 150 basis points.  Interest  payments
are due ninety days after the date of any  principal  draws made on the loan and
every  ninety  days  thereafter.  The  principal  balance  is due in  full as of
November 29, 2000.  As of June 30, 2000 the Company had a $6.2 million  balance,
consisting of two draws of $5.1 million and $1.1 million accruing interest as of
June 30,  2000 at 8.34% and  8.29%,  respectively.  The  Company  used the funds
attained  to buy  back  shares  of the  Company's  common  stock.  The  note  is
collateralized by the assets of the Company.  Under terms of the agreement,  the
Company is bound by certain  restrictive  debt convenants  relating to earnings,
net worth and various financial ratios.

         Other than the FHLB advances and the Senior Debt,  Home  Federal's only
borrowings in recent years have been short-term borrowings.  The following table
sets  forth  the  maximum  amount  of each  category  of  short-term  borrowings
(borrowings  with remaining  maturities of one year or less)  outstanding at any
month-end  during  the  periods  shown and the  average  aggregate  balances  of
short-term borrowings for such periods.

                                                            For the year ended June 30,

                                                         2000         1999          1998
                                                         -----        ----          ----
                                                              (Dollars in Thousands)

 FHLB advances                                       $    70,900   $    34,500   $   38,800
Official check overnight remittance                  $     5,150   $     6,273   $    8,710
Money Order remittance                               $        54   $        57   $       44
FHLB overnight remittance                            $     2,325   $       420   $      992
Average amount of total short-term borrowings
outstanding                                          $    39,878   $    26,309   $   32,934

The  following  table  sets  forth  the  amount  of  short  term  FHLB  advances
outstanding at year end during the period shown and the weighted average rate of
such FHLB advances.

                                         At the year ended June 30,

                                     2000          1999          1998
                                     ----          ----          ----
                                           (Dollars in Thousands)

FHLB advances:
        Amount                   $  69,900     $  11,300     $  36,000
        Weighted average rate        6.5%          6.1%          6.1%

         See Note 9 in the Notes to Consolidated  Financial  Statements included
in the 2000  Shareholder  Annual  Report  incorporated  into Item 8 hereof for a
description of the terms of these borrowings.

         Service Corporation Subsidiaries

         Federal  savings banks generally may invest up to 2% of their assets in
service  corporations and make loans to such  subsidiaries and joint ventures in
which such subsidiaries are participants in an aggregate amount not exceeding 2%
of an association's  assets,  plus an additional 1% of assets if the amount over
2% is used for  specified  community  or  inner-city  development  purposes.  In
addition,  federal  regulations  permit  associations to make specified types of
loans to such subsidiaries  (other than special- purpose finance  subsidiaries),
in which the association owns more than 10% of the stock, in an aggregate amount
not exceeding 50% of the association's  regulatory  capital if the association's
regulatory capital is in compliance with applicable regulations.

         One of Home Federal's  subsidiaries,  Home Savings Corporation ("HSC"),
an Indiana corporation,  is currently engaged in three types of activities:  (i)
real estate  development;  (ii) sales of life insurance  products and annuities;
and (iii) full-service  securities brokerage services. With the exception of its
securities  brokerage  services,  all of HSC's activities are conducted  through
joint  ventures  in which it is an equity  investor.  HSC has  undertaken  these
activities as a part of Home Federal's  business  strategy of  diversifying  its
operations into areas which, although related to traditional activities in which
Home  Federal has  expertise  and often  involving a similar  pool of  potential
customers,  provide  opportunities  to earn income that are not as  sensitive to
changes in interest rates as is net interest income,  and also to meet the needs
of its customers by becoming a  full-service  financial  center.  Although these
activities create a potential for a higher rate of return than mortgage lending,
either directly through operations or indirectly  through  appreciation in value
of the business or real property, these activities involve greater and different
risks than those  associated  with thrift  lending and can affect  adversely the
savings  association's  regulatory  capital  calculations.  See  "Regulation  --
Regulatory  Capital." At June 30, 2000, Home Federal's  aggregate  investment in
HSC,  including loans, was $10.3 million.  For the year ended June 30, 2000, HSC
reported  income of $789,000 from these  operations.  HSC's office is located at
222 West  Second  Street,  Seymour,  Indiana.  The  consolidated  statements  of
operations  of Home  Federal  and its  subsidiaries  included  elsewhere  herein
include the operations of HSC.  Intercompany balances and transactions have been
eliminated in the consolidation.

         The following  table sets forth certain  information  regarding each of
the joint ventures in which HSC was involved at June 30, 2000.

                                                                        Date

                                                                        HSC                        Loans from Home
                                                                       Entered                       Savings Corp.
                                                                       into the       Equity         Outstanding

Name                          Type of Project                          Project        Investment     June 30, 2000
----                          ---------------                          -------        ----------     -------------
Consortium Partners           Owns Family Financial Life Insurance     11/31/83   $        715,000 $               -
                              Company of New Orleans

Coventry Associates           Real Estate development                   8/31/89   $         19,000 $               -
                              in Seymour, Indiana
Heritage Woods II             Rental Apartment project of low income   11/15/89   $         78,000 $               -
                              housing (22 units)
Broadmoor North /Heathfield   Real estate development                  12/15/99   $      1,374,000 $       1,346,000
                              in Columbus, Indiana
Home-Breeden                  Real estate development                   7/1/94    $      2,058,000 $       1,559,000
                              in Columbus, Indiana
Crystal Lake at River Ridge   Single family homes in Indianapolis,     11/29/97   $      1,918,000 $       1,939,000
                              Indiana
Bloomington Technology        Industrial park in Bloomington, Indiana  11/10/97   $        569,000 $               -
Park, LLC
Courtyard Homes at            Single family homes in Indianapolis,      6/14/99   $      3,602,000 $       3,593,000
Sycamore Springs, LLC         Indiana


         HSC has a 14% interest in Consortium Partners, a Louisiana partnership,
which owns 50% of the outstanding  shares of the Family Financial Life Insurance
Company  of  New  Orleans  ("Family  Financial").   The  remaining  50%  of  the
outstanding shares of Family Financial is owned  proportionately by the partners
of  Consortium  Partners.  Family  Financial  sells life,  accident,  and health
insurance  as  well  as  annuity  products  to the  customers  of the  partners'
parent-thrifts. HSC receives (1) dividends paid on Family Financial shares owned
directly by it, (2) a pro rata  allocation of dividends  received on shares held
by  Consortium  Partners,  which are  divided  among the  partners  based on the
actuarially  determined value of Family  Financial's  various lines of insurance
generated  by  customers  of these  partners,  and (3)  commissions  on sales of
insurance  products  made to customers.  For the year ended June  30,2000,  Home
Federal had income of $343,000,  on a consolidated  basis,  from commissions and
dividends paid on Family Financial activities.

         During the fiscal year 2000 HSC switched from offering  Linsco  Private
Ledger  full-service  securities  brokerage  services to offering  Raymond James
Financial  services  products.  For the year ended June 30,  2000,  HSC received
$498,000 in commissions from these activities.

         In August,  1989, HSC entered into a financing  agreement with Greemann
Real Estate,  Inc. to purchase and develop  Coventry  Place, a residential  real
estate subdivision in Seymour, Indiana. HSC is entitled to 65% of the net profit
after the payment of all interest, development and sales fees.

         In  November,  1989,  HSC  invested  $184,000  as a limited  partner in
Heritage Woods II, a low income housing project in Columbus,  Indiana.  HSC will
receive  low-income  housing tax credits for 10 years from this project and must
maintain the investment for 15 years to avoid any tax credit recapture.

         On December 15, 1999,  HSC entered into a joint venture  agreement with
Breeden  Investment  Group,  Inc. to develop a 100 lot  residential  real estate
subdivision  ("Broadmoor   North/Heathfiled").   Broadmoor  North/Heathfield  is
located on the north  central side of Columbus,  Indiana.  Loan  documents  were
executed on December 23, 1999 for land  acquisition  and development of phases I
and II in an amount not to exceed $2.2  million.  In addition to interest on the
loan,  HSC will receive 35% of the profits after all interest,  development  and
sales costs.

         On July 1,  1994,  HSC  entered  into a joint  venture  agreement  with
Breeden  Investment  Group,  Inc. to develop a 320 lot starter home  subdivision
with  additional   multi-family  and  commercial  land   ("McCullough's   Run").
McCullough's  Run is  located  on the  east  side  of  Columbus,  Indiana.  Loan
documents were executed on July 1, 1994 for land  acquisition and development of
phases I and II.  Subsequent  closings have  encompassed  the balance of the six
phases and on March 6, 2000 loan  documents  were  executed  in an amount not to
exceed $2.1 million. The outstanding loan balance of $1.6 million as of June 30,
2000,  reflects the development costs to date of all six phases, the condominium
site and commercial  acreage.  HSC is entitled to 50% of the profit from sale of
lots within McCullough's Run.

         On November 29, 1997,  HSC entered  into an LLC  agreement  with Curtis
Enterprises, Inc., and Gary B. Warstler to build up to eighty-five single family
homes at Crystal Lake at River Ridge in northern  Indianapolis,  Indiana. On May
1, 2000,  the LLC  agreement was amended when Mr.  Warstler  desired to withdraw
from the LLC and assign his  percentage  share in the LLC equally  among the two
remaining members.  The LLC purchases finished lots from RN Thompson Development
Corporation.  HSC has  provided  a line of credit in the amount of $3 million to
build the homes.  HSC is entitled to one third of the profits from homes started
before Mr. Warstler withdrew and 50% of the profits from homes started after Mr.
Warstler withdrew.

         On  November  10,  1997  HSC  entered  into  an  LLC   agreement   with
Wininger-Stolberg  HC, II, Inc. to develop the  Bloomington  Technology  Park in
Bloomington,  IN. The City of  Bloomington  and Monroe  County are  providing an
$800,000 grant to build infrastructure.  HSC will provide a matching amount. The
eighty-two  acre site was purchased  from Otis Elevator  Company,  Inc. and work
started late spring,  1998.  HSC is entitled to a fee of $150,000 and 50% of all
profit from the sale of lots in Bloomington Technology Park.

         On June  14,  1999,  HSC  entered  into an LLC  agreement  with  Curtis
Enterprises,  Inc. to build 54 homes at Courtyard Homes at Sycamore  Springs,  a
planned community in Indianapolis,  Indiana. The LLC purchased the land and will
develop  lots and  build the  homes.  HSC has  provided  a line of credit in the
amount of $5  million to build the homes,  and is  entitled  to one third of the
profits from the home sales.

         Home Federal also  organized  another  service  corporation  subsidiary
under Indiana law, HomeFed  Financial Corp., as a financing  subsidiary to issue
subordinated debt, collateralized mortgage obligations,  and similar securities.
This  corporation is currently a shell  corporation and has never engaged in any
business operations.

         Employees

         As of June 30, 2000,  Home Federal  employed 255 persons on a full-time
basis and 5 persons on a part-time basis.  None of Home Federal's  employees are
represented by a collective bargaining group.  Management considers its employee
relations to be excellent.

         Competition

         Home Federal  operates in south central Indiana and makes almost all of
its  loans to,  and  accepts  almost  all of its  deposits  from,  residents  of
Bartholomew,  Jackson, Jefferson, Jennings, Scott, Ripley, Washington,  Decatur,
Monroe and Marion counties in Indiana.

         Home  Federal  is  subject  to  competition   from  various   financial
institutions,  including  state and  national  banks,  state and federal  thrift
associations,  and other companies or firms,  including  brokerage houses,  that
provide similar services in the areas of Home Federal's home and branch offices.
Also,  in Seymour,  Columbus,  North  Vernon and  Batesville,  Home Federal must
compete with banks and savings institutions in Indianapolis. To a lesser extent,
Home Federal competes with financial and other  institutions in the market areas
surrounding  Cincinnati,  Ohio  and  Louisville,  Kentucky.  Home  Federal  also
competes  with money  market  funds which  currently  are not subject to reserve
requirements,  and with  insurance  companies  with  respect  to its  Individual
Retirement and annuity accounts.

        Under current law, bank holding companies may acquire thrifts.  Thrifts
may also acquire banks under federal law. To date,  several bank holding company
acquisitions  of healthy  thrifts in Indiana have been  completed.  Affiliations
between banks and thrifts based in Indiana have increased the competition  faced
by  Home  Federal  and  the  Company.  See  "Acquisitions  or  Dispositions  and
Branching".

         The primary factors  influencing  competition for deposits are interest
rates, service and convenience of office locations.  Competition is affected by,
among other things,  the general  availability  of lendable  funds,  general and
local economic conditions,  current interest rate levels, and other factors that
are not readily predictable.

Regulation

         General

         Home Federal,  as a federally chartered stock savings bank, is a member
of the Federal  Home Loan Bank  System  ("FHLB  System")  and its  deposits  are
insured by the Savings Association Insurance Fund ("SAIF") which is administered
by the FDIC. Home Federal is subject to extensive regulation by the OTS. Federal
associations may not enter into certain  transactions  unless certain regulatory
tests are met or they obtain prior governmental  approval,  and the associations
must  file  reports  with the OTS about  their  activities  and their  financial
condition. Periodic compliance examinations of Home Federal are conducted by the
OTS that has, in conjunction  with the FDIC in certain  situations,  examination
and enforcement  powers.  This supervision and regulation is intended  primarily
for the  protection of depositors  and federal  deposit  insurance  funds.  Home
Federal is also subject to certain reserve requirements under regulations of the
Board of Governors of the Federal Reserve System ("FRB").

         An OTS  regulation  establishes  a schedule for the  assessment of fees
upon all savings  associations  to fund the operations of the OTS and a schedule
of fees for the  various  types of  applications  and  filings  made by  savings
associations  with the OTS. The OTS has  established a marginal  assessment rate
for calculating the semi-annual  assessment payable by savings associations that
decreases as the asset size of a savings association  increases,  and includes a
fixed-cost  component  that  is  assessed  on  all  savings  associations.   The
assessment  rate  that  applies  to  a  savings  association  depends  upon  the
institution's  size,  condition,  and the  complexity  of its  operations.  Home
Federal's semi-annual  assessment under this revised regulation is approximately
$76,000.

         Home Federal is also subject to federal and state regulation as to such
matters as loans to officers,  directors,  or principal  shareholders,  required
reserves,  limitations as to the nature and amount of its loans and investments,
regulatory  approval of any merger or consolidation,  issuance or retirements of
its own securities, and limitations upon other aspects of banking operations. In
addition,  the activities and operations of Home Federal are subject to a number
of additional detailed, complex and sometimes overlapping federal and state laws
and regulations.  These include state usury and consumer credit laws, state laws
relating to fiduciaries,  the Federal Truth-In-Lending Act and Regulation Z, the
Federal Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting
Act, the Community Reinvestment Act,  anti-redlining  legislation and anti-trust
laws.

Federal Home Loan Bank System

         Home Federal is a member of the FHLB of  Indianapolis,  which is one of
twelve  regional  FHLBs.  Each FHLB serves as a reserve or central  bank for its
members  within its assigned  region.  The FHLB is funded  primarily  from funds
deposited by banks and savings  associations  and proceeds derived from the sale
of consolidated obligations of the FHLB system. It makes loans to members (i.e.,
advances) in accordance with policies and procedures established by the Board of
Directors of the FHLB.  All FHLB  advances  must be fully  secured by sufficient
collateral  as  determined  by the  FHLB.  The  Federal  Housing  Finance  Board
("FHFB"), an independent agency, controls the FHLB System, including the FHLB of
Indianapolis.

         Prior to the enactment of the Gramm-Leach-Bliley Act (the "GLB Act") on
November 12, 1999, a federal savings association was required to become a member
of the FHLB for the  district  in  which  the  thrift  is  located.  The GLB Act
abolished this requirement,  effective six months following the enactment of the
statute,  at which time membership with the FHLB became  voluntary.  Any savings
association that chooses to become (or remain) a member of the FHLB must qualify
for membership under the criteria that existed prior to the enactment of the GLB
Act.  Home  Federal  currently  intends  to  remain  a  member  of the  FHLB  of
Indianapolis.

         As a member of the FHLB,  Home  Federal is  required  to  purchase  and
maintain stock in the FHLB of  Indianapolis in an amount equal to at least 1% of
its aggregate unpaid  residential  mortgage loans, home purchase  contracts,  or
similar  obligations  at the  beginning  of each year.  At June 30,  2000,  Home
Federal's investment in stock of the FHLB of Indianapolis was $ 9.0 million. The
FHLB  imposes  various  limitations  on advances  such as limiting the amount of
certain types of real estate-related collateral to 30% of a member's capital and
limiting  total  advances to a member.  Interest rates charged for advances vary
depending upon maturity,  the cost of funds to the FHLB of Indianapolis  and the
purpose of the borrowing.

         The FHLBs are required to provide funds for the  resolution of troubled
savings  associations  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.  For the fiscal year ended June
30, 2000,  dividends paid by the FHLB of  Indianapolis  to Home Federal  totaled
approximately $575,000 for an annual rate of 8.0%.

         Liquidity

         Federal law  requires  that  savings  associations  maintain an average
daily balance of liquid assets in a minimum amount not less than 4% or more than
10% of their  withdrawable  accounts plus short-term  borrowings.  Liquid assets
include cash,  certain time deposits,  certain bankers'  acceptances,  specified
U.S.  government,  state or federal agency  obligations,  certain corporate debt
securities,  commercial paper,  certain mutual funds,  certain  mortgage-related
securities,   and  certain  first-lien   residential  mortgage  loans.  The  OTS
regulation that implements this statutory liquidity  requirement provides that a
savings  association  must hold liquid  assets in a minimum  amount of 4% of net
withdrawable accounts and short-term borrowings.  The regulation permits savings
associations to calculate  compliance with the liquidity  requirement based upon
their average  daily  balance of liquid assets during each quarter.  The OTS may
impose  monetary  penalties  on  savings  associations  that fail to meet  these
liquidity  requirements.  As of June 30, 2000, Home Federal had liquid assets of
$117.6 million, and a regulatory liquidity ratio of 19.0%.

         Insurance of Deposits

         Deposit  Insurance.  The FDIC is an independent  federal agency that
insures the deposits,  up to prescribed  statutory  limits, of banks and thrifts
and  safeguards  the safety and soundness of the banking and thrift  industries.
The FDIC administers two separate  insurance funds, the BIF for commercial banks
and state  savings  banks and the SAIF for savings  associations  and banks that
have  acquired  deposits  from  savings  associations.  The FDIC is  required to
maintain  designated  levels of reserves in each fund. In 1996,  the reserves of
the SAIF were below the level required by law,  primarily  because a significant
portion of the  assessments  paid into the SAIF had been used to pay the cost of
prior thrift failures,  while the reserves of the BIF met the levels required by
law.  However,  on September 30, 1996,  provisions  designed to recapitalize the
SAIF and  eliminate  the  premium  disparity  between  the BIF and the SAIF were
signed into law. See "--Assessments" below.

         Assessments.  The  FDIC is  authorized  to  establish  separate  annual
assessment rates for deposit insurance for members of the BIF and members of the
SAIF.  The FDIC may  increase  assessment  rates for either fund if necessary to
restore the fund's  ratio of reserves  to insured  deposits to the target  level
within a reasonable  time and may  decrease  these rates if the target level has
been met. The FDIC has established a risk-based  assessment system for both SAIF
and BIF members.  Under this system,  assessments vary depending on the risk the
institution poses to its deposit insurance fund. An institution's  risk level is
determined  based on its  capital  level  and the  FDIC's  level of  supervisory
concern about the institution.

          On September 30, 1996,  legislation  was inacted to  recapitalize  the
SAIF and eliminate the  significant  premium  disparity  between the BIF and the
SAIF. Under the new law, Home Federal was charged a one-time special  assessment
equal to $.657 per $100 in assessable  deposits at March 31, 1995.  Home Federal
recognized  this one-time  assessment as a  non-recurring  operating  expense of
$3,001,000,  ($1,726,000  after  tax),  during  the  three-month  period  ending
September 30, 1996,  and Home Federal paid the  assessment on November 27, 1996.
The  assessment  was fully  deductible  for both  federal  and state  income tax
purposes.  Beginning  January 1, 1997, Home Federal's  annual deposit  insurance
premium  was  reduced  from  .23% to .0644% of total  assessable  deposits.  BIF
institutions pay lower assessments than comparable SAIF institutions because BIF
institutions  pay  only  20% of the  rate  paid by SAIF  institutions  on  their
deposits  with  respect  to  obligations   issued  by  the   federally-chartered
corporation which provided some of the financing to resolve the thrift crisis in
the 1980's,  ("FICO"). The 1996 law also provided for the merger of the SAIF and
the BIF by 1999,  provided  that the bank and thrift  charters  were combined by
then.  Because Congress did not enact  legislation to combine the charters,  the
FDIC continues to maintain  separate SAIF and BIF funds.  Until the charters are
combined, savings associations with SAIF deposits may not transfer deposits into
the BIF  system  without  paying  various  exit  and  entrance  fees,  and  SAIF
institutions  will  continue  to pay  higher  FICO  assessments.  Such  exit and
entrance fees need not be paid if a SAIF institution  converts to a bank charter
or merges with a bank, as long as the resulting bank continues to pay applicable
insurance  assessments to the SAIF, and as long as certain other  conditions are
met.

         Regulatory Capital

         Currently,  savings  associations are subject to three separate minimum
capital-to-assets  requirements:  (i) a leverage limit,  (ii) a tangible capital
requirement,  and (iii) a risk-based  capital  requirement.  The leverage  limit
requires  that  savings  associations  with the highest  supervisory  rating for
safety and soundness maintain "core capital" of at least 3% of total assets. All
other savings associations must maintain core capital of at least 4% to 5%. Core
capital is generally defined as common  stockholders' equity (including retained
income),  noncumulative  perpetual preferred stock and related surplus,  certain
minority equity  interests in  subsidiaries,  qualifying  supervisory  goodwill,
purchased  mortgage  servicing  rights and purchased  credit card  relationships
(subject to certain limits) less nonqualifying  intangibles.  Under the tangible
capital requirement,  a savings association must maintain tangible capital (core
capital less all intangible  assets except purchased  mortgage  servicing rights
which may be included after making the  above-noted  adjustments in an amount up
to 100% of  tangible  capital)  of at least  1.5% of  total  assets.  Under  the
risk-based capital requirements,  a minimum amount of capital must be maintained
by a savings  association to account for the relative risks inherent in the type
and amount of assets held by the savings  association.  The risk- based  capital
requirement   requires  a  savings  association  to  maintain  capital  (defined
generally for these purposes as core capital plus general  valuation  allowances
and  permanent  or maturing  capital  instruments  such as  preferred  stock and
subordinated  debt  less  assets  required  to be  deducted)  equal  to  8.0% of
risk-weighted  assets.  Assets are  ranked as to risk in one of four  categories
(0-100%)  with a credit  risk-free  asset such as cash  requiring no  risk-based
capital and an asset with a significant  credit risk such as a non-accrual  loan
being  assigned  a  factor  of  100%.  At June 30,  2000,  based on the  capital
standards  then in effect,  Home  Federal  was in  compliance  with all  capital
requirements.

         The OTS has  delayed  implementation  of a rule,  which  sets forth the
methodology  for  calculating an interest rate risk component to be incorporated
into the OTS regulatory capital rule. Under the rule, only savings  associations
with "above normal"  interest rate risk  (institutions  whose  portfolio  equity
would decline in value by more than 2% of assets in the event of a  hypothetical
200-basis point move in interest rates) will be required to maintain  additional
capital for interest rate risk under the risk-based capital framework. A savings
association  with an "above  normal"  level of  exposure  will have to  maintain
additional  capital  equal to  one-half  the  difference  between  its  measured
interest rate risk (the most adverse change in the market value of its portfolio
resulting from a 200-basis point move in interest rates divided by the estimated
market  value of its  assets)  and 2%,  multiplied  by the  market  value of its
assets. That dollar amount of capital is in addition to a savings  association's
existing risk-based capital  requirement.  Although the OTS has decided to delay
implementation  of this rule, it will  continue to closely  monitor the level of
interest  rate  risk at  individual  savings  associations  and it  retains  the
authority,  on a case-by-case  basis, to impose additional capital  requirements
for individual savings associations with significant interest rate risk. The OTS
recently updated its standards regarding the management of interest rate risk to
include summary  guidelines to assist savings  associations in determining their
exposures to interest rate risk.

         In periods of rapidly changing interest rates, the Bank's balance sheet
is subject to  significant  fluctuations  in market  value  (interest  rate risk
exposure).  However, as the delayed interest rate risk rules proposed by the OTS
currently  read,  the Bank at June 30, 2000,  would have no  additional  capital
requirement.  The Bank's management  continues to monitor its interest rate risk
position.

         The  following is a summary of Home  Federal's  regulatory  capital and
capital requirements at June 30, 2000:

                                                                              To Be Categorized
                                                                           As "Well Capitalized"
                                                                              Under Prompt
                                                          For Capital       Corrective Action
(dollars in thousands)                    Actual        Adequacy Purposes       Provisions
                                     Amount    Ratio     Amount    Ratio     Amount       Ratio
                                     ----------------------------------------------------------
As of  June 30, 2000
Tangible capital (to total assets)   $63,558    7.74%   $12,316    1.50%         N/A        N/A
Core capital (to total assets) ...   $63,558    7.74%   $32,843    4.00%         N/A        N/A
Total risk-based capital
   (to risk-weighted assets) .....   $67,271   10.76%   $50,033    8.00%     $62,542      10.00%
Tier 1 risk-based capital
   (to risk-weighted assets) .....   $63,558   10.16%       N/A     N/A      $37,525       6.00%
Tier 1 leverage capital
   (to average assets) ...........   $63,558    8.10%       N/A     N/A      $39,242       5.00%


         If an association is not in compliance  with its capital  requirements,
the OTS is required to prohibit  asset growth and to impose a capital  directive
that may restrict,  among other  things,  the payment of dividends and officers'
compensation. In addition to these sanctions, the OTS and the FDIC generally are
authorized to take enforcement  actions against a savings association that fails
to meet its capital  requirements,  which  actions may include  restrictions  on
operations  and banking  activities,  the imposition of a capital  directive,  a
cease and desist order,  civil money  penalties or harsher  measures such as the
appointment  of a  receiver  or  conservator  or a forced  merger  into  another
institution.

         Prompt Corrective Regulatory Action

         The  Federal  Deposit  Insurance  Corporation  Improvement  Act of 1991
("FedICIA") requires, among other things, federal bank regulatory authorities to
take "prompt  corrective  action" with respect to institutions  that do not meet
minimum capital  requirements.  For these  purposes,  FedICIA  establishes  five
capital  tiers:  well  capitalized,  adequately  capitalized,  undercapitalized,
significantly  undercapitalized,  and critically  undercapitalized.  At June 30,
2000,  Home Federal was  categorized  as "well  capitalized,"  meaning that Home
Federal's  total  risk-based  capital ratio  exceeded 10%, Home Federal's Tier I
risk-based capital ratio exceeded 6%, Home Federal's leverage ratio exceeded 5%,
and Home Federal was not subject to a regulatory  order,  agreement or directive
to meet and maintain a specific capital level for any capital measure.

Limitations on Rates Paid for Deposits

         Regulations   promulgated   by  the  FDIC  pursuant  to  FedICIA  place
limitations on the ability of insured depository  institutions to accept,  renew
or roll over  deposits by offering  rates of  interest  which are  significantly
higher  than the  prevailing  rates of  interest  on  deposits  offered by other
insured  depository  institutions  having  the  same  type  of  charter  in  the
institution's  normal market area. Under these  regulations,  "well-capitalized"
depository  institutions  may accept,  renew or roll such  deposits over without
restriction,  "adequately capitalized" depository institutions may accept, renew
or roll such  deposits  over with a waiver  from the FDIC  (subject  to  certain
restrictions   on   payments   of  rates)  and   "undercapitalized"   depository
institutions  may not accept,  renew or roll such deposits over. The regulations
contemplate that the definitions of "well-capitalized," "adequately-capitalized"
and  "undercapitalized"  will  be the  same  as the  definition  adopted  by the
agencies to implement the corrective  action  provisions of FedICIA.  Management
does not believe that these regulations will have a materially adverse effect on
Home Federal's current operations.

Loans to One Borrower

         Under  OTS  regulations,  Home  Federal  may not make a loan or  extend
credit  to a single  or  related  group of  borrowers  in  excess  of 15% of its
unimpaired capital and surplus. Additional amounts may be lent, not in excess of
10% of unimpaired capital and surplus, if such loans or extensions of credit are
fully  secured by readily  marketable  collateral,  including  certain  debt and
equity  securities  but not  including  real  estate.  In some cases,  a savings
association may lend up to 30% of unimpaired capital and surplus to one borrower
for purposes of  developing  domestic  residential  housing,  provided  that the
association meets its regulatory capital requirements and the OTS authorizes the
association  to use this  expanded  lending  authority.  At June 30, 2000,  Home
Federal  did not have any loans or  extensions  of credit to a single or related
group of borrowers in excess of its regulatory  lending limits.  Management does
not believe that the loans-to-one-borrower limits will have a significant impact
on Home Federal's business operations or earnings.

         Capital Distributions Regulation

         The OTS regulation that applies to "capital  distributions"  by savings
associations  defines a capital  distribution  as a distribution of cash or other
property to a savings  association's owners, made on account of their ownership.
This definition  includes a savings  association's  payment of cash dividends to
shareholders,  or any payment by a savings  association to  repurchase,  redeem,
retire,  or  otherwise  acquire any of its shares or debt  instruments  that are
included in total capital, and any extension of credit to finance an affiliate's
acquisition  of those  shares or  interests.  The  regulation  does not apply to
dividends  consisting  only of a  savings  association's  shares  or  rights  to
purchase such shares.

         The regulation exempts certain savings  associations from filing either
a notice or an application with the OTS before making any capital  distribution.
The  regulation  requires  a  savings  association  to file an  application  for
approval of a proposed capital  distribution  with the OTS if the association is
not eligible for expedited  treatment under OTS's application  processing rules,
or the total amount of all capital distributions, including the proposed capital
distribution,  for the applicable  calendar year would exceed an amount equal to
the  savings  association's  net income  for that year to date plus the  savings
association's retained net income for the preceding two years (the "retained net
income standard"). At June 30, 2000, Home Federal's retained net income standard
was $8.2  million.  A savings  association  must also  file an  application  for
approval  of  a  proposed  capital   distribution  if,  following  the  proposed
distribution, the association would not be at least adequately capitalized under
the OTS prompt corrective action  regulations,  or if the proposed  distribution
would violate a prohibition contained in any applicable statute,  regulation, or
agreement between the association and the OTS or the FDIC.

         The OTS capital distribution  regulation requires a savings association
to file a notice of a proposed capital distribution in lieu of an application if
the association or the proposed capital  distribution do not meet the conditions
described  above,  and:  (1) the savings  association  will not be at least well
capitalized  (as defined  under the OTS prompt  corrective  action  regulations)
following the capital  distribution;  (2) the capital  distribution would reduce
the  amount  of,  or  retire  any part of the  savings  association's  common or
preferred  stock,  or  retire  any  part of debt  instruments  such as  notes or
debentures  included  in  the  association's   capital  under  the  OTS  capital
regulation; or (3) the savings association is a subsidiary of a savings and loan
holding  company.  Because Home  Federal is a  subsidiary  of a savings and loan
holding  company,  this latter provision will require,  at a minimum,  that Home
Federal  file  a  notice  with  the  OTS  30  days  before  making  any  capital
distributions to the Company.

         In addition to these  regulatory  restrictions,  Home Federal's Plan of
Conversion imposes additional limitations on the amount of capital distributions
it may make to the  Company.  The Plan of  Conversion  requires  Home Federal to
establish and maintain a liquidation account for the benefit of Eligible Account
Holders and  Supplemental  Eligible  Account  Holders and prohibits Home Federal
from  making  capital  distributions  to the  Company if its net worth  would be
reduced below the amount required for the liquidation account.

         Safety and Soundness Standards

         In  1995,  the  federal  banking  agencies  adopted  final  safety  and
soundness  standards for all insured  depository  institutions.  The  standards,
which were issued in the form of guidelines rather than  regulations,  relate to
internal   controls,   information   systems,   internal  audit  systems,   loan
underwriting  and  documentation,  compensation  and interest rate exposure.  In
general,  the standards are designed to assist the federal  banking  agencies in
identifying and addressing  problems at insured depository  institutions  before
capital becomes impaired.  If an institution fails to meet these standards,  the
appropriate  federal  banking  agency may  require the  institution  to submit a
compliance  plan.  Failure to submit a compliance plan may result in enforcement
proceedings. In 1996, the federal banking agencies added asset quality, earnings
standards and interest rate sensitivity to the safety and soundness guidelines.

         Real Estate Lending Standards

         OTS regulations require savings  associations to establish and maintain
written  internal  real estate  lending  policies.  Each  association's  lending
policies  must  be  consistent  with  safe  and  sound  banking   practices  and
appropriate  to the size of the  association  and the  nature  and  scope of its
operations.   The  policies  must  establish   loan  portfolio   diversification
standards;  establish prudent underwriting  standards,  including  loan-to-value
limits, that are clear and measurable;  establish loan administration procedures
for the  association's  real  estate  portfolio;  and  establish  documentation,
approval,   and  reporting   requirements   to  monitor   compliance   with  the
association's real estate lending policies.

         The association's written real estate lending policies must be reviewed
and approved by the association's board of directors at least annually. Further,
each association is expected to monitor  conditions in its real estate market to
ensure that its lending  policies  continue to be appropriate for current market
conditions.

         Federal Reserve System

         Under  regulations  of the Board of  Governors  of the Federal  Reserve
Board (the  "FRB"),  Home Federal is required to maintain  reserves  against its
transaction  accounts  (primarily  checking and NOW accounts)  and  non-personal
money market deposit  accounts.  The effect of these reserve  requirements is to
increase Home  Federal's cost of funds.  Home Federal is in compliance  with its
reserve  requirements.  A federal  savings  association,  like other  depository
institutions  maintaining reservable accounts, may borrow from the FRB "discount
window,"  to meet  these  requirements  but the FRB's  regulations  require  the
savings association to exhaust other reasonable  alternative sources,  including
borrowing from its regional FHLB, before borrowing from the FRB. FedICIA imposes
certain limitations on the ability of undercapitalized  depository  institutions
to borrow from FRBs.

         Savings and Loan Holding Company Regulation

         The Company is regulated as a "non-diversified savings and loan holding
company"  within  the  meaning of the Home  Owners'  Loan Act,  as amended  (the
"HOLA"),  and subject to  regulatory  oversight  of the  Director of the OTS. As
such,  the  Company is  registered  with the OTS and is  thereby  subject to OTS
regulations,   examinations,   supervision  and  reporting  requirements.  As  a
subsidiary  of a savings and loan  holding  company,  Home Federal is subject to
certain  restrictions  in its dealings with the Company and with other companies
affiliated with the Company.

         In general,  the HOLA  prohibits a savings  and loan  holding  company,
without  obtaining the prior approval of the Director of the OTS, from acquiring
control of another  savings  association or savings and loan holding  company or
retaining  more than 5% of the  voting  shares of a  savings  association  or of
another holding  company which is not a subsidiary.  The HOLA also restricts the
ability of a director  or  officer of the  Company,  or any person who owns more
than 25% of the  Company's  stock,  from  acquiring  control of another  savings
association  or savings and loan holding  company  without  obtaining  the prior
approval of the Director of the OTS.

         The Company  currently  operates as a unitary  savings and loan holding
company.  Prior to the enactment of the GLB Act on November 12, 1999, there were
no restrictions on the permissible  business activities of a unitary savings and
loan holding  company.  The GLB Act included a provision  that prohibits any new
unitary savings and loan holding  company,  defined as a company that acquires a
thrift after May 4, 1999, from engaging in commercial activities. This provision
also includes a grandfather clause,  however,  that permits a company that was a
savings and loan holding  company as of May 4, 1999,  or had an  application  to
become a savings and loan holding  company on file with the OTS as of that date,
to  acquire  and  continue  to  control a thrift  and to  continue  to engage in
commercial  activities.  Because the Company  qualifies  under this  grandfather
provision,  the GLB Act did not  affect  the  Company's  authority  to engage in
diversified business activities.

         Notwithstanding the above rules as to permissible business activities
of unitary  savings  and loan  holding  companies,  if the  savings  association
subsidiary of such a holding  company fails to meet the Qualified  Thrift Lender
("QTL") test,  then such unitary  holding  company  would become  subject to the
activities   restrictions   applicable  to  multiple  holding   companies.   See
"--Qualified  Thrift Lender." At June 30, 2000, Home Federal's asset composition
was in excess of that required to qualify Home Federal as a QTL.

         If the  Holding  Company  were to acquire  control  of another  savings
association other than through a merger or other business  combination with Home
Federal,  the Holding Company would thereupon become a multiple savings and loan
holding  company.  Except where such acquisition is pursuant to the authority to
approve  emergency  thrift   acquisitions  and  where  each  subsidiary  savings
association meets the QTL test, the activities of the Holding Company and any of
its  subsidiaries   (other  than  Home  Federal  or  other  subsidiary   savings
associations) would thereafter be subject to further restrictions. HOLA provides
that,  among other  things,  no multiple  savings  and loan  holding  company or
subsidiary thereof which is not a savings association shall commence or continue
for a limited period of time after becoming a multiple  savings and loan holding
company or subsidiary  thereof,  any business activity other than (i) furnishing
or performing  management  services for a subsidiary savings  association,  (ii)
conducting an insurance agency or escrow business,  (iii) holding,  managing, or
liquidating assets owned by or acquired from a subsidiary  savings  association,
(iv) holding or managing  properties  used or occupied by a  subsidiary  savings
association,  (v) acting as trustee under deeds of trust,  (vi) those activities
previously  directly  authorized by the FSLIC by regulation as of March 5, 1987,
to be  engaged  in by  multiple  holding  companies  or (vii)  those  activities
authorized  by the FRB as  permissible  for bank holding  companies,  unless the
Director  of the OTS by  regulation  prohibits  or limits  such  activities  for
savings and loan holding  companies.  Those activities  described in (vii) above
must also be approved by the Director of the OTS prior to being  engaged in by a
multiple holding company.

         The Director of the OTS may also approve acquisitions  resulting in the
formation of a multiple  savings and loan holding company which controls savings
associations  in more than one state,  if the multiple  savings and loan holding
company involved controls a savings  association which operated a home or branch
office in the state of the  savings  association  to be  acquired as of March 5,
1987,  or if the laws of the  state  in  which  the  savings  association  to be
acquired  is  located   specifically  permit  associations  to  be  acquired  by
state-chartered  associations or savings and loan holding  companies  located in
the state where the  acquiring  entity is located (or by a holding  company that
controls such state-chartered  savings associations).  Also, the Director of the
OTS may approve an acquisition  resulting in a multiple savings and loan holding
company controlling  savings  associations in more than one state in the case of
certain emergency thrift acquisitions.

         No subsidiary saving  association of a savings and loan holding company
may declare or pay a dividend on its permanent or  nonwithdrawable  stock unless
it  first  gives  the  Director  of the  OTS 30  days  advance  notice  of  such
declaration and payment.  Any dividend  declared during such period,  or without
the giving of such notice, shall be invalid.

Acquisitions or Dispositions and Branching

         The Bank  Holding  Company Act  specifically  authorizes a bank holding
company, upon receipt of appropriate regulatory approvals, to acquire control of
any savings association or holding company thereof wherever located.  Similarly,
a savings and loan  holding  company may  acquire  control of a bank.  Moreover,
federal  savings  associations  may  acquire  or  be  acquired  by  any  insured
depository institution. Regulations promulgated by the Board of Governors of the
Federal  Reserve Board (the "FRB")  restrict the branching  authority of savings
associations  acquired by bank holding companies.  Savings associations acquired
by bank holding companies may be converted to banks if they continue to pay SAIF
premiums, but as such they become subject to branching and activity restrictions
applicable to banks.

         Subject to certain  exceptions,  commonly-controlled  banks and savings
associations  must reimburse the FDIC for any losses suffered in connection with
a failed  bank or  savings  association  affiliate.  Institutions  are  commonly
controlled  if one is owned by another or if both are owned by the same  holding
company.  Such claims by the FDIC under this provision are subordinate to claims
of depositors,  secured creditors,  and holders of subordinated debt, other than
affiliates.

         The OTS has adopted  regulations which permit  nationwide  branching to
the extent permitted by federal statute. Federal statutes permit federal savings
associations to branch outside of their home state if the association  meets the
domestic  building  and loan  test in ss.  7701(a)(19)  of the Code or the asset
composition test of ss. 7701(c) of the Code.  Branching that would result in the
formation of a multiple  savings and loan holding  company  controlling  savings
associations  in more  than one  state is  permitted  if the law of the state in
which the savings association to be acquired is located specifically  authorizes
acquisitions of its state-chartered associations by state-chartered associations
or their  holding  companies  in the state where the  acquiring  association  or
holding company is located. Moreover, Indiana banks and savings associations are
permitted  to  acquire  other  Indiana  banks and  savings  associations  and to
establish branches throughout Indiana.

         Finally,  The Riegle-Neal  Interstate Banking and Branching  Efficiency
Act of 1994 (the  "Riegle-Neal  Act") permits bank holding  companies to acquire
banks  in  other  states  and,   with  state  consent  and  subject  to  certain
limitations, allows banks to acquire out-of-state branches either through merger
or de novo  expansion.  The State of Indiana  enacted  legislation  establishing
interstate  branching  provisions for Indiana  state-chartered  banks consistent
with those established by the Riegle-Neal Act (the "Indiana Branching Law"). The
Indiana Branching Law, which became effective in 1996,  authorizes Indiana banks
to  branch  interstate  by  merger  or de novo  expansion,  provided  that  such
transactions  are not permitted to  out-of-state  banks unless the laws of their
home  states  permit  Indiana  banks to merge or  establish  de novo  banks on a
reciprocal basis.

Transactions with Affiliates

         Home Federal is subject to Sections  22(h),  23A and 23B of the Federal
Reserve Act,  which  restrict  financial  transactions  between  banks and their
directors,  executive  officers and  affiliated  companies.  The statute  limits
credit  transactions  between a bank or savings  association  and its  executive
officers and its affiliates,  prescribes terms and conditions for bank affiliate
transactions deemed to be consistent with safe and sound banking practices,  and
restricts the types of collateral security permitted in connection with a bank's
extension of credit to an affiliate.

         Federal Securities Law

         The shares of Common Stock of the Holding  Company are registered  with
the SEC under the Securities  Exchange Act of 1934 (the "1934 Act"). The Holding
Company is subject  to the  information,  proxy  solicitation,  insider  trading
restrictions  and  other  requirements  of the 1934 Act and the rules of the SEC
thereunder.  If the  Holding  Company  has fewer than 300  shareholders,  it may
deregister  its  shares  under  the 1934  Act and  cease  to be  subject  to the
foregoing requirements.

         Shares  of Common  Stock  held by  persons  who are  affiliates  of the
Holding Company may not be resold without registration unless sold in accordance
with the resale  restrictions  of Rule 144 under the Securities Act of 1933 (the
"1933  Act").  If the  Holding  Company  meets the  current  public  information
requirements  under Rule 144, each affiliate of the Holding Company who complies
with the other  conditions of Rule 144 (including a one-year  holding period and
conditions  that require the  affiliate's  sale to be  aggregated  with those of
certain  other  persons)  will be able to  sell in the  public  market,  without
registration,  a number of shares not to exceed, in any three-month  period, the
greater of (i) l % of the outstanding  shares of the Holding Company or (ii) the
average  weekly  volume of trading in such  shares  during  the  preceding  four
calendar weeks.

         Qualified Thrift Lender

         Savings  associations  must meet a QTL test  which  requires  a savings
association to have at least 65% of its portfolio  assets invested in "qualified
thrift  investments"  on a monthly  average  basis in 9 out of every 12  months.
Qualified thrift  investments under the QTL test include  primarily  residential
mortgages and related investments including certain mortgage-related securities.
Portfolio assets under the QTL test include all of an association's  assets less
(i)  goodwill  and other  intangibles,  (ii) the value of  property  used by the
association to conduct its business,  and (iii) its liquid assets as required to
be maintained under law up to 20% of total assets.

         A savings  association  which  fails to meet the QTL test  must  either
convert to a bank (but its deposit  insurance  assessments  and payments will be
those of and paid to SAIF) or be subject to the following penalties:  (i) it may
not enter into any new activity except for those permissible for a national bank
and for a savings association; (ii) its branching activities shall be limited to
those  of a  national  bank;  (iii) it shall  not be  eligible  for any new FHLB
advances; and (iv) it shall be bound by regulations applicable to national banks
respecting  payment of dividends.  Three years after  failing the QTL test,  the
association must (i) dispose of any investment or activity not permissible for a
national  bank and a savings  association  and (ii) repay all  outstanding  FHLB
advances.  If such a savings  association  is  controlled  by a savings and loan
holding  company,  then such holding  company  must,  within a  prescribed  time
period,  become  registered as a bank holding  company and become subject to all
rules  and  regulations   applicable  to  bank  holding   companies   (including
restrictions as to the scope of permissible business activities).

         A savings  association  failing to meet the QTL test may requalify as a
QTL if it thereafter  meets the QTL test. In the event of such  requalification,
it shall not be subject to the penalties  described above. A savings association
which  subsequently  again  fails to  qualify  under the QTL test  shall  become
subject to all of the described  penalties  without  application  of any waiting
period.

         At June 30, 2000, 70.8% of Home Federal's  portfolio assets (as defined
on that date) were invested in qualified thrift  investments (as defined on that
date),  and therefore Home  Federal's  asset  composition  was in excess of that
required  to qualify  Home  Federal as a QTL.  Home  Federal  does not expect to
significantly  change its lending or  investment  activities in the near future,
and therefore  expects to continue to qualify as a QTL, although there can be no
such assurance.

         Community Reinvestment Act Matters

         Federal law requires that ratings of depository  institutions under the
Community Reinvestment Act of 1977 ("CRA") be disclosed. The disclosure includes
both a  four-unit  descriptive  rating -- using terms such as  satisfactory  and
unsatisfactory -- and a written  evaluation of each  institution's  performance.
Each FHLB is required to establish standards of community  investment or service
that its members must maintain for continued  access to long-term  advances from
the FHLBs. The standards take into account a member's  performance under the CRA
and its record of lending to first-time  homebuyers.  The FHLBs have established
an  "Affordable  Housing  Program" to subsidize the interest rate of advances to
member associations engaged in lending for long-term,  low- and moderate-income,
owner-occupied  and affordable  rental housing at subsidized rates. Home Federal
is  participating  in this program.  The  examiners  have  determined  that Home
Federal has an outstanding record of meeting community credit needs.

Taxation

         Federal Taxation

         The Holding  Company and its  subsidiary  file a  consolidated  federal
income tax return on the accrual  basis for each fiscal year ending June 30. The
consolidated   federal   income  tax  return  has  the  effect  of   eliminating
intercompany   distributions,   including  dividends,   in  the  computation  of
consolidated  taxable income.  Income of the Holding Company generally would not
be taken into  account in  determining  the bad debt  deduction  allowed to Home
Federal,  regardless  of whether a  consolidated  tax return is filed.  However,
certain  "functionally  related" losses of the Holding Company would be required
to be taken into account in determining the permitted bad debt deduction  which,
depending  upon  the  particular  circumstances,   could  reduce  the  bad  debt
deduction.

         Historically,  savings  associations,  such as Home Federal,  have been
permitted to compute bad debt deductions using either the bank experience method
or the percentage of taxable income method.  However,  for years beginning after
December  31,  1995,  Home  Federal is no longer able to use the  percentage  of
taxable  income method of computing its allocable tax bad debt  deduction.  Home
Federal is required  to compute its  allocable  deduction  using the  experience
method.  As a result of the repeal of the  percentage of taxable  income method,
reserves  taken  after  1987  using the  percentage  of  taxable  income  method
generally  must be included  in future  taxable  income over a six-year  period,
although  a  two-year  delay  may  be  permitted  for  institutions   meeting  a
residential  mortgage loan  origination  test.  Home Federal  began  recapturing
approximately  $2.5 million over a six-year period  beginning in fiscal 1999. In
addition,  the pre-1988 reserve,  in which no deferred taxes have been recorded,
will not have to be  recaptured  into income  unless (i) Home  Federal no longer
qualifies  as a bank under the Code,  or (ii) excess  dividends  are paid out by
Home Federal.

         Depending  on the  composition  of its items of income and  expense,  a
savings  institution  may be subject to the  alternative  minimum tax. A savings
institution must pay an alternative  minimum tax equal to the amount (if any) by
which 20% of  alternative  minimum  taxable  income  ("AMTI"),  as reduced by an
exemption  varying with AMTI,  exceeds the regular tax due. AMTI equals  regular
taxable  income   increased  or  decreased  by  certain  tax   preferences   and
adjustments,  including depreciation  deductions in excess of that allowable for
alternative  minimum tax purposes,  tax-exempt interest on most private activity
bonds  issued  after  August 7, 1986  (reduced by any related  interest  expense
disallowed  for  regular  tax  purposes),  the  amount  of the bad debt  reserve
deduction  claimed in excess of the deduction based on the experience method and
75% of the excess of adjusted current earnings over AMTI (before this adjustment
and before any alternative tax net operating loss).  AMTI may be reduced only up
to 90% by net operating loss carryovers,  but alternative  minimum tax paid that
is  attributable  to most  preferences  (although  not to  post-August  7,  1986
tax-exempt interest) can be credited against regular tax due in later years.

         State Taxation

         Home  Federal  is  subject  to  Indiana's  Financial  Institutions  Tax
("FIT"),  that is imposed  at a flat rate of 8.5% on  "adjusted  gross  income."
"Adjusted  gross  income,"  for purposes of FIT,  begins with taxable  income as
defined by Section 63 of the Code, and thus, incorporates federal tax law to the
extent that it affects the computation of taxable income. Federal taxable income
is then adjusted by several Indiana modifications.  Other applicable state taxes
include generally applicable sales and use taxes plus real and personal property
taxes.

         Home  Federal's  state  income tax returns have not been audited in the
last five years.

Current Accounting Issues

 Statement of Financial Accounting  Standards No. 133 ("SFAS 133"),  "Accounting
for Derivative  Instruments and Hedging Activities," was issued in June 1998 and
amended by Statement of Financial Standard No. 137 ("SFAS 137"), "Accounting for
Derivative  Instruments and Hedging  Activities - Deferral of the Effective Date
of SFAS 133" and  Statement  of  Financial  Acounting  Standards  No. 138 ("SFAS
138"),  "Accounting  for Certain  Derivative  Instruments  and  Certain  Hedging
Activities".  SFAS 133, as amended,  is effective for all fiscal quarters of all
fiscal years  beginning  after June 15, 2000.  As a result on July 1, 2000,  the
Company  implemented SFAS 133. The Company designated its interest rate swaps as
fair value hedge  instruments which are recorded as assets or liabilities on the
balance  sheet and  measured  at fair  value.  The  effect of this new  standard
resulted in $271,000 being recorded in comprehensive income on July 1, 2000. The
was no income  statement  impact as the fair value  hedges  were  determined  by
management to be highly effective in accordance with SFAS 133.

Item 2.           Properties.

         At June 30, 2000,  Home Federal  conducted  its business  from its main
office at 222 West Second Street, Seymour, Indiana and 15 full-service branches.
Home  Federal  owns  two  buildings  that it  uses  for  certain  administrative
operations located at 218 West Second Street,  Seymour, and 211 Chestnut Street,
Seymour.  The headquarters of its Private Ledger  operations,  conducted through
its  service  corporation  subsidiary,  are  located at 501  Washington  Street,
Columbus, Indiana. Information concerning these properties, as of June 30, 2000,
is presented in the following table:

                                                            Net Book Value of
                                                                Property,         Approximate
   Description and                          Owned or          Furniture and          Square            Lease
      Address                                Leased              Fixtures            Footage        Expiration

                                                           (Dollars in Thousands)

Principal Office

222 West Second Street                          Owned          $   1,911               9,200             N/A

Operations Center

218 West Second Street                          Owned          $     420              20,000             N/A

Loan Processing Center

211 North Chestnut                              Owned          $     370               5,130             N/A

Branch Offices:
Columbus Branches:

     501 Washington Street                      Owned          $   1,855              14,800             N/A
     3805 25th Street                           Owned          $     326               5,800             N/A
     2751  Brentwood Drive                      Owned          $     467               3,200             N/A
     4330 West Jonathon Moore Pike              Owned          $     662               2,600             N/A

Hope Branch                                1/2 Owned           $      35               2,000
332 Jackson Street                        1/2 Leased                                                  4/2002

Austin Branch

67 West Main Street                             Owned          $      48               3,600             N/A

Brownstown Branch                                                                                     Month to
101 North Main Street                          Leased          $      16               2,400            Month

North Vernon Branches

     111 North State Street                     Owned          $     387               1,900             N/A
     1540 North State Street                   Leased          $      37               1,600           10/2002

Osgood Branch

South Buckeye Street                            Owned          $     109               1,280             N/A

Salem Branch

     1208 South Jackson                         Owned          $     810               1,860             N/A


Seymour Branch

1117 East Tipton Street                         Owned          $     538               6,800             N/A

Batesville Branch

12 West Pearl Street                            Owned          $     625               2,175             N/A

Madison Branch

201 Clifty Drive                                Owned          $     451               2,550             N/A

Greensburg Branch

115 East North Street                          Leased          $      18               2,440            8/00

         Home Federal owns its computer and data  processing  equipment  that is
used for  accounting,  financial  forecasting,  and general  ledger  work.  Home
Federal also has  contracted for the data  processing and reporting  services of
NCR  headquartered  in Dayton,  Ohio.  The contract  with NCR expires in October
2000.

Item 3.           Legal Proceedings.

         The Bank has sued one of its  depositors in the Jackson  County Circuit
Court in Brownstown, Indiana, to recover amounts lost as a result of his cashing
of bad checks (in the aggregate amount of $298,000), plus treble damages, costs,
and fees. The depositor has  counterclaimed  for damages  resulting from certain
actions the Bank has taken to protect its rights  with  respect to this  matter,
including the freezing of the depositor's savings account at the Bank.

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

         No  matter  was  submitted  to  the  Company's  or  Home  Federal's
shareholders during the quarter ended June 30, 2000.

Item 4.5.          Executive Officers of Home Federal Bancorp.

Presented below is certain  information  regarding the executive officers of HFB
who are not also directors.


                                                  Position with HFB
                                                  -----------------
Gerald L. Armstrong                      Chief Operating Officer and
                                         Executive Vice President

S. Elaine Pollert                        Senior Vice President
                                         Retail Banking

Lawrence E. Welker                       Executive Vice President, Treasurer,
                                         Chief Financial Officer and Secretary

         Gerald L.  Armstrong  (age 60) has been  employed by Home Federal since
February,  1992 as its Executive Vice President,  and Chief  Operating  Officer.
Before being employed by Home Federal, he was President, Chief Executive Officer
and a Director of Seymour  National Bank, a commercial  bank located in Seymour,
Indiana.

S. Elaine Pollert (age 40) has been employed by Home Federal since 1986. She was
elected Vice President Branch


         -----------------
Administration in 1989 and Senior Vice President Retail Banking in 1996.

         Lawrence  E. Welker (age 53) has been  employed by Home  Federal  since
1979.  He was  Controller  from 1979 to 1982.  In 1982,  he was elected as Chief
Financial  Officer  and  Treasurer,  and in 1994 he  became  an  Executive  Vice
President.

                                     PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters.

         Home Federal  converted from mutual to stock form effective January 14,
1988 (the "Conversion").  Home Federal then reorganized  effective March 1, 1993
by converting  each  outstanding  share of its common stock,  par value $.01 per
share,  into one share of common  stock,  without  par value,  of HFB, a unitary
savings and loan holding  company  organized in Indiana (the  "Reorganization").
HFB's principal asset is 100% of the outstanding  capital stock of Home Federal.
HFB's common stock  ("Common  Stock") is quoted on the National  Association  of
Securities  Dealers  Automated  Quotation  System  ("NASDAQ"),  National  Market
System,  under the symbol  "HOMF."  HFB's  Common Stock was  substituted  on the
NASDAQ, National Market System for Home Federal's common stock on March 1, 1993,
subject to the  Reorganization.  Home Federal's  common stock had been quoted on
the NASDAQ,  National Market System since its initial  issuance  pursuant to the
Conversion  on January 14, 1988.  For certain  information  related to the stock
prices and dividends paid by HFB, see  "Management's  Discussion and Analysis of
Financial   Condition  and  Results  of  Operations  --  Quarterly   Results  of
Operations" on page 6 of HFB's 2000 Shareholder  Annual Report (the "Shareholder
Annual  Report").  As of June 30, 2000, there were 533 shareholders of record of
HFB's Common Stock.

         It is  currently  the policy of HFB's Board of Directors to continue to
pay  quarterly  dividends,  but any future  dividends are subject to the Board's
discretion  based on its  consideration  of HFB's operating  results,  financial
condition, capital, income tax considerations, regulatory restrictions and other
factors.

         Since  HFB has no  independent  operations  or  other  subsidiaries  to
generate  income,  its ability to  accumulate  earnings  for the payment of cash
dividends to its  shareholders  is directly  dependent  upon the ability of Home
Federal to pay dividends to the Company.

         Under OTS regulations,  a converted savings association may not declare
or pay cash  dividends  if the effect would be to reduce its net worth below the
amount required for the liquidation account created at the time it converted. In
addition,  under OTS regulations,  the extent to which a savings association may
make  a  "capital  distribution,"  which  includes,  among  other  things,  cash
dividends,  is limited. See  "Regulation--Capital  Distributions  Regulation" in
Item 1 hereof.  Prior  notice of any  dividend to be paid by Home Federal to the
Company will have to be given to the OTS.

         Income of Home Federal  appropriated  to bad debt reserves and deducted
for federal  income tax purposes is not available for payment of cash  dividends
or other  distributions  to HFB without the payment of federal  income  taxes by
Home  Federal on the amount of such income  deemed  removed from the reserves at
the then-current  income tax rate. At June 30, 2000,  approximately $2.4 million
of Home Federal's  retained income  represented bad debt deductions for which no
federal income tax provision had been made. See "Taxation--Federal  Taxation" in
Item 1 hereof.

         Unlike Home Federal,  generally  there is no regulatory  restriction on
the payment of dividends by HFB, subject to the determination of the Director of
the OTS that there is reasonable  cause to believe that the payment of dividends
constitutes  a serious risk to the financial  safety,  soundness or stability of
Home Federal.  Indiana law,  however,  would prohibit HFB from paying a dividend
if, after giving effect to the payment of that  dividend,  HFB would not be able
to pay its debts as they  become due in the usual  course of  business  or HFB's
assets  would be less than the sum of its total  liabilities  plus  preferential
rights of holders of preferred stock, if any.

         On November 22, 1994, the Board of Directors of HFB declared a dividend
of one common share purchase right (a "Right" or "Rights") for each  outstanding
share of  Common  Stock.  The  dividend  was  paid on  December  6,  1994 to the
shareholders  of record as of November 22, 1994.  If and when the Rights  become
exercisable,  each Right will entitle the registered holder to purchase from HFB
one Common Share at a purchase price of $80.00 (the "Purchase  Price"),  subject
to  adjustment  as  described  in the Rights  Agreement  between the Company and
LaSalle  National  Bank,  Chicago,  Illinois,  (the  "Rights  Agreement")  which
specifies  the  terms of the  Rights.  The  Rights  will be  represented  by the
outstanding Common Share  certificates and the Rights cannot be bought,  sold or
otherwise  traded  separately  from the Common  Shares  until the  "Distribution
Date," which is the earliest to occur of (i) 10 calendar days following a public
announcement  that a person or group (an  "Acquiring  Person")  has (a) acquired
beneficial  ownership  of 15% or more of the  outstanding  Common  Shares or (b)
become the beneficial  owner of an amount of the outstanding  Common Shares (but
not less than 10%) which the Board of Directors determines to be substantial and
which  ownership  the  Board  of  Directors  determines  is  intended  or may be
reasonably  anticipated,  in general, to cause HFB to take actions determined by
the Board of Directors to be not in HFB's best long-term  interests (an "Adverse
Person"), or (ii) 10 business days following the commencement or announcement of
an intention to make a tender offer or exchange offer the  consummation of which
would result in the beneficial  ownership by a person or group of 30% or more of
such outstanding Common Shares.

         The Rights have  certain  anti-takeover  effects.  The Rights may cause
substantial  dilution to a person or group that attempts to acquire HFB on terms
not  approved  by the Board of  Directors  of HFB,  except  pursuant to an offer
conditioned on a substantial number of Rights being acquired.  The Rights should
not  interfere  with any merger or other  business  combination  approved by the
Board of  Directors  since the Rights may be  redeemed  by HFB at $.01 per Right
prior to the time that a person or group has  acquired  beneficial  ownership of
15% or more of the Common Shares.

Item 6.           Selected Financial Data.

         The  information  required by this item is incorporated by reference to
the material under the heading "Summary of Selected Consolidated Financial Data"
on page 5 of the Shareholder Annual Report.

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

         The  information  required by this item is incorporated by reference to
pages 7 to 15 of the Shareholder Annual Report.

Item 7A.          Quantitative and Qualitative Disclosures About Market Risk.

The OTS requires each thrift  institution  to calculate the estimated  change in
the  institution's  net  portfolio  value  ("NPV")  assuming  an  instantaneous,
parallel  shift in the Treasury yield curve of 100 to 300 basis points either up
or down in 100 basis point  increments.  NPV  represents  the sum of future cash
flows of liabilities  discounted to present value. The OTS permits  institutions
to  utilize  the  OTS'  model,  which  is  based  upon  data  submitted  in  the
institution's quarterly thrift financial reports.

In estimating the NPV of mortgage loans and mortgage-backed  securities, the OTS
model utilizes various price indications and prepayment rates. At June 30, 2000,
these price indications varied from 74.07 to 111.95 for fixed rate mortgages and
mortgage-backed  securities and varied from 87.61 to 104.13 for adjustable  rate
mortgages and  mortgage-backed  securities.  Prepayment rates for June 30, 2000,
ranged from a constant prepayment rate ("CPR") of 6% to a CPR of 37%.

 The value of deposit  accounts  appears on both the asset and liability side of
the NPV  calculation in the OTS model. In estimating the value of certificate of
deposit  accounts,  ("CDs"),  retail price estimates  represent the value of the
liability implied by the CD and reflect the difference between the CD coupon and
secondary-market  CD rates. As of June 30, 2000, the retail CD price assumptions
varied from 74.28 to 113.32. The retail CD intangible prices represent the value
of the  "customer  relationship"  due to the  rollover of CD deposits and are an
intangible  asset for the Bank.  As of June 30, 2000,  the retail CD  intangible
price assumptions varied from .02 to 0.48.

Other  deposit  accounts  such as  transaction  accounts,  money market  deposit
accounts, passbook accounts and non-interest-bearing accounts are valued at 100%
of their respective  outstanding balances in all nine interest rate scenarios on
the liability side of the OTS model. On the asset side of the model,  intangible
prices  are used to  reflect  the value of the  "customer  relationship"  of the
various types of deposit  accounts.  As of June 30, 2000, the intangible  prices
for transaction accounts,  money market deposit accounts,  passbook accounts and
non-interest  bearing accounts varied from -1.38 to 20.35, -0.29 to 13.00, -0.43
to 16.23 and 7.81 to 17.78, respectively.

The following table sets forth the Bank's interest rate sensitivity of NPV as of
June 30, 2000. (dollars in thousands)


            Net Portfolio Value                NPV as % of PV  of  Assets
   -----------------------------------------------------------------------------
    Change
   In Rates    $ Amount     $ Change  % Change      NPV Ratio        Change
   -----------------------------------------------------------------------------
    +300 bp     76,329      (14,905)      (16)         9.43 %      (141)  bp
    +200 bp     82,885       (8,349)       (9)        10.09 %       (75)  bp
    +100 bp     88,256       (2,977)       (3)        10.60 %       (24)  bp
        0 bp    91,234                                10.84 %
    -100 bp     91,476          243                   10.79 %        (5)  bp
    -200 bp     90,043       (1,191)       (1)        10.56 %       (28)  bp
    -300 bp     89,890      ( 1,344)       (1)        10.46 %       (38)  bp




Item 8.           Financial Statements and Supplementary Data.

         The  Company's  Consolidated  Financial  Statements  and Notes  thereto
contained on pages 16 to 34 of the  Shareholder  Annual Report are  incorporated
herein by reference.  HFB's Quarterly Results of Operations  contained on page 6
of the Shareholder Annual Report are incorporated herein by reference.

Item 9.           Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
-------           -------------------------------------------------------------------------------------

         There are no such  changes  and  disagreements  during  the  applicable
period.

                                    PART III

Item 10.          Directors and Executive Officers of the Registrant.

         The  information  required by this item with  respect to  directors  is
incorporated  by reference to pages 2 to 4 of the Company's  Proxy Statement for
its 2000 annual shareholder  meeting (the "2000 Proxy  Statement").  Information
concerning  the  Company's  executive  officers  who are not also  directors  is
included in Item 4.5 in Part I of this report.

         The  information  required by this item with respect to the  compliance
with Section 16(a) of the  Securities  Exchange Act of 1934 is  incorporated  by
reference to page 11 of the 2000 Proxy Statement.

Item 11.          Executive Compensation.

         The  information  required  by this  item  with  respect  to  executive
compensation  is  incorporated  by  reference to pages 4 to 11 of the 2000 Proxy
Statement.

Item 12.          Security Ownership of Certain Beneficial Owners and Management.

         The  information  referred by this item is incorporated by reference to
pages 1 to 3 of the 2000 Proxy Statement.

Item 13.          Certain Relationships and Related Transactions.

         The  information  required by this item is incorporated by reference to
page 11 of the 2000 Proxy Statement.

                                     PART IV

Item 14.          Exhibits, Financial Statement Schedules and Reports on Form 8-K.
---------         ---------------------------------------------------------------

(a)      List the following documents filed as a part of the report:

Financial Statements
--------------------
                                                                  Page in 2000
                                                                   Shareholder
                                                                  Annual Report

Consolidated Balance Sheets as of

         June 30, 2000 and 1999                                        16

Consolidated Statements of Income for each of
         the years in the three-year period ended
         June 30, 2000                                                 17

Consolidated Statements of  Shareholders' Equity
         for each of the years in the three-year period
         ended June 30, 2000                                           18

Consolidated Statements of Cash Flows for each
         of the years in the three-year period ended
         June 30, 2000                                                 19

Notes to Consolidated Financial Statements                             20

Report of Deloitte & Touche LLP

         Independent Auditors                                          34

(b)      Reports on Form 8-K

         Registrant has filed no reports on Form 8-K for the quarter ending June
30, 2000.

(c)  The exhibits filed  herewith or  incorporated  by reference  herein are set
     forth on the Exhibit Index on page 40.

(d)  All  schedules  are  omitted  as the  required  information  either  is not
     applicable  or is  included in the  Consolidated  Financial  Statements  or
     related notes.





                                   SIGNATURES

         Pursuant  to the  requirements  of Section  13 or 15(d) the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on behalf of the undersigned,  thereto duly authorized,  this 27th day
of September, 2000.

                                              HOME FEDERAL BANCORP
DATE: September 27, 2000                      /s/ John K. Keach. Jr.
                                              ----------------------
                                             John K. Keach, Jr., President and
                                             Chief Executive Officer

         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  indicated on this 27th day of September,
2000.

/s/  Lawrence E. Welker                          /s/ John K. Keach. Jr.
-----------------------                          ----------------------
Lawrence E. Welker, Executive                    John K. Keach, Jr.,
Vice President, Treasurer,                       Chairman of the Board,
Chief Financial Officer and Secretary            President and Chief
 (Principal Financial Officer)                   Executive Officer
                                                 (Principal Executive
                                                  Officer)
/s/ Melissa  A. McGill
----------------------
Melissa A. McGill,
Vice  President and Controller                   /s/John K. Keach. Jr.
(Principal Accounting Officer)                   ---------------------
                                                 John K. Keach, Jr,Director

/s/ Gregory J. Pence                              /s/ John T. Beatty
--------------------                              ------------------
Gregory J. Pence, Director                        John T. Beatty, Director

/s/Lewis Essex                                    /s/ Harold Force
-----------------                                ----------------------
Lewis Essex, Director                            Harold Force, Director

/s/ David W. Laitinen                            /s/ Harvard W. Nolting. Jr.
---------------------                            ---------------------------
David W. Laitinen, Director                      Harvard W. Nolting, Jr., Director






                                  EXHIBIT INDEX

Reference to

Regulation S-K                                                                          Sequential
Exhibit Number                                    Document                              Page Number

 3(a)                               Articles of Incorporation (incorporated by
                                    reference from Exhibit B to Registrant's
                                    Registration Statement on Form S-4 (Registration
                                    No. 33-55234)).

 3(b)                               Code of By-Laws (incorporated by reference from
                                    Exhibit C to Registrant's Registration Statement on
                                    From S-4 (Registration No. 33-55234)).

 4(a)                               Article 6 of the  Articles of  Incorporation
                                    (incorporated by reference from Exhibit B to
                                    Registrant's  Registration Statement on Form
                                    S-4 (Registration No.33-55234)).

  4(b)                              Article III of the Code of By-Laws (incorporated by
                                    reference from Exhibit C to Registrant's Registration
                                    Statement on From S-4 (Registration No. 33-55234)).

  10(a)                             Stock Option Plan (incorporated by reference from
                                    Exhibit 10(a) to Registrant's Registration Statement
                                    on Form S-4 (Registration No. 33-55234)).

 10(b)                              1993 Stock Option Plan (incorporated by reference
                                     from Exhibit 10(b) to Registrant's Form 10-K for the
                                    year ended June 30, 1994).

  10(c)                             Employment Agreement with Lawrence E. Welker
                                    (incorporated by reference from Exhibit 10(c) to
                                    Registrants Registration Statement on Form S-4
                                    (Registration No. 33-55234)); first, second and third
                                    amendments thereto incorporated by reference to
                                     Exhibit 10(c) of Registrant's  Form 10-K for
                                     the year ended June 30, 1998.

10(d)                               Employment Agreement with John K. Keach, Jr.
                                    (incorporated by reference from Exhibit 10(d) to
                                    Registrant's Registration Statement on Form S-4
                                    (Registration No. 33-55234)); first, second and third
                                    amendments thereto incorporated by reference to
                                     Exhibit 10(d) of Registrant's  Form 10-K for
                                     the year ended June 30, 1998.

10(f)                               Employment Agreement with Gerald L. Armstrong
                                    (incorporated by reference from Exhibit 10(f) to
                                    Registrant's Registration Statement on Form S-4
                                    (Registration No. 33-55234)). )); first and second
                                    amendments thereto incorporated by reference to
                                     Exhibit 10(f) of Registrant's  Form 10-K for
                                     the year ended June 30, 1998.

10(g)                               1999 Stock option plan incorporated by reference to
                                    Exhibit J to the registrant's proxy statement for it's
                                    1999 Annual Shareholder's meeting.


 10(i)                              Stock Option Agreement with Harvard W. Nolting, Jr.
                                    (incorporated by reference from Exhibit 10(i) to Home
                                    Federal Savings Bank's Form 10-K for the fiscal year
                                    ended June 30, 1991).

 10(j)                              Stock Option Agreement with David W. Laitinen
                                    (incorporated by reference from Exhibit 10(j) to Home
                                     Federal  Savings  Bank's  Form 10-K for the
                                    fiscal year ended June 30, 1991).

 10(k)                              Stock Option  Agreement  with John T. Beatty
                                    (incorporated   by  reference  from  Exhibit
                                    10(k) to Home  Federal  Savings  Bank's Form
                                    10-K  for the  fiscal  year  ended  June 30,
                                    1991).

10(l)                               Stock Option Agreement with Harold Force
                                    (incorporated by reference from Exhibit 10(l) to
                                    Home Federal Savings Bank's Form 10-K for the fiscal
                                    year ended June 30, 1991).

 10(n)                              Executive  Supplemental   Retirement  Income
                                    Agreement   with   John   K.   Keach,    Jr.
                                    (incorporated   by  reference  from  Exhibit
                                    10(n) to Home  Federal  Savings  Bank's Form
                                    10-K  for the  fiscal  year  ended  June 30,
                                    1991)  and  First   Amendment  to  Executive
                                    Supplemental   Retirement  Income  Agreement
                                    (incorporated   by  reference  from  Exhibit
                                    10(n)  to  Registrant's  Form  10-K  for the
                                    fiscal year ended June 30, 1992); second and
                                    third  amendments  thereto  incorporated  by
                                    reference to Exhibit 10(n) of Registrant's  Form 10-K for
                                     the year ended June 30, 1998.

10(o)                               Executive  Supplemental   Retirement  Income
                                    Agreement    with    Lawrence    E.   Welker
                                    (incorporate by reference from Exhibit 10(o)
                                    to Home Federal  Saving Bank's Form 10-K for
                                    the fiscal  year  ended  June 30,  1991) and
                                    First  Amendment to  Executive  Supplemental
                                    Retirement Income Agreement (incorporated by
                                    reference from Exhibit 10(o) to Registrant's
                                    Form 10-K for the fiscal year ended June 30,
                                    1992);  second and third amendments  thereto
                                    incorporated  by reference to Exhibit  10(o)
                                    of Registrant's  Form 10-K for the year ended
                                    June 30, 1998.

10(p)                               Executive  Supplemental   Retirement  Income
                                    Agreement with Elaine  Pollert  (incorporate
                                    by  reference  from  Exhibit  10(p)  to Registrant's
                                      Form  10-K  for the
                                    fiscal year ended June 30,  1998) and First,
                                    Second  and Third  Amendments  to  Executive
                                    Supplemental   Retirement  Income  Agreement
                                    (incorporated   by  reference  from  Exhibit
                                    10(p)  to  Registrant's  Form  10-K  for the
                                    fiscal year ended June 30, 1998).

10(v)                               Deferred Compensation Agreement with John K.
                                    Keach,  Sr.  (incorporated by reference from
                                    Exhibit  10(v) to Home Federal  Savings Bank
                                    Form 10-K for the fiscal year ended June 30,
                                    1992)  and  First   Amendment   to  Deferred
                                    Compensation   Agreement   (incorporated  by
                                    reference from Exhibit 10(v) to Registrant's
                                    Form 10-K for the year ended June 30, 1994)
                                    and    Second    Amendment    to    Deferred
                                    Compensation   Agreement   (incorporated  by
                                    reference from Exhibit 10(v) to Registrant's
                                    Form 10-K for the year ended June 30, 1998).

10(w)                               Employment Agreement with S. Elaine Pollert (incorporated by reference from Exhibit l0(w) to Home
                                    Federal Savings Bank Form 10-K for the fiscal year ended June 30, 1998); and First Amendment to
                                    Employment Agreement (incorporated by reference from Exhibit 10(w) to Registrant's Form 10-K for
                                    the year ended June 30, 1998).

10(x)                               Executive  Supplemental   Retirement  Income
                                    Agreement    with   Gerald   L.    Armstrong
                                    (incorporated   by  reference  from  Exhibit
                                    10(x) to Home Federal Savings Bank Form 10-K
                                    for the fiscal year ended June 30, 1992) and
                                    First  Amendment to  Executive  Supplemental
                                    Retirement Income Agreement (incorporated by
                                    reference from Exhibit 10(x) to Registrant's
                                    Form 10-K for the year ended June 30, 1994);
                                    and Second and Third Amendments to Executive
                                    Supplemental   Retirement  Income  Agreement
                                    (incorporated   by  reference  from  Exhibit
                                    10(x) to Registrant's Form 10-K for the year
                                    ended June 30, 1998).

               10(y) Employment Agreement with Gerald L. Armstrong (incorporated
               by  reference  from Exhibit  l0(aa) to Home Federal  Savings Bank
               Form  10-K  for the  fiscal  year  ended  June 30,  1992).  First
               Amendment  thereto  dated  November  22, 1994.  (incorporated  by
               reference from Exhibit 10(f) to the Form 10-K for the fiscal year
               ended June 30, 1998);  Second Amendment thereto dated April 30,
               1996  (incorporated by reference from exhibit 10(f) to registrant's
               Form 10-K for the fiscal year ended June 30, 1998.)



10(ab)                              Stock Option Agreement with Gerald L. Armstrong (incorporated by reference from Exhibit 10(ab) to
                                    Home Federal Savings Bank Form 10-K for the fiscal year ended June 30, 1992).

10(ac)                              Director  Deferred  Compensation   Agreement
                                    with John Beatty  (incorporated by reference
                                    from Exhibit l0(ac) to Home Federal  Savings
                                    Bank Form  10-K for the  fiscal  year  ended
                                    June 30, 1992);  first and second amendments
                                    thereto   (incorporated  by  reference  from
                                    Exhibit 10(ac) to Registrant's Form 10-K for
                                    the year ended June 30, 1998).

 10(ad)                             Director  Deferred  Compensation   Agreement
                                    with Lewis Essex  (incorporated by reference
                                    from Exhibit 10(ad) to Home Federal  Savings
                                    Bank Form  10-K for the  fiscal  year  ended
                                    June 30, 1992);  first and second amendments
                                    thereto   (incorporated  by  reference  from
                                    Exhibit 10(ad) to Registrant's Form 10-K for
                                    the year ended June 30, 1998).

10(ae)                              Director  Deferred  Compensation   Agreement
                                    with Harold Force (incorporated by reference
                                    from Exhibit 10(ae) to Home Federal  Savings
                                    Bank Form  l0-K for the  fiscal  year  ended
                                    June 30,  1992);  first,  second  and  third
                                    amendments    thereto    (incorporated    by
                                    reference    from    Exhibit    10(ae)    to
                                    Registrant's  Form  10-K for the year  ended
                                    June 30, 1998).

10(af)                              Director Deferred Compensation Agreement with David W. Laitinen (incorporated by reference from
                                    Exhibit 10(af) to Home Federal Savings Bank Form 10-K for the fiscal year ended June 30, 1992);
                                    first, second and third amendments thereto (incorporated by reference from Exhibit 10(af) to
                                    Registrant's Form 10-K for the year ended June 30, 1998).

10(ag)                              Director  Deferred  Compensation   Agreement
                                    with  William   Nolting   (incorporated   by
                                    reference   from  Exhibit   10(ag)  to  Home
                                    Federal  Savings  Bank  Form  10-K  for  the
                                    fiscal year ended June 30,  1992);  ); first
                                    and second amendments thereto  (incorporated
                                    by   reference   from   Exhibit   10(ag)  to
                                    Registrant's  Form  10-K for the year  ended
                                    June 30, 1998).

 10(ah)                             Non-Qualified Stock Option Agreement,  dated
                                    December  22,  1992,  with  John  T.  Beatty
                                    (incorporated   by   referencefrom   Exhibit
                                    10(ah) to Registrant's Form 10-K for theyear
                                    ended June 30, 1994).

10                                  (ai)  Non-Qualified  Stock Option Agreement,
                                    dated December 22, 1992, with Lewis W. Essex
                                    (incorporated   by  reference  from  Exhibit
                                    10(ai)  to  Registrant's  Form  10-K for the
                                    year ended June 30, 1994).

10                                  (aj)  Non-Qualified  Stock Option Agreement,
                                    dated  December 22, 1992,  with Harold Force
                                    (incorporated   by  reference  from  Exhibit
                                    10(aj)  to  Registrant's  Form  10-K for the
                                    year ended June 30, 1994).

10 (ak)                             Non-Qualified Stock Option Agreement, dated December 22, 1992, with David W. Laitinen
                                    (incorporated by reference from Exhibit 10(ak) to Registrant's Form 10-K for the year ended June
                                    30, 1994).

 10 (al)                            Non-Qualified Stock Option Agreement, dated December 22, 1992, with Harvard W. Nolting, Jr
                                    (incorporated by reference from Exhibit 10(al) to Registrant's Form 10-K for the year ended June
                                    30, 1994).

10(am)                              Non-Qualified Stock Option Agreement,  dated
                                    August   24,1993,   with   John  T.   Beatty
                                    (incorporated   by  reference  from  Exhibit
                                    10(am)  to  Registrant's  Form  10-K for the
                                    year ended June 30, 1994).

10 (an)                             Non-Qualified Stock Option Agreement, dated August 24,1993, with Lewis W. Essex (incorporated by
                                    reference from Exhibit 10(an) to Registrant's Form 10-K for the year ended June 30, 1994).

10                                  (ao)  Non-Qualified  Stock Option Agreement,
                                    dated  August 24,  1993,  with Harold  Force
                                    (incorporated   by  reference  from  Exhibit
                                    10(ao)  to  Registrant's  Form  10-K for the
                                    year ended June 30, 1994).

10                                  (ap)  Non-Qualified  Stock Option Agreement,
                                    dated  August  24,   1993,   with  David  W.
                                    Laitinen  (incorporated  by  reference  from
                                    Exhibit 10(ap) to Registrant's Form 10-K for
                                    the year ended June 30, 1994).

 10 (aq)                            Non-Qualified Stock Option Agreement, dated August 24, 1993, with Harvard W. Nolting, Jr.
                                    (incorporated by reference from Exhibit 10(aq) to Registrant's Form 10-K for the year ended June
                                    30, 1994).

10 (ar)                             Rights Agreement, dated as of November 22, 1994, between Registrant and LaSalle National Bank,
                                    Chicago, Illinois, as Rights Agent (incorporated by reference from Exhibit 1 to Registrant's
                                    Registration Statement on Form 8-A filed with the SEC on December 5, 1994), first amendment thereto dated November 25, 1994.

10 (as)                             1995 Stock Option Plan (incorporated by reference  from Exhibit A to Registrant's Proxy Statement
                                    for its  1995 annual shareholder meeting).

13                                                 2000 Shareholder Annual Report.

21                                  Subsidiaries of the Registrant (incorporated
                                    by reference from Exhibit 21 to Registrant's
                                    Form 10-K for the year ended June 30, 1993).

23.1     Independent Auditors' Consent.

 27                                 Financial Data Schedule (to be filed electronically).`