UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

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

                  For the quarterly period ended March 31, 2000

                                       or

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

For the transition period from __________________ to _________________

                         Commission File Number 1-13793

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                       NORTHEAST PENNSYLVANIA FINANCIAL CORP.
-------------------------------------------------------------------------------

              (Exact name of registrant as specified in its charter)
-------------------------------------------------------------------------------


DELAWARE                                                          06-1504091
-------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
                                                            Identification No.)


12 E. BROAD STREET, HAZLETON, PENNSYLVANIA                              18201
-------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)


                             (570) 459-3700
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           (Registrant's telephone number, including area code)


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


         Indicate by check mark whether the registrant (1) 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 __


                    APPLICABLE ONLY TO CORPORATE ISSUERS.

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest  practicable  date: The Registrant had
5,308,149 shares of Common Stock outstanding as of May 9, 2000.

<PAGE>


                             TABLE OF CONTENTS

Item
No.
                                                                         Page
                                                                         Number
PART  I - CONSOLIDATED FINANCIAL INFORMATION

Item 1   CONSOLIDATED FINANCIAL STATEMENTS

         Consolidated Statements of Financial Condition
         March 31, 2000 (unaudited) and September 30, 1999............     1

         Consolidated Statements of Operations for the Three Months Ended
         March 31, 2000 and 1999 (unaudited)..........................     2

         Consolidated Statement of Comprehensive Income for the Three Months
         Ended March 31, 2000 and 1999 (unaudited)....................     3

         Consolidated Statements of Operations for the Six Months Ended
         March 31, 2000 and 1999 (unaudited)..........................     4

         Consolidated Statement of Comprehensive Income for the Six Months
         Ended March 31, 2000 and 1999 (unaudited)....................     5

         Consolidated Statements of Changes in Equity for the Years Ended
         September 30, 1999, 1998 and 1997 and the Six Months Ended
         March 31, 2000 (unaudited)...................................     6

         Consolidated Statements of Cash Flows for the Six Months Ended
         March 31, 2000 and 1999(unaudited)...........................     7-8

         Notes to Consolidated Financial Statements (unaudited).......     9-12

Item 2   Management's Discussion and Analysis of Financial Condition
         and Results of Operations....................................     13-19

Item 3   Quantitative and Qualitative Disclosures about Market Risk...     20

Part II - OTHER INFORMATION

1        Legal Proceedings............................................     21

2        Changes in Securities and Use of Proceeds....................     21

3        Defaults Upon Senior Securities..............................     21

4        Submission of Matters to a Vote of Security Holders..........     21-22

5        Other Information............................................     22

6        Exhibits and Reports on Form 8 - K...........................     22

Signatures

<PAGE>


                     Northeast Pennsylvania Financial Corp.
                 Consolidated Statements of Financial Condition
                March 31, 2000 (unaudited) and September 30, 1999
                               (in thousands)
<TABLE>

                                                                              March 31,        September 30,
                                                                                2000               1999
                                                                                ----               ----
                              Assets                                        (unaudited)
<S>                                                                          <C>                 <C>

Cash and cash equivalents                                                        $4,158          $ 4,177
Securities available-for-sale                                                   197,278          189,835
Securities held-to-maturity (estimated fair value of $27,804 at
    March 2000 and $28,315 at September 1999)                                    31,333           30,332
Loans (less allowance for loan losses $3,322 for March 2000 and
    $2,924 for September 1999)                                                  409,888          364,190
Accrued interest receivable                                                       5,572            4,769
Assets acquired through foreclosure                                                 282               98
Property and equipment, net                                                       9,655            9,868
Other assets                                                                     11,410            8,956
                                                                                 ------            -----
     Total assets                                                              $669,576        $ 612,225
                                                                               ========        =========

                       Liabilities and Equity

Deposits                                                                       $372,850        $ 375,983
Federal Home Loan Bank advances                                                 220,970          155,980
Other borrowings                                                                    405              524
Advances from borrowers for taxes and insurance                                     987            1,040
Accrued interest payable                                                          1,815            1,317
Other liabilities                                                                 1,014            1,905
                                                                                  -----            -----

     Total liabilities                                                          598,041          536,749
                                                                                -------          -------

Preferred stock ($.01 par value; 2,000,000 authorized shares;  0
    shares issued)                                                                    -                -
Common stock ($.01 par value; 16,000,000 authorized shares;
    6,427,350 shares issued)                                                         64               64
Additional paid-in capital                                                       62,173           62,119
Common stock acquired by stock benefit plans                                    (6,653)          (7,066)
Retained earnings - substantially restricted                                     32,322           30,818
Accumulated other comprehensive loss                                            (4,571)          (2,874)
Treasury stock, at cost (1,058,901 shares at March 2000                         (11,800)          (7,585)
and 626,667 at September 1999)                                                  --------          -------


     Total equity                                                                71,535           75,476
                                                                                 ------           ------

            Total liabilities and equity                                       $669,576        $ 612,225
                                                                               ========        =========
</TABLE>


                                        -1-
<PAGE>


                     Northeast Pennsylvania Financial Corp.
                     Consolidated Statements of Operations
          For the Three Months Ended March 31, 2000 and 1999 (unaudited)
                     (in thousands, except per share data)
<TABLE>


                                                                           For the Three Months Ended
                                                                                    March 31,
                                                                           2000                  1999
                                                                           ----                  ----
                                                                                   (unaudited)
<S>                                                                       <C>                    <C>
Interest Income:
  Loans                                                                        $7,577            $ 5,805
  Mortgage-related securities                                                     923              1,093
  Investment securities:
     Taxable                                                                    1,805              1,274
     Non-taxable                                                                  857                803
                                                                                  ---                ---
     Total interest income                                                     11,162              8,975


Interest Expense:
  Deposits                                                                      3,693              3,294
  Federal Home Loan Bank advances and other                                     2,763              1,350
                                                                                -----              -----
     Total interest expense                                                     6,456              4,644


Net interest income                                                             4,706              4,331

Provision for loan losses                                                         238                135
                                                                                  ---                ---


Net interest income after provision for loan losses                             4,468              4,196

Non-interest Income:
  Service charges and other fees                                                  271                194
  Other income                                                                    107                 97
  Insurance premium income                                                         47                 78
  Gain (loss) on sale of:
     Real estate owned                                                           (73)               (15)
     Loans                                                                          5                 15
    Available-for-sale securities                                                   1                (1)
                                                                                    -                ---
        Total non-interest income                                                 358                368

Non-interest Expense:
  Salaries and net employee benefits                                            1,911              1,844
  Occupancy costs                                                                 506                423
  Data processing                                                                 139                117
  Professional fees                                                               144                204
  Federal Home Loan Bank service charges                                          160                 96
  Other                                                                           693                552
                                                                                  ---                ---
     Total non-interest expense                                                 3,553              3,236


Income before income taxes                                                      1,273              1,328

Income taxes                                                                      174                255
                                                                                  ---                ---


Net income                                                                     $1,099             $1,073
                                                                               ======             ======

Earnings per share- basic                                                       $0.23              $0.19
                                                                                =====              =====
Earnings per share- diluted                                                     $0.22              $.019
                                                                                =====              =====
</TABLE>


                                   -2-


<PAGE>


                     Northeast Pennsylvania Financial Corp.
                Consolidated Statements of Comprehensive Income
         For the Three Months Ended March 31, 2000 and 1999 (unaudited)
                     (in thousands, except per share data)
<TABLE>


                                                                               For the Three Months Ended
                                                                                       March 31,
                                                                                 2000               1999
                                                                                 ----               ----
                                                                                      (unaudited)
<S>                                                                            <C>                <C>
Net Income                                                                     $1,099             $1,073
                                                                               ======             ======

Other  comprehensive  income  (loss),  net of tax
   Unrealized  gains (losses) on securities:
    Unrealized holding losses arising during the period                        (613)              (811)
    Less:  Reclassification adjustment for gains (losses)
      included in net income                                                       1                (1)
                                                                                   -                ---
Other comprehensive loss                                                      $(614)            $ (810)
Comprehensive income                                                            $485              $ 263
                                                                                ====              =====
</TABLE>

















                                   -3-


<PAGE>


                     Northeast Pennsylvania Financial Corp.
                     Consolidated Statements of Operations
           For the Six Months Ended March 31, 2000 and 1999 (unaudited)
                     (in thousands, except per share data)
<TABLE>

                                                                                 For the Six Months Ended
                                                                                          March 31,
                                                                                   2000                1999
                                                                                   ----                ----
                                                                                         (unaudited)
<S>                                                                              <C>                 <C>
Interest Income:
  Loans                                                                          $14,867             $11,548
  Mortgage-related securities                                                      1,836               2,297
  Investment securities:
    Taxable                                                                        3,454               2,638
    Non-Taxable                                                                    1,734               1,460
                                                                                   -----               -----
    Total interest income                                                         21,891              17,943

Interest Expense:
  Deposits                                                                         7,459               6,610
  Federal Home Loan Bank advances and other                                        5,002               2,670
                                                                                   -----               -----
    Total interest expense                                                        12,461               9,280


Net interest income                                                                9,430               8,663

Provision for loan losses                                                            443                 183
                                                                                     ---                 ---

Net interest income after provision for loan losses                                8,987               8,480

Non-interest Income:
  Service charges and other fees                                                     586                 411
  Other Income                                                                       214                 182
  Insurance premium income                                                           106                 123
  Gain (loss) on the sale of:
     Real estate owned                                                             (113)                (30)
     Loans                                                                            14                  35
     Available-for-sale securities                                                  (13)                  33
     Other                                                                             -                 (1)
                                                                                       -                 ---
     Total  non-interest incom                                                      794                 753


Non-interest Expense:
  Salaries and net employee benefits                                               3,878               3,560
  Occupancy costs                                                                    975                 842
  Data processing                                                                    260                 242
  Professional fees                                                                  302                 427
  Federal Home Loan Bank and other service charges                                   325                 193
  Other                                                                            1,459               1,076
                                                                                   -----               -----
     Total non-interest expense                                                    7,199               6,340

Income before income taxes                                                         2,582               2,893

Income taxes                                                                         337                 642
                                                                                     ---                 ---

Net income                                                                       $ 2,245              $2,251
                                                                                   =====              ======

Earnings per share- basic                                                          $0.45               $0.39
                                                                                   =====               =====
Earnings per share- diluted                                                        $0.43               $0.38
                                                                                   =====               =====
</TABLE>

                                   -4-

<PAGE>


                     Northeast Pennsylvania Financial Corp.
                 Consolidated Statements of Comprehensive Income
           For the Six Months Ended March 31, 2000 and 1999 (unaudited)
                     (in thousands, except per share data)
<TABLE>


                                                                                 For the Six Months Ended
                                                                                       March 31,
                                                                                 2000               1999
                                                                                 ----               ----
                                                                                      (unaudited)
<S>                                                                            <C>                <C>
Net Income                                                                     $2,245             $2,251
                                                                               ======             ======

Other  comprehensive  income  (loss),  net of tax
   Unrealized  gains (losses) on securities:
    Unrealized holding losses arising during the period                        (1,705)            (1,092)
    Less:  Reclassification adjustment for gains (losses)
      included in net income                                                      (8)                 22
                                                                                  ---            -------
Other comprehensive loss                                                      $(1,697)          $ (1,114)
Comprehensive income                                                             $548            $ 1,137
                                                                                 ====            =======
</TABLE>





















                                      -5-

<PAGE>


                     Northeast Pennsylvania Financial Corp.
                  Consolidated Statements of Changes in Equity
            For the Three Years Ended September 30, 1999,1998 and 1997
               and the Six Months Ended March 31, 2000 (unaudited)
                               (in thousands)
<TABLE>



                                                                      Common Stock                Accumulated
                                                          Additional  Acquired by                    Other
                                               Common      Paid In   stock benefit   Retained    Comprehensive   Treasury    Total
                                               Stock       Capital       plans       Earnings    income(loss)     Stock      Equity
                                               -----       -------       -----       --------    ------------     -----      ------
<S>                                            <C>         <C>           <C>         <C>         <C>              <C>        <C>


Balance September 30, 1996                   $     -       $     -      $     -      $ 25,874     $     253         $-      $ 26,127

Net changes in gains (losses) on
   securities available for sale, net of tax                                                          1,030                    1,030
Net Income                                                                              1,381                                  1,381
                                             -------       -------      -------      --------     ---------       ------    --------
Balance September 30, 1997                   $     -       $     -      $     -      $ 27,255     $   1,283         $-      $ 28,538

Issuance of Common Stock ($.01 par value;
     16,000,000 authorized shares;
     6,427,350 shares issued)                     64                                                                              64
Additional paid-in Capital                                  61,959                                                            61,959
Unearned Employee Stock Ownership
     Plan (ESOP) shares                                                 (5,142)                                              (5,142)
ESOP shares committed to be released                           124          343                                                  467
Net changes in gains (losses) on
     securities available for sale, net of tax                                                        1,595                    1,595
Net loss                                                                                 (47)                                   (47)
                                             -------       -------      -------      --------     ---------       ------    --------
Balance September 30, 1998                   $    64       $62,083     $(4,799)      $ 27,208     $   2,878         $-      $ 87,434

Unearned stock awards                                                   (3,312)                                              (3,312)
ESOP shares committed to be released                            77          557                                                  634
Stock awards                                                  (41)          488                                                  447
Net changes in gains (losses) on
securities available for sale, net of tax                                                           (5,752)                  (5,752)
Treasury stock at cost, (626,667 shares)                                                                          (7,585)    (7,585)
Cash dividend paid                                                                      (955)                                  (955)
Net income                                                                              4,565                                  4,565
                                             -------       -------      -------      --------     ---------       -------   --------
Balance September 30, 1999                   $    64       $62,119     $(7,066)      $ 30,818     $ (2,874)       $(7,585)  $ 75,476

ESOP shares committed to be released                            80          107                                                  187
Stock awards                                                  (26)          306                                                  280
Net changes in losses on
securities available-for-sale, net of tax                                                           (1,697)                  (1,697)
Treasury stock at cost, (432,234 shares)                                                                           (4,215)   (4,215)
Cash dividend paid                                                                      (741)                                  (741)
Net income                                                                              2,245                                  2,245
                                             -------       -------     --------      --------     ---------       --------   -------
Balance, March 31, 2000                      $    64       $62,173     $(6,653)      $ 32,322     $ (4,571)      $(11,800)   $71,535
                                             =======       =======     ========      ========     =========      =========   =======

</TABLE>









                                        -6-




<PAGE>


                     Northeast Pennsylvania Financial Corp.
                      Consolidated Statement of Cash Flows
             For the Six Months Ended March 31, 2000 and 1999 (unaudited)
                                (in thousands)
<TABLE>
<S>                                                                                        <C>            <C>

                                                                                           For the Six Months Ended
                                                                                                  March 31,
                                                                                             2000           1999
                                                                                             ----           ----
Operating Activities:                                                                            (unaudited)
Net Income                                                                                 $2,245          $ 2,251
Adjustments to reconcile net income to net cash provided by operating activities:
  Provision for REO loss                                                                       40               10
  Provision for loan losses                                                                   443              183
  Depreciation                                                                                560              398
  Deferred income tax provision                                                               932              141
  ESOP expense                                                                                187              332
  Stock award expense                                                                         280                -
  Amortization and accretion on:
     Held-to-maturity securities                                                                2               28
     Available-for-sale securities                                                             13              171
  Amortization of deferred loan fees                                                         (99)            (230)
(Gain) loss on sale of:
     Assets acquired through foreclosure                                                      113               30
     Loans                                                                                   (14)             (35)
     Available-for-sale securities                                                             13             (33)
  Gain (loss) on disposal of property and equipment                                             -                1
  Changes in assets and liabilities:
    Increase in accrued interest receivable                                                 (803)              (5)
    Increase in other assets                                                              (2,289)             (94)
    Increase (decrease) in accrued interest payable                                           498             (66)
    Decrease in accrued income taxes payable                                              (1,380)            (467)
    Increase in other liabilities                                                             489              651
                                                                                              ---              ---

      Net cash provided by operating activities                                             1,230            3,266

Investing Activities:
Net increase in loans                                                                    (47,421)         (36,344)
Proceeds from sale of:
  Available-for-sale securities                                                             5,313            5,769
  Assets acquired through foreclosure                                                         112              116
  Loans                                                                                       923            6,601
Proceeds from repayments of held-to-maturity securities                                         2           16,953
Proceeds from repayments of available-for-sale securities                                   3,793           39,770
Proceeds from disposal of fixed assets                                                          -               67
Purchase of:
  Held-to-maturity securities                                                             (1,005)         (13,558)
  Available-for-sale securities                                                          (16,123)         (55,728)
  Office properties and equipment                                                           (347)            (782)
  Federal Home Loan Bank stock                                                            (3,225)          (1,075)
                                                                                          -------          -------

Net cash used in investing activities                                                    (57,978)         (38,211)

Financing Activities:
  Net increase (decrease) in deposit accounts                                             (3,133)           20,509
  Net increase in Federal Home Loan Bank short-term advances                               15,000            6,500
  Borrowings of Federal Home Loan Bank long-term advances                                  50,000           15,000
  Repayments of Federal Home Loan Bank long-term advances                                    (10)              (9)
  Net increase (decrease) in advances from borrowers for taxes and insurance                 (53)              320


</TABLE>

                                        -7-



<PAGE>


                     Northeast Pennsylvania Financial Corp.
                      Consolidated Statement of Cash Flows
           For the Six Months Ended March 31, 2000 and 1999 (unaudited)
                                  (in thousands)
<TABLE>


                                                                                         For the Six Months Ended
                                                                                                 March 31,
                                                                                             2000        1999
                                                                                             ----        ----
                                                                                                (unaudited)
<S>                                                                                     <C>               <C>
    Net decrease in other borrowings                                                        (119)           (547)
    Purchase of common stock for stock incentive plan                                           -         (3,312)
    Purchase of treasury stock                                                            (4,215)         (4,062)
    Cash dividend on common stock                                                           (741)           (321)
                                                                                            -----           -----

    Net cash provided by financing activities                                             56,729          34,078

Decrease in cash and cash equivalents                                                        (19)           (867)

Cash and cash equivalents, beginning of year                                                4,177           3,053
                                                                                            -----           -----

Cash and cash equivalents, end of year                                                     $4,158         $ 2,186
                                                                                           ======         =======

Supplemental  disclosures of cash flow information:
  Cash paid during the period for:
     Interest                                                                             $11,963         $ 9,346
                                                                                          =======         =======
     Income taxes                                                                            $807           $ 947
                                                                                             ====           =====
Supplemental disclosure - non-cash information:
  Transfer from loans to real estate owned                                                   $449            $ 94
                                                                                             ====            ====
Net change in unrealized losses on securities
   Available-for-sale, net of tax                                                        $(1,697)       $ (1,114)
                                                                                         ========       =========

</TABLE>














                                        -8-




<PAGE>


Northeast Pennsylvania Financial Corp.
Notes to Consolidated Financial Statements (unaudited)

1.       Summary of Significant Accounting Policies

         Basis of Financial Statements Presentation

         The  accompanying  consolidated  financial  statements were prepared in
         accordance  with  instructions  to Form  10-Q,  and  therefore,  do not
         include information or footnotes necessary for a complete  presentation
         of  financial  position,  results  of  operations  and  cash  flows  in
         conformity with generally accepted accounting principles.  However, all
         normal recurring  adjustments which, in the opinion of management,  are
         necessary for a fair  presentation  of the financial  statements,  have
         been included. These financial statements should be read in conjunction
         with the audited financial statements and the notes thereto included in
         the Company's  Annual  Report for the period ended  September 30, 1999.
         The results for the six months ended March 31, 2000 are not necessarily
         indicative  of the  results  that may be  expected  for the year  ended
         September 30, 2000.

         Business

         Northeast  Pennsylvania  Financial Corp. (the "Company") is the holding
         company for First Federal Bank.  The  Company's  principal  subsidiary,
         First  Federal  Bank,  serves  Northeastern  and  Central  Pennsylvania
         through  thirteen full service office  locations and a loan  production
         office.  The  Bank  provides  a  wide  range  of  banking  services  to
         individual  and  corporate  customers.  The  Company  and the  Bank are
         subject to  competition  from other  financial  institutions  and other
         companies that provide financial services. The Company and the Bank are
         subject to the  regulations  of certain  federal  agencies  and undergo
         periodic examinations by those regulatory authorities.

         Principles of Consolidation and Presentation

         The  accompanying  financial  statements  of the  Company  include  the
         accounts  of  First  Federal   Bank,   Abstractors,   Inc.,   Northeast
         Pennsylvania Trust Co. and FIDACO,  Inc.. First Federal Bank, Northeast
         Pennsylvania  Trust  Co.,  and  Abstractors,   Inc.,  are  wholly-owned
         subsidiaries of Northeast  Pennsylvania  Financial  Corp.  Abstractors,
         Inc. is a title  insurance  agency.  Northeast  Pennsylvania  Trust Co.
         offers trust,  estate and asset management  services and products.  All
         material  inter-company  balances and transactions have been eliminated
         in  consolidation.   Prior  period  amounts  are   reclassified,   when
         necessary,  to conform with the current  year's  presentation.  FIDACO,
         Inc. is an inactive subsidiary of First Federal Bank and its only major
         asset is an investment in Hazleton Community Development Corporation.

         Earnings per Share

         Earnings  per share  (EPS),  basic and  diluted,  were $0.23 and $0.22,
         respectively,  for the three  months  ended March 31, 2000  compared to
         $0.19, basic and diluted for the three months ended March 31, 1999, and
         $0.45 and $0.43, respectively, for the six months ended March 31, 2000,
         compared  to $0.39 and $0.38,  respectively,  for the six months  ended
         March 31, 1999.



                                        -9-


<PAGE>



The  following  table  presents  the   reconciliation   of  the  numerators  and
denominators of the basic and diluted EPS computations.

<TABLE>

                                                      Three months ended                  Six months ended
                                                           March 31,                          March 31,
                                                      2000            1999             2000             1999
                                                      ----            ----             ----             ----
                                                                          (unaudited)
                                                         (Dollars in thousands, except per share data)
       <S>                                         <C>               <C>               <C>              <C>

       Basic:

       Net Income                                   $1,099            $1,073            $2,245          $2,251
                                                    ======            ======            ======          ======

       Weighted average shares outstanding       4,741,317         5,494,638         4,872,922       5,662,409
       Plus:  ESOP shares released
          or committed to be released              109,266            53,562           102,839          50,348
                                                   -------            ------           -------          ------

                                                 4,850,583         5,548,200         4,975,761       5,712,757
                                                 =========         =========         =========       =========

       Earnings per share  - basic                   $0.23             $0.19             $0.45           $0.39
                                                     =====             =====             =====           =====



                                                      Three months ended                  Six months ended
                                                           March 31,                          March 31,
                                                      2000            1999             2000             1999
                                                      ----            ----             ----             ----
                                                                          (unaudited)
                                                         (Dollars in thousands, except per share data)

       Diluted:

       Net Income                                   $1,099             $1,073           $2,245          $2,251
                                                    ======             ======           ======          ======

       Basic weighted shares outstanding         4,850,583          5,548,200        4,975,761       5,712,757
       Dilutive Instruments:
         Dilutive effect of outstanding
          stock options                                  -                  -                -               -
         Dilutive effect of stock awards           194,369            243,304          193,896         243,468
                                                   -------            -------          -------         -------
                                                 5,044,952          5,791,504        5,169,657       5,956,225
                                                 =========          =========        =========       =========

       Earnings per share  - diluted                 $0.22              $0.19            $0.43           $0.38
                                                     =====              =====            =====           =====
</TABLE>




2.       Recent Accounting Pronouncements

         In June 1998, the FASB issued SFAS No. 133,  "Accounting for Derivative
         Instruments and Hedging  Activities," which was subsequently amended in
         July 1999 by SFAS No. 137,  "Accounting for Derivative  Instruments and
         Hedging Activities-Deferral of the Effective Date of FASB Statement No.
         133." This Statement established accounting and reporting standards for
         derivative   instruments,   including  certain  derivative  instruments
         embedded in other contracts,  (collectively referred to as derivatives)
         and for hedging  activities.  It required that an entity  recognize all
         derivatives  as  either  assets  or  liabilities  in the  statement  of
         financial  position and measure those  instruments  at fair value.  The
         accounting for changes in the fair value of a derivative depends on the
         intended  use of the  derivative  and  the  resulting  designation.  If
         certain conditions are met, a derivative may

                                         -10-

<PAGE>


         be specifically designated as (a) a hedge of the exposure to changes in
         the fair value of a recognized  asset or  liability or an  unrecognized
         firm commitment,  (b) a hedge of the exposure to variable cash flows of
         a forecasted  transaction,  or (c) a hedge of certain foreign  currency
         exposures.  This  Statement "as amended"  becomes  effective for fiscal
         years beginning after December 15, 1999. Earlier adoption is permitted.
         The Company adopted SFAS 133, prior to the issuance of SFAS 137, in its
         fourth  fiscal  quarter  of  1998,  including  its  provision  for  the
         potential reclassification of investments, resulting in a $56.2 million
         transfer of securities  from held to maturity to available for sale and
         an  increase  of  $597,000  of  unrealized  gains,  net  of  taxes,  on
         securities  available for sale.  The adoption of this Statement did not
         affect operating results of the Company.

         3.       Conversion to Stock Form of Ownership

         The Company is a business  corporation  formed at the  direction of the
         Bank under the laws of  Delaware  on December  16,  1997.  On March 31,
         1998, the Company  issued  6,427,350  shares,  par value $.01 per share
         (the "Common Stock"),  including  514,188 shares to the Bank's Employee
         Stock  Ownership Plan and related trust ("ESOP") and a contribution  of
         476,100  shares  of  Common  Stock  to  The  First  Federal  Charitable
         Foundation (the "Foundation").  The Conversion resulted in net proceeds
         of $52.1 million, after expenses of $2.2 million.

         The  Bank  established  a  liquidation  account  at  the  time  of  the
         Conversion  in an amount equal to the equity of the Bank as of the date
         of its latest balance sheet date,  September 30, 1997, contained in the
         final  Prospectus  used  in  connection  with  the  Conversion.  In the
         unlikely event of a complete liquidation of the Bank, (and only in such
         an event), eligible depositors who continue to maintain accounts at the
         Bank shall be entitled to receive a distribution  from the  liquidation
         account.  The amount of the liquidation account decreases to the extent
         the balances of eligible  deposits  decrease.  The liquidation  account
         approximated $10.7 million at September 30, 1999.

         The  Company may not  declare  nor pay  dividends  on its stock if such
         declaration   and  payment  would   violate   statutory  or  regulatory
         requirements.

         In addition to the 16,000,000  authorized  shares of common stock,  the
         Company authorized 2,000,000 shares of preferred stock with a par value
         of $0.01 per share (the "preferred  stock").  The Board of Directors is
         authorized,  subject to any  limitations  by law,  to  provide  for the
         issuance of the shares of preferred stock in series,  to establish from
         time to time the number of shares to be included  in each such  series,
         and to fix the  designation,  powers,  preferences  and  rights  of the
         shares of each  such  series  and any  qualifications,  limitations  or
         restriction  thereof.  As of March 31,  2000,  there  were no shares of
         preferred stock issued.







                                       -11-

<PAGE>



<TABLE>

4.       Loans

        Loans are summarized as follows:                            March 31,            September 30,
                                                                      2000                   1999
                                                                      ----                   ----
                                                                  (unaudited)
                                                                            (In thousands)
<S>                                                                <C>                      <C>
        Real Estate loans:
          One-to four-family                                          $217,396               $196,885
          Multiple family and commercial                                27,420                 31,497
          Construction                                                  10,046                  3,983
                                                                        ------                  -----
        Total real estate loans                                        254,862                232,365
                                                                       -------                -------

        Consumer Loans:
          Home equity loans and lines of credit                         72,017                 70,118
          Automobile                                                    41,931                 34,619
          Education                                                      3,412                  2,796
          Unsecured lines of credit                                      1,754                  1,744
          Other                                                          7,331                  5,571
                                                                         -----                  -----
        Total consumer loans                                           126,445                114,848
                                                                       -------                -------
        Commercial loans                                                33,344                 21,262
                                                                        ------                 ------
        Total loans                                                    414,651                368,475
                                                                       -------                -------
          Less:
             Allowance for loan losses                                 (3,322)               (2,924)
             Deferred loan origination fees                            (1,441)               (1,361)
                                                                       -------               -------
        Total loans, net                                              $409,888               $364,190
                                                                      ========               ========
</TABLE>

<TABLE>


         Allowance for loan losses is summarized as follows (in thousands):

                                                  For the six                                              For the six
                                                 months ended              For the year ended             months ended
                                                March 31, 2000             September 30, 1999            March 31, 1999
                                                --------------             ------------------            --------------
                                                 (unaudited)                                               (unaudited)

<S>                                              <C>                         <C>                          <C>
         Balance, beginning of period                $2,924                      $2,273                       $2,273
         Charge-offs                                   (47)                       (101)                         (56)
         Recoveries                                       2                           5                            2
         Provision for loan losses                      443                         747                          183
                                                        ---                         ---                          ---
         Balance, end of period                      $3,322                      $2,924                       $2,402
                                                     ======                      ======                       ======
</TABLE>

<TABLE>


5.       Deposits

         Deposits consist of the following major classifications (in thousands):

                                                                      March 31, 2000              September 30, 1999
                                                                      --------------              ------------------
                                                                       (unaudited)
                                                                                 Percent                     Percent
                                                                      Amount     of Total          Amount    of Total
                                                                ------------- ------------- -------------- ------------
        <S>                                                     <C>                <C>            <C>          <C>
        Savings accounts (passbook, statement, clubs)                $67,460       18.10%         $69,667      18.53%
        Money market accounts                                         21,398        5.70%          21,132       5.62%
        Certificates of deposit less than $100,000                   180,305       48.40%         185,790      49.41%
        Certificates of deposit greater than $100,000(1)              45,797       12.30%          51,200      13.62%
        NOW Accounts                                                  38,102       10.20%          35,339       9.40%
        Non-interest bearing deposits                                 19,788        5.30%          12,855       3.42%
                                                                      ------        -----          ------       -----
        Total deposits at end of period                             $372,850      100.00%        $375,983     100.00%
                                                                    ========      =======        ========     =======
</TABLE>

         (1) Deposit balances in excess of $100,000 are not federally insured.



                                        -12-


<PAGE>



Item 2    MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS

In  addition  to  historical   information,   this  10-Q  may  include   certain
forward-looking  statements  based  on  current  management  expectations.   The
Company's   actual  results  could  differ   materially  from  those  management
expectations.  Factors  that could  cause  future  results to vary from  current
management  expectations  include,  but are not  limited  to,  general  economic
conditions,  legislative and regulatory changes, monetary and fiscal policies of
the  federal  government,  changes in tax  policies,  rates and  regulations  of
federal,  state and local tax  authorities,  changes in interest rates,  deposit
flows,  the cost of  funds,  demand  for loan  products,  demand  for  financial
services, competition,  changes in the quality or composition of the Bank's loan
and  investment  portfolios,  changes  in  accounting  principles,  policies  or
guidelines,  and other economic,  competitive,  governmental  and  technological
factors  affecting the Company's  operations,  markets,  products,  services and
prices.  Further  description of the risks and uncertainties to the business are
included in detail in Section B, Management  Strategy;  and Section D, Liquidity
and Capital Resources.

A.       General

The  Company is the holding  company  for First  Federal  Bank (the  "Bank"),  a
federally chartered capital stock savings bank regulated by the Office of Thrift
Supervision  ("OTS").  The Company does not transact any material business other
than  through  the  Bank and its  other  subsidiaries.  The  Bank's  results  of
operations  are  dependent  primarily  on  net  interest  income,  which  is the
difference  between the income earned on its loan and investment  portfolios and
its cost of funds,  consisting of the interest paid on deposits and  borrowings.
Results of operations are also affected by the Bank's provision for loan losses,
loan and security sales,  service charges and other fee income, and non-interest
expense.  The Bank's non-interest  expense principally  consists of compensation
and employee  benefits,  office  occupancy and equipment  expense,  professional
fees, federal deposit insurance premiums,  data processing,  and advertising and
business  promotion  expenses.  Results  of  operations  are also  significantly
affected by general economic and competitive conditions, particularly changes in
interest rates, government policies and actions of regulatory authorities.

In June 1999, the Company received approval from the Pennsylvania  Department of
Banking to form a trust company, Northeast Pennsylvania Trust Co. (the "Trust").
The Trust began operations in the first fiscal quarter of 2000. The Trust offers
current customers and potentially other financial institutions' customers trust,
estate and asset management services and products.

B.       Management Strategy

The Bank's operating strategy is that of a community-based bank, offering a wide
variety of savings  products to its retail  customers,  while  concentrating  on
residential and consumer lending and, to a lesser extent,  construction  lending
and  small  business  and  municipal  commercial  lending.  In order to  promote
long-term  financial strength and  profitability,  the Bank's operating strategy
has focused on: (i)  maintaining  strong  asset  quality by  originating  one-to
four-family  loans  in  its  market  area;  (ii)  increasing   profitability  by
emphasizing  higher-yielding  consumer and commercial loans;  (iii) managing its
interest rate risk by emphasizing  consumer and commercial loans, in addition to
shorter-term,  fixed-rate,  one-to four-family loans;  limiting its retention of
newly-originated  longer-term  fixed-rate one-to four-family  loans;  soliciting
longer-


                                        -13-

<PAGE>

term  deposits;  utilizing  longer-term  advances  from  the  Federal  Home Loan
Bank of Pittsburgh  ("FHLB");  and investing in investment and  mortgage-related
securities having shorter estimated durations; (iv) meeting the banking needs of
its customers  through expanded products and improved delivery systems by taking
advantage of  technological  advances;  and (v) maintaining a strong  regulatory
capital position.

During the quarter the Bank  continued to diversify and expand its loan products
to better  serve its  customer  base by placing a greater  emphasis  on consumer
lending   and   commercial   lending,   primarily   to  small   businesses   and
municipalities.  The Bank also entered into an agreement with  BuildersFirst.com
(an internet based  business-to-business  portal offering  construction mortgage
lending,  financial  services and other products to the independent  homebuilder
industry) to purchase one to four family construction loans. These loans will be
underwritten  according  to the  Bank's  standards.  To date no loans  have been
purchased, but purchases are expected to commence in May. BuildersFirst.com will
provide  an  internet-based  delivery  and  servicing  system  giving  Northeast
Pennsylvania Financial Corp. a virtual management tool.

C.       Non-Performing Assets

The following  table presents  information  regarding the Bank's  non-performing
assets at the dates indicated (dollars in thousands):

<TABLE>

                                                                           March 31,               September 30,
                                                                             2000                       1999
                                                                             ----                       ----
                                                                          (unaudited)
<S>                                                                       <C>                       <C>
Non-performing assets:
 Non-accrual loans                                                            $1,468                    $1,371
Real estate owned and other repossessed assets                                   282                        98
                                                                                 ---                        --
     Total non-performing assets                                              $1,750                    $1,469
                                                                              ======                    ======

         Total non-performing loans as a percentage of total loans             0.36%                     0.38%
         Total non-performing assets as a percentage of total assets           0.26%                     0.24%

</TABLE>

The increase in non-performing  loans was due to a participation loan secured by
commercial  real  estate,   which  has  been  on  the  books  of  the  Bank  for
approximately  seven years.  The borrower is  experiencing  cash flow difficulty
arising from other facilities which they own.  Management of the Bank is working
closely  with the  borrower in order to  satisfactorily  resolve the  situation.
Subsequent to the end of the quarter the loan was brought  current.  Real estate
owned and other repossessed  assets increased due to the higher outstanding loan
balances of indirect loans.

D.       Liquidity and Capital Resources

The Bank's  primary  sources of funds on a long-term  and  short-term  basis are
deposits,   principal  and  interest  payments  on  loans,  mortgage-backed  and
investment  securities,  and FHLB advances. The Bank uses the funds generated to
support its lending and  investment  activities as well as any other demands for
liquidity such as deposit outflows.  While maturities and scheduled amortization
of loans are predictable sources of funds,  deposit flows,  mortgage prepayments
and the exercise of call  features are greatly  influenced  by general  interest
rates,  economic conditions and competition.  The Bank has continued to maintain
the  required  levels  of liquid  assets as  defined  by OTS  regulations.  This
requirement  of the  OTS,  which  may be  varied  at the  direction  of the  OTS
depending upon economic conditions and deposit flows, is based upon a percentage
of deposits and short-term  borrowings.  The Bank's current  required  liquidity
ratio is 4.0%. At March 31, 2000 and 1999, the Bank's liquidity ratios were 4.6%
and 10.6%, respectively.

                                        -14-

<PAGE>


At March 31, 2000, the Bank exceeded all of its regulatory capital  requirements
with a  tangible  capital  level of  $58.9  million,  or 8.9% of total  adjusted
assets,  which is above the  required  level of $9.9  million,  or 1.5%;  a core
capital level of $58.9 million, or 8.9% of total adjusted assets, which is above
the required level of $26.5 million,  or 4.0%; and a risk-based capital of $63.2
million, or 17.4% of risk-weighted  assets, which is above the required level of
$29.0 million, or 8.0%.

The Bank's most liquid assets are cash and cash  equivalents  and its investment
and mortgage-related securities  available-for-sale.  The levels of these assets
are  dependent  on  the  Bank's  operating,  financing,  lending  and  investing
activities during any given period. At March 31, 2000, cash and cash equivalents
and investment and mortgage-related securities available-for-sale totaled $201.4
million, or 30.1% of total assets.

The Bank has other sources of liquidity if a need for  additional  funds arises,
including  FHLB  advances.  At March 31,  2000,  the Bank had $221.0  million in
advances  outstanding from the FHLB, and had an overall borrowing  capacity from
the FHLB of $282.9  million.  Depending  on market  conditions,  the  pricing of
deposit  products  and FHLB  advances,  the Bank  may  continue  to rely on FHLB
borrowings to fund asset growth.

At March 31, 2000, the Bank had  commitments to originate and purchase loans and
unused  outstanding  lines of credit and  undisbursed  proceeds of  construction
mortgages  totaling  $37.9  million.  The  Bank  anticipates  that it will  have
sufficient  funds  available to meet these  commitments.  Certificate  accounts,
including  Individual  Retirement Account ("IRA") and KEOGH accounts,  which are
scheduled  to mature in less than one year from March 31, 2000,  totaled  $148.0
million.  The Bank expects that  substantially  all of the maturing  certificate
accounts,  with the exception of jumbo certificates of deposit (balances greater
than $100,000), will be retained by the Bank at maturity. At March 31, 2000, the
Bank had $31.8 million in jumbo certificates, the majority of which are deposits
from local school districts and municipalities.

At March 31, 2000,  the Bank had total equity,  determined  in  accordance  with
generally accepted  accounting  principles,  of $56.4 million, or 8.6%, of total
assets,  which approximated the Bank's regulatory  tangible capital at that date
of 8.9% of assets.  An  institution  with a ratio of  tangible  capital to total
assets of greater  than or equal to 5% is  considered  to be  "well-capitalized"
pursuant to OTS regulations.

E.  Comparison of Financial Condition at March 31, 2000 and September 30, 1999

Total assets  increased  $57.4 million from $612.2 million at September 30, 1999
to $669.6  million at March 31, 2000.  The growth in assets was primarily due to
increases in loans  receivable and investment  securities,  which were funded by
increases in FHLB advances.

Securities classified as  available-for-sale  securities increased $7.5 million,
from $189.8  million at September 30, 1999 to $197.3  million at March 31, 2000.
The increase was primarily attributable to the effect of security purchases, net
of unrealized gain/loss on available-for-sale securities.

Loans  increased  $45.7  million to $409.9  million at March 31, 2000.  This was
primarily  due to a $20.5  million  increase in one-to  four-family  real estate
loans,  as a  result  of  loan  purchases  from


                                        -15-

<PAGE>

other  financial  institutions.  Commercial  loans  increased  $12.1 million due
to the business development efforts of the commercial loan officers.  Automobile
loans increased $7.3 million primarily due to increased direct and indirect auto
loan  originations.  Construction  loans  increased  $6.1 million as a result of
marketing efforts combined with competitive pricing of products. The majority of
the loan  originations  and  purchases  for this  quarter  and the past  several
quarters were adjustable or floating rate loans.  These loans will assist in the
management of interest rate risk as they will be adjusting over the next several
quarters, which should increase their yield to the Bank.

Other assets  increased  $2.5 million to $11.4  million at March 31, 2000.  This
change was primarily due to a $2.0 million  investment in the preferred stock of
BuildersFirst.com.  Also  contributing to the change was a $462,000  increase in
deferred income taxes.

FHLB advances  increased $65.0 million from $156.0 million at September 30, 1999
to  $221.0  million  at  March  31,  2000.  This was a  result  of  management's
utilization of FHLB  borrowings to fund asset growth.  FHLB borrowings have been
invested at yields higher than the cost of the borrowed funds thereby increasing
net interest income.

Total equity  decreased  $3.9 million to $71.5  million at March 31, 2000.  This
decrease in equity  resulted  primarily  from a repurchase of 289,334  shares of
common stock at a cost of $4.2 million.  Also contributing to this decline was a
$1.7  million  increase  in  unrealized   losses  on  securities   reflected  in
accumulated other  comprehensive  loss. These decreases were partially offset by
net income of $2.2 million for the period.

F.   Comparison  of  Operating Results for the Three Months ended March 31, 2000
and March 31, 1999

General.  The Company had net income of $1.1  million for the three months ended
March 31, 2000 and for the three months ended March 31, 1999.

Interest Income.  Total interest income increased $2.2 million,  or 24.4%,  from
$9.0 million for the three months ended March 31, 1999 to $11.2  million for the
three months ended March 31, 2000.  This was primarily due to a $102.9  million,
or 19.8%,  increase  in the  average  balance of  interest  earning  assets.  An
increase in the weighted  average  yield on interest  earning  assets was due to
rising  interest rates and more adjustable  rate loans.  Specifically,  interest
income on loans  increased  $1.8  million,  or 30.5%,  from $5.8 million for the
period  ending  March  31,  1999 to $7.6  million.  This  was due to a  $979,000
increase  of  interest  income  on real  estate  loans,  due to a $55.1  million
increase  in the average  balance of these  loans.  Interest  income on consumer
loans increased  $793,000 due to a $35.8 million increase in the average balance
of such loans.  Interest income on investment  securities  increased $585,000 to
$2.7 million for the three months ended March 31, 2000  primarily due to a $22.9
million increase in the average balance of such securities.

Interest Expense.  Interest expense increased $1.8 million,  or 39.0%, from $4.6
million to $6.4  million for the three months ended March 31, 1999 and March 31,
2000, respectively. The increase in interest expense was primarily the result of
a $91.6  million  increase in the  average  balance of FHLB  advances  and other
borrowings,  which  increased  from  $105.7  million at March 31, 1999 to $197.3
million at March 31, 2000, as well as a 45 basis point  increase in the weighted
average rate paid on those  borrowings  from 5.18% to 5.63% for the three months
ended  March 31, 1999 and March 31,  2000,  respectively.  The  increase in FHLB
advances


                                        -16-

<PAGE>

reflects  management's   determination  to  utilize  FHLB advances to fund asset
growth.  The increase in interest expense also resulted from increased  interest
expense on  certificates  of  deposit,  which was the result of a $21.6  million
increase in the average balance of certificates of deposit.

Provision  for Loan Losses.  The Bank's  provision for loan losses for the three
months  ended March 31,  2000 was  $238,000  compared to $135,000  for the three
months ended March 31, 1999.  The increase in the  provision was a result of the
$26.9 million  increase in outstanding  loan balances in the first quarter.  The
provision for loan losses increases the allowance for loan losses. The allowance
is  maintained  at a level that  management  considers  adequate  to provide for
estimated  losses based upon an  evaluation  of known and inherent  risks in the
loan portfolio.  Loan losses,  other than those incurred on loans held for sale,
are  charged  directly  against  the  allowance  and  recoveries  on  previously
charged-off loans are added to the allowance.  Management's  evaluation is based
upon,  among other  things,  delinquency  trends,  the volume of  non-performing
loans, prior loss experience of the portfolio,  current economic conditions, and
other  relevant  factors.  Although  management  believes  it has  used the best
information  available  to  it in  making  such  determinations,  and  that  the
allowance for loan losses is adequate,  future  adjustments to the allowance may
be necessary,  and net income may be adversely affected if circumstances  differ
substantially  from  the  assumptions  used  in  determining  the  level  of the
allowance.  In addition,  various  regulatory  agencies,  as an integral part of
their examination  process,  periodically review the Bank's allowance for losses
on loans.  Such  agencies  may require the Bank to  recognize  additions  to the
allowance based on their judgments  about  information  available to them at the
time of their examination.

Non-interest  Income.  Non-interest  income  decreased  $10,000 from $368,000 to
$358,000 for the three months ended March 31, 2000. The decrease in non-interest
income was  primarily  due to a $58,000  increase in loss on real estate  owned.
Also  contributing to the decrease was a $31,000  decrease in insurance  premium
income.  Offsetting the decreases was a $77,000,  or 39.7%,  increase in service
charges and other fees resulting from increased customer activity on the various
deposit and loan accounts.


Non-interest Expense.  Total non-interest expense increased from $3.2 million to
$3.6  million for the three  months  ended  March 31,  1999 and March 31,  2000,
respectively. Other non-interest expense increased $141,000, or 25.5%, primarily
due to increased  marketing of deposit and loan  products  and  amortization  of
goodwill from the purchase of the Danville  branch.  Occupancy  costs  increased
$83,000  due to branch  expansion.  Salaries  and  employee  benefits  increased
$67,000 as a result of additional  staffing for 3 new branches added since March
31, 1999.

Income Taxes.  The Company had an income tax provision of $174,000 for the three
months ended March 31,  2000,  compared to a provision of $255,000 for the three
months  ended March 31, 1999  resulting  in  effective  tax rates of 13.7%,  and
19.2%,  for the  three  months  ended  March  31,  2000,  and  March  31,  1999,
respectively.  The  decrease  in income  tax  expense  was  attributable  to the
decrease in income  before  taxes,  as well as, the decline in the effective tax
rate, which was the result of increased tax-free income.






                                        -17-

<PAGE>




G.   Comparison of Operating Results for the Six Months ended March 31, 2000
     and March 31, 1999.

General.  The  Company  reported  net income of $2.25 million for the six months
ended March 31, 2000 and for the six months ended March 31, 1999.

Interest Income.  Total interest income increased $4.0 million,  or 22.0%,  from
$17.9 million to $21.9 million for the six months ended March 31, 2000. This was
primarily due to a $98.5 million,  or 19.2%,  increase in the average balance of
interest earning assets.  Specifically,  interest income on loans increased $3.3
million  from $11.6  million for the six month  period  ending March 31, 1999 to
$14.9  million.  This was due to a $1.7 million  increase in interest  income on
real estate  loans,  due to a $50.9 million  increase in the average  balance of
these loans.  Interest  income on consumer loans increased $1.4 million due to a
$34.1 million increase on the average balance of these loans. Interest income on
commercial  loans  increased  $185,000  due to a $9.3  million  increase  in the
average  balance  of these  loans.  Interest  income  on  investment  securities
increased  $1.1  million to $5.2 million for the six months ended March 31, 2000
primarily  due to a  $23.5  million  increase  in the  average  balance  of such
securities.

Interest Expense.  Interest expense increased $3.2 million,  or 34.3%, from $9.3
million to $12.5  million for the six months  ended March 31, 1999 and March 31,
2000, respectively. The increase in interest expense was primarily the result of
a  $77.7  million  increase  in the  average  balance  of FHLB  advances,  which
increased  from $102.8  million at March 31, 1999 to $180.5 million at March 31,
2000,  as  well  as an  increase  in the  weighted  average  rate  paid  on such
borrowings from 5.21% at March 31, 1999 to 5.54% at March 31, 2000. The increase
in FHLB advances reflects management's determination to utilize FHLB advances to
fund asset growth.  This increase in interest expense was also due to an overall
increase in interest  expense on deposits  primarily due to a $30.0 million,  or
14.6%, rise in the average balance of certificate  accounts and $9.0 million, or
18.4% rise in the average balance of interest-bearing checking accounts.

Provision  for Loan  Losses.  The Bank's  provision  for loan losses for the six
months ended March 31, 2000 was $443,000 compared to $183,000 for the six months
ended March 31, 1999.  The increase in the  provision  was a result of the $45.7
million increase in outstanding loan balances from September 1999 to March 2000.
The  provision for loan losses  increases  the  allowance  for loan losses.  The
allowance is maintained at a level that management considers adequate to provide
for estimated losses based upon an evaluation of known and inherent risks in the
loan portfolio.  Loan losses,  other than those incurred on loans held for sale,
are  charged  directly  against  the  allowance  and  recoveries  on  previously
charged-off loans are added to the allowance.  Management's  evaluation is based
upon,  among other  things,  delinquency  trends,  the volume of  non-performing
loans, prior loss experience of the portfolio,  current economic conditions, and
other  relevant  factors.  Although  management  believes  it has  used the best
information  available  to  it in  making  such  determinations,  and  that  the
allowance for loan losses is adequate,  future  adjustments to the allowance may
be necessary,  and net income may be adversely affected if circumstances  differ
substantially  from  the  assumptions  used  in  determining  the  level  of the
allowance.  In addition,  various  regulatory  agencies,  as an integral part of
their examination  process,  periodically review the Bank's allowance for losses
on loans.  Such  agencies  may require the Bank to  recognize  additions  to the
allowance based on their judgements about  information  available to them at the
time of their examination.


                                        -18-

<PAGE>


Non-interest  income. The Company experienced a $41,000 increase in non-interest
income from  $753,000 to  $794,000  for the six months  ended March 31, 1999 and
March  31,  2000.  The  increase  in the year to date  non-interest  income  was
primarily  the result of a $175,000  increase in service  charges and other fees
due to increased  customer  activity on various deposit and loan accounts.  This
was offset by an $83,000 increase in the loss on the sale of repossessed assets,
which  occurred  in the second  fiscal  quarter  and a loss of $53,000  from the
operations of Northeast Pennsylvania Trust Co. for the first six months.

Non-interest  expense.  Total non-interest expense increased $859,000, or 13.5%,
from $6.3 million to $7.2 million for the six months ended March 31, 2000. Other
non-interest  expense increased $383,000,  or 35.6%. This increase is partly due
to $164,000  amortization  of  goodwill  associated  with branch and  subsidiary
acquisitions. Rising advertising and general operating costs also contributed to
the  increase.  There was also an  increase  in salary  and  benefit  expense of
$318,000,  or 8.9%,  primarily  due to the addition of staffing  since March 31,
1999. Occupancy costs increased $133,000 due to branch expansion.


Income taxes.  The Company had income tax expense of $337,000 for the six months
ended March 31,  1999,  compared  to an expense of  $642,000  for the six months
ended March 31, 1999,  resulting in an effective  tax rate of 13.1%,  and 22.2%,
for the six months ended March 31, 2000, and March 31, 1999,  respectively.  The
decrease in income tax expense was attributable to the decrease in income before
taxes for the six months  ended March 31,  2000,  as well as, the decline in the
effective tax rate, which was the result of increased tax-free income.






















                                        -19-

<PAGE>


Item 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                  As of March 31, 2000,  there have been no material  changes in
                  the  quantitative  and  qualitative  disclosures  about market
                  risks  presented in the  Company's  Annual Report on Form 10-K
                  for the fiscal year ended September 30, 1999.




























                                        -20-


<PAGE>


Part II - OTHER INFORMATION

Item 1.           Legal Proceedings

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

Item 2.           Changes in Securities and Use of Proceeds

                  Not applicable.

Item 3.           Defaults Upon Senior  Securities

                  Not applicable.

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

                  Rider 21 A

                  The Annual Meeting of  Stockholders of the Company was held on
                  January 26, 2000. The results of the vote were as follows:

                  1.       The  following individuals were elected as directors,
                           each for a three-year term:
<TABLE>
                           <S>                         <C>                         <C>

                                                        VOTES FOR               VOTES WITHHELD
                                                        ---------               --------------
                           Paul L. Conard               4,541,854                   390,713

                           John P. Lavelle              4,528,813                   403,754

                           Michael J. Leib              4,567,159                   365,408
</TABLE>


<TABLE>

                  2.       The   amendments  to   the   Northeast   Pennsylvania
                           Financial Corp.  1998 Stock-Based Incentive Plan were
                           ratified by stockholders by the following vote:
                           <S>              <C>            <C>               <C>

                           FOR              AGAINST         ABSTAIN           BROKER NON-VOTES
                           ---              -------         -------           ----------------

                           3,073,616        670,491          41,707               1,146,753

                  3.       The Northeast Pennsylvania Financial Corp. 2000 Stock
                           Option  Plan  was  approved  by  stockholders  by the
                           following vote:

                           FOR              AGAINST         ABSTAIN           BROKER NON-VOTES
                           ---              -------         -------           ----------------

                           2,821,290        923,666          40,858               1,146,753

</TABLE>

                                             -21-

<PAGE>

                   4.    The appointment of  KPMG LLP as independent auditors of
                         Northeast  Pennsylvania  Financial Corp. for the fiscal
                         year  ended  September  30,  2000  was  ratified by the
                         stockholders by the following vote:
<TABLE>


                          FOR               AGAINST           ABSTAIN
                          ---               -------           -------
                         <S>                <C>               <C>

                         4,867,332           48,409           16,826
</TABLE>



Item 5.           Other information

                  Not applicable.

Item 6.           Exhibits and Reports on Form 8-K

     (A)   Exhibits

          3.1      Certificate   of   Incorporation  of  Northeast  Pennsylvania
                   Financial Corp.*

          3.2      Bylaws of Northeast Pennsylvania Financial Corp.*

          4.0      Form of Stock Certificate of Northeast Pennsylvania Financial
                   Corp.*

          10.1     Northeast  Pennsylvania  Financial  Corp.  1998   Stock-Based
                   Incentive Plan**

          10.2     Northeast  Pennsylvania  Financial  Corp.  2000  Stock  Based
                   Option Plan**

          11.0     Statement  regarding  Computation of Per Share Earnings  (See
                   Notes to Consolidated Financial Statements)

          27.0     Financial  Data  Schedule  (submitted  only  with  filing  in
                   electronic format)

         *    Incorporated  herein  by  reference  into this  document  from the
              Exhibits to Form S-1, Registration  Statement,  and any amendments
              thereto, Registration No. 333-43281.

         **   Incorporated herein by reference into this document from the proxy
              statement  for the 2000 Annual  Meeting of  Shareholders  filed on
              December 17, 1999.


     (B)  Reports on Form 8-K

         On  February  2, 2000,  the  Company  filed an 8-K to  announce  it had
         received  regulatory  clearance to  repurchase  10% of its  outstanding
         shares.   The  press  release  announcing  the  receipt  of  regulatory
         clearance was filed by Exhibit.

         On February 23, 2000,  the Company filed an 8-K to announce that it had
         completed  its  repurchase  of an  additional  10% of  its  outstanding
         shares.  The  press  release  making  this  announcement  was  filed by
         exhibit.

                                        -22-


<PAGE>


                                   SIGNATURES

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




                                     NORTHEAST PENNSYLVANIA
                                     FINANCIAL CORP.


Date:                                By: /s/ E. Lee Beard
                                     E. Lee Beard
                                     President and Chief Executive
                                     Officer

Date:                                By: /s/ Patrick J. Owens, Jr.
                                     Patrick J. Owens, Jr.
                                     Vice President and Chief Financial Officer























<PAGE>


                                  Exhibit Index
                                  -------------

27.0 Financial Data Schedule (submitted only with filing in electronic format)






























                                        -1-