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 June 30, 2000

                                       or

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

For the transition period from __________________ to _________________

                         Commission File Number 1-13793


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




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


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


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


                                 Not Applicable
-------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed 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
                                                            ---------      ----


         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
5,293,149 shares of Common Stock outstanding as of August 11, 2000.


<PAGE>


                                TABLE OF CONTENTS

Item
No.
----                                                                      Page
                                                                         Number
PART  I - CONSOLIDATED FINANCIAL INFORMATION

Item 1   CONSOLIDATED FINANCIAL STATEMENTS

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

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

         Consolidated Statement of Comprehensive Income (Loss) for the Three
         Months Ended June 30, 2000 and 1999 (unaudited)..................... 3

         Consolidated Statements of Operations for the Nine Months Ended
         June 30, 2000 and 1999 (unaudited).................................. 4

         Consolidated Statement of Comprehensive Income (Loss) for the Nine
         Months Ended June 30, 2000 and 1999 (unaudited)..................... 5

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

         Consolidated Statements of Cash Flows for the Nine Months Ended
         June 30, 2000 and 1999 (unaudited).................................. 7

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


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

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

5        Other Information...................................................21

6        Exhibits and Reports on Form 8 - K...............................21-22

Signatures


<PAGE>



                     Northeast Pennsylvania Financial Corp.
                 Consolidated Statements of Financial Condition
                June 30, 2000 (unaudited) and September 30, 1999
                                 (in thousands)
<TABLE>
<S>                                                                             <C>                 <C>
                                                                                  June 30,           September 30,
                                                                                    2000                 1999
                                                                                    ----                 ----
                               Assets                                           (unaudited)

Cash and cash equivalents                                                        $  8,177             $  4,177
Securities available-for-sale                                                     179,304              189,835
Securities held-to-maturity (estimated fair value of $27,795 at June
    2000 and $28,315 at September 1999)                                            30,334               30,332
Loans (less allowance for loan losses $3,437 for June 2000 and
    $2,924 for September 1999)                                                    412,835              364,190
Accrued interest receivable                                                         5,437                4,769
Assets acquired through foreclosure                                                   316                   98
Property and equipment, net                                                         9,625                9,868
Other assets                                                                       12,501                8,956
                                                                                 --------             --------
     Total assets                                                               $ 658,529            $ 612,225
                                                                                 ========             ========

                       Liabilities and Equity

Deposits                                                                         $354,803             $375,983
Federal Home Loan Bank advances                                                   225,465              155,980
Other borrowings                                                                    1,252                  524
Advances from borrowers for taxes and insurance                                     1,324                1,040
Accrued interest payable                                                            1,998                1,317
Other liabilities                                                                   2,582                1,905
                                                                                 --------             --------

     Total liabilities                                                            587,424              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                                                         62,158               62,119
Common stock acquired by stock benefit plans                                       (6,424)              (7,066)
Retained earnings - substantially restricted                                       33,121               30,818
Accumulated other comprehensive loss                                               (5,286)              (2,874)
Treasury stock, at cost (1,134,201 shares at June 2000 and
626,667 at September 1999)                                                        (12,528)              (7,585)
                                                                                 --------             --------

     Total equity                                                                  71,105               75,476
                                                                                 --------             --------

            Total liabilities and equity                                        $ 658,529            $ 612,225
                                                                                =========            =========
</TABLE>



                                     1
<PAGE>


                     Northeast Pennsylvania Financial Corp.
                      Consolidated Statements of Operations
          For the Three Months Ended June 30, 2000 and 1999 (unaudited)
                      (in thousands, except for share data)
<TABLE>
<S>                                                                        <C>                   <C>
                                                                                For the Three months ended
                                                                                         June 30,
Interest Income:                                                               2000                 1999
                                                                               ----                 ----
                                                                                      (unaudited)
  Loans                                                                     $ 8,032              $ 6,291
  Mortgage-related securities                                                   923                  897
  Investment securities
     Taxable                                                                  1,865                1,518
     Non-taxable                                                                781                  848
                                                                              -----                -----
     Total interest income                                                   11,601                9,554

Interest Expense:
  Deposits                                                                    3,751                3,320
  Federal Home Loan Bank advances and other                                   3,235                1,666
                                                                              -----                -----
     Total interest expense                                                   6,986                4,986


Net interest income                                                           4,615                4,568

Provision for loan losses                                                       141                  149
                                                                              -----                -----

Net interest income after provision for loan losses                           4,474                4,419

Non-interest Income:
  Service charges and other fees                                                338                  223
   Other income                                                                 126                  123
   Insurance premium income                                                      83                   61
   Gain (loss) on sale of:
     Real estate owned                                                          (53)                  (8)
     Loans                                                                        1                  246
     Available-for-sale securities                                               18                   31
    Other                                                                         -                   (5)
                                                                              -----                -----
      Total non-interest income                                                 513                  671

Non-interest Expense:
  Salaries and net employee benefits                                          1,940                1,898
  Occupancy costs                                                               474                  426
  Data processing                                                               183                  129
  Professional fees                                                             164                  159
  Federal Home Loan Bank service charges                                        166                  133
  Other                                                                         682                  635
                                                                              -----                -----
     Total non-interest expense                                               3,609                3,380


Income before income taxes                                                    1,378                1,710

Income taxes                                                                    202                  330
                                                                              -----                -----


Net income                                                                  $ 1,176              $ 1,380
                                                                            =======              =======

Earnings per share - basic                                                  $  0.25              $  0.27
                                                                            =======              =======
Earnings per share - diluted                                                $  0.24              $  0.25
                                                                            =======              =======
</TABLE>

                                     2

<PAGE>


                     Northeast Pennsylvania Financial Corp.
              Consolidated Statement of Comprehensive Income (Loss)
          For the Three Months Ended June 30, 2000 and 1999 (unaudited)
                                 (in thousands)
<TABLE>
<S>                                                                        <C>                     <C>
                                                                            For the Three Months Ended
                                                                                     June 30,
                                                                              2000             1999
                                                                              ----             ----
                                                                                   (unaudited)
Net Income                                                                 $ 1,176          $ 1,380
                                                                           =======          =======

Other comprehensive loss, net of tax Unrealized losses on securities:
    Unrealized holding losses arising during the period                    $(2,424)         $(3,263)
    Less:  Reclassification adjustment for gains included in net
      income                                                                    12               20
                                                                           -------          -------
Other comprehensive loss                                                    (2,412)          (3,243)
                                                                           -------          -------
Comprehensive loss                                                         $(1,236)         $(1,863)
                                                                           =======          =======
</TABLE>



                                     3


<PAGE>


                     Northeast Pennsylvania Financial Corp.
                      Consolidated Statements of Operations
          For the Nine Months Ended June 30, 2000 and 1999 (unaudited)
                      (in thousands, except per share data)
<TABLE>
<S>                                                                             <C>                 <C>
                                                                                For the Nine Months Ended
                                                                                         June 30,
                                                                                   2000             1999
                                                                                   ----             ----
                                                                                        (unaudited)
Interest Income:
  Loans                                                                        $ 22,899         $ 17,839
  Mortgage-related securities                                                     2,760            3,194
  Investment securities:
     Taxable                                                                      5,318            4,156
     Non-Taxable                                                                  2,515            2,308
                                                                               --------         --------
    Total interest income                                                        33,492           27,497

Interest Expense:
  Deposits                                                                       11,209            9,931
  Federal Home Loan Bank advances and other                                       8,237            4,336
                                                                               --------         --------
     Total interest expense                                                      19,446           14,267


Net interest income                                                              14,046           13,230

Provision for loan losses                                                           585              343
                                                                               --------         --------
Net interest income after provision for loan losses                              13,461           12,887

Non-interest Income:
  Service charges and other fees                                                    925              635
  Other Income                                                                      340              305
  Insurance premium income                                                          189              184
  Gain (loss) on the sale of
     Real estate owned                                                             (167)             (39)
     Loans                                                                           15              282
     Available-for-sale securities                                                    5               64
     Other                                                                            -               (6)
                                                                               --------         --------
     Total non-interest income                                                    1,307            1,425


Non-interest Expense:
  Salaries and net employee benefits                                              5,818            5,461
  Occupancy costs                                                                 1,448            1,246
  Data processing                                                                   444              371
  Professional fees                                                                 466              624
  Federal Home Loan Bank and other service charges                                  491              324
  Other                                                                           2,141            1,720
                                                                               --------         --------
     Total non-interest expense                                                  10,808            9,746


Income before income taxes                                                        3,960            4,566

Income taxes                                                                        540              973
                                                                               --------         --------


Net income                                                                      $ 3,420          $ 3,593
                                                                                =======          =======

Earnings per share - basic                                                      $  0.70          $  0.65
                                                                                =======          =======
Earnings per share - diluted                                                    $  0.68          $  0.62
                                                                                =======          =======
</TABLE>


                                     4
<PAGE>


                     Northeast Pennsylvania Financial Corp.
              Consolidated Statement of Comprehensive Income (Loss)
          For the Nine Months Ended June 30, 2000 and 1999 (unaudited)
                                 (in thousands)
<TABLE>
<S>                                                                             <C>                 <C>
                                                                                 For the Nine Months Ended
                                                                                         June 30,
                                                                                 2000                 1999
                                                                                 ----                 ----
                                                                                      (unaudited)
Net Income                                                                    $ 3,420              $ 3,593
                                                                              =======              =======

Other comprehensive loss, net of tax Unrealized losses on securities:
    Unrealized holding losses arising during the period                       $(2,415)             $(4,399)
    Less:  Reclassification adjustment for gains included in net
      income                                                                        3                   42
                                                                              -------              -------
Other comprehensive loss                                                       (2,412)              (4,357)
                                                                              -------              -------
Comprehensive loss                                                            $(1,008)              $ (764)
                                                                              =======              =======

</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 Nine Months Ended June 30, 2000 (unaudited)
                                 (in thousands)
<TABLE>
<S>                                               <C>          <C>         <C>            <C>       <C>         <C>       <C>
                                                                            Common Stock            Accumulated
                                                               Additional   Acquired by                Other
                                                   Common      Paid In     stock benefit  Retained  Comprehensive Treasury  Total
                                                   Stock       Capital         plans      Earnings   income(loss)   Stock   Equity


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                                77           200                                            277
Stock awards                                                       (38)          442                                            404
Net changes in losses on
     securities available-for-sale, net of tax                                                        (2,412)                (2,412)
Treasury stock at cost, (507,534 shares)                                                                            (4,943)  (4,943)
Cash dividend paid                                                                          (1,117)                          (1,117)
Net income                                                                                   3,420                            3,420
                                                   -------     -------       -------       -------   -------       -------  -------
Balance, June 30, 2000                             $    64    $ 62,158      $ (6,424)     $ 33,121   $(5,286)     $(12,528) $71,105
                                                   =======     =======       =======       =======   =======       =======  =======

</TABLE>



                                     6


<PAGE>


<TABLE>



                                  Northeast Pennsylvania Financial Corp.
                                   Consolidated Statement of Cash Flows
                     For the Nine Months Ended June 30, 2000 and 1999 (unaudited)
                                             (in thousands)
<S>                                                                                       <C>            <C>
                                                                                          For the Nine Months Ended
                                                                                                   June 30,
                                                                                             2000           1999
                                                                                             ----           ----
Operating Activities:                                                                            (unaudited)
Net Income                                                                                $ 3,420          $ 3,593
Adjustments to reconcile net income to net cash provided by operating activities:
  Provision for REO loss                                                                       64               12
  Provision for loan losses                                                                   585              343
  Depreciation                                                                                853              626
  Deferred income tax provision                                                               461              142
  ESOP expense                                                                                277              455
  Stock award expense                                                                         404              411
  Amortization and (accretion) on:
     Held-to-maturity securities                                                              (4)               32
     Available-for-sale securities                                                        (1,521)              302
  Amortization of deferred loan fees                                                        (122)            (597)
(Gain) loss on sale of:
     Assets acquired through foreclosure                                                      167               39
     Loans                                                                                   (15)            (282)
     Available-for-sale securities                                                            (5)             (64)
  Gain (loss) on disposal of property and equipment                                             -                6
  Changes in assets and liabilities:
    Increase in accrued interest receivable                                                 (668)            (467)
    Increase in other assets                                                              (2,481)          (2,137)
    Increase in accrued interest payable                                                      681              106
    Decrease in accrued income taxes payable                                                (776)            (566)
    Increase in other liabilities                                                           1,453            1,542
                                                                                            -----            -----

      Net cash provided by operating activities                                             2,773            3,496

Investing Activities:
Net increase in loans                                                                    (50,801)         (66,023)
Proceeds from sale of:
  Available-for-sale securities                                                            32,058           19,401
  Assets acquired through foreclosure                                                         208              147
  Loans                                                                                     1,051            7,728
Proceeds from repayments of held-to-maturity securities                                         2           17,953
Proceeds from repayments of available-for-sale securities                                   6,952           48,984
Proceeds from disposal of fixed assets                                                          -               71
Purchase of:
  Held-to-maturity securities                                                                   -         (14,545)
  Available-for-sale securities                                                          (24,641)         (72,562)
  Office properties and equipment                                                           (610)          (1,710)
  Federal Home Loan Bank stock                                                            (6,249)          (3,600)
                                                                                          -------          -------

Net cash used in investing activities                                                    (42,030)         (64,156)

Financing Activities:
  Net increase (decrease) in deposit accounts                                            (21,180)           40,475
  Net increase (decrease) in Federal Home Loan Bank short-term advances                    39,500          (8,500)
  Borrowings of Federal Home Loan Bank long-term advances                                  30,000           45,000
  Repayments of Federal Home Loan Bank long-term advances                                    (15)             (14)
  Net increase in advances from borrowers for taxes and insurance                             284              798

</TABLE>

                                        7


<PAGE>

<TABLE>

                                  Northeast Pennsylvania Financial Corp.
                                   Consolidated Statement of Cash Flows
                        For the Nine Months Ended June 30, 2000 and 1999 (unaudited)
                                              (in thousands)
<S>                                                                                       <C>            <C>

                                                                                         For the Nine Months Ended
                                                                                                 June 30,

                                                                                            2000            1999
                                                                                            ----            ----
                                                                                                 (unaudited)
     Net increase (decrease) in other borrowings                                            $ 728         $ (520)
    Purchase of common stock for stock incentive plan                                           -         (3,312)
    Purchase of treasury stock                                                            (4,943)         (7,585)
    Cash dividend on common stock                                                         (1,117)           (607)
                                                                                          -------           -----

     Net cash provided by financing activities                                             43,257          65,735

Increase in cash and cash equivalents                                                       4,000           5,075

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

Cash and cash equivalents, end of year                                                    $ 8,177         $ 8,128
                                                                                          =======         =======

Supplemental  disclosures of cash flow information:
Cash paid during the period for:
     Interest                                                                             $18,887        $ 14,160
                                                                                          =======        ========
     Income taxes                                                                           $ 696         $ 1,361
                                                                                            =====         =======
Supplemental disclosure - non-cash information:
  Transfer from loans to real estate owned                                                  $ 657           $ 161
                                                                                            =====           =====
   Net change in unrealized losses on securities
     available-for-sale, net of tax                                                     $ (2,412)       $ (4,357)
                                                                                        =========       =========
</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 nine months ended June 30, 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. 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.  . FIDACO, Inc. is an inactive
         subsidiary  of  First  Federal  Bank and its  only  major  asset is an
         investment in Hazleton Community Development Corporation. 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.

         Earnings per Share

         Earnings per share  ("EPS"),  basic and diluted,  were $0.25 and $0.24,
         respectively,  for the three months  ended June 30,  2000,  compared to
         $0.27 and  $0.25,  respectively,  for the three  months  ended June 30,
         1999, and $0.70 and $0.68, respectively, for the nine months ended June
         30,  2000,  compared  to $0.65 and  $0.62,  respectively,  for the nine
         months ended June 30, 1999.


                                       9

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

<TABLE>
<S>                                                   <C>             <C>            <C>            <C>
                                                      Three months ended              Nine months ended
                                                           June 30,                        June 30,
                                                      2000            1999           2000             1999
                                                      ----            ----           ----             ----
                                                                          (unaudited)
                                                         (Dollars in thousands, except per share data)

       Basic:

       Net Income                                   $1,176          $1,380         $3,420           $3,593
                                                    ======          ======         ======           ======

       Weighted average shares outstanding
                                                 4,543,060       5,123,339      4,760,307        5,482,719
       Plus:  ESOP shares released or
          committed to be released                 122,121          66,418        109,266           57,132
                                                   -------          ------        -------           ------
                                                 4,665,181       5,189,757      4,869,573        5,539,851
                                                 =========       =========      =========        =========

       Earnings per share  - basic                   $0.25           $0.27          $0.70            $0.65
                                                     =====           =====          =====            =====



                                                      Three months ended              Nine months ended
                                                           June 30,                        June 30,
                                                      2000            1999           2000             1999
                                                      ----            ----           ----             ----
                                                                          (unaudited)
                                                         (Dollars in thousands, except per share data)

       Diluted:  (1)

       Net Income                                   $1,176          $1,380         $3,420           $3,593
                                                    ======          ======         ======           ======

      Basic weighted shares outstanding          4,665,181       5,189,757      4,869,573        5,539,851
       Dilutive Instruments:
         Dilutive effect of outstanding
          stock options                                  -               -              -                -
         Dilutive effect of stock awards           193,984         242,438        193,925          243,089
                                                   -------         -------        -------          -------
                                                 4,859,165       5,432,195      5,063,498        5,782,940
                                                 =========       =========      =========        =========

       Earnings per share  - diluted                 $0.24           $0.25          $0.68            $0.62
                                                     =====           =====          =====            =====

        The Company has 508,930 and 617,310 anti-dilutive common stock options outstanding
        as of June 30, 2000 and 1999, respectively.  These options are not included in the
        calculation of diltued earnings per share for the periods presented.
<FN>
(1) Diluted  earnings  per share  include the dilutive  effect of the  Company's
weighted  average  stock  options/awards  outstanding  using the Treasury  Stock
Method.
</FN>
</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" and amended  again in June 2000 by SFAS No. 138,  "Accounting  for
         Certain  Derivative  Instruments  and Certain  Hedging  Activities,  an
         Amendment to FASB 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


                                       10


<PAGE>

         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
         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
         materially affect the 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 June 30,  2000,  there  were no  shares of
         preferred stock issued.


<PAGE>
<TABLE>
<S>                                                                <C>                    <C>

4.       Loans

        Loans are summarized as follows:                               June 30,            September 30,
                                                                         2000                  1999
                                                                         ----                  ----
                                                                     (unaudited)
                                                                             (In thousands)
        Real Estate loans:
          One-to four-family                                          $201,283               $196,885
          Multi- family and commercial                                  58,680                 31,497
          Construction                                                   2,968                  3,983
                                                                         -----                  -----
        Total real estate loans                                        262,931                232,365
                                                                       -------                -------

        Consumer Loans:
          Home equity loans and lines of credit                         71,943                 70,118
          Automobile                                                    46,336                 34,619
          Education                                                      3,387                  2,796
          Unsecured lines of credit                                      1,743                  1,744
          Other                                                          7,964                  5,571
                                                                         -----                  -----
        Total consumer loans                                           131,373                114,848
                                                                       -------                -------
        Commercial loans                                                23,465                 21,262
                                                                        ------                 ------
        Total loans                                                    417,769                368,475
                                                                       -------                -------
          Less:
             Allowance for loan losses                                  (3,437)                (2,924)
             Deferred loan origination fees                             (1,497)                (1,361)
                                                                       -------                -------
        Total loans, net                                              $412,835               $364,190
                                                                      ========               ========
</TABLE>

         Allowance for loan losses is summarized as follows (in thousands):
<TABLE>
     <S>                                         <C>                       <C>                           <C>
                                                 For the nine                                             For the nine
                                                 months ended              For the year ended             months ended
                                                 June 30, 2000             September 30, 1999             June 30, 1999
                                                 -------------             ------------------             -------------
                                                  (unaudited)                                              (unaudited)
         Balance, beginning of period                $2,924                      $2,273                       $2,273
         Charge-offs                                    (88)                       (101)                         (99)
         Recoveries                                      16                           5                            3
         Provision for loan losses                      585                         747                          343
                                                        ---                         ---                          ---
         Balance, end of period                      $3,437                      $2,924                       $2,520
                                                     ======                      ======                       ======
</TABLE>
5.       Deposits

         Deposits consist of the following major classifications (in thousands):
<TABLE>
<S>                                                                   <C>       <C>               <C>       <C>
                                                                      June 30, 2000             September 30, 1999
                                                                      -------------             ------------------
                                                                       (unaudited)
                                                                                 Percent                     Percent
                                                                      Amount     of Total          Amount    of Total
                                                                ------------- ------------- -------------- ------------
        Savings accounts (passbook, statement, clubs)                $67,831       19.12%         $69,667      18.53%
        Money market accounts                                         24,617        6.94%          21,132       5.62%
        Certificates of deposit less than $100,000                   163,339       46.03%         185,790      49.41%
        Certificates of deposit greater than $100,000(1)              42,631       12.02%          51,200      13.62%
        NOW Accounts                                                  38,368       10.81%          35,339       9.40%
        Non-interest bearing deposits                                 18,017        5.08%          12,855       3.42%
                                                                      ------        -----          ------       -----
        Total deposits at end of period                             $354,803      100.00%        $375,983     100.00%
                                                                    ========      =======        ========     =======

<FN>

         (1) Deposit balances in excess of $100,000 are not federally insured.
</FN>
</TABLE>

                                       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.

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-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.


                                       13
<PAGE>

During the quarter  ended June 30, 2000,  the Bank  continued  to diversify  and
expand its loan products to better serve its growing  customer base by placing a
greater emphasis on consumer lending and commercial lending,  primarily to small
businesses  and  municipalities.  The Bank has an investment in and 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. It is
anticipated  that loan  purchases  will commence in the fourth  fiscal  quarter.
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>
<S>                                                                        <C>                      <C>
                                                                             June 30,               September 30,
                                                                              2000                      1999
                                                                              ----                      ----
                                                                          (unaudited)
Non-performing assets:
 Non-accrual loans                                                            $1,501                    $1,371
Real estate owned and other repossessed assets                                   316                        98
                                                                                 ---                        --
     Total non-performing assets                                              $1,817                    $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           0.28%                     0.24%
</TABLE>

The increase in non-performing  loans was not due to any one particular  credit,
rather it was a result of higher  outstanding  balances.  Real estate  owned and
other   repossessed   assets  increased  due  to  additional   repossessions  of
residential mortgages acquired through foreclosure.

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 June 30, 2000 and 1999, the Bank's liquidity ratios were 12.2%
and 12.4%, respectively.

At June 30, 2000,  the Bank had total  equity,  determined  in  accordance  with
generally accepted  accounting  principles,  of $54.1 million, or 8.4%, of total
assets.  At June 30,  2000,  the Bank  exceeded  all of its  regulatory  capital
requirements  with a tangible  capital level of $57.4 million,  or 8.9% of total
adjusted assets,  which is above the required level of $9.7 million,  or 1.5%; a
core capital level of $57.4 million, or 8.9% of total adjusted assets,  which is
above the required level of $26.0 million,  or 4.0%; and a risk-based capital of
$61.0 million,  or 16.9% of  risk-weighted  assets,  which is above the required



                                       14

<PAGE>


level of $28.8 million, or 8.0%. 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.

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 June 30, 2000, cash and cash equivalents
and investment and mortgage-related securities available-for-sale totaled $187.5
million, or 28.5% of total assets.

The Bank has other sources of liquidity if a need for  additional  funds arises,
including  FHLB  advances.  At June 30,  2000,  the Bank had  $225.5  million in
advances  outstanding from the FHLB, and had an overall borrowing  capacity from
the FHLB of $289.2  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 June 30, 2000,  the Bank had  commitments to originate and purchase loans and
unused  outstanding  lines of credit and  undisbursed  proceeds of  construction
mortgages  totaling  $39.9  million.  The  Bank  anticipates  that it will  have
sufficient  funds  available to meet these  commitments.  Certificate  accounts,
including Individual Retirement Account and KEOGH accounts,  which are scheduled
to mature in less than one year from June 30, 2000, totaled $144.2 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
with a negotiated rate of return),  will be retained by the Bank at maturity. At
June 30, 2000, the Bank had $17.5 million in jumbo certificates, the majority of
which are deposits from local school districts and municipalities.


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

Total assets  increased  $46.3 million from $612.2 million at September 30, 1999
to $658.5  million at June 30, 2000.  The growth in assets was  primarily due to
increases in loans receivable, which were funded by increases in FHLB advances.

Securities classified as available-for-sale  securities decreased $10.5 million,
from $189.8  million at September  30, 1999 to $179.3  million at June 30, 2000.
The  decrease  was  primarily  attributable  to the  effect of  security  sales,
particularly    tax-free    municipal    bonds   and   unrealized    losses   on
available-for-sale securities.

Net loans  increased  $48.6 million to $412.8 million at June 30, 2000. This was
primarily  due to a  $27.2  million,  or  86.3%  increase  in  multi-family  and
commercial  real estate loans, as a result of business  development  efforts and
competitive  pricing.   Automobile  loans  increased  $11.7  million,  or  33.8%
primarily  due to increased  direct and indirect  auto loan  originations,  as a
result of more participating automobile dealers.  One-to-four family real estate
loans  increased $4.4 million as a result of loan purchases from other financial
institutions. Other consumer loans increased $2.4 million while commercial loans
increased  $2.2 million.  These  increases  are a result of continued  marketing
efforts and competitive pricing. A significant portion of this quarter and prior
quarters loan originations and purchases were adjustable or floating rate loans.
These loans will assist in the management of interest rate risk, as they will be



                                       15

<PAGE>

adjusting over the next several quarters, which also should increase their yield
to the Bank, assuming the higher interest rate environment continues.

Other  assets  increased  $3.5 million to $12.5  million at June 30, 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 $1.1 million increase
in deferred income taxes, due to the change in other comprehensive income.

Total deposits  decreased  $21.2 million,  or 5.6% to $354.8 million at June 30,
2000.  This  decrease  was  primarily  due  to  a  $31.0  million   decrease  in
certificates  of deposit from $237.0  million at June 30, 1999 to $206.0 million
at June 30, 2000, as a result of the maturity of jumbo  certificates  from local
municipalities.  This  decrease  was  offset  by  a  $5.2  million  increase  in
non-interest  bearing  deposits,  as well as a $3.5  million  increase  in money
market  accounts,  resulting  from a more  active  marketing  of such  accounts,
coupled with a concerted effort to build customer relationships.

FHLB advances  increased $69.5 million from $156.0 million at September 30, 1999
to  $225.5  million  at  June  30,  2000.  This  was a  result  of  management's
utilization  of FHLB  borrowings to fund asset growth and offset the decrease in
deposits.  FHLB  borrowings have been invested at yields higher than the cost of
the borrowed funds thereby increasing net interest income.

Total  equity  decreased  $4.4 million to $71.1  million at June 30, 2000.  This
decrease in equity  resulted  primarily  from a repurchase of 507,534  shares of
common stock at a cost of $4.9 million.  Also contributing to this decline was a
$2.4  million  increase  in  unrealized   losses  on  securities   reflected  in
accumulated other  comprehensive  loss. These decreases were partially offset by
net income of $3.4 million for the period less dividends of $1.1 million.

F.  Comparison of Operating Results for the Three Months ended June
    30, 2000 and June 30, 1999

General.  The Company had net income of $1.2  million for the three months ended
June 30, 2000, compared to net income of $1.4 million for the three months ended
June 30, 1999,  a decrease of $204,000 or 14.8%.  This  decrease  was  primarily
attributable to a $229,000 rise in non-interest  expense,  as well as a $158,000
decrease in non-interest income.

Interest Income.  Total interest income increased  $2.0million,  or 21.4%,  from
$9.6 million for the three  months ended June 30, 1999 to $11.6  million for the
three months ended June 30, 2000. This was primarily due to a $99.4 million,  or
18.3%, increase in the average balance of interest earning assets. Specifically,
interest income on loans increased $1.7 million,  or 27.7% from $6.3 million for
the period ending June 30, 1999 to $8.0 million at June 30, 2000,  primarily due
to a $62.8  million  increase in the average  balance of real estate loans and a
$24.8 million increase in the average balance of consumer loans.

Interest Expense.  Interest expense increased $2.0 million,  or 40.1%, from $5.0
million for the three  months  ended June 30, 1999 to $7.0 million for the three
months ended June 30, 2000.  The increase in interest  expense was primarily the
result of an $89.7 million  increase in the average balance of FHLB advances and
other borrowings, which increased from $128.5 million at June 30, 1999 to $218.3
million at June 30, 2000,  as well as a 76 basis point  increase in the weighted
average rate paid on those borrowings from 5.20% for the three months ended June
30, 1999 to 5.96% for the three months ended June 30, 2000. The increase in FHLB

                                       16

<PAGE>


advances reflects management's decision to more heavily utilize FHLB advances to
fund asset growth and offset deposit  outflow.  Contributing  to the increase in
interest expense was a $361,000  increase in interest expense on certificates of
deposit, which was the result of a $13.0 million increase in the average balance
of these accounts.

Provision  for Loan Losses.  The Bank's  provision for loan losses for the three
months  ended June 30, 2000 was  $141,000  compared  to  $149,000  for the three
months  ended  June 30,  1999.  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.  At June 30, 2000 and June 30, 1999 the allowance for loan losses was
$3.4  million  and  $2.5  million,  respectively.  This  represented  229.0%  of
non-performing loans and .82% of total loans at June 30, 2000 compared to 239.3%
of non-performing loans and .73% of total loans at June 30, 1999.

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  $158,000 from $671,000 to
$513,000, for the three months ended June 30, 2000. The decrease in non-interest
income was primarily due to a decrease in gain on sale of loans from $246,000 to
$1,000  for the three  months  ended June 30,  2000,  as a result of the sale of
mortgage loans as part of a  restructuring  transaction in the period ended June
30, 1999. Also  contributing  to the decrease was a $45,000  increase in loss on
real estate owned,  due to an increase in assets acquired  through  foreclosure.
Offsetting the decrease was a $115,000, or 51.6% increase in service charges and
other fees resulting from increased customer activity on the various deposit and
loan accounts, and late charges on a delinquent loan brought current.

Non-interest Expense. Total non-interest expense increased from $3.4 million for
the three  months ended June 30, 1999 to $3.6 million for the three months ended
June 30, 2000. Data processing  increased $54,000 due to a maintenance  contract
incurred in the current quarter as a result of a vendor billing error. Occupancy
costs  increased  $48,000 as a result of three  additional  branches  since June
1999. Other expense  increased  $47,000 due to the amortization of goodwill from
the purchase of the Danville branch.  Salaries and benefits increased $42,000 as
a result of the addition of the new branches,  as well as the  additional  staff
hired by Northeast Pennsylvania Trust Co.

Income Taxes.  The Company had an income tax provision of $202,000 for the three
months  ended June 30,  2000,  compared to a provision of $330,000 for the three
months ended June 30, 1999 resulting in effective tax rates of 14.6%, and 19.3%,
respectively.  The decline in income tax expense was attributable to an increase


                                       17

<PAGE>


in tax-free  income due to the  purchase of municipal  securities,  as well as a
decrease in income before taxes.

G.   Comparison of Operating Results for the Nine Months ended June 30, 2000
     and June 30, 1999.

General.  For the nine months  ended June 30,  2000,  the Company  reported  net
income of $3.4  million,  compared  to net income of $3.6  million  for the same
period in 1999.  The  decrease  was due to a $5.2  million  increase in interest
expense, offset by a $6.0 million increase in interest income and a $1.1 million
increase in non-interest expense.

Interest Income.  Total interest income increased $6.0 million,  or 21.8%,  from
$27.5 million,  for the nine months ended June 30, 1999 to $33.5 million for the
nine months ended June 30, 2000,  primarily  due to a $98.8  million,  or 18.9%,
increase in the average balance of interest earning assets.

Interest  income on investment  securities  increased $1.4 million,  or 21.2% to
$7.8 million for the nine months ended June 30, 2000,  primarily due to an $18.0
million increase in the average balance of such  securities.  Interest income on
loans  increased  $5.1 million,  or 28.4%,  to $22.9 million for the nine months
ended June 30,  2000.  This was  primarily  due to the  increase  in the average
balance on real estate loans  increasing by $54.8 million from $194.8 million at
June 30, 1999 to $249.6 million at June 30, 2000, due to the increased  purchase
of loans from June 1999. Interest income on consumer loans grew $2.1 million, or
36.7%,  from $5.7 million at June 30, 1999 to $7.8 million at June 30, 2000, due
to a $31.0 million  increase on the average  balance of these loans. An increase
in indirect auto loan  originations,  as well as greater  marketing  efforts and
competitive  pricing  of these  loans was the basis for the  growth in  consumer
loans.

Interest Expense.  Interest expense increased $5.2 million, or 36.3%, from $14.3
million to $19.4  million for the nine  months  ended June 30, 1999 and June 30,
2000, respectively. The increase in interest expense was primarily the result of
an $81.6  million  increase  in the  average  balance  of FHLB  advances,  which
increased  from $111.4  million at June 30,  1999 to $193.0  million at June 30,
2000,  as  well  as an  increase  in the  weighted  average  rate  paid  on such
borrowings  from 5.20% at June 30, 1999 to 5.70% at June 30, 2000.  The increase
in FHLB advances  reflects  management's  decision to more heavily  utilize FHLB
advances to fund asset growth and offset the deposit  outflow.  This increase in
interest  expense was also due to an overall  increase  in  interest  expense on
deposits primarily due to a $24.4 million, or 11.7%, rise in the average balance
of certificate accounts.

Provision  for Loan Losses.  The Bank's  provision  for loan losses for the nine
months ended June 30, 2000 was $585,000 compared to $343,000 for the nine months
ended June 30,  1999.  The increase in the  provision  was a result of the $49.3
million increase in outstanding  total loan balances from September 1999 to June
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.



                                       18

<PAGE>

Non-interest income. The Company experienced a $118,000 decrease in non-interest
income from $1.4 million for the nine months ended June 30, 1999 to $1.3 million
for the nine months ended June 30, 2000.  The decrease was largely the result of
a $267,000  decrease in gain on sale of loans due to the sales of mortgage loans
as a part of a  restructuring  transaction  in the period  ending June 30, 1999.
Contributing to this decrease was a $128,000 increase in the loss on the sale of
real estate owned,  due to an increase in assets acquired  through  foreclosure.
The decrease in non-interest income was offset by a $290,000 increase in service
charges and other fees, due to increased  customer  activity on various  deposit
and loan accounts and delinquent loan fees on a loan brought current.

Non-interest  expense.  Total non-interest  expense increased from $9.7 million,
for the nine  months  ended June 30,  1999 to $10.8  million for the nine months
ended June 30, 2000. The largest  increase in non-interest  expense was in other
expense, which increased $421,000, primarily due to the amortization of goodwill
associated  with branch and subsidiary  acquisitions  and increased  advertising
costs due to loan and deposit  product  promotions.  Salary and benefit  expense
increased $357,000, or 6.5% due to the additional staffing of new branches since
June 1999.  There was also a  $202,000,  or 16.2%  increase in  occupancy  costs
associated  with branch  expansion.  FHLB and other  service  charges  increased
$167,000,  or 51.5%,  mainly due to  increased  charges  for higher ATM  volume.
Offsetting  the increases  was a $158,000  decrease in  professional  fees, as a
result of  consulting  fees paid in prior  year for  expansion  into new  market
areas.

Income taxes. The Company had income tax expense of $540,000 for the nine months
ended June 30,  2000,  compared to $973,000  for the nine months  ended June 30,
1999,  resulting in  effective  tax rates of 13.6% and 21.3% for the nine months
ended  June 30,  2000  and  June 30,  1999,  respectively.  The  decline  in the
effective tax rate was the result of increased tax-free income.




                                       19

<PAGE>


Item 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                  As of June 30,  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

                  Not applicable.

Item 5.           Other information

                  Not applicable.

Item 6.           Exhibits and Reports on Form 8-K

(A)      Exhibits

              2.1          Agreement and Plan of Merger, dated June 2, 2000, by
                           and between Northeast Pennsylvania Financial Corp.,
                           Northeast Acquisition, Inc. and Security of
                           Pennsylvania Financial Corp.*

              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.**

              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 Form 8-K
           filed on June 15, 2000.

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

                                       21

<PAGE>

(B)      Reports on Form 8-K

               On June 2, 2000, the Company filed an 8-K to announce that it had
               entered  into an  agreement  and plan of merger with  Security of
               Pennsylvania Financial Corp., Hazleton,  Pennsylvania.  A copy of
               the press release announcing the merger was attached by exhibit.

               On June  15,  2000,  the  Company  filed an 8-K  summarizing  the
               material  components  of its merger  agreement and plan of merger
               with  Security  of  Pennsylvania   Financial   Corp.,   Hazleton,
               Pennsylvania.  A copy of the  agreement  and plan of  merger  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.
                                          Treasurer and Chief Financial Officer











<PAGE>



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

3.2 Bylaws of Northeast Pennsylvania Financial Corp.

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



                     NORTHEAST PENNSYLVANIA FINANCIAL CORP.

                                     BYLAWS

                            ARTICLE I - STOCKHOLDERS

         Section 1.        Annual Meeting.
         ---------         --------------

         An annual meeting of the stockholders, for the election of Directors to
succeed those whose terms expire and for the  transaction of such other business
as may properly  come before the meeting,  shall be held at such place,  on such
date, and at such time as the Board of Directors shall each year fix, which date
shall be within  thirteen  (13)  months  subsequent  to the later of the date of
incorporation or the last annual meeting of stockholders.

         Section 2.        Special Meetings.
         ---------         ----------------

         Subject  to the  rights  of the  holders  of any  class  or  series  of
preferred  stock of the  Corporation,  special  meetings of  stockholders of the
Corporation  may be  called  only  by  the  Board  of  Directors  pursuant  to a
resolution  adopted by a majority  of the total  number of  Directors  which the
Corporation  would have if there  were no  vacancies  on the Board of  Directors
(hereinafter the "Whole Board").

         Section 3.        Notice of Meetings.
         ---------         ------------------

         Written  notice of the place,  date,  and time of all  meetings  of the
stockholders  shall be given,  not less than ten (10) nor more than  sixty  (60)
days  before the date on which the  meeting is to be held,  to each  stockholder
entitled  to vote at such  meeting,  except  as  otherwise  provided  herein  or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General  Corporation Law or the Certificate of Incorporation of the
Corporation).

         When a meeting is adjourned  to another  place,  date or time,  written
notice need not be given of the  adjourned  meeting if the place,  date and time
thereof  are  announced  at the  meeting  at which  the  adjournment  is  taken;
provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally  noticed,  or if a
new record date is fixed for the adjourned meeting, written notice of the place,
date, and time of the adjourned  meeting shall be given in conformity  herewith.
At any adjourned  meeting,  any business may be transacted which might have been
transacted at the original meeting.

         Section 4.        Quorum.
         ---------         ------

         At any meeting of the stockholders, the holders of a majority of all of
the shares of the stock entitled to vote at the meeting, present in person or by
proxy  (after  giving  effect  to  the  provisions  of  Article  FOURTH  of  the
Corporation's Certificate of Incorporation), shall constitute a quorum for

<PAGE>


all  purposes,  unless or except to the  extent  that the  presence  of a larger
number may be  required by law.  Where a separate  vote by a class or classes is
required, a majority of the shares of such class or classes present in person or
represented by proxy (after giving effect to the provisions of Article FOURTH of
the  Corporation's  Certificate  of  Incorporation)  shall  constitute  a quorum
entitled to take action with respect to that vote on that matter.

         If a quorum  shall  fail to attend any  meeting,  the  chairman  of the
meeting or the holders of a majority of the shares of stock entitled to vote who
are present,  in person or by proxy,  may adjourn the meeting to another  place,
date, or time.

         If a notice of any adjourned special meeting of stockholders is sent to
all  stockholders  entitled to vote  thereat,  stating that it will be held with
those  present  in person or by proxy  constituting  a  quorum,  then  except as
otherwise required by law, those present in person or by proxy at such adjourned
meeting  shall  constitute a quorum,  and all matters  shall be  determined by a
majority of the votes cast at such meeting.

         Section 5.        Organization.
         ---------         ------------

         Such person as the Board of Directors  may have  designated  or, in the
absence of such a person,  the Chairman of the Board of the  Corporation  or, in
his or her absence, such person as may be chosen by the holders of a majority of
the shares entitled to vote who are present,  in person or by proxy,  shall call
to order any meeting of the stockholders and act as chairman of the meeting.  In
the absence of the  Secretary of the  Corporation,  the secretary of the meeting
shall be such person as the chairman appoints.

         Section 6.        Conduct of Business.
         ---------         -------------------

                  (a)  The  chairman  of  any  meeting  of  stockholders   shall
determine  the order of business and the  procedures  at the meeting,  including
such regulation of the manner of voting and the conduct of discussion as seem to
him or her in order.  The date and time of the  opening and closing of the polls
for each matter upon which the  stockholders  will vote at the meeting  shall be
announced at the meeting.

                  (b) At any  annual  meeting  of the  stockholders,  only  such
business shall be conducted as shall have been brought  before the meeting:  (i)
by or at the direction of the Board of Directors or (ii) by any  stockholder  of
the  Corporation  who is entitled to vote with respect  thereto and who complies
with the notice  procedures  set forth in this Section 6(b).  For business to be
properly  brought before an annual  meeting by a stockholder,  the business must
relate to a proper subject  matter for  stockholder  action and the  stockholder
must have  given  timely  notice  thereof in  writing  to the  Secretary  of the
Corporation. To be timely, a stockholder's notice must be delivered or mailed to
and received at the principal executive offices of the Corporation not less than
ninety  (90) days prior to the date of the annual  meeting;  provided,  however,
that in the event that less than one hundred  (100) days' notice or prior public
disclosure of the date of the meeting is given or made to  stockholders,  notice
by the  stockholder  to be timely must be  received  not later than the close of
business on the 10th day  following  the day on which such notice of the date of
the  annual   meeting  was  mailed  or  such  public   disclosure  was  made.  A
stockholder's  notice to the  Secretary  shall set forth as to each  matter such
stockholder proposes to bring before the annual meeting: (i) a brief description
of the business  desired to be brought before the annual meeting and the reasons
for conducting such business at the annual  meeting;  (ii) the name and address,
as they appear on the  Corporation's  books, of the  stockholder  proposing such
business;  (iii)  the class and  number of shares of the  Corporation's  capital
stock that are  beneficially  owned by such  stockholder;  and (iv) any material
interest of such stockholder in such business. Notwithstanding anything in these
Bylaws to the contrary,  no business  shall be brought before or conducted at an
annual  meeting  except in accordance  with the provisions of this Section 6(b).
The Officer of the Corporation or other person presiding over the annual meeting
shall,  if the facts so  warrant,  determine  and  declare to the  meeting  that
business  was not properly  brought  before the meeting in  accordance  with the
provisions  of this  Section  6(b) and, if he should so  determine,  he shall so
declare to the meeting and any such  business so  determined  to be not properly
brought before the meeting shall not be transacted.

         At any special meeting of the stockholders, only such business shall be
conducted as shall have been brought  before the meeting by or at the  direction
of the Board of Directors.

                  (c) Only persons who are qualified under Article II, Section 1
of these Bylaws and nominated in  accordance  with the  procedures  set forth in
these Bylaws shall be eligible for election as Directors. Nominations of persons
for  election  to the Board of  Directors  of the  Corporation  may be made at a
meeting of  stockholders at which directors are to be elected only: (i) by or at
the  direction  of the Board of  Directors;  or (ii) by any  stockholder  of the
Corporation  entitled to vote for the  election of  Directors at the meeting who
complies  with the  notice  procedures  set  forth in this  Section  6(c).  Such
nominations,  other  than  those  made by or at the  direction  of the  Board of
Directors,  shall be made by timely  notice in writing to the  Secretary  of the
Corporation.  To be timely, a stockholder's  notice shall be delivered or mailed
to and received at the principal  executive  offices of the Corporation not less
than ninety (90) days prior to the date of the meeting; provided,  however, that
in the event that less than one hundred  (100) days' notice or prior  disclosure
of the  date of the  meeting  is given or made to  stockholders,  notice  by the
stockholder  to be  timely  must be so  received  not  later  than the  close of
business on the 10th day  following  the day on which such notice of the date of
the meeting was mailed or such public  disclosure was made.  Such  stockholder's
notice shall set forth: (i) as to each person whom such stockholder  proposes to
nominate for election or re-election as a Director,  all information relating to
such person that would  indicate such person's  qualification  under Article II,
Section 1,  including  an affidavit  that such person would not be  disqualified
under the provisions of Section 1(d), and such  information  that is required to
be  disclosed  in  solicitations  of proxies for  election of  directors,  or is
otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended  (including  such person's  written  consent to
being named in the proxy  statement as a nominee and to serving as a director if
elected);  and (ii) as to the  stockholder  giving  the  notice (x) the name and
address, as they appear on the Corporation's  books, of such stockholder and (y)
the class and  number of shares  of the  Corporation's  capital  stock  that are
beneficially  owned  by  such  stockholder.  At  the  request  of the  Board  of
Directors,  any person  nominated  by the Board of  Directors  for election as a
Director  shall furnish to the  Secretary of the  Corporation  that  information
required  to  establish  his or her  qualifications  and  to be set  forth  in a
stockholder's  notice of  nomination  which  pertains to the nominee.  No person
shall be eligible for election as a Director of the Corporation unless nominated
in accordance  with the provisions of this Section 6(c) and Section 1 of Article
II. The Officer of the  Corporation  or other  person  presiding  at the meeting
shall,  if the facts so warrant,  determine  that a  nomination  was not made in
accordance with such provisions and, if he or she shall so determine,  he or she
shall  so  declare  to  the  meeting  and  the  defective  nomination  shall  be
disregarded.

         Section 7.        Proxies and Voting.
         ---------         ------------------

         At any meeting of the stockholders,  every stockholder entitled to vote
may vote in person or by proxy  authorized  by an instrument in writing filed in
accordance  with  the  procedure  established  for the  meeting.  Any  facsimile
telecommunication or other reliable  reproduction of the writing or transmission
created  pursuant to this  paragraph may be  substituted  or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing  or  transmission  could be used,  provided  that such  copy,  facsimile
telecommunication or other reproduction shall be a complete  reproduction of the
entire original writing or transmission.

         All voting,  including on the election of Directors but excepting where
otherwise required by law or by the governing documents of the Corporation,  may
be made by a voice  vote;  provided,  however,  that upon  demand  therefor by a
stockholder  entitled to vote or his or her proxy,  a stock vote shall be taken.
Every stock vote shall be taken by ballot, each of which shall state the name of
the  stockholder  or proxy voting and such other  information as may be required
under the procedures  established  for the meeting.  The  Corporation  shall, in
advance of any meeting of stockholders, appoint one or more inspectors to act at
the meeting and make a written report thereof. The Corporation may designate one
or more persons as alternate  inspectors  to replace any  inspector who fails to
act. If no inspector  or alternate is able to act at a meeting of  stockholders,
the person  presiding at the meeting shall appoint one or more inspectors to act
at the  meeting.  Each  inspector,  before  entering  upon the  discharge of his
duties,  shall  take  and sign an oath  faithfully  to  execute  the  duties  of
inspector with strict impartiality and according to the best of his ability.

         All elections shall be determined by a plurality of the votes cast, and
except as otherwise  required by law or the  Certificate of  Incorporation,  all
other matters shall be determined by a majority of the votes cast.

         Section 8.        Stock List.
         ---------         ----------

         A complete  list of  stockholders  entitled  to vote at any  meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares  registered in his
or her name, shall be open to the examination of any such  stockholder,  for any
purpose germane to the meeting,  during ordinary  business hours for a period of
at least ten (10) days prior to the  meeting,  either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the  meeting,  or if not so  specified,  at the place where the meeting is to be
held.

         The stock list shall  also be kept at the place of the  meeting  during
the  whole  time  thereof  and  shall  be open to the  examination  of any  such
stockholder who is present. This list shall presumptively determine the identity
of the  stockholders  entitled  to vote at the  meeting and the number of shares
held by each of them.

         Section 9.        Consent of Stockholders in Lieu of Meeting.
         ---------         ------------------------------------------

         Subject  to the  rights  of the  holders  of any  class  or  series  of
preferred stock of the Corporation, any action required or permitted to be taken
by the  stockholders of the Corporation must be effected at an annual or special
meeting  of  stockholders  of the  Corporation  and may not be  effected  by any
consent in writing by such stockholders.

                         ARTICLE II - BOARD OF DIRECTORS

         Section 1.        General Powers, Number, Term of Office and
                           ------------------------------------------
                           Qualifications.
                           ---------------

         (a)      General    Powers.     The   business  and  affairs  of  the
                  Corporation  shall  be  under  the  direction of its Board of
                  Directors.  The Board of  Directors  shall  annually  elect a
                  Chairman  of the  Board  from  among  its  members who shall,
                  when present, preside at its meetings.

         (b)      Number.  The number of  Directors  who shall  constitute  the
                  Whole Board  shall be such  number as the Board of  Directors
                  shall from time to time have designated,  except that in the
                  absence of such  designation  shall be nine (9).

         Except  for the  initial  members of the Board of  Directors  as of the
effective date of these Bylaws, no person shall be eligible for initial election
as a  Director  who is 68  years  of age or  more.  No  person  may be  elected,
appointed,  nominated or otherwise serve as a Director of the Corporation  after
December 31 of the year in which such person attains the age of 70. Vacancies on
the Board of Directors  created by operation of this  provision may be filled in
accordance with these Bylaws.

         (c)      Term of Office. The Directors,  other  than  those who may be
                  elected by the  holders  of any class  or series of Preferred
                  Stock, shall be divided, with respect to  the time  for which
                  they  severally  hold office,  into  three classes, with  the
                  term of office of the  first class  to  expire  at the  first
                  annual  meeting   of stockholders,  the term of office of the
                  second  class to expire at the annual meeting of stockholders
                  one year thereafter and the term of office of the third class
                  to  expire  at  the  annual meeting of stockholders two years
                  thereafter,  with each  Director to hold office  until his or
                  her  successor  shall  have  been  duly elected and qualified
                  At each annual meeting of  stockholders, Directors elected to
                  succeed  those  Directors  whose  terms  then expire shall be
                  elected  for  a  term  of  office  to  expire  at  the  third
                  succeeding   annual   meeting  of  stockholders  after  their
                  election,  with  each   Director  to hold office until his or
                  her  successor shall have  been  duly  elected  and qualified.

         (d)      No person  shall be eligible  for  election or  appointment
                  to the Board of Directors:  (i) if such person has, within
                  the previous 10 years,  been the subject of supervisory
                  action by a financial regulatory agency that resulted in a
                  cease and desist order or an agreement or other written
                  statement subject to public disclosure under 12U.S.C.1818(u),
                  or  any  successor  provision;  (ii)if  such  person has been
                  convicted of a crime  involving dishonesty or breach of trust
                  which is punishable by  imprisonment for a term exceeding one
                  year under state  or  federal  law;  (iii) if such  person is
                  currently  charged  in any information,  indictment, or other
                  complaint with  the commission  of  or participation  in such
                  a crime;  and (iv) unles  such person has been,  for a period
                  of at least one year prior to his or her election, nomination
                  or  appointment,  a  resident  of  a  county  in   which  the
                  Corporation or its subsidiaries maintains a banking office or
                  of a county  contiguous to any such county or had significant
                  business  ties  to such counties.  No person may serve on the
                  Board of Directors  and  at  the  same  time be a director or
                  officer of another  co-operative bank, credit union,  savings
                  bank,  savings  and  loan  association,  trust  company, bank
                  holding  company or banking association (in each case whether
                  chartered by a state,  the  federal  government  or any other
                  jurisdiction)  that  engages  in business  activities  in the
                  same  market  area  as  the  Corporation   or   any   of  its
                  subsidiaries. No person shall be eligible for election to the
                  Board  of Directors if such person is the  representative  or
                  agent of a person or acting in concert (as that term is  used
                  to describe  relationships  involved in either presumptive or
                  actual  concerted  action  under  12  C.F.R. Section 574.4(d))
                  with  respect  to the Corporation or its subsidiaries, with a
                  person  who  is  ineligible  for  election  to  the  Board of
                  Directors  under  this  Subsection  1(d).  No  nomination  of
                  any individual  who would not be qualified to be  elected  or
                  appointed to or serve as a  member  of the Board of Directors
                  under this Article II, Section 1(d) shall be valid,  accepted
                  or  voted upon.  The Board of Directors  shall have the power
                  to  construe  and  apply  the  provisions  of this   Section
                  1(d)  and to  make  all determinations necessary to implement
                  such provisions, including but not limited to  determinations
                  as to whether any persons are a group acting in concert,  as
                  defined  by  this Section 1(d).  The Board may request from a
                  nominee  information  it  deems  relevant   to   assessing  a
                  nominee's satisfaction of the requirements  of this Section
                  1(d).

         Section 2.        Vacancies and Newly Created Directorships.
         ---------         -----------------------------------------

         Subject  to the  rights  of the  holders  of any  class  or  series  of
Preferred Stock, and unless the Board of Directors otherwise  determines,  newly
created  directorships  resulting from any increase in the authorized  number of
directors  or any  vacancies  in the Board of  Directors  resulting  from death,
resignation,  retirement,  disqualification,  removal from office or other cause
may be filled only by a majority  vote of the Directors  then in office,  though
less  than a quorum,  and  Directors  so chosen  shall  hold  office  for a term
expiring at the annual  meeting of  stockholders  at which the term of office of
the class to which they have been  elected  expires  and until  such  Director's
successor shall have been duly elected and qualified.  No decrease in the number
of  authorized  directors  constituting  the Board shall shorten the term of any
incumbent Director.

<PAGE>
         Section 3.        Regular Meetings.
         ---------         ----------------

         Regular  meetings of the Board of Directors shall be held at such place
or places,  on such date or dates,  and at such time or times as shall have been
established  by the Board of Directors and  publicized  among all  Directors.  A
notice of each regular meeting shall not be required.

         Section 4.        Special Meetings.
         ---------         ----------------

         Special  meetings of the Board of Directors  may be called by one-third
(1/3) of the Directors then in office  (rounded up to the nearest whole number),
by the Chairman of the Board or the President or, in the event that the Chairman
of the Board or President  are  incapacitated  or otherwise  unable to call such
meeting, by the Secretary, and shall be held at such place, on such date, and at
such time as they, or he or she, shall fix. Notice of the place,  date, and time
of each such  special  meeting  shall be given each  Director  by whom it is not
waived by mailing  written notice not less than five (5) days before the meeting
or by telegraphing or telexing or by facsimile transmission of the same not less
than  twenty-four (24) hours before the meeting.  Unless otherwise  indicated in
the notice thereof, any and all business may be transacted at a special meeting.

         Section 5.        Quorum.
         ---------         ------

         At any meeting of the Board of Directors, a majority of the Whole Board
shall constitute a quorum for all purposes. If a quorum shall fail to attend any
meeting,  a majority of those present may adjourn the meeting to another  place,
date, or time, without further notice or waiver thereof.

         Section 6.       Participation in Meetings By Conference Telephone.
         ---------        -------------------------------------------------

         Members of the Board of  Directors,  or of any committee  thereof,  may
participate  in a meeting  of such  Board or  committee  by means of  conference
telephone  or similar  communications  equipment  by means of which all  persons
participating  in the meeting can hear each other and such  participation  shall
constitute presence in person at such meeting.

         Section 7.        Conduct of Business.
                           -------------------

         At any meeting of the Board of Directors,  business shall be transacted
in such order and manner as the Board may from time to time  determine,  and all
matters shall be determined by the vote of a majority of the Directors  present,
except as otherwise  provided  herein or required by law. Action may be taken by
the Board of Directors  without a meeting if all members thereof consent thereto
in  writing,  and the  writing  or  writings  are  filed  with  the  minutes  of
proceedings of the Board of Directors.

         Section 8.        Powers.
         ---------         ------

         The Board of  Directors  may,  except  as  otherwise  required  by law,
exercise  all such powers and do all such acts and things as may be exercised or
done by the  Corporation,  including,  without  limiting the  generality  of the
foregoing, the unqualified power:

                  (1)      To declare dividends from time to time in accordance
                           with law;

                  (2)      To  purchase  or  otherwise   acquire  any  property
                           rights  or   privileges  on   such terms as it shall
                           determine;

                  (3)      To authorize  the creation,  making and issuance, in
                           such  form   as  it   may   determine,   of  written
                           obligations  of    every    kind,     negotiable  or
                           non-negotiable,  secured  or  unsecured,  and  to do
                           all things necessary in connection therewith;

                  (4)      To remove any   Officer of the  Corporation  with or
                           without  cause,  and  from time  to time to  devolve
                           the powers and duties of any Officer upon any other
                           person for the time being;

                  (5)      To confer upon any  Officer  of the Corporation  the
                           power to appoint,  remove  and  suspend  subordinate
                           Officers, employees and agents;

                  (6)      To adopt from time to time such stock, option, stock
                           purchase,  bonus  or  other  compensation  plans for
                           Directors,  Officers,  employees   and agents of the
                           Corporation   and   its  subsidiaries  as  it   may
                           determine;

                  (7)      To   adopt   from   time  to  time  such  insurance,
                           retirement, and other benefit plans  for  Directors,
                           Officers,  employees and agents of  the Corporation
                           and its subsidiaries as it may determine;

                  (8)      To  adopt  from  time  to  time   regulations,   not
                           inconsistent  with these Bylaws,  for the management
                           of the Corporation's business and affairs; and

                  (9)      To fix the Compensation of officers and employees of
                           the  Corporation  and  its  subsidiaries  as it may
                           determine.

         Section 9.        Compensation of Directors.
         ---------         -------------------------

         Directors, as such, may receive, pursuant to resolution of the Board of
Directors,  fixed fees and other  compensation  for their services as Directors,
including,  without  limitation,  their services as members of committees of the
Board of Directors.


                            ARTICLE III - COMMITTEES

         Section 1.        Committees of the Board of Directors.
         ---------         ------------------------------------

         The  Board  of  Directors,  by a vote of a  majority  of the  Board  of
Directors,  may from time to time designate  committees of the Board,  with such
lawfully  delegable  powers and duties as it  thereby  confers,  to serve at the
pleasure of the Board and shall,  for these  committees and any others  provided
for  herein,  elect a Director or  Directors  to serve as the member or members,
designating, if it desires, other Directors as alternate members who may replace
any absent or disqualified member at any meeting of the committee. Any committee
so designated  may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of  ownership  and  merger  pursuant  to  Section  253 of the  Delaware  General
Corporation  Law  if  the  resolution   which  designates  the  committee  or  a
supplemental  resolution  of the Board of  Directors  shall so  provide.  In the
absence or  disqualification  of any member of any  committee  and any alternate
member in his or her place,  the member or members of the  committee  present at
the meeting and not disqualified  from voting,  whether or not he or she or they
constitute a quorum,  may by unanimous vote appoint  another member of the Board
of  Directors  to act at the meeting in the place of the absent or  disqualified
member.

         Section 2.        Conduct of Business.
         ---------         -------------------

         Each  committee  may  determine  the  procedural  rules for meeting and
conducting  its  business  and  shall  act in  accordance  therewith,  except as
otherwise  provided herein or required by law. Adequate  provision shall be made
for notice to members of all  meetings.  The quorum  requirements  for each such
committee shall be a majority of the members of such committee  unless otherwise
determined  by the  Board  of  Directors  by a  majority  vote of the  Board  of
Directors  which  such  quorum  determined  by a  majority  of the  Board may be
one-third of such members and all matters considered by such committees shall be
determined by a majority vote of the members present. Action may be taken by any
committee  without a meeting if all members  thereof consent thereto in writing,
and the writing or writings  are filed with the  minutes of the  proceedings  of
such committee.

         Section 3.        Nominating Committee.
         ---------         --------------------

         The Board of  Directors  shall  appoint a  Nominating  Committee of the
Board,  consisting of not less than three (3) members.  The Nominating Committee
shall have authority: (a) to review any nominations for election to the Board of
Directors made by a stockholder of the Corporation  pursuant to Section 6(c)(ii)
of Article I of these Bylaws in order to determine  compliance  with such Bylaw;
and (b) to  recommend  to the Whole Board  nominees for election to the Board of
Directors to replace those Directors whose terms expire at the annual meeting of
stockholders next ensuing.


                              ARTICLE IV - OFFICERS

         Section 1.        Generally.
         ---------         ---------

                  (a) The Board of Directors as soon as may be practicable after
the annual meeting of stockholders  shall choose a Chairman of the Board,  Chief
Executive Officer, a President,  one or more Vice Presidents,  a Secretary and a
Treasurer  and from time to time may choose  such other  officers as it may deem
proper. The Chairman of the Board shall be chosen from among the Directors.  Any
number of offices may be held by the same person.

                  (b) The term of office of all Officers shall be until the next
annual election of Officers and until their respective successors are chosen but
any Officer may be removed from office at any time by the affirmative  vote of a
majority of the authorized  number of Directors then  constituting  the Board of
Directors.

                  (c) All Officers  chosen by the Board of Directors  shall have
such powers and duties as generally pertain to their respective Offices, subject
to the specific  provisions  of this ARTICLE IV. Such  officers  shall also have
such  powers  and duties as from time to time may be  conferred  by the Board of
Directors or by any committee thereof.

         Section 2.        Chairman of the Board of Directors.
         ---------         ----------------------------------

         The Chairman of the Board,  subject to the  provisions  of these Bylaws
and to the  direction of the Board of  Directors,  when present shall preside at
all meetings of the stockholders of the  Corporation.  The Chairman of the Board
shall perform such duties  designated to him by the Board of Directors and which
are delegated to him or her by the Board of Directors by resolution of the Board
of Directors.

         Section 3.        President and Chief Executive Officer.
         ---------         -------------------------------------

         The   President  and  Chief   Executive   Officer  shall  have  general
responsibility for the management and control of the business and affairs of the
Corporation  and shall perform all duties and have all powers which are commonly
incident to the office of  President  and Chief  Executive  Officer or which are
delegated to him or her by the Board of  Directors.  Subject to the direction of
the Board of Directors,  the President  and Chief  Executive  Officer shall have
power to sign all stock  certificates,  contracts and other  instruments  of the
Corporation  which are authorized  and shall have general  supervision of all of
the other Officers (other than the Chairman of the Board),  employees and agents
of the Corporation.

         Section 4.        Vice President.
         ----------        --------------

         The Vice President or Vice  Presidents  shall perform the duties of the
President in his absence or during his  inability to act. In addition,  the Vice
Presidents  shall perform the duties and exercise the powers usually incident to
their respective  offices and/or such other duties and powers as may be properly
assigned  to them by the Board of  Directors,  the  Chairman of the Board or the
President.  A Vice  President or Vice  Presidents may be designated as Executive
Vice President or Senior Vice President.

         Section 5.        Secretary.
         ---------         ---------

         The Secretary or Assistant  Secretary  shall issue notices of meetings,
shall keep their minutes, shall have charge of the seal and the corporate books,
shall  perform such other  duties and exercise  such other powers as are usually
incident to such  office  and/or  such other  duties and powers as are  properly
assigned  thereto by the Board of  Directors,  the  Chairman of the Board or the
President.  Subject to the  direction of the Board of  Directors,  the Secretary
shall have the power to sign all stock certificates.

         Section 6.        Treasurer.
                           ---------

         The Treasurer  shall be the  Comptroller of the  Corporation  and shall
have  the   responsibility   for  maintaining  the  financial   records  of  the
Corporation.  He or she  shall  make  such  disbursements  of the  funds  of the
Corporation  as are  authorized and shall render from time to time an account of
all such  transactions and of the financial  condition of the  Corporation.  The
Treasurer  shall also perform  such other  duties as the Board of Directors  may
from time to time prescribe. Subject to the direction of the Board of Directors,
the Treasurer shall have the power to sign all stock certificates.

         Section 7.        Assistant Secretaries and Other Officers.
         ---------         -----------------------------------------

         The Board of Directors  may appoint one or more  Assistant  Secretaries
and such other Officers who shall have such powers and shall perform such duties
as are  provided  in these  Bylaws or as may be assigned to them by the Board of
Directors, the Chairman of the Board or the President.

         Section 8.    Action with Respect to Securities of Other Corporations.
         ---------     --------------------------------------------------------

         Unless otherwise  directed by the Board of Directors,  the President or
any Officer of the  Corporation  authorized by the President shall have power to
vote and otherwise act on behalf of the  Corporation,  in person or by proxy, at
any meeting of  stockholders of or with respect to any action of stockholders of
any  other  corporation  in  which  this  Corporation  may hold  securities  and
otherwise to exercise any and all rights and powers which this  Corporation  may
possess by reason of its ownership of securities in such other corporation.




<PAGE>


                                ARTICLE V - STOCK

         Section 1.        Certificates of Stock.
         ---------         ---------------------

         Each  stockholder  shall be entitled to a certificate  signed by, or in
the name of the Corporation by, the Chairman of the Board or the President,  and
by the  Secretary  or an  Assistant  Secretary,  or any  Treasurer  or Assistant
Treasurer,  certifying  the number of shares  owned by him or her. Any or all of
the signatures on the certificate may be by facsimile.

         Section 2.        Transfers of Stock.
         ---------         ------------------

         Transfers  of stock shall be made only upon the  transfer  books of the
Corporation  kept  at  an  office  of  the  Corporation  or by  transfer  agents
designated to transfer  shares of the stock of the  Corporation.  Except where a
certificate is issued in accordance with Section 4 of Article V of these Bylaws,
an  outstanding   certificate  for  the  number  of  shares  involved  shall  be
surrendered for cancellation before a new certificate is issued therefor.

         Section 3.        Record Date.
         ---------         -----------

         In order that the Corporation may determine the  stockholders  entitled
to notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any  change,  conversion  or  exchange  of stock or for the
purpose of any other  lawful  action,  the Board of  Directors  may fix a record
date,  which  record  date shall not  precede  the date on which the  resolution
fixing the record date is adopted  and which  record date shall not be more than
sixty  (60)  nor less  than ten (10)  days  before  the date of any  meeting  of
stockholders,  nor more than  sixty  (60) days  prior to the time for such other
action as hereinbefore described;  provided,  however, that if no record date is
fixed by the Board of Directors,  the record date for  determining  stockholders
entitled  to notice of or to vote at a meeting of  stockholders  shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived,  at the close of business on the next day preceding the day
on which the meeting is held,  and,  for  determining  stockholders  entitled to
receive payment of any dividend or other  distribution or allotment or rights or
to  exercise  any rights of change,  conversion  or exchange of stock or for any
other  purpose,  the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating thereto.

         A  determination  of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.



<PAGE>


         Section 4.        Lost, Stolen or Destroyed Certificates.
         ---------         --------------------------------------

         In the event of the loss,  theft or destruction  of any  certificate of
stock,  another may be issued in its place  pursuant to such  regulations as the
Board  of  Directors  may  establish  concerning  proof of such  loss,  theft or
destruction  and  concerning  the  giving  of a  satisfactory  bond or  bonds of
indemnity.

         Section 5.        Regulations.
         ---------         -----------

         The issue,  transfer,  conversion and  registration  of certificates of
stock shall be governed by such other  regulations as the Board of Directors may
establish.

                              ARTICLE VI - NOTICES

         Section 1.        Notices.
         ---------         -------

         Except as otherwise  specifically  provided  herein or required by law,
all notices required to be given to any stockholder, Director, Officer, employee
or agent shall be in writing and may in every instance be  effectively  given by
hand delivery to the recipient thereof,  by depositing such notice in the mails,
postage paid, or by sending such notice by prepaid telegram or mailgram or other
courier.  Any such notice  shall be  addressed  to such  stockholder,  Director,
Officer,  employee or agent at his or her last known address as the same appears
on the books of the Corporation.  The time when such notice is received, if hand
delivered,  or  dispatched,  if  delivered  through  the mails or by telegram or
mailgram or other courier, shall be the time of the giving of the notice.

         Section 2.        Waivers.
         ---------         -------

         A written  waiver of any  notice,  signed by a  stockholder,  Director,
Officer,  employee or agent,  whether  before or after the time of the event for
which notice is to be given,  shall be deemed  equivalent to the notice required
to be given to such stockholder,  Director,  Officer, employee or agent. Neither
the business nor the purpose of any meeting need be specified in such a waiver.

                           ARTICLE VII - MISCELLANEOUS

         Section 1.        Facsimile Signatures.
         ---------         --------------------

         In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these Bylaws,  facsimile signatures of any officer or
officers of the  Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.


<PAGE>


         Section 2.        Corporate Seal.
         ---------         --------------

         The Board of Directors may provide a suitable seal, containing the name
of the Corporation,  which seal shall be in the charge of the Secretary.  If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the  Treasurer or by an Assistant  Secretary or
an assistant to the Treasurer.

         Section 3.        Reliance Upon Books, Reports and Records.
         ---------         ----------------------------------------

         Each Director,  each member of any committee designated by the Board of
Directors,  and each Officer of the Corporation shall, in the performance of his
or her  duties,  be fully  protected  in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or  statements  presented to the  Corporation  by any of its Officers or
employees,  or  committees  of the Board of Directors so  designated,  or by any
other person as to matters  which such Director or committee  member  reasonably
believes are within such other person's  professional  or expert  competence and
who has been selected with reasonable care by or on behalf of the Corporation.

         Section 4.        Fiscal Year.
         ---------         -----------

         The fiscal  year of the  Corporation  shall be as fixed by the Board of
Directors.

         Section 5.        Time Periods.
         ---------         ------------

         In applying any provision of these Bylaws which requires that an act be
done or not be done a specified  number of days prior to an event or that an act
be done  during  a period  of a  specified  number  of days  prior to an  event,
calendar days shall be used,  the day of the doing of the act shall be excluded,
and the day of the event shall be included.

                            ARTICLE VIII - AMENDMENTS

         The Board of Directors  may amend,  alter or repeal these Bylaws at any
meeting of the Board,  provided notice of the proposed change was given not less
than two (2) days prior to the meeting.  The stockholders  shall also have power
to amend,  alter or repeal these Bylaws at any meeting of stockholders  provided
notice of the proposed change was given in the notice of the meeting;  provided,
however,  that,  notwithstanding  any  other  provisions  of the  Bylaws  or any
provision of law which might  otherwise  permit a lesser vote or no vote, but in
addition  to any  affirmative  vote of the  holders of any  particular  class or
series of the voting stock required by law, the  Certificate  of  Incorporation,
any Preferred Stock  Designation or these Bylaws,  the affirmative  votes of the
holders of at least 80% of the voting power of all the  then-outstanding  shares
of the Voting Stock,  voting  together as a single  class,  shall be required to
alter, amend or repeal any provisions of these Bylaws.

The above Bylaws are effective as of May 16, 2000.