**Exhibit
      99.1**





**For
        Release:  October 13, 2006**
 
 **Contact:**
              **Douglas
                  Stewart, President-CEO****Debra
                  Geuy, Chief Financial
                  Officer**
 
 
 **PEOPLES-SIDNEY
        FINANCIAL CORPORATION ANNOUNCES FIRST**
 **QUARTER
        EARNINGS AND DECLARES REGULAR AND SPECIAL**
 **DIVIDENDS**
 
 
 Sidney,
        Ohio OTCBB - “PSFC”
 
 
 Douglas
        Stewart, President and CEO of Peoples-Sidney Financial Corporation, parent
        company of Peoples Federal Savings and Loan Association, announced today
        the
        Corporation’s first quarter earnings for the fiscal year ending June 30, 2007
        and the declaration of a regular quarterly dividend, plus a special dividend
        to
        be paid to its shareholders.
 
 Net
        income for the three-month period ended September 30, 2006 was $289,000,
        or
        $0.21 basic and diluted earnings per share. This compares to $240,000, or
        $0.17
        basic and diluted earnings per share for the same period ended September
        30,
        2005. This represents an increase in net income of $49,000. The most significant
        change occurred in the provision for loan losses, which decreased $65,000
        from
        $17,000 for the three months ended September 30, 2005 to a negative provision
        of
        $48,000 for the three months ended September 30, 2006. The negative provision
        was primarily the result of the positive resolution of a commercial loan
        that
        had a specific loss allocation of $80,000 at June 30, 2006. Additionally,
        the
        Corporation had slower growth in the loan portfolio during the current period
        as
        compared to a year ago. These factors that resulted in a negative provision
        for
        loan losses were partially offset by an increase in nonperforming loans for
        the
        three months ended September 30, 2006 as compared to the three months ended
        September 30, 2005. The level of nonperforming loans at September 30, 2006
        was
        $1,867,000 compared to $1,441,000 at September 30. 2005. The decrease in
        provision for loan losses was partially offset by an increase of $22,000
        in
        federal income tax expense. The increase in income tax expense is directly
        related to an increase in income before income taxes during the current
        period.
  
  
 
 **PEOPLES-SIDNEY
        FINANCIAL CORPORATION ANNOUNCES EARNINGS**
 **AND
        DECLARES REGULAR AND SPECIAL DIVIDEND**
 
 **October
        13, 2006**
 
 **Page
        2**
 
 At
        its
        regular meeting held October 13, 2006, the Board of Directors declared a
        regular
        quarterly dividend of $0.16 per share for record holders as of October 31,
        2006
        and payable on November 15, 2006.
 
 In
        addition, the directors declared a special dividend of $0.10 per share to
        all
        record holders as of October 31, 2006 and payable on November 15,
        2006.
 
 Stewart
        commented, “This is the fifth occasion since going public in 1997 that our
        shareholders have received a special dividend in addition to our regular
        quarterly dividends. We appreciate the support and loyalty of our shareholders
        and are pleased to share a portion of our success with them.”
 
 Assets
        of
        the Corporation at September 30, 2006 totaled $139.7 million with shareholders’
equity of $15.5 million.
 
 Peoples
        Federal operates from its main office in downtown Sidney and its branches
        in
        Anna, Jackson Center and the Sidney Wal-Mart Supercenter.
 
 When
        used
        in this press release or other public or shareholder communications, in filings
        by the Corporation with the Securities and Exchange Commission and in oral
        statements made with the approval of an authorized executive office, the
        words
        or phrases “should result,” “will likely result,” “will enable,” “are expected
        to,” “is anticipated,” “estimate,” “project” or similar expressions are intended
        to identify “forward-looking statements” within the meaning of the Private
        Securities Litigation Reform Act of 1995. Such statements are subject to
        certain
        risks and uncertainties, including changes in economic conditions in the
        Corporation’s market area, changes in policies by regulatory agencies,
        fluctuations in interest rates, demand for loans in the Corporation’s market
        area and competition, that could cause actual results to differ materially
        from
        historical results and those presently anticipated or projected. The Corporation
        wishes to caution readers not to place undue reliance on such forward-looking
        statements, which speak only as of the date made. The Corporation wishes
        to
        advise readers that the factors listed could affect the Corporation’s financial
        performance and could cause the Corporation’s actual results for future periods
        to differ materially from any opinions or statements expressed with respect
        to
        future periods in any current statements.
 
 The
        Corporation does not undertake-and specifically declines any obligation-to
        publicly release the result of any revisions which may be made to any
        forward-looking statements to reflect events or circumstances after the date
        of
        such statements or to reflect the occurrence of anticipated or unanticipated
        events.