UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                  For the quarterly period ended June 30, 2003

                         Commission file number: 0-31847

                        Lawrence Financial Holdings, Inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

           Maryland                                               31-1724442
 ------------------------------                              -------------------
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)

                   311 South Fifth Street, Ironton, Ohio 45638
                   -------------------------------------------
                    (Address of principal executive offices)

                                 (740) 532-0263
                ------------------------------------------------
                (Issuer's telephone number, including area code)

Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

           Class:                                   Outstanding at July 31, 2003
Common Stock, $.01 par value                            650,110 Common Shares

Transitional Small Business Disclosure Format (Check One): Yes |_|   No |X|

<PAGE>

                        Lawrence Financial Holdings, Inc.
                                   FORM 10-QSB
                           Quarter Ended June 30, 2003

                                                                            Page
                                                                            ----

                         Part I - Financial Information

ITEM 1 - Financial Statements

         Consolidated Balance Sheets ........................................  2

         Consolidated Statements of Income...................................  3

         Consolidated Statements of Comprehensive Income.....................  4

         Consolidated Statements of Changes in
          Shareholders' Equity...............................................  5

         Consolidated Statements of Cash Flows...............................  6

         Notes to the Consolidated Financial Statements......................  7

ITEM 2 - Management's Discussion and Analysis of
         Financial Condition and Results of Operations....................... 11

ITEM 3 - Controls and Procedures............................................. 20

                           Part II - Other Information

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

Signatures................................................................... 22

Exhibits .................................................................... 23


--------------------------------------------------------------------------------
        1
<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                       June 30, 2003 and December 31, 2002

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      (Unaudited)
-------------------------------------------------------------------------------------------------------
                                                                        June 30,          December 31,
                                                                          2003               2002
                                                                     -------------       -------------
<S>                                                                  <C>                 <C>
ASSETS
     Cash and due from banks                                         $  10,762,740       $  16,140,900
     Merrill Lynch money market fund                                       487,120             179,600
                                                                     -------------       -------------
         Total cash and cash equivalents                                11,249,860          16,320,500
     Securities available for sale, at fair value                       25,002,609          14,192,370
     Loans receivable, net                                              91,299,315          96,457,033
     Federal Home Loan Bank stock                                          626,500             614,400
     Premises and equipment, net                                         3,419,030           3,340,888
     Accrued interest receivable                                           626,278             685,755
     Cash surrender value of life insurance                              2,208,880           2,131,685
     Other assets                                                          880,338             645,916
                                                                     -------------       -------------
              Total Assets                                           $ 135,312,810       $ 134,388,547
                                                                     =============       =============

LIABILITIES AND SHAREHOLDERS' EQUITY

     Liabilities
         Noninterest-bearing deposits                                $   3,016,513       $   1,995,918
         Interest-bearing deposits                                     117,627,520         116,930,237
                                                                     -------------       -------------
              Total deposits                                           120,644,033         118,926,155
         Other liabilities                                                 780,356             673,601
                                                                     -------------       -------------
              Total liabilities                                        121,424,389         119,599,756
                                                                     -------------       -------------
     Shareholders' Equity
         Common stock; par value $0.01 per share; shares
         authorized: 4,000,000; shares issued: 799,110                       7,991               7,991
         Additional paid-in capital                                      7,499,672           7,467,042
         Retained earnings                                               9,645,516           9,485,971
         Treasury stock, at cost; shares: 149,000 in
              2003 and 94,000 in 2002                                   (2,728,688)         (1,683,600)
Unearned ESOP shares                                                      (403,540)           (434,580)
         Unearned restricted stock awards                                 (201,794)           (201,794)
         Accumulated other comprehensive income,
              net of tax of $35,681 at 2003 and $76,119 in 2002             69,264             147,761
                                                                     -------------       -------------
              Total shareholders' equity                                13,888,421          14,788,791
                                                                     -------------       -------------
                  Total liabilities and shareholders' equity         $ 135,312,810       $ 134,388,547
                                                                     =============       =============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


--------------------------------------------------------------------------------
        2
<PAGE>

                        CONSOLIDATED STATEMENTS OF INCOME
            Three Months Ended and Six Months June 30, 2003 and 2002
                                   (Unaudited)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                Three Months Ended               Six Months Ended
                                                    June 30,                         June 30,
                                            --------------------------      --------------------------
                                               2003            2002            2003            2002
                                            ----------      ----------      ----------      ----------
<S>                                         <C>             <C>             <C>             <C>
Interest income
     Loans, including fees                  $1,677,334      $2,048,371      $3,418,418      $4,126,248
     Taxable securities                        173,513         161,004         365,533         326,440
     Tax exempt securities                      23,219              --          45,555              --
     Overnight deposit                          16,498          29,612          38,982          61,150
                                            ----------      ----------      ----------      ----------
                                             1,890,564       2,238,987       3,868,488       4,513,838
                                            ----------      ----------      ----------      ----------
Interest expense
     Deposits                                  627,848         925,081       1,308,559       1,944,221
     Federal Home Loan Bank borrowings              --          29,469              --          58,614
                                            ----------      ----------      ----------      ----------
                                               627,848         954,550       1,308,559       2,002,835
                                            ----------      ----------      ----------      ----------
Net interest income                          1,262,716       1,284,437       2,559,929       2,511,003
Provision for loan losses                      195,000         180,000         495,000         330,000
                                            ----------      ----------      ----------      ----------
Net interest income
     after provision for loan losses         1,067,716       1,104,437       2,064,929       2,181,003
Noninterest income
     Net securities gains                       31,488          13,103         184,610           8,214
     Service charges                           120,089         109,504         226,587         217,092
     Other                                      50,979          50,668          91,296         113,590
                                            ----------      ----------      ----------      ----------
                                               202,556         173,275         502,493         338,896
                                            ----------      ----------      ----------      ----------
Noninterest expense
     Salaries and benefits                     495,250         431,019         983,800         866,822
     Deposit insurance premiums                 15,082          28,891          30,354          57,640
     Occupancy and equipment                    89,729          82,953         181,893         167,245
     Data processing                           160,775         131,720         357,158         265,883
     Franchise tax                              34,594          32,250          67,594          65,250
     Advertising expense                        19,110          23,868          49,752          55,192
     Professional fees                          77,308          69,062         166,139         139,704
     Other                                     211,190         201,320         392,890         343,980
                                            ----------      ----------      ----------      ----------
                                             1,103,038       1,001,083       2,229,580       1,961,716
                                            ----------      ----------      ----------      ----------
Income before income tax                       167,234         276,629         337,842         558,183
Provision for income tax                        42,725          76,894          86,504         166,093
                                            ----------      ----------      ----------      ----------
Net income                                  $  124,509      $  199,735      $  251,338      $  392,090
                                            ==========      ==========      ==========      ==========
Basic earnings per common share             $     0.21      $     0.31      $     0.41      $     0.57
                                            ==========      ==========      ==========      ==========
Diluted earnings per common share           $     0.20      $     0.29      $     0.40      $     0.55
                                            ==========      ==========      ==========      ==========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


--------------------------------------------------------------------------------
        3
<PAGE>

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
            Three Months Ended and Six Months June 30, 2003 and 2002
                                   (Unaudited)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                     Three Months Ended               Six Months Ended
                                                          June 30,                        June 30,
                                                 -------------------------       -------------------------
                                                    2003            2002            2003            2002
                                                 ---------       ---------       ---------       ---------
<S>                                              <C>             <C>             <C>             <C>
Net income                                       $ 124,509       $ 199,735       $ 251,338       $ 392,090
Other comprehensive income:
     Unrealized gains arising during period        151,439         299,476          65,675         128,473
     Reclassification adjustment for gains
     included in net income                        (31,488)        (13,103)       (184,610)         (8,214)
                                                 ---------       ---------       ---------       ---------
                                                   119,951         286,373        (118,935)        120,259
     Income tax effect                             (40,783)        (97,367)         40,438         (40,888)
                                                 ---------       ---------       ---------       ---------
     Other comprehensive income (loss),
       net of tax                                   79,168         189,006         (78,497)         79,371
                                                 ---------       ---------       ---------       ---------
Comprehensive income                             $ 203,677       $ 388,741       $ 172,841       $ 471,461
                                                 =========       =========       =========       =========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


--------------------------------------------------------------------------------
        4
<PAGE>

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
      Year Ended December 31, 2002 and the Six Months Ended June 30, 2003
                                   (Unaudited)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                      Unearned    Accumulated
                                                  Additional                              Unearned   Restricted      Other
                                          Common   Paid-In     Retained     Treasury        ESOP       Stock     Comprehensive
                                          Stock    Capital     Earnings       Stock        Shares      Awards        Income
                                          ------  ----------  -----------   ---------     ---------   ---------     ---------
<S>                                       <C>     <C>         <C>           <C>           <C>         <C>           <C>
Balance - January 1, 2002                 $7,991  $7,426,239  $ 9,076,779   $        --   $(496,660)  $(269,059)    $  33,008
Net income                                    --          --      606,449            --          --          --            --
Net unrealized appreciation on
   securities available for sale,
   net of tax of $59,115                      --          --           --            --          --          --       114,753
Treasury Stock  acquired - 94,000 shares      --          --           --    (1,683,600)         --          --            --
Cash dividend - $0.28 per share               --          --     (197,257)           --          --          --            --
Stock-based compensation                      --      40,803           --            --      62,080      67,265            --
                                          ------  ----------  -----------   -----------   ---------   ---------     ---------

Balance, December 31, 2002                 7,991   7,467,042    9,485,971    (1,683,600)   (434,580)   (201,794)      147,761
Net income                                    --          --      251,338            --          --          --            --
Net unrealized depreciation on
   securities available for sale,
   net of tax of $(40,438)                    --          --           --            --          --          --       (78,497)
Treasury Stock  acquired - 55,000 shares      --          --           --    (1,045,088)         --          --            --
Cash dividend - $0.14 per share               --          --      (91,793)           --          --          --            --
Stock-based compensation                      --      32,630           --            --      31,040          --            --
                                          ------  ----------  -----------   -----------   ---------   ---------     ---------
Balance, June 30, 2003                    $7,991  $7,499,672  $ 9,645,516   $(2,728,688)  $(403,540)  $(201,794)    $  69,264
                                          ======  ==========  ===========   ===========   =========   =========     =========
<CAPTION>



                                                Total
                                            ------------
<S>                                         <C>
Balance - January 1, 2002                   $ 15,778,298
Net income                                       606,449
Net unrealized appreciation on
   securities available for sale,
   net of tax of $59,115                         114,753
Treasury Stock  acquired - 94,000 shares      (1,683,600)
Cash dividend - $0.28 per share                 (197,257)
Stock-based compensation                         170,148
                                            ------------

Balance, December 31, 2002                    14,788,791
Net income                                       251,338
Net unrealized depreciation on
   securities available for sale,
   net of tax of $(40,438)                       (78,497)
Treasury Stock  acquired - 55,000 shares      (1,045,088)
Cash dividend - $0.14 per share                  (91,793)
Stock-based compensation                          63,670
                                            ------------
Balance, June 30, 2003                      $ 13,888,421
                                            ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


--------------------------------------------------------------------------------
        5
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Six Months Ended June 30, 2003 and 2002
                                   (Unaudited)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                              Six Months Ended
                                                                                  June 30,
                                                                       -------------------------------
                                                                           2003                2002
                                                                       ------------       ------------
<S>                                                                    <C>                <C>
Cash flows from operating activities
     Net income                                                        $    251,338       $    392,090
     Adjustments to reconcile net income to net cash from
       operating activities
         Depreciation                                                       108,282             89,503
         Provision for loan losses                                          495,000            330,000
         Stock dividend on Federal Home Loan Bank stock                     (12,100)           (13,500)
         Net premium amortization (discount accretion)                       82,530            (10,291)
Net securities gains                                                       (184,610)            (8,214)
         ESOP expense                                                        63,670             51,782
         Restricted stock award expense                                      52,369             37,654
         Change in other assets and liabilities                            (113,829)            69,809
                                                                       ------------       ------------
     Net cash from operating activities                                     742,650            938,833
                                                                       ------------       ------------
Cash flows from investing activities
     Purchase of:
         Securities available for sale                                  (27,873,325)        (7,458,857)
         Premises and equipment                                            (186,423)          (118,715)
     Proceeds from:
         Sale of securities available for sale                           15,401,821          5,560,000
         Calls, maturities and principal repayments of securities
           available for sale                                             1,641,357          1,550,000
         Sale of fixed assets                                                 2,800                 --
     Net change in loans                                                  4,619,483            479,724
                                                                       ------------       ------------
              Net cash from investing activities                         (6,394,287)            12,152
                                                                       ------------       ------------
Cash flows from financing activities
     Net change in:
         Deposits                                                         1,717,878            233,015
         Cash dividend paid                                                 (91,793)          (101,149)
         Purchase of treasury stock                                      (1,045,088)        (1,683,600)
                                                                       ------------       ------------
              Net cash from financing activities                            580,997         (1,551,734)
                                                                       ------------       ------------
Net change in cash and cash equivalents                                  (5,070,640)          (600,749)
Cash and cash equivalents at beginning of the year                       16,320,500         12,197,766
                                                                       ------------       ------------
Cash and cash equivalents at end of the period                         $ 11,249,860       $ 11,597,017
                                                                       ============       ============
Supplemental disclosures:
     Cash paid during the period for:
         Interest                                                      $  1,312,062       $  2,008,161
         Income taxes                                                       347,413            486,500
Non-cash transactions
         Transfer of loans to real estate owned                              43,235                 --
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


--------------------------------------------------------------------------------
        6
<PAGE>

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2003
                                   (Unaudited)
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements include
Lawrence Financial Holdings, Inc. and its wholly-owned subsidiary, Lawrence
Federal Savings Bank (the "Bank") and the Bank's wholly-owned subsidiary,
Lawrence Financial Services Corporation (together, the "Company"). Intercompany
transactions and balances are eliminated in consolidation.

Nature of Operations: The Company provides financial services through its
offices in Lawrence and Scioto Counties, Ohio. Its primary deposit products are
checking, savings, and term certificate accounts, and its primary lending
products are real estate mortgage and installment loans. Substantially all loans
are secured by specific items of collateral including consumer assets and real
estate. Lawrence Financial Services Corporation only holds liquid assets in the
form of cash. The operations from Lawrence Financial Services Corporation are
not considered to be significant. Management considers the Company to operate in
one segment, banking.

Earnings Per Common Share: Basic earnings per common share is net income divided
by the weighted average number of common shares outstanding during the period.
Diluted earnings per common share includes the dilutive effect of additional
potential common shares issuable. ESOP shares are considered to be outstanding
for this calculation unless they are unearned. The weighted average number of
common shares outstanding for basic and diluted earnings per share computations
were as follows:

<TABLE>
<CAPTION>
                                                     Six Month Period          Three Month Period
                                                       Ended June 30,            Ended June 30
                                                   --------------------      --------------------
                                                    2003         2002         2003         2002
                                                   -------      -------      -------      -------
<S>                                                <C>          <C>          <C>          <C>
Weighted average shares outstanding                617,446      683,557      601,941      653,005
Effect of stock options                             13,202        6,903        9,744        7,876
Effect of non-vested stock awards                    2,136       17,457        1,668       16,874
                                                   -------      -------      -------      -------
Net Effect of stock options and non-vested
   stock awards                                     15,338       24,360       11,413       24,750
Weighted average shares outstanding - Diluted      632,784      707,917      613,354      677,755
                                                   =======      =======      =======      =======
</TABLE>

Stock-Based Compensation: Employee compensation under the stock option plan is
reported if options are granted below market price at grant date. Pro forma
disclosures of compensation cost of stock-based awards have been determined
using the fair value method that considers the time value of the option
considering the volatility of the Company's stock, expected dividend yield, and
the risk-free interest rate over the expected life of the option using a
Black-Scholes valuation model.

The options granted on December 31, 2001 have an exercise price of $14.45 and
expire in December 2011. One-fifth of the options vested on the date of grant;
the remaining options vest over four years. The fair value of options granted in
2001 was estimated using the following assumptions: Risk-free interest rate of
4.49%, expected life of 5 years, expected volatility of stock price of 27% and
expected dividend yield of 1.94%. Based on these assumptions, the estimated fair
value of options granted in 2001 was $3.77 per option.

The following pro forma information presents net income and earnings per common
share had the fair value of the options been used to measure compensation cost
for the stock option plan.


--------------------------------------------------------------------------------
        7
<PAGE>

<TABLE>
<CAPTION>
                                                     Six Months Ended               Three Months Ended
                                                         June 30,                        June 30,
                                                 ------------------------        ------------------------
                                                   2003            2002            2003            2002
                                                 --------        --------        --------        --------
<S>                                              <C>             <C>             <C>             <C>
Reported net income                              $251,338        $392,090        $124,509        $199,735
Pro forma impact                                  (19,450)        (19,450)         (9,725)         (9,725)
                                                 --------        --------        --------        --------
Pro forma net income                             $231,888        $372,640        $114,784        $190,010
                                                 ========        ========        ========        ========

Reported basic earnings per common share         $   0.41        $   0.57        $   0.21        $   0.31
Pro forma impact                                    (0.03)          (0.02)          (0.02)          (0.02)
                                                 --------        --------        --------        --------
Pro forma basic earnings per common share        $   0.38        $   0.55        $   0.19        $   0.29
                                                 ========        ========        ========        ========

Reported diluted earnings per common share       $   0.39        $   0.55        $   0.20        $   0.29
Pro forma impact                                    (0.03)          (0.02)          (0.01)          (0.01)
                                                 --------        --------        --------        --------
Pro forma diluted earnings per common share      $   0.36        $   0.53        $   0.19        $   0.28
                                                 ========        ========        ========        ========
</TABLE>

Management's Opinion: In the opinion of management, the accounting and reporting
policies followed by Lawrence Financial Holdings, Inc. conform to accounting
principles generally accepted in the United States of America (US GAAP). The
preparation of finacial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclousrure of contingent assets and liabiltities at
the date of the financial statements. Actual results could differ from those
estimates. The allowance for loan losses is particularly subject to change.

These interim financial statements are prepared without audit and reflect all
adjustments of a normal recurring nature which, in the opinion of management,
are necessary to present fairly the consolidated financial position of Lawrence
Financial Holdings, Inc. at June 30, 2003, and its results of operations and
cash flows for the periods presented. Certain amounts in prior financial
statements have been reclassified to conform to the current presentation. The
accompanying consolidated financial statements do not contain all financial
disclosures required by US GAAP. Lawrence Financial Holdings, Inc.'s Annual
Report for the year ended December 31, 2002, contains consolidated financial
statements and related notes which should be read in conjunction with the
accompanying consolidated financial statements.

NOTE 2 - REGULATORY CAPITAL REQUIREMENTS

      The Bank is subject to various regulatory capital requirements
administered by federal regulatory agencies. Failure to meet minimum capital
requirements can initiate certain mandatory actions that, if undertaken, could
have a direct material effect on the Bank's financial statements. Under capital
adequacy guidelines and regulatory framework for prompt-corrective action, the
Bank must meet specific capital guidelines involving quantitative measures of
the Bank's assets, liabilities and certain off-balance-sheet items as calculated
under regulatory accounting practices. The Bank's capital amounts and
classifications are also subject to qualitative judgments by regulators about
the Bank's components, risk weightings and other factors. At June 30, 2003 and
December 31, 2002, management believes the Bank complied with all regulatory
capital requirements. At June 30, 2003, Lawrence Federal exceeded all of its
regulatory capital requirements. Lawrence Federal is considered "well
capitalized" under regulatory guidelines. Management is unaware of any events or
circumstances that would change the Bank's classification since this time.


--------------------------------------------------------------------------------
        8
<PAGE>

      The Bank's actual capital levels and minimum required levels were as
follows:

<TABLE>
<CAPTION>
                                                                                        Minimum
                                                                                     Required to be
                                                           Minimum Required       Well Capitalized Under
                                                             for Capital            Prompt Corrective
                                       Actual              Adequacy Purposes        Action Regulations
                                 -------------------      -------------------     ---------------------
   (dollars in thousands)         Amount      Ratio       Amount        Ratio      Amount        Ratio
                                 -------      -----       -------       -----      ------        -----
<S>                              <C>          <C>         <C>            <C>       <C>           <C>
June 30,2003:
Total capital (to risk-
  weighted assets)               $13,509      15.36%      $ 7,036        8.0%      $ 8,795       10.0%
Tier 1 (core) capital (to
  risk-weighted assets)          $12,684      14.42%      $ 3,518        4.0%      $ 5,278        6.0%
Tier 1 (core) capital (to
  adjusted total assets)         $12,684       9.35%      $ 5,426        4.0%      $ 6,783        5.0%

December 31,2002:
Total capital (to risk-
  weighted assets)               $13,806      15.19%      $ 7,271        8.0%      $ 9,089       10.0%
Tier 1 (core) capital (to
  risk-weighted assets)          $12,976      14.28%      $ 3,635        4.0%      $ 5,452        6.0%
Tier 1 (core) capital (to
  adjusted total assets)         $12,976       9.67%      $ 5,368        4.0%      $ 6,709        5.0%
</TABLE>

      Regulations of the Office of Thrift Supervision (OTS) limit the amount of
capital distributions that may be made by the Bank without prior approval of the
OTS. The regulatory restriction provides that the Bank may make a capital
distribution without notifying the OTS or applying to the OTS for approval
provided that (1) the total amount of all capital at the institution (including
the proposed capital distribution) for the applicable calendar year does not
exceed the institution's net income for that year to date plus the institution's
retained net income for the preceding two years; (2) the institution will be
well capitalized following the proposed capital distributions; and, (3) certain
other conditions are met.

      In addition to the restriction described above, the Bank may not make any
capital distributions if the effect thereof would reduce the Bank's capital
level below the aggregate balance required for the liquidation account
established in connection with the Bank's mutual-to-stock conversion.


--------------------------------------------------------------------------------
        9
<PAGE>

NOTE 3 - ALLOWANCE FOR LOAN LOSSES AND NON-PERFORMING LOANS

Activity in the allowance for loan losses is as follows:

                                                     Six Months Ended June 30,
                                                    ---------------------------
                                                      2003                2002
                                                    -------             -------
              (Dollars in Thousands)
Beginning Balance                                   $ 1,111             $ 1,232
Provision for Loan Losses                               495                 330
Charge Offs                                            (505)               (519)
Recoveries                                               23                  15
                                                    -------             -------
Ending Balance                                      $ 1,124             $ 1,058
                                                    =======             =======

The following table shows the components of non-performing assets at:

                                                      June 30,      December 31,
                                                        2003           2002
                                                      --------      ------------
              (Dollars in Thousands)
Non-Accrual Loans                                      $  751         $  531
Loans 90 days or more past due
  and still accruing interest                             539          1,411
                                                       ------         ------
  Total Non-Performing Loans                            1,290          1,942
Other Real Estate Owned                                    75            151
                                                       ------         ------
Total Non-Performing Assets                            $1,365         $2,093
                                                       ======         ======
Non-performing loans to total loans                      1.40%          1.99%
Non-Performing assets to total loans plus                1.48%          2.14%
   other real estate owned
Allowance for credit losses to total                    87.10%         57.20%
   non-performing loans
Loans 90 days or more past due and                        .58%          1.45%
   not on non-accrual to total loans


--------------------------------------------------------------------------------
        10
<PAGE>

ITEM 2

          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
                             Selected Financial Data

<TABLE>
<CAPTION>
                                                   Three Months Ended            Six Months Ended
                                                       June 30,                      June 30,
                                                -----------------------       -----------------------
                                                  2003           2002           2003           2002
                                                --------       --------       --------       --------
<S>                                            <C>             <C>           <C>             <C>
Significant Ratios:
Net income to
   Average total assets                            0.37%          0.60%          0.37%          0.59%
   Average stockholders' equity                    3.58           5.49           3.55           5.22
Net Interest Margin                                4.05           4.16           4.08           4.05
Average net loans to average deposits             78.70          90.05          79.40          90.33
Average stockholders' equity to
   average total assets                           10.33          10.99          10.51          11.37
Capital ratios
   Tier I capital                                  9.35           9.94           9.35           9.94
   Risk-based capital                             15.36          15.03          15.36          15.03
-----------------------------------------------------------------------------------------------------
Per Share Data:
Earnings per weighted average share
   Basic                                       $   0.21           0.31       $   0.41           0.57
   Diluted                                         0.20           0.29           0.40           0.55
Weighted average shares outstanding
   Basic                                        601,941        653,005        617,446        683,557
   Diluted                                      613,354        677,755        632,784        707,917
Total shares outstanding at end of period       650,110        705,110        650,110        705,110
Cash dividends per share                       $   0.07           0.07       $   0.14           0.14
Book value per share at end of period          $  21.36          20.59       $  21.36          20.59
Market price at end of period
     Source: NASDAQ.com                        $  27.50          16.15       $  22.50          16.15
</TABLE>

Introduction

      This report contains certain "forward-looking statements" within the
meaning of the federal securities laws. These statements are not historical
facts, rather they are statements based on Lawrence Financial Holdings, Inc.'s
("Lawrence Financial") current expectations regarding its business strategies,
intended results and future performance. Forward-looking statements are preceded
by terms such as "expects," "believes," "anticipates," "intends" and similar
expressions.

      Management's ability to predict results or the effect of future plans or
strategies is inherently uncertain. Factors which could affect actual results
include interest rate trends, the general economic climate in the market area in
which Lawrence Financial operates, as well as nationwide, Lawrence Financial's
ability to control costs and expenses, competitive products and pricing, loan
delinquency rates and changes in federal and state legislation and regulation.
These factors should be considered in evaluating the forward-looking statements
and undue reliance should not be placed on such statements. Lawrence Financial
assumes no obligation to update any forward-looking statements.

Operating Strategy

      Lawrence Financial, through its wholly owned subsidiary Lawrence Federal
Savings Bank (the "Bank" or "Lawrence Federal"), operates as a
community-oriented financial institution focused on meeting the financial
service needs of consumers in its market area. To accomplish this objective,
Lawrence Federal offers a variety of mortgage and consumer loans and retail
deposit products. Lawrence Federal extends its lending activities outside of its
market area through programs for originating automobile loans through a network
of dealers. The consumer loans originated through these indirect lending
programs typically have shorter terms and higher yields than mortgage loans. In
addition, the


--------------------------------------------------------------------------------
        11
<PAGE>

origination of shorter term consumer loans will help Lawrence Federal in
managing its interest rate risk. However, these indirect lending programs
represent a higher risk of credit loss than real estate loans, since the
collateral securing these loans may decline in value quickly.

      Lawrence Federal's results of operations depend primarily on net interest
income, which is the difference between the interest income earned on Lawrence
Federal's interest-earning assets, such as loans and securities, and the
interest expense on its interest-bearing liabilities, such as deposits and
borrowings. Lawrence Federal also generates noninterest income primarily from
loan fees and service charges. Lawrence Federal's noninterest expenses primarily
consist of employee compensation and benefits, occupancy expense, data
processing costs, and other operating expenses. Lawrence Federal's results of
operations are also affected by general economic and competitive conditions,
notably changes in market interest rates, government policies and regulations.

      The Bank continued to experience credit quality issues in portions of the
loan portfolio, and expensed $300,000 of provision in the first quarter of 2003,
and $195,000 was expensed in the second quarter of 2003, compared to $150,000 in
the first quarter of 2002, and $180,000 in the second quarter of 2002.

      During the six month period ended June 30, 2003, the Company had net
charge-offs of approximately $482,000, of which $272,000 occurred in the second
quarter. At June 30, 2003, the Company had a ratio of ALLL to gross loans of
1.22% compared to 1.24% at the end of the prior quarter, and 1.01% for the six
months ended June 30, 2002 and 1.19% for the quarter ended March 31, 2002.

General

      Lawrence Federal's results of operations depend primarily on net interest
income, which is the difference between the interest income earned on Lawrence
Federal's interest-earning assets, such as loans and securities, and the
interest expense on its interest-bearing liabilities, such as deposits and
borrowings. Lawrence Federal also generates noninterest income primarily from
loan fees and deposit service charges. Lawrence Federal's noninterest expenses
primarily consist of employee compensation and benefits, occupancy expense, data
processing costs, and other operating expenses. Lawrence Federal's results of
operations are also affected by general economic and competitive conditions,
notably changes in market interest rates, government policies and regulations.

Comparison of Financial Condition at June 30, 2003 and December 31, 2002

      During the first six months of 2003, total assets increased $924,000, or
0.7%, to $135.3 million at June 30, 2003 when compared to December 31, 2002. At
June 30, 2003, net loans receivable had decreased $5.2 million, or 5.3%, when
compared to December 31, 2002. Direct and indirect consumer loans decreased $3.4
million, or 8%, real estate loans decreased by $4.4 million, or 9%, indirect
mobile home loans decreased $1.5 million, or 9%, and commercial loans increased
by $2.2 million, or 42%. The allowance for loan losses at June 30, 2003 was $1.1
million. The growth in the commercial loan portfolio was due primarily to the
origination of commercial loan participations with other, local commercial
banks. In general, the decline in the direct consumer loan portfolios reflects a
combination of reduced loan demand and very aggressive competition from other
in-market and out-of-market lenders. The Bank has maintained competitve and
consistent pricing and underwriting criteria during this period of heightened
competition. The decline in indirect loan balances is the result of an ongoing
strategic objective to gradually reduce the outstanding amounts in both the
indirect mobile home and indirect consumer loan portfolios. Lawrence Federal's
long term investments, held in the form of securities, increased by $10.8
million, or 76%, when comparing June 30, 2003 balances to December 31, 2002. The
reason for the growth in long term investments was due to the fact the bank had
excess liquidity in the form of cash in the form of overnight deposits, which
were earning only minimal interest. During the first six months of 2002,
Lawrence Financial's available cash and cash equivalents decreased to $11.3
million, a decrease of $5.1 million, or 31%. This decrease was primarily due to
the purchase of long term investments.


--------------------------------------------------------------------------------
        12
<PAGE>

      Compared to December 31, 2002, total deposits increased $1.7 million, or
1%, to $120.6 million at June 30, 2003.

      Equity decreased $0.9 million, or 6%, to $13.9 million at June 30, 2003
when compared to December 31, 2002. During the period ended June 30, 2003,
treasury stock purchased totaled $1,045,088, retained earnings increased
$251,000 as a result of net income for the period, the net unrealized
appreciation on securities available-for-sale decreased from an unrealized gain
of $148,000 to an unrealized gain of $69,000 and $92,000 of cash dividends were
paid to shareholders.

Comparison of Operating Results for the Three Month and Six Month Periods Ending
June 30, 2003 and 2002

      General. For the three months ended June 30, Lawrence Financial's net
income decreased 38% to $125,000 for 2003 from $200,000 for 2002. For the six
month period ended June 30, Lawrence Financial's net income decreased 36% to
$251,000 for 2003 from $392,000 for 2002. Return on average assets was 0.37% and
0.37% for the second quarter and first six months of 2003, respectively,
compared to 0.60% and 0.59% for the same two periods in 2002. Return on average
equity was 3.58% and 3.55% for the second quarter and first six months of 2003,
respectively, compared to 5.49% and 5.22% for the same two periods in 2002. Net
interest income decreased $22,000, or 2%, during the second quarter and
increased $49,000, or 2%, for the six month period ending June 30. Noninterest
income increased $29,000, or 17%, during the second quarter and $164,000, or
48%, for the six month period ending June 30. Offseting the increase in net
interest was a $15,000 or 8% increase in the provision for loan losses for the
quarter ended June 30, and a $165,000 or 50% increase in the provision for loan
losses for the six months ended June 30. Offsetting the increase in net interest
and noninterest income was a $102,000, or 10%, increase in noninterest expense
for the quarter ended June 30 and a $268,000, or 14%, increase in noninterest
expense for the six months ended June 30. There are several causes for the
increase in non-interest expense. The Company has expensed $610,000 year to date
for salaries and wages compared to $524,000 during the same period in 2002. The
Company has also experienced: increased costs of employee benefits; increased
data processing fees; increased costs related to the collection of delinquent
mobile home loans; and other non-interest expenses which are related to the
growth of the Company's customer base.

         Interest Income. Interest income decreased $348,000, or 16%, for the
quarter compared to the same quarter in 2002 and decreased $645,000, or 14%, for
the first six months of 2003 compared to the first six months of 2002. Interest
income on loans decreased $371,000, or 18%, and decreased $708,000, or 17%, for
the quarter and six months ended June 30 respectively. These decreases were
primarily a result of a decline in the balance of the loan portfolio and as a
result of a decrease in the yield on the portfolio. Interest income on long-term
investments increased $36,000, or 22%, for the quarter and increased $85,000, or
26%, for the six months ended June 30 primarily as a result of a larger average
balance being carried by the Company during 2003. The average yield on
interest-earning assets declined to 6.06% for the quarter and 6.16% for the six
months ended June 30, 2003, from 7.26% and 7.32% for the same two periods in
2002, as lower yielding long term investments became a higher percentage of
interest earning assets.


--------------------------------------------------------------------------------
        13
<PAGE>

      Interest Expense. Interest expense decreased $327,000, or 34%, for the
quarter compared to the same quarter in 2002 and decreased $694,000, or 35%, for
the first six months of 2003 compared to the first six months in 2002. The
decrease in interest expense for the quarter and six months ending June 30,
2003, was a direct result of a decline in the rates paid on deposits. In the
second quarter and first six months of 2003, there was no interest paid on
Federal Home Loan Bank advances, compared to $29,000 and $59,000 for the same
periods in 2002. The average cost of interest-bearing liabilities was 2.11% for
the quarter and 2.20% in the first six months of 2003 compared to 3.28% and
3.46% for the same periods in 2002, primarily as a result of lower market rates
on certificates of deposits and a change in the mix of deposits with a higher
percentage of deposit dollars being made up from lower cost funding sources.

      Provision for Loan Losses. Activity in the allowance for loan losses (the
"Allowance") consists of increases due to monthly provisions for loan losses and
decreases for monthly charge offs, net of recoveries. Management analyzes the
adequacy of the allowance balance quarterly by determining its estimate of
probable losses in the loan portfolio and comparing that estimate to the
allowance's balance. Management calculates its estimate of probable losses
primarily by applying expected loss percentages to classified loans and
homogeneous loan categories. The impact of these events are described in more
detail below as part of the discussion comparing the second quarter of 2003, to
the fourth quarter 2002 and to the second quarter 2002 provisions for loan
losses.

      The provision for loan losses was $195,000 for the second quarter of 2003
which represents an increase of $15,000, or 8%, over the $180,000 of provision
recorded for the same period in 2002. The provision for loan losses was $495,000
for the six months ended June 30, 2003 compared to $330,000 for the same period
in 2002. Through the six month periods ended June 30, provision increased
$165,000, or 50% when comparing 2003 to 2002. The increase in provision was
driven, in part, by a shift in the loan portfolio's mix toward more consumer
loan balances which, historically, contain more risk of loss to the Bank than
loans secured by mortgages.

      Non-performing assets totaled $1.37 million at June 30, 2003, or 1.01% of
assets. Of the $1.37 million in non-performing assets, $539,000 were loans which
are 90 days or more past due and still accruing interest and $751,000 were loans
in a non-accrual status. Non-performing indirect mobile home loans made up
$360,000 of the loans that were 90 days or more past due and still accruing
interest and $311,000 of the loans that are carried in a non-accrual status. At
December 31, 2002, non-performing assets totaled $2.09 million or 1.56% of
assets. Of the $2.09 million $1.41 million were loans which are 90 days or more
past due and still accruing interest and $531,000 were loans in a non-accrual
status. At December 31, 2002, non-performing indirect mobile home loans made up
$975,000 of the loans that were 90 days or more past due and still accruing
interest and $180,000 of the loans that are carried in a non-accrual status. To
facilitate long-term improvement to the quality of the Bank's loan portfolios,
the Bank's loan review and collection processes have been enhanced in 2002 by
the addition of experienced employees. In addition to these improvements the
Bank hired an experienced Certified Public Accountant to implement a full time
internal audit function within the Company during the second quarter of 2002.
Management believes that these changes have served to improve the quality of the
information used to analyze the credit risk contained on the balance sheet and
the adequacy of the Bank's allowance for loan losses.

      Allowance for loan losses totaled $1.1 million at June 30, 2003, as well
as at June 30, 2002. At June 30, 2003, Lawrence Federal's allowance for loan
losses represented 1.22% of total gross loans and 87.00% of nonperforming loans.
Although management believes that it uses the best information available to
establish the allowance for loan losses, future adjustments to the allowance for
loan losses may be necessary and results of operations could be adversely
affected. Furthermore, while Lawrence Federal believes it has established its
existing allowance for loan losses in conformity with generally accepted
accounting principles, there can be no assurance that regulators, in reviewing
Lawrence Federal's loan portfolio, will not request Lawrence Federal to increase
its future provisions for loan losses. In addition, because future events
affecting borrowers and collateral cannot be predicted with certainty, there can
be no assurance that the existing allowance for loan losses is adequate or that
increases will not be necessary should the quality of any loans deteriorate as a
result of the factors discussed above. Any material increase in the allowance
for loan losses may adversely affect Lawrence Federal's financial condition and
results of operations.

      Management continues to monitor closely the risk characteristics of the
loan portfolio, local economic conditions and, as stated earlier, will consider
these factors when evaluating the appropriate amount of provision and allowance
for loan losses. Management believes the company to be adequately reserved at
June 30, 2003.


--------------------------------------------------------------------------------
        14
<PAGE>

Noninterest Income. The following table shows the components of noninterest
income and the dollar and percentage change from the three months ended June 30,
2003 to the same period in 2002 and the six months ending June 30, 2003 to the
same period in 2002.

                                       Quarters Ended
                                     -------------------    Dollar    Percentage
                                     06/30/03   06/30/02    Change      Change
                                     --------   --------    ------      ------
       (Dollars in Thousands)
Net securities gains (losses)          $ 31       $ 13       $ 18        N/M
Service charges                         120       $109         11         10%
Other                                    51         51         --         --
                                       ----       ----       ----
      Total                            $202       $173       $ 29         17%
                                       ====       ====       ====

      Net securities gains recognized for the quarter ended June 30, 2003 were
not duplicated in the same period of 2002. Service charges increased during the
period as a result of growth in the number of deposit accounts.

                                    Six Months Ended
                                   -------------------    Dollar     Percentage
                                   06/30/03   06/30/02    Change       Change
                                   --------   --------    ------       ------
       (Dollars in Thousands)
Net securities gains (losses)       $ 185      $   8      $ 177         N/M
Service charges                       226      $ 217          9           4%
Other                                  91        114        (23)        (20)%
                                    -----      -----      -----
      Total                         $ 502      $ 339      $ 163          48%
                                    =====      =====      =====

      Net securities gains recognized in the first six months of 2003 were not
duplicated in the same period of 2002. Securities were sold in the first quarter
of 2003 to reduce the Bank's exposure to unrealized losses in an upward rate
environment. During the first quarter of 2003, management determined that there
were investments being held that should be sold due to market conditions. The
gains recognized are not expected to be repeated during the remainder of 2003.
The decrease in "Other" was primarily due to the loss of $18,000 recorded from
the sale of real estate owned, in addition to fluctuations in various items
including a decrease in income earned on the cash surrender value of bank owned
life insurance. Service charges increased during the period as a result of
growth in the number of deposit accounts.


--------------------------------------------------------------------------------
        15
<PAGE>

Non-Interest Expense. The following tables show the components of noninterest
expense and the dollar and percentage change from the three months ended June
30, 2003 to the same period in 2002 and the six months ending June 30, 2003 to
the same period in 2002.

                                  Quarters Ended
                                --------------------     Dollar       Percentage
                                06/30/03    06/30/02     Change         Change
                                --------    --------     ------         ------
       (Dollars in Thousands)
Salaries and benefits            $  495      $  431      $   64           15%
Deposit insurance premiums           15          29         (14)         (48)%
Occupancy and equipment              90          83           7            8%
Data processing                     161         132          29           22%
Franchise tax                        35          32           3            9%
Advertising expense                  19          24          (5)         (21)%
Professional fees                    77          69           8           12%
Other                               211         201          10            5%
                                 ------      ------      ------
      Total                      $1,103      $1,001      $  102           10%
                                 ======      ======      ======

         Non-interest expense increased $102,000, or 10%, for quarter ended June
30, 2003, as compared to the same period in 2002. The increase in salaries and
benefits for the quarter ended June 30, 2003 compared to the same period in 2002
reflects the addition of employees as discussed below. The Company has also
experienced increases in: data processing as described in greater detail below;
printing and supplies; and other non-interest expenses which are related to the
growth of the Company's customer base and the daily operation of the Company.

                                    Six Months Ended
                                  --------------------     Dollar    Percentage
                                  06/30/03    06/30/02     Change      Change
                                  --------    --------     ------      ------
       (Dollars in Thousands)
Salaries and benefits              $  984      $  867      $  117        13%
Deposit insurance premiums             30          58         (28)      (48)%
Occupancy and equipment               182         167          15         9%
Data processing                       357         266          91        34%
Franchise tax                          68          65           3         5%
Advertising expense                    50          55          (5)       (9)%
Professional Fees                     166         140          26        19%
Other                                 393         344          49        14%
                                   ------      ------      ------
      Total                        $2,230      $1,962      $  268        14%
                                   ======      ======      ======

      Non-interest expense increased $268,000, or 14%, for the six months ended
June 30, 2003, as compared to the same period in 2002. The increase in salaries
and benefits for the six months ended June 30, 2003 compared to the same period
in 2002 reflects the addition of employees in the loan collection, loan review,
internal audit and operations departments within the Company's banking
subsidiary. The increase in data processing is the result of an increase of
$10,000 in regular data processing fees and a $75,000 expense related to the
conversion process (discussed in the following paragraph). The Company has also
experienced increases in: data processing; printing and supplies; and other
non-interest expenses which are related to the growth of the Company's customer
base and the daily operation of the Company.


--------------------------------------------------------------------------------
        16
<PAGE>

      In July of 2003, the Company replaced its existing data processing system.
This conversion to a new processing system will better position the Bank to
offer additional products, manage existing products, enhance customer service
value, and as an ultimate result, enhance shareholder value. While the final
costs for the deconversion process are unknown until the conversion process is
completed, the final savings for the post conversion process from the current
processor will more than offset these costs within the first full year of
processing under the new data processing service provider. Management is
actively monitoring the post conversion activities and working with outside
parties to provide for a successful conversion.

      Income Tax Expense. The provision for income tax was $42,700 for the three
months ended June 30, 2003, compared to $76,900 in the same period for 2002 and
$86,500 for the six months ended June 30, 2003, compared to $166,100 in the same
period for 2001. The provision decreased as a result of lower taxable income.
The effective tax rate for the quarter ended June 30, 2003 was 25.5% compared
with 27.8% for the same period in 2002 and for the six months ended June 30,
2003 was 25.6% compared with 29.8% for the same period in 2002.

Average Balances, Interest and Average Yields/Cost

      The following table presents certain information regarding average
balances of assets and liabilities, as well as the total dollar amounts of
interest income from average interest-earning assets and interest expense on
average interest-bearing liabilities and the resulting average yields and costs.
The yields and costs for the periods indicated are derived by dividing income or
expense by the average balances of assets or liabilities, respectively, for the
periods presented. Average balances were derived from daily balances.

<TABLE>
<CAPTION>
                                                                       Six months ended June 30,
                                                -------------------------------------------------------------------------
                                                                2003                                  2002
                                                ----------------------------------      ---------------------------------
                                                                           Average                                Average
                                                 Average                    Yield/      Average                    Yield/
                                                 Balance       Interest      Rate       Balance       Interest      Rate
                                                 -------       --------      ----       -------       --------      ----
              (Dollars in Thousands)
<S>                                              <C>           <C>           <C>        <C>           <C>           <C>
Interest-earning assets:
   Loans (1)                                     $ 95,030      $  3,418      7.22%      $103,565      $  4,126      8.00%
   Securities (2)                                  22,514           411      3.95%        11,953           327      5.52%
   Short term investments                           9,154            39      0.09%         8,337            61      1.48%
                                                 --------      --------      ----       --------      --------
         Total interest-earning assets            126,698         3,868      6.16%       123,855         4,514      7.35%
Non-interest-earning assets                         9,163                                  9,316
                                                 --------                               --------
         Total assets                            $135,861                               $133,171
                                                 ========                               ========
Interest-bearing liabilities:
   Deposits:
      Passbook accounts                          $ 33,305           155      0.94%      $ 26,340           294      2.25%
      Money market accounts                           980             6      1.14%           981            14      2.87%
      NOW accounts                                 16,074            52      0.65%        15,236           103      1.33%
      Certificates of deposit                      69,321         1,095      3.19%        72,100         1,533      4.28%
                                                 --------      --------      ----       --------      --------
         Total deposits                           119,680         1,308      2.20%       114,657         1,944      3.42%
   FHLB advances                                       --            --        --          2,000            59      5.91%
                                                 --------      --------      ----       --------      --------
         Total interest-bearing liabilities       119,680         1,308      2.20%       116,657         2,003      3.46%
Non-interest-bearing liabilities                    1,092                                  1,375
                                                 --------                               --------
         Total liabilities                        120,772                                118,032
Total retained earnings                            15,089                                 15,139
                                                 --------                               --------
         Total liabilities and
           retained earnings                     $135,861                               $133,171
                                                 ========                               ========
   Net interest-earning assets                   $  7,018                               $  7,198
                                                 ========                               ========
   Net interest income/interest
     rate spread (3)                                           $  2,560      3.91%                    $  2,511      3.86%
                                                               ========      ====                     ========      ====
   Net interest margin (4)                                         4.08%                                  4.05%
   Ratio of interest-earning assets to
     interest-bearing liabilities                  105.86%                                106.17%
</TABLE>

----------
(1)   Balances are net of deferred loan origination costs, allowance for loan
      losses, undisbursed proceeds of construction loans in process, and include
      non-accrual loans.
(2)   Includes investment securities available-for-sale, stock in the Federal
      Home Loan Bank of Cincinnati and mutual funds.
(3)   Net interest rate spread represents the difference between the weighted
      average yield on interest-earning assets and the weighted average cost of
      interest-bearing liabilities.
(4)   Net interest margin represents net interest income as a percentage of
      average interest-earning assets.


--------------------------------------------------------------------------------
        17
<PAGE>

Management of Interest Rate Risk and Market Risk Analysis

      Qualitative Aspects of Market Risk. Lawrence Federal's most significant
form of market risk is interest rate risk. The principal objectives of Lawrence
Federal's interest rate risk management are to evaluate the interest rate risk
inherent in certain balance sheet accounts, determine the level of risk
appropriate given Lawrence Federal's business strategy, operating environment,
capital, liquidity requirements and performance objectives, and manage the risk
consistent with the Board of Director's approved guidelines. Lawrence Federal
has an Asset/Liability Committee (ALCO), responsible for reviewing its
asset/liability policies and interest rate risk position, which meets monthly
and reports trends and interest rate risk position to the Board of Directors
quarterly. The ALCO is actively involved in reviewing the mix, volume and
pricing strategies associated with managing the Bank's balance sheet and
interest rate risk. During the first six months of 2003 management has utilized
several internal reports to better analyze the current financial position of the
Bank, and the Company, and to identify historic trends in both entities.
However, management is aware that the movement of interest rates is an
uncertainty which could have a negative impact on the earnings of Lawrence
Federal.

      At this time, Lawrence Federal is liability sensitive which makes the Bank
subject to increased interest expense during periods of rising interest rates.
Lawrence Federal has placed an emphasis on adjustable-rate loans and the
origination of fixed-rate mortgage loans through a third party which, over the
long-term, will serve to make the balance sheet less liability sensitive.
Lawrence Federal currently does not participate in hedging programs, interest
rate swaps or other activities involving the use of derivative financial
instruments.

      Quantitative Aspects of Market Risk. When evaluating interest rate risk
Lawrence Federal utilizes an interest sensitivity analysis prepared by the
Office of Thrift Supervision (the "OTS"), which is supplemented by an internally
generated, monthly "Rate-Volume-Variance Report". The following table, which is
based on information provided to Lawrence Federal by the Office of Thrift
Supervision, presents the change in Lawrence Federal's net portfolio value at
March 31, 2003, that would occur upon an immediate change in interest rates
based on OTS assumptions, but without giving effect to any steps that management
might take to counteract that change.

                                                           NPV as % of Portfolio
   Change in                Net Portfolio Value               Value of Assets
Interest Rates      -----------------------------------    ---------------------
In Basis Points     (Dollars in thousands)                   NPV
 (Rate Shock)       $ Amount     $ Change      % Change     Ratio      Change(1)
 ------------       --------     --------      --------     -----      ---------
     300             13,625      (2,352)         (15)%      10.02%      (132)
     200             14,691      (1,286)          (8)%      10.65%       (69)
     100             15,496        (481)          (3)%      11.10%       (24)
    Static           15,977          --           --        11.34%        --
    (100)            16,101         124            1%       11.35%         1
----------
(1)   Expressed in basis points.

      The preceding table shows that in the event of a sudden and sustained
increase in market interest rates of 200 basis points or more, the net portfolio
value of Lawrence Federal would decrease moderately.

      The OTS uses certain assumptions in assessing the interest rate risk of
savings associations. These assumptions relate to interest rates, loan
prepayment rates, deposit decay rates, and the market values of certain assets
under differing interest rate scenarios, among others.


--------------------------------------------------------------------------------
        18
<PAGE>

      As with any method of measuring interest rate risk, certain shortcomings
are inherent in the method of analysis presented in the foregoing table. For
example, although certain assets and liabilities may have similar maturities or
periods to repricing, they may react in different degrees to changes in market
interest rates. Also, the interest rates on certain types of assets and
liabilities may fluctuate in advance of changes in market interest rates, while
interest rates on other types may lag behind changes in market rates.
Additionally, certain assets, such as adjustable rate mortgage loans, have
features which restrict changes in interest rates on a short-term basis and over
the life of the asset. Further, if interest rates change, expected rates of
prepayments on loans and early withdrawals from certificates of deposit could
deviate significantly from those assumed in calculating the table.

Liquidity and Capital Resources

      Liquidity is the ability to meet current and future financial obligations
of a short-term nature. Lawrence Federal further defines liquidity as the
ability to respond to the needs of depositors and borrowers as well as
maintaining the flexibility to take advantage of investment opportunities.
Lawrence Federal's primary sources of funds consist of deposit inflows, loan
repayments, maturities and sales of investment securities and borrowings from
the Federal Home Loan Bank. While maturities and scheduled amortization of loans
and securities are predictable sources of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates, economic
conditions and competition.

      Lawrence Federal's most liquid assets are cash and short-term investments
(securities maturing in one year or less). The levels of these assets are
dependent on Lawrence Federal's operating, financing, lending and investing
activities during any given period. At June 30, 2003, cash and short-term
investments totaled $11.3 million. Securities classified as available-for-sale
totaled $25.0 million at June 30, 2003.

      Funding is obtained primarily from activity involving deposit accounts and
Federal Home Loan Bank advances. In the first six months of 2003 Lawrence
Federal experienced a net increase in total deposits of $1.7 million since
December 31, 2002 compared to an increase of $0.2 million for the same period in
2002. In addition, at June 30, 2003, Lawrence Federal had the ability to borrow
a total of approximately $15 million from the Federal Home Loan Bank of
Cincinnati through the use of an existing cash management advance agreement. On
that date, Lawrence Federal had no long term advances outstanding. On the same
date in 2002, Federal Home Loan Bank advances were at $2 million. Deposit flows
are affected by the overall level of interest rates, the interest rates and
products offered by Lawrence Federal and its local competitors and other
factors. Lawrence Federal generally manages the pricing of its deposits to be
competitive and to increase core deposit relationships. Occasionally, Lawrence
Federal offers promotional rates on certain deposit products in order to attract
deposits.

      Lawrence Federal is subject to various regulatory capital requirements
administered by the OTS including a risk-based capital measure. The risk-based
capital guidelines include both a definition of capital and a framework for
calculating risk-weighted assets by assigning balance sheet assets and
off-balance sheet items to broad risk categories. At June 30, 2003, Lawrence
Federal exceeded all of its regulatory capital requirements. Lawrence Federal is
considered "well capitalized" under regulatory guidelines. See the table on page
nine (9) of this filing for more detail regarding the Bank's capital position.

Effect of Inflation and Changing Prices

      The consolidated financial statements and related financial data presented
in this Form 10-QSB have been prepared following accounting principles generally
accepted in the United States of America, which require the measurement of
financial position and operating results in terms of historical dollars without
considering the change in the relative purchasing power of money over time due
to inflation. The primary impact of inflation is reflected in the increased cost
of Lawrence Federal's operations. Unlike most industrial companies, virtually
all the assets and liabilities of a financial institution are monetary in
nature. As a result, interest rates generally have a more significant impact on
a financial institution's performance than do general levels of inflation.
Interest rates do not necessarily move in the same direction or to the same
extent as the prices of goods and services.


--------------------------------------------------------------------------------
        19
<PAGE>

ITEM 3

                            Controls and Procedures

(a)   Evaluation of disclosure controls and procedures. The Company maintains
      controls and procedures designed to ensure that information required to be
      disclosed in the reports that the Company files or submits under the
      Securities Exchange Act of 1934 is recorded, processed, summarized and
      reported within the time periods specified in the rules and forms of the
      Securities and Exchange Commission. Based upon their evaluation of those
      controls and procedures performed within 90 days of the filing date of
      this report, the chief executive and chief financial officers of the
      Company concluded that the Company's disclosure controls and procedures
      were effective.

(b)   Changes in internal controls. The Company made no significant changes in
      its internal controls or in other factors that could significantly affect
      these controls subsequent to the date of the evaluation of those controls
      by the Chief Executive and Chief Financial officers.


--------------------------------------------------------------------------------
        20
<PAGE>

                        Lawrence Financial Holdings, Inc.
                                   Form 10-QSB
                           Quarter ended June 30, 2003

PART II - Other Information

Item 1-     Legal Proceedings:

            There are no matters required to be reported under this item.

Item 2-     Changes in Securities:

            There are no matters required to be reported under this item.

Item 3-     Defaults Upon Senior Securities:

            There are no matters required to be reported under this item.

Item 4-     Submission of Matters to a Vote of Security Holders:

            The Annual Meeting of Stockholders of the Company was held on May
            12, 2003. The results of the vote on matters presented at the
            meeting is as follows:

            The following individuals were elected as directors, each for a
            three year term:

                                              Votes For          Votes Withheld
                                              ---------          --------------
            Herbert J. Karlet                  512,806               65,350
            Robert N. Taylor                   512,806               65,350

            The appointment of Crowe, Chizek and Company LLP as auditors for the
            Corporation for the fiscal year ending December 31, 2003 was
            ratified by the stockholders by the following vote:

            For 577,323;  Against 300;  Abstain 533

            Broker non-votes totaled 900

Item 5-     Other Information:

            There are no matters required to be reported under this item.

Item 6-     Exhibits and Reports on Form 8-K:

            (a) Exhibits -

                31.1 - Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
                         Officer
                31.2 - Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
                         Officer
                32.1 - Section 1350 Certification of Chief Executive Officer
                32.2 - Section 1350 Certification of Chief Financial Officer

                (b) Reports on Form 8-K.

                    A report on form 8-K was filed on April 14, 2003. Under Item
                    5, Other Events, Lawrence Financial Holdings, Inc. reported
                    that it issued a press release to announce financial results
                    for the quarter ended March 31, 2003.

                    A report on form 8-K was filed on April 21, 2003. Under Item
                    5, Other Events, Lawrence Financial Holdings, Inc.(the
                    Company) reported that it issued a press release to announce
                    the Company had completed the repurchase of 55,000 shares of
                    the Company's outstanding common stock through a repurchase
                    program.


--------------------------------------------------------------------------------
        21
<PAGE>

                                   Signatures

      In accordance with 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.

                                        Lawrence Financial Holdings, Inc.


Date: August 13, 2003                   /s/ Jack L. Blair
                                        ----------------------------------------
                                        Jack L. Blair
                                        President and Chief Executive Officer


Date: August 13, 2003                   /s/ RobRoy Walters
                                        ----------------------------------------
                                        RobRoy Walters
                                        Executive Vice President
                                        and Chief Financial Officer


--------------------------------------------------------------------------------
        22