**Exhibit
      99.1**








**For
      Release:   October 12, 2007**





**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, 2008
      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, 2007 was $211,000, or
      $0.16 basic and diluted earnings per share.  This compares to
      $289,000, or $0.21 basic and diluted earnings per share for the same period
      ended September 30, 2006.  This represents a decrease in net income of
      $78,000.  The most significant change occurred in the provision for
      loan losses, which increased $133,000 from a negative provision of $48,000
      for
      the three months ended September 30, 2006 to a provision of $85,000 for the
      three months ended September 30, 2007.  The negative provision in the
      prior year quarter 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.  The increase in provision for loan losses in the current year
      quarter is largely due to increases in specific allocations on impaired
      loans.  The Corporation recorded $77,000 in provision for loan losses
      for these loans.  The remainder recorded for provision for loan losses
      in the current year quarter was due to an overall increase in nonperforming
      loans since June 30, 2007.  The increase in provision for loan losses
      was partially offset by a decrease of $40,000 in federal income tax
      expense.  The decrease in income tax expense is directly related to
      the decrease in income before income taxes during the current
      period.  The Corporation realized improvements in noninterest income
      and noninterest expense that combined for an





increase
      of $20,000 to pre-tax income as compared to the same period a year
      ago.  The most significant change was an increase of $10,000 in
      noninterest income related to activity in the secondary market.





At
      its
      regular meeting held October 12, 2007, the Board of Directors declared a regular
      quarterly dividend of $0.16 per share for record holders as of October 31,
      2007
      and payable on November 15, 2007.





In
      addition, the directors declared a special dividend of $0.10 per share to all
      record holders as of October 31, 2007 and payable on November 15,
      2007.





Stewart
      commented, “Although we are currently feeling a squeeze on quarterly income,
      this is the sixth occurrence of our Corporation paying a special dividend in
      addition to our regular quarterly dividend.  We continue to appreciate
      the support of our shareholders and we are happy to share our profits with
      them.”





Assets
      of
      the Corporation at September 30, 2007 totaled $136.3 million with shareholders’
equity of $15.4 million.





Peoples
      Federal operates from its main office and separate drive-through facility 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.