----

----

| x | QUARTERLY                REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT                OF                1934 |
|---|---------------------------------------------------------------------------------------------------------------------------------|

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE                ACT |
|---|-----------------------------------------------------------------------------------------------|

**PEOPLES-SIDNEY      FINANCIAL CORPORATION**

| Delaware                                                                      |                                                              | 31-1499862                                       |
|-------------------------------------------------------------------------------|-------------------------------------------------------------------|--------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) |                                                              | (IRS                Employer Identification No.) |
|                                                                          |                                                              |                                             |
|                                                                          | 101                E. Court Street, Sidney, Ohio  45365 |                                             |
|                                                                          | (Address                of principal executive offices)           |                                             |
|                                                                          |                                                              |                                             |
|                                                                          | (937)                492-6129                                     |                                             |
|                                                                          | (Issuer’s                telephone number)                  |                                             |

----

----

----

EO

|                                          |                                                                                                     | Page  |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------|------------|
|                                          |                                                                                                     |       |   |
|                                          |                                                                                                     |       |   |
| PART                I - FINANCIAL INFORMATION |                                                                                                     |       |
|                                          |                                                                                                     |       |   |
|   Item                1.            | Financial                Statements (Unaudited)                                                          |       |   |
|                                          |                                                                                                     |       |   |
|                                          | Consolidated                Balance Sheets                                                               | 3          |   |
|                                          |                                                                                                     |       |   |
|                                          | Consolidated                Statements of Income                                                         | 4          |   |
|                                          |                                                                                                     |       |   |
|                                          | Consolidated                Statements of Comprehensive                Income                            | 5          |   |
|                                          |                                                                                                     |       |   |
|                                          | Condensed                Consolidated Statements of Changes in                Shareholders’ Equity | 6          |   |
|                                          |                                                                                                     |       |   |
|                                          | Consolidated                Statements of Cash Flows                                                     | 7          |   |
|                                          |                                                                                                     |       |   |
|                                          | Notes                to Consolidated Financial                Statements                                 | 8          |   |
|                                          |                                                                                                     |       |   |
|   Item                2.            | Management’s                Discussion and Analysis                                                | 16         |   |
|                                          |                                                                                                     |       |   |
|   Item                3.            | Controls                and Procedures                                                                   | 22         |   |
|                                          |                                                                                                     |       |   |
| PART                II - OTHER INFORMATION    |                                                                                                     |       |
|                                          |                                                                                                     |       |   |
|   Item                1.            | Legal                Proceedings                                                                         | 23         |   |
|                                          |                                                                                                     |       |   |
|   Item                2.            | Unregistered                Sales of Equity Securities and Use of                Proceeds                | 23         |   |
|                                          |                                                                                                     |       |   |
|   Item                3.            | Defaults                Upon Senior Securities                                                           | 23         |   |
|                                          |                                                                                                     |       |   |
|   Item                4.            | Submission                of Matters to a Vote of Security                Holders                        | 23         |   |
|                                          |                                                                                                     |       |   |
|   Item                5.            | Other                Information                                                                         | 23         |   |
|                                          |                                                                                                     |       |   |
|   Item                6.            | Exhibits                                                                                                 | 23         |   |
|                                          |                                                                                                     |       |   |
| SIGNATURES                                    | 24                                                                                                       |       |
|                                          |                                                                                                     |       |   |
| INDEX                TO EXHIBITS              | 25                                                                                                       |       |

----

***Index***

EO

----

|                                                                                                                            |   | September 30, |        |   | June 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|---------------|--------|
|                                                                                                                            |   | 2007               |        |   | 2007          |   |
|                                                                                                                            |   | (Unaudited)        |        |   |          |   |
| **ASSETS**                                                                                                                      |   |               |        |   |          |   |
| Cash                and due from financial institutions                                                                         |   | $                  | 1,247,004   |   |          | $      | 1,065,054 |   |
| Interest-bearing                deposits in other financial institutions                                                        |   |               | 4,244,107   |   |          |   | 4,117,144 |   |
| Overnight                deposits                                                                                               |   |               | --          |   |          |   | 2,000,000 |   |
| Total                cash and cash equivalents                                                                                  |   |               | 5,491,111   |   |          |   | 7,182,198 |   |
| Securities                available for sale                                                                                    |   |               | 4,930,950   |   |          |   | 4,847,820 |   |
| Federal                Home Loan Bank stock                                                                                     |   |               | 1,820,800   |   |          |   | 1,820,800 |   |
| Loans,                net of allowance of $749,000 and $664,800                                                                 |   |               | 120,939,243 |   |          |   | 121,487,075 |   |
| Accrued                interest receivable                                                                                      |   |               | 948,629     |   |          |   | 795,326 |   |
| Premises                and equipment, net                                                                                      |   |               | 1,829,992   |   |          |   | 1,864,053 |   |
| Other                real estate owned and repossessions                                                                        |   |               | 228,000     |   |          |   | 143,482 |   |
| Other                assets                                                                                                     |   |               | 149,720     |   |          |   | 167,540 |   |
|                                                                                                                            |   |               |        |   |          |   |   |   |
| Total                assets                                                                                                     |   | $                  | 136,338,445 |   |          | $      | 138,308,294 |   |
|                                                                                                                            |   |               |        |   |          |   |   |   |
|                                                                                                                            |   |               |        |   |          |   |   |   |
| **LIABILITIES                AND SHAREHOLDERS’ EQUITY**                                                                   |   |               |        |   |          |   |   |   |
| Deposits                                                                                                                        |   | $                  | 80,821,383  |   |          | $      | 82,479,470 |   |
| Borrowed                funds                                                                                                   |   |               | 37,859,809  |   |          |   | 38,189,030 |   |
| Accrued                interest payable and other liabilities                                                                   |   |               | 637,363     |   |          |   | 704,238 |   |
| Total                liabilities                                                                                                |   |               | 119,318,555 |   |          |   | 121,372,738 |   |
|                                                                                                                            |   |               |        |   |          |   |   |   |
| Common                stock in ESOP subject to repurchase obligation                                                            |   |               | 1,619,402   |   |          |   | 1,677,238 |   |
|                                                                                                                            |   |               |        |   |          |   |   |   |
| Preferred                stock, $.01 par value, 500,000 shares authorized, none issued and                outstanding           |   |               | --          |   |          |   | -- |   |
| Common                stock, $.01 par value,                3,500,000 shares authorized, 1,785,375 shares                issued |   |               | 16,569      |   |          |   | 16,569 |   |
| Additional                paid-in capital                                                                                       |   |               | 9,230,379   |   |          |   | 9,169,858 |   |
| Retained                earnings                                                                                                |   |               | 11,700,000  |   |          |   | 11,702,607 |   |
| Treasury                stock, 424,327 shares, at cost                                                                          |   |               | (5,198,322  | )      |          |   | (5,198,322 | ) |
| Unearned                employee stock ownership plan shares                                                                    |   |               | (303,594    | )      |          |   | (333,042 | ) |
| Accumulated                other comprehensive loss                                                                             |   |               | (44,544     | )      |          |   | (99,352 | ) |
| Total                shareholders’ equity                                                                                 |   |               | 15,400,488  |   |          |   | 15,258,318 |   |
|                                                                                                                            |   |               |        |   |          |   |   |   |
| Total                liabilities and shareholders’ equity                                                                 |   | $                  | 136,338,445 |   |          | $      | 138,308,294 |   |

----

----

***Index***

EO

----

|                                                               |   | Three Months Ended |      |
|--------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                               |   | September 30,           |      |
|                                                               |   | 2007                         |      |   | 2006 |   |
|                                                               |   |                         |      |   |   |   |
| Interest                income                                     |   |                         |      |   |   |   |
| Loans,                including fees                               |   | $                            | 2,134,017 |   |   | $ | 2,100,108 |   |
| Securities                                                         |   |                         | 57,590    |   |   |   | 55,590 |   |
| Demand,                time and overnight deposits                 |   |                         | 53,369    |   |   |   | 27,808 |   |
| Dividends                on Federal Home Loan Bank Stock           |   |                         | 29,831    |   |   |   | 25,625 |   |
| Total                interest income                               |   |                         | 2,274,807 |   |   |   | 2,209,131 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Interest                expense                                    |   |                         |      |   |   |   |   |   |
| Deposits                                                           |   |                         | 588,838   |   |   |   | 495,019 |   |
| Borrowed                funds                                      |   |                         | 508,679   |   |   |   | 530,833 |   |
| Total                interest expense                              |   |                         | 1,097,517 |   |   |   | 1,025,852 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Net                interest income                                 |   |                         | 1,177,290 |   |   |   | 1,183,279 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Provision                for loan losses                           |   |                         | 85,489    |   |   |   | (47,952 | ) |
|                                                               |   |                         |      |   |   |   |   |   |
| Net                interest income after provision for loan losses |   |                         | 1,091,801 |   |   |   | 1,231,231 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Noninterest                income                                  |   |                         |      |   |   |   |   |   |
| Service                fees and other charges                      |   |                         | 27,877    |   |   |   | 32,361 |   |
| Gain                (loss) on sale of REO and repossessions        |   |                         | 4,554     |   |   |   | (120 | ) |
| Mortgage                banking income                             |   |                         | 9,582     |   |   |   | -- |   |
| Total                noninterest income                            |   |                         | 42,013    |   |   |   | 32,241 |   |
|                                                               |   |                         |      |   |   |   |   |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Noninterest                expense                                 |   |                         |      |   |   |   |   |   |
| Compensation                and benefits                           |   |                         | 431,021   |   |   |   | 436,091 |   |
| Director                fees                                       |   |                         | 24,300    |   |   |   | 24,300 |   |
| Occupancy                and equipment                             |   |                         | 95,332    |   |   |   | 89,051 |   |
| Computer                processing                                 |   |                         | 81,308    |   |   |   | 90,997 |   |
| Professional                services                               |   |                         | 43,406    |   |   |   | 44,208 |   |
| State                franchise taxes                               |   |                         | 51,419    |   |   |   | 54,450 |   |
| Other                                                              |   |                         | 78,807    |   |   |   | 77,388 |   |
| Total                noninterest expense                           |   |                         | 805,593   |   |   |   | 816,485 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Income                before income taxes                          |   |                         | 328,221   |   |   |   | 446,987 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Income                tax expense                                  |   |                         | 117,600   |   |   |   | 157,500 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Net                income                                          |   | $                            | 210,621   |   |   | $ | 289,487 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Earnings                per common share - basic                   |   | $                            | 0.16      |   |   | $ | 0.21 |   |
|                                                               |   |                         |      |   |   |   |   |   |
| Earnings                per common share - diluted                 |   | $                            | 0.16      |   |   | $ | 0.21 |   |

----

----

***Index***

EO

----

|                                                                                                 |   | Three                Months Ended |    |
|------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                                                 |   | September                30,      |    |
|                                                                                                 |   | 2007                              |    |   | 2006 |   |
|                                                                                                 |   |                              |    |   |   |   |
|                                                                                                 |   |                              |    |   |   |   |
| Net                income                                                                            |   | $                                 | 210,621 |   |   | $ | 289,487 |   |
|                                                                                                 |   |                              |    |   |   |   |   |   |
| Other                comprehensive income (loss)                                                     |   |                              |    |   |   |   |   |   |
| Unrealized                holding gains and (losses) on available-for-sale                securities |   |                              | 83,041  |   |   |   | 95,065 |   |
| Tax                effect                                                                            |   |                              | (28,233 | ) |   |   | (32,322 | ) |
| Other                comprehensive income (loss)                                                     |   |                              | 54,808  |   |   |   | 62,743 |   |
|                                                                                                 |   |                              |    |   |   |   |   |   |
| Comprehensive                income                                                                  |   | $                                 | 265,429 |   |   | $ | 352,230 |   |

----

----

***Index***

EO

----

|                                                                                                                                                                                                         |   | Three                Months Ended |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|
|                                                                                                                                                                                                         |   | September                30,      |       |
|                                                                                                                                                                                                         |   | 2007                              |       |   | 2006 |   |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |
| Balance,                beginning of period                                                                                                                                                                  |   | $                                 | 15,258,318 |   |   | $ | 15,499,512 |   |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |   |   |
| Net                income for period                                                                                                                                                                         |   |                              | 210,621    |   |   |   | 289,487 |   |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |   |   |
| Cash                dividends, $.16 and $.16 per share for the three months ended September                30, 2007 and 2006                                                                                 |   |                              | (213,228   | ) |   |   | (216,584 | ) |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |   |   |
| Purchase                of 8,380 shares of treasury stock for the three months ended September                30,                2006, at cost                                                               |   |                              | --         |   |   |   | (125,700 | ) |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |   |   |
| Commitment                to release 2,510 and 2,654 employee stock ownership plan shares for                the                three months ended September 30, 2007 and 2006, at fair                value |   |                              | 32,133     |   |   |   | 39,597 |   |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |   |   |
| Change                in fair value of common stock subject to repurchase obligation for                the                three  months ended September 30, 2007 and 2006                         |   |                              | 57,836     |   |   |   | (11,791 | ) |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |   |   |
| Change                in fair value on securities available for sale, net of tax                                                                                                                             |   |                              | 54,808     |   |   |   | 62,743 |   |
|                                                                                                                                                                                                         |   |                              |       |   |   |   |   |   |
| Balance,                end of period                                                                                                                                                                        |   | $                                 | 15,400,488 |   |   | $ | 15,537,264 |   |

----

----

***Index***

EO

----

|                                                                                                    |   | Three                Months Ended |       |
|---------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|
|                                                                                                    |   | September                30,      |       |
|                                                                                                    |   | 2007                              |       |   | 2006 |   |
| Cash                flows from operating activities                                                     |   |                              |       |   |   |   |
| Net                income                                                                               |   | $                                 | 210,621    |   |   | $ | 289,487 |   |
| Adjustments                to reconcile net income to net cash from operating                activities |   |                              |       |   |   |   |   |   |
| Depreciation                                                                                            |   |                              | 41,872     |   |   |   | 40,438 |   |
| Provision                for loan losses                                                                |   |                              | 85,489     |   |   |   | (47,952 | ) |
| Net                accretion on securities                                                              |   |                              | (89        | ) |   |   | (90 | ) |
| Proceeds                from sale of loans in secondary market                                          |   |                              | 351,993    |   |   |   | -- |   |
| Loans                disbursed for sale in secondary market                                             |   |                              | (347,404   | ) |   |   | -- |   |
| Gain                on sale of loans                                                                    |   |                              | (9,671     | ) |   |   | -- |   |
| Amortization                of mortgage servicing rights                                                |   |                              | 139        |   |   |   | -- |   |
| (Gain)                loss on sale of REO and repossessions                                             |   |                              | (4,554     | ) |   |   | 120 |   |
| FHLB                stock dividends                                                                     |   |                              | --         |   |   |   | (25,600 | ) |
| Compensation                expense for ESOP shares                                                     |   |                              | 32,133     |   |   |   | 39,597 |   |
| Change                in:                                                                               |   |                              |       |   |   |   |   |   |
| Accrued                interest receivable and other assets                                             |   |                              | (130,541   | ) |   |   | 92,057 |   |
| Accrued                expense and other liabilities                                                    |   |                              | (95,108    | ) |   |   | (89,052 | ) |
| Deferred                loan fees                                                                       |   |                              | (10,456    | ) |   |   | (12,867 | ) |
| Net                cash from operating activities                                                       |   |                              | 124,424    |   |   |   | 286,138 |   |
|                                                                                                    |   |                              |       |   |   |   |   |   |
| Cash                flows from investing activities                                                     |   |                              |       |   |   |   |   |   |
| Net                change in loans                                                                      |   |                              | 244,800    |   |   |   | (13,420 | ) |
| Premises                and equipment expenditures                                                      |   |                              | (7,811     | ) |   |   | (4,210 | ) |
| Proceeds                from sale REO and repossessions                                                 |   |                              | 148,036    |   |   |   | 100,301 |   |
| Net                cash from investing activities                                                       |   |                              | 385,025    |   |   |   | 82,671 |   |
|                                                                                                    |   |                              |       |   |   |   |   |   |
| Cash                flows from financing activities                                                     |   |                              |       |   |   |   |   |   |
| Net                change in deposits                                                                   |   |                              | (1,658,087 | ) |   |   | (2,170,606 | ) |
| Net                change in short-term FHLB advances                                                   |   |                              | --         |   |   |   | 3,250,000 |   |
| Repayments                of long-term FHLB advances                                                    |   |                              | (329,221   | ) |   |   | (378,750 | ) |
| Cash                dividends paid                                                                      |   |                              | (213,228   | ) |   |   | (216,584 | ) |
| Purchase                of treasury stock                                                               |   |                              | --         |   |   |   | (125,700 | ) |
| Net                cash from financing activities                                                       |   |                              | (2,200,536 | ) |   |   | 358,360 |   |
|                                                                                                    |   |                              |       |   |   |   |   |   |
| Net                change in cash and cash equivalents                                                  |   |                              | (1,691,087 | ) |   |   | 727,169 |   |
| Cash                and cash equivalents at beginning of period                                         |   |                              | 7,182,198  |   |   |   | 4,714,929 |   |
|                                                                                                    |   |                              |       |   |   |   |   |   |
| Cash                and cash equivalents at end of period                                               |   | $                                 | 5,491,111  |   |   | $ | 5,442,098 |   |
|                                                                                                    |   |                              |       |   |   |   |   |   |
| Supplemental                disclosures of cash flow information                                        |   |                              |       |   |   |   |   |   |
| Cash                paid during the period for                                                          |   |                              |       |   |   |   |   |   |
| Interest                                                                                                |   | $                                 | 1,087,718  |   |   | $ | 1,009,129 |   |
| Income                taxes                                                                             |   |                              | 30,000     |   |   |   | 65,000 |   |
|                                                                                                    |   |                              |       |   |   |   |   |   |
| Noncash                transactions                                                                     |   |                              |       |   |   |   |   |   |
| Transfer                from loans to other real estate owned                                           |   | $                                 | 228,000    |   |   | $ | -- |   |

----

----

***Index***

EO

----

**NOTE      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

----

----

***Index***

----

**NOTE      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **

----

----

***Index***

----

**NOTE      2 – SECURITIES AVAILABLE FOR SALE**

|                                    |   |   |      |   | Gross      |   |   | Gross      |   |
|-----------------------------------------|--------|--------|-----------|--------|------------|--------|--------|------------|--------|
|                                    |   | Fair   |      |   | Unrealized |   |   | Unrealized |   |
|                                    |   | Value  |      |   | Gains      |   |   | Losses     |   |
| September                30, 2007       |   |   |      |   |       |   |   |       |   |
| U.S.                Government agencies |   | $      | 4,930,950 |   |       | $      | 2,332  |       |   | $ | (69,825 | ) |
|                                    |   |   |      |   |       |   |   |       |   |   |   |   |
| June                30, 2007            |   |   |      |   |       |   |   |       |   |   |   |   |
| U.S.                Government agencies |   | $      | 4,847,820 |   |       | $      | --     |       |   | $ | (150,534 | ) |

|                                                  |   | Fair   |      |
|-------------------------------------------------------|--------|--------|-----------|
|                                                  |   | Value  |      |
|                                                  |   |   |      |
| Due                in less than one year              |   | $      | 1,000,310 |   |
| Due                after one year through five years  |   |   | 2,001,880 |   |
| Due                after five years through ten years |   |   | 1,928,760 |   |
|                                                  |   |   |      |   |
|                                                  |   | $      | 4,930,950 |   |

|                                    |   | Less than 12 Months |   |   | 12 Months or More |   |   | Total  |   |
|-----------------------------------------|--------|------------------------------------|--------|--------|----------------------------------|--------|--------|--------|--------|
|                                    |   | Fair                               |   |   | Unrealized                       |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Description of Securities     |   | Value                              |   |   | Loss                             |   |   | Value  |   |   | Loss |   |   | Value |   |   | Loss |   |
|                                    |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| September                30, 2007       |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agencies |   | $                                  | --     |   |                             | $      | --     |   |   | $ | 1,928,760 |   |   | $ | (69,825 | ) |   | $ | 1,928,760 |   |   | $ | (69,825 | ) |
|                                    |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June                30, 2007            |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agencies |   | $                                  | --     |   |                             | $      | --     |   |   | $ | 4,847,820 |   |   | $ | (150,534 | ) |   | $ | 4,847,820 |   |   | $ | (150,534 | ) |

----

----

***Index***

----

**NOTE      3 - LOANS**

|                                                    |   | September                30, |        |   | June                30, |   |
|---------------------------------------------------------|--------|------------------------------|-------------|--------|-------------------------|--------|
|                                                    |   | 2007                         |        |   | 2007                    |   |
| Mortgage                loans:                          |   |                         |        |   |                    |   |
| 1-4                family residential                   |   | $                            | 85,427,894  |   |                    | $      | 86,555,451 |   |
| Multi-family                residential                 |   |                         | 4,211,596   |   |                    |   | 4,232,326 |   |
| Commercial                real estate                   |   |                         | 14,535,121  |   |                    |   | 13,893,048 |   |
| Real                estate construction and development |   |                         | 1,690,258   |   |                    |   | 1,522,448 |   |
| Land                                                    |   |                         | 2,765,896   |   |                    |   | 2,891,359 |   |
| Total                mortgage loans                     |   |                         | 108,630,765 |   |                    |   | 109,094,632 |   |
| Consumer                loans                           |   |                         | 5,148,810   |   |                    |   | 5,357,102 |   |
| Commercial                loans                         |   |                         | 8,247,210   |   |                    |   | 8,049,139 |   |
| Total                loans                              |   |                         | 122,026,785 |   |                    |   | 122,500,873 |   |
| Less:                                                   |   |                         |        |   |                    |   |   |   |
| Allowance                for loan losses                |   |                         | (749,000    | )      |                    |   | (664,800 | ) |
| Deferred                loan fees                       |   |                         | (338,542    | )      |                    |   | (348,998 | ) |
|                                                    |   |                         |        |   |                    |   |   |   |
|                                                    |   | $                            | 120,939,243 |   |                    | $      | 121,487,075 |   |

|                                          |   | Three                Months Ended |    |
|-----------------------------------------------|--------|-----------------------------------|---------|
|                                          |   | September                30,      |    |
|                                          |   | 2007                              |    |   | 2006 |   |
|                                          |   |                              |    |   |   |   |
|                                          |   |                              |    |   |   |   |
| Balance                at beginning of period |   | $                                 | 664,800 |   |   | $ | 893,600 |   |
| Provision                for losses           |   |                              | 85,489  |   |   |   | (47,952 | ) |
| Charge-offs                                   |   |                              | (2,827  | ) |   |   | (6,000 | ) |
| Recoveries                                    |   |                              | 1,538   |   |   |   | 352 |   |
|                                          |   |                              |    |   |   |   |   |   |
| Balance                at end of period       |   | $                                 | 749,000 |   |   | $ | 840,000 |   |

----

----

***Index***

----

**NOTE      3 – LOANS **

|                                                                                 |   | September                30, |    |   | June                30, |   |
|--------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|-------------------------|--------|
|                                                                                 |   | 2007                         |    |   | 2007                    |   |
|                                                                                 |   |                         |    |   |                    |   |
| Period-end                impaired loans with no allowance for loan losses allocated |   | $                            | --      |   |                    | $      | -- |   |
| Period-end                impaired loans with allowance for loan losses allocated    |   |                         | 380,000 |   |                    |   | 246,000 |   |
| Amount                of the allowance allocated to impaired loans                   |   |                         | 124,000 |   |                    |   | 35,000 |   |

|                                                        |   | Three                Months Ended |    |
|-------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                        |   | September                30,      |    |
|                                                        |   | 2007                              |    |   | 2006 |   |
|                                                        |   |                              |    |   |   |   |   |   |
|                                                        |   |                              |    |   |   |   |   |   |
| Average                of impaired loans during the period  |   | $                                 | 470,000 |   |   | $ | 167,000 |   |
| Interest                income recognized during the period |   |                              | 13,007  |   |   |   | 1,699 |   |
| Cash-basis                interest income recognized        |   |                              | 13,007  |   |   |   | 1,699 |   |

|                                                        |   | September                30, |      |   | June                30, |   |
|-------------------------------------------------------------|--------|------------------------------|-----------|--------|-------------------------|--------|
|                                                        |   | 2007                         |      |   | 2007                    |   |
|                                                        |   |                         |      |   |                    |   |
| Loans                past due over 90 days still on accrual |   | $                            | 401,000   |   |                    | $      | 69,000 |   |
| Nonaccrual                loans                             |   |                         | 1,541,000 |   |                    |   | 1,772,000 |   |

----

----

***Index***

----

**NOTE      4 - BORROWED FUNDS**

|                                                                                                                               |   | September 30, |       |   | June 30, |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|--------|---------------|--------|
|                                                                                                                               |   | 2007               |       |   | 2007          |   |
|                                                                                                                               |   |               |       |   |          |   |
| 4.88%                FHLB fixed-rate advance, due January 25, 2008                                                                 |   |               | 2,000,000  |   |          |   | 2,000,000 |   |
| 6.13%                FHLB fixed-rate advance, due June 25, 2008                                                                    |   |               | 7,000,000  |   |          |   | 7,000,000 |   |
| 5.16%                FHLB fixed-rate advance, due March 13, 2009                                                                   |   |               | 3,000,000  |   |          |   | 3,000,000 |   |
| 6.00%                FHLB convertible advance, fixed-rate until December 2007, due June                11,                2009     |   |               | 5,000,000  |   |          |   | 5,000,000 |   |
| 4.42%                FHLB fixed-rate advance, due July 9, 2010                                                                     |   |               | 2,000,000  |   |          |   | 2,000,000 |   |
| 6.27%                FHLB convertible advance, fixed-rate until December 2007, due September                8,                2010 |   |               | 5,000,000  |   |          |   | 5,000,000 |   |
| 5.12%                FHLB fixed-rate advance, due October 31, 2011                                                                 |   |               | 5,000,000  |   |          |   | 5,000,000 |   |
| 5.30%                select pay mortgage-matched advance, final maturity May 1,                2011                                |   |               | 456,159    |   |          |   | 484,157 |   |
| 5.35%                select pay mortgage-matched advance, final maturity July 1,                2011                               |   |               | 951,012    |   |          |   | 1,118,371 |   |
| 3.92%                select pay mortgage-matched advance, final maturity November 1,                2012                           |   |               | 460,417    |   |          |   | 480,421 |   |
| 3.55%                select pay mortgage-matched advance, final maturity March 1,                2013                              |   |               | 593,495    |   |          |   | 617,819 |   |
| 4.10%                select pay mortgage-matched advance, final maturity March 1,                2015                              |   |               | 503,660    |   |          |   | 517,930 |   |
| 4.09%                select pay mortgage-matched advance, final maturity November 1,                2017                           |   |               | 486,696    |   |          |   | 496,302 |   |
| 3.31%                select pay mortgage-matched advance, final maturity April 1,                2019                              |   |               | 499,727    |   |          |   | 508,543 |   |
| 4.72%                select pay mortgage-matched advance, final maturity November 1,                2022                           |   |               | 2,044,419  |   |          |   | 2,067,366 |   |
| 4.38%                select pay mortgage-matched advance, final maturity December 1,                2022                           |   |               | 679,979    |   |          |   | 687,777 |   |
| 3.92%                select pay mortgage-matched advance, final maturity December 1,                2022                           |   |               | 543,217    |   |          |   | 549,696 |   |
| 3.64%                select pay mortgage-matched advance, final maturity March 1,                2023                              |   |               | 1,641,028  |   |          |   | 1,660,648 |   |
|                                                                                                                               |   |               |       |   |          |   |   |   |
|                                                                                                                               |   | $                  | 37,859,809 |   |          | $      | 38,189,030 |   |

----

----

***Index***

----

**NOTE      4 - BORROWED FUNDS **

| Year                ended September 30, |   |   |       |
|-----------------------------------------|--------|--------|------------|
| 2008                                    |   | $      | 10,560,361 |   |
| 2009                                    |   |   | 9,378,268  |   |
| 2010                                    |   |   | 8,221,737  |   |
| 2011                                    |   |   | 1,026,558  |   |
| 2012                                    |   |   | 5,724,176  |   |
| Thereafter                              |   |   | 2,948,709  |   |
|                                    |   |   |       |   |
|                                    |   | $      | 37,859,809 |   |

**NOTE      5 - OFF-BALANCE-SHEET ACTIVITIES**

|                                                                    |   | September                30, |      |   | June                30, |   |
|-------------------------------------------------------------------------|--------|------------------------------|-----------|--------|-------------------------|--------|
|                                                                    |   | 2007                         |      |   | 2007                    |   |
|                                                                    |   |                         |      |   |                    |   |
| 1-4                family residential real estate – fixed rate    |   | $                            | 176,000   |   |                    | $      | 219,000 |   |
| 1-4                family residential real estate – variable rate |   |                         | 442,000   |   |                    |   | 366,000 |   |
| Commercial                real estate – fixed rate                |   |                         | 364,000   |   |                    |   | 232,000 |   |
| Commercial                lines of credit – variable rate         |   |                         | 5,281,000 |   |                    |   | 5,324,000 |   |
| Home                equity lines of credit – variable rate        |   |                         | 882,000   |   |                    |   | 974,000 |   |

----

----

***Index***

----

**NOTE      5 - OFF-BALANCE-SHEET ACTIVITIES **

**NOTE      6 – EARNINGS PER SHARE**

|                                                                                                             |   | Three                Months Ended |      |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                                                                             |   | September                30,      |      |
|                                                                                                             |   | 2007                              |      |   | 2006 |   |
| Basic                Earnings Per Common Share                                                                   |   |                              |      |   |   |   |
|                                                                                                             |   |                              |      |   |   |   |
| Net                income                                                                                        |   | $                                 | 210,621   |   |   | $ | 289,487 |   |
|                                                                                                             |   |                              |      |   |   |   |   |   |
| Weighted                average common shares outstanding                                                        |   |                              | 1,361,048 |   |   |   | 1,386,636 |   |
| Less:  Average                unallocated ESOP shares                                                  |   |                              | (27,125   | ) |   |   | (37,669 | ) |
| Weighted                average common shares outstanding for basic earnings per common                share     |   |                              | 1,333,923 |   |   |   | 1,348,967 |   |
|                                                                                                             |   |                              |      |   |   |   |   |   |
| Basic                earnings per common share                                                                   |   | $                                 | 0.16      |   |   | $ | 0.21 |   |
|                                                                                                             |   |                              |      |   |   |   |   |   |
| Diluted                Earnings Per Common Share                                                                 |   |                              |      |   |   |   |   |   |
|                                                                                                             |   |                              |      |   |   |   |   |   |
| Net                income                                                                                        |   | $                                 | 210,621   |   |   | $ | 289,487 |   |
|                                                                                                             |   |                              |      |   |   |   |   |   |
| Weighted                average common shares outstanding for basic earnings per common                share     |   |                              | 1,333,923 |   |   |   | 1,348,967 |   |
| Add:  Dilutive                effects of assumed exercises of stock options                            |   |                              | --        |   |   |   | -- |   |
| Weighted                average common shares and dilutive potential common shares                outstanding    |   |                              | 1,333,923 |   |   |   | 1,348,967 |   |
|                                                                                                             |   |                              |      |   |   |   |   |   |
| Diluted                earnings per common share                                                                 |   | $                                 | 0.16      |   |   | $ | 0.21 |   |
| Average                stock options not considered in calculation because they were not                dilutive |   |                              | 119,972   |   |   |   | 128,898 |   |

----

***Index***

----

te

**Introduction**

**Overview      and Outlook**

**Forward-Looking      Statements**

**Financial      Condition**

----

----

***Index***

----

----

----

***Index***

----

**Results      of Operations**

**Three      Months Ended September 30, 2007 Compared to the Three Months Ended September      30,      2006**

**Net      Income.**

**Net      Interest Income.**

----

----

***Index***

----

**Provision      for Loan Losses.**

**Noninterest      income.**

**Noninterest      expense.**

**Income      Tax Expense.**

----

----

***Index***

----

**Liquidity      and Capital Resources**

|                                                                                                    |   | Three                Months           |   |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                    |   | Ended                September 30,    |   |
|                                                                                                    |   | 2007                                  |   |   | 2006 |   |
|                                                                                                    |   | (Dollars                in thousands) |   |
|                                                                                                    |   |                                  |   |   |   |   |
| Net                income                                                                               |   | $                                     | 211    |   |   | $ | 289 |   |
| Adjustments                to reconcile net income to net cash from operating                activities |   |                                  | (87    | ) |   |   | (3 | ) |
| Net                cash from operating activities                                                       |   |                                  | 124    |   |   |   | 286 |   |
| Net                cash from investing activities                                                       |   |                                  | 385    |   |   |   | 83 |   |
| Net                cash from financing activities                                                       |   |                                  | (2,200 | ) |   |   | 358 |   |
| Net                change in cash and cash equivalents                                                  |   |                                  | (1,691 | ) |   |   | 727 |   |
| Cash                and cash equivalents at beginning of period                                         |   |                                  | 7,182  |   |   |   | 4,715 |   |
|                                                                                                    |   |                                  |   |   |   |   |   |   |
| Cash                and cash equivalents at end of period                                               |   | $                                     | 5,491  |   |   | $ | 5,442 |   |

----

----

***Index***

|                                                                |   | Actual |   |   | For CapitalAdequacy Purposes |   |   | To BeWell-CapitalizedUnder Prompt CorrectiveAction Regulations |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|----------------------------------------|--------|--------|------------------------------------------------------------------------------------|--------|
|                                                                |   | Amount |   |   | Ratio                                  |   |   | Amount                                                                             |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                                                |   |   |   |   |                                   |   |   | (Dollars in Thousands)                                                   |   |   |   |   |   |   |   |
| September                30, 2007                                   |   |   |   |   |                                   |   |   |                                                                               |   |   |   |   |   |   |   |   |   |   |
| Total                capital to                risk-weighted assets |   | $      | 14,321 |   |                                   |   | 16.6   | %                                                                                  |   | $ | 6,916 |   |   |   | 8.0 | % |   | $ | 8,645 |   |   |   | 10.0 | % |
| Tier                1 (core) capital to risk-weighted assets        |   |   | 13,834 |   |                                   |   | 16.0   |                                                                               |   |   | 3,458 |   |   |   | 4.0 |   |   |   | 5,187 |   |   |   | 6.0 |   |
| Tier                1 (core) capital to adjusted total assets       |   |   | 13,834 |   |                                   |   | 10.1   |                                                                               |   |   | 5,457 |   |   |   | 4.0 |   |   |   | 6,821 |   |   |   | 5.0 |   |
| Tangible                capital to adjusted total assets            |   |   | 13,834 |   |                                   |   | 10.1   |                                                                               |   |   | 2,046 |   |   |   | 1.5 |   |   | N/A |   |   |   |   |   |
|                                                                |   |   |   |   |                                   |   |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June                30, 2007                                        |   |   |   |   |                                   |   |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                capital to risk-weighted assets                |   | $      | 13,989 |   |                                   |   | 16.1   | %                                                                                  |   | $ | 6,930 |   |   |   | 8.0 | % |   | $ | 8,663 |   |   |   | 10.0 | % |
| Tier                1 (core) capital to risk-weighted assets        |   |   | 13,572 |   |                                   |   | 15.7   |                                                                               |   |   | 3,465 |   |   |   | 4.0 |   |   |   | 5,198 |   |   |   | 6.0 |   |
| Tier                1 (core) capital to adjusted total assets       |   |   | 13,572 |   |                                   |   | 9.8    |                                                                               |   |   | 5,541 |   |   |   | 4.0 |   |   |   | 6,926 |   |   |   | 5.0 |   |
| Tangible                capital to adjusted total assets            |   |   | 13,572 |   |                                   |   | 9.8    |                                                                               |   |   | 2,078 |   |   |   | 1.5 |   |   | N/A |   |   |   |   |   |

----

***Index***

----

te

**Disclosure      Controls**

----

----

***Index***

----

| Item                1. | Legal                Proceedings |
|------------------------|----------------------------------|

| Item                2. | Unregistered                Sales of Equity Securities and Use of                Proceeds |
|------------------------|-------------------------------------------------------------------------------------------|

|   | None |
|--------|------|

| Item                3. | Defaults                Upon Senior Securities |
|------------------------|------------------------------------------------|

|   | Not                applicable. |
|--------|--------------------------------|

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

|   | None |
|--------|------|

| Item                5.   | Other                Information |
|------------------------------------|----------------------------------|

|   | None. |
|--------|-------|

| Item                6. | Exhibits |
|------------------------|----------|

|   | (a)                (1) Exhibit 11: Computation of Earnings per                Share |
|--------|-------------------------------------------------------------------------------------|

|   | (2)                  Exhibits 31.1 and 31.2: Section 302                  Certifications |
|--------|------------------------------------------------------------------------------------------|

|   | (3)                Exhibit 32: Section 906                Certifications |
|--------|--------------------------------------------------------------------------|

|   | All                other Exhibits previously filed |
|--------|----------------------------------------------------|

----

----

***Index***

EO

----

| Date:  | November                14, 2007 |   | /s/                Douglas Stewart                   |
|--------|----------------------------------|--------|------------------------------------------------------|
|   |                             |   | Douglas                Stewart                       |
|   |                             |   | President                and Chief Executive Officer |

| Date:  | November                14, 2007 |   | /s/                Debra Geuy          |
|--------|----------------------------------|--------|----------------------------------------|
|   |                             |   | Debra                Geuy              |
|   |                             |   | Chief                Financial Officer |

----

***Index***

EO

| EXHIBITNUMBER |   |  DESCRIPTION                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                        |
|---------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1           |   | Articles                of Incorporation ofPeoples-Sidney                FinancialCorporation                                                                                        |   | Incorporated                by reference to the Registration Statement on Form S-1 filed by                Peoples-Sidney Financial Corporation on January 27, 1997 (the “S-1”) with                the Securities and Exchange Commission (the “SEC”), Exhibit                3.1. |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 3.2           |   | Bylaws                of Peoples-Sidney Financial Corporation                                                                                                                        |   | Incorporated                by reference to the S-1, Exhibit 3.2.                                                                                                                                                                                                                                           |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 10.1          |   | Employee                Stock Ownership Plan                                                                                                                                         |   | Incorporated                by reference to the S-1, Exhibit 10.1                                                                                                                                                                                                                                           |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 10.2          |   | Form                of Employment Agreement with Douglas Stewart                                                                                                                     |   | Incorporated                by Pre-Effective Amendment No. 1 to the S-1 filed with the SEC on                March                12, 1997, Exhibit 10.2                                                                                                                                                    |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 10.3          |   | Form                of Employment Agreements with David R. Fogt, Gary N. Fullenkamp and                Debra                A. Geuy                                                  |   | Incorporated                by Pre-Effective Amendment No. 1 to the S-1 filed with the SEC on                March                12, 1997, Exhibit 10.3                                                                                                                                                    |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 10.4          |   | Form                of Severance Agreement with Steve Goins                                                                                                                          |   | Incorporated                by Pre-Effective Amendment No. 1 to the S-1 filed with the SEC on                March                12, 1997, Exhibit 10.4                                                                                                                                                    |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 10.5          |   | 401                (k) Plan                                                                                                                                                          |   | Incorporated                by Pre-Effective Amendment No. 1 to the S-1 filed with the SEC on                March                12, 1997, Exhibit 10.5                                                                                                                                                    |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 10.6          |   | Peoples-Sidney                Financial Corporation Amended and Restated 1998 Stock Option and                Incentive                Plan                                          |   | Filed                as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the                fiscal year ended June 30, 1999 (File No. 0-22223) and incorporate                herein                by reference.                                                                      |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 10.7          |   | Peoples-Sidney                Financial Corporation Amended and Restated 1998 Management Recognition                Plan                                                             |   | Filed                as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the                fiscal year ended June 30, 1999 (File No. 0-22223) and incorporate                herein                by reference.                                                                      |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 11            |   | Statement                Regarding Computation of Earnings per Share                                                                                                            |   | See                Notes 1 and 6 to the consolidated financial statements, which are                incorporated herein by reference.                                                                                                                                                                       |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 31.1          |   | Certification                of Principal Executive Officer Pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                 |   |                                                                                                                                                                                                                                                                                                        |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 31.2          |   | Certification                of Principal Financial Officer Pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                 |   |                                                                                                                                                                                                                                                                                                        |
|          |   |                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                        |
| 32            |   | Certifications                of the Chief Executive Officer and the Chief Financial Officer Pursuant                to                Section 906 of the Sarbanes-Oxley Act of 2002 |   |                                                                                                                                                                                                                                                                                                        |

----