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

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 1999

                                       OR

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

               For the transition period from                          to

                         Commission File Number 0-26012

                         NORTHEAST INDIANA BANCORP, INC.
                         -------------------------------
                 (Name of small business issuer in its charter)

              Delaware                                 35-1948594
--------------------------------------------------------------------------------
 (State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                      Identification No.)

             648 North Jefferson Street, Huntington, Indiana 46750
--------------------------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (219) 356-3311
                                                     --------------

           Securities Registered Pursuant to Section 12(b) of the Act:

                                      None

           Securities Registered Pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.01 per share
                     ---------------------------------------
                                (Title of class)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports)  and (2) has been subject to such filing  requirements  for the past 90
days. YES [X]. NO [ ].

         Check if there is no  disclosure  of  delinquent  filers in response to
Item  405 of  Regulation  S-B  contained  herein,  and  no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
<PAGE>
         Our revenues for the most recent fiscal year: $18.6 million.

         The aggregate market value of the voting stock held by  non-affiliates,
computed by  reference  to the average of the bid and ask price of such stock as
of March 10, 2000,  was $14.3  million.  (The  exclusion from such amount of the
market  value of the shares owned by any person shall not be deemed an admission
by the registrant that such person is an affiliate.)

         As of March 10, 2000,  there were 1,748,036  shares  outstanding of the
registrant's Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

Parts II and IV of Form 10-KSB - annual  report to  stockholders  for the fiscal
year ended  December 31,  1999.  Part III of Form 10-KSB - proxy  statement  for
annual meeting of stockholders.



<PAGE>
FORWARD-LOOKING STATEMENTS

               Northeast   Indiana   Bancorp,   Inc.,   and   its   wholly-owned
subsidiaries,  First Federal Savings Bank and Northeast Indiana Financial, Inc.,
may  from  time to time  make  written  or  oral  "forward-looking  statements,"
including  statements  contained in its filings with the Securities and Exchange
Commission.  These  forward-looking  statements  may be  included in this Annual
Report on Form  10-KSB and the  exhibits  attached to it, in  Northeast  Indiana
Bancorp's reports to stockholders and in other communications, which are made in
good  faith by us  pursuant  to the  "safe  harbor"  provisions  of the  Private
Securities Litigation Reform Act of 1995.

               These  forward-looking  statements  include  statements about our
beliefs, plans, objectives,  goals, expectations,  anticipations,  estimates and
intentions,  that are subject to significant  risks and  uncertainties,  and are
subject  to  change  based on  various  factors,  some of which are  beyond  our
control. The words "may", "could", "should", "would",  "believe",  "anticipate",
"estimate",  "expect",  "intend", "plan" and similar expressions are intended to
identify forward-looking  statements. The following factors, among others, could
cause our financial performance to differ materially from the plans, objectives,
expectations,   estimates  and  intentions   expressed  in  the  forward-looking
statements:

         o     the  strength  of the United  States  economy in general  and the
               strength of the local economies in which we conduct operations;
         o     the  effects  of, and  changes  in,  trade,  monetary  and fiscal
               policies  and  laws,  including  interest  rate  policies  of the
               Federal Reserve Board;
         o     inflation, interest rate, market and monetary fluctuations;
         o     the timely  development of and acceptance of our new products and
               services and the perceived  overall  value of these  products and
               services by users,  including the  features,  pricing and quality
               compared to competitors' products and services;
         o     the  willingness of users to substitute our products and services
               for products and services of our competitors;
         o     our success in gaining  regulatory  approval of our  products and
               services, when required;
         o     the impact of changes in financial services' laws and regulations
               (including  laws  concerning  taxes,   banking,   securities  and
               insurance);
         o     the impact of technological changes;
         o     acquisitions;
         o     changes in consumer spending and saving habits; and
         o     our success at managing the risks involved in the foregoing.

               The list of important  factors stated above is not exclusive.  We
do not undertake to update any  forward-looking  statement,  whether  written or
oral,  that may be made from time to time by or on behalf of Northeast  Indiana,
First Federal Savings or Northeast Financial.

                                       2

<PAGE>
                                     PART I

Item 1.        Description of Business
               -----------------------

               Northeast Indiana Bancorp,  Inc., a Delaware corporation,  is the
holding company for First Federal Savings Bank and Northeast Indiana  Financial,
Inc. All  references to Northeast  Indiana  Bancorp prior to June 27, 1995,  the
date of First  Federal's  conversion  from  mutual to stock form,  except  where
otherwise  indicated,  are to First  Federal.  References in this Form 10-KSB to
"we", "us" and "our" refer to Northeast  Indiana Bancorp and/or First Federal as
the context requires.

               At  December  31,  1999,  we had  $254.75  million  of assets and
stockholders' equity of $25.66 million (or 10.07% of total assets).

               First Federal is a federally  chartered stock savings association
headquartered in Huntington,  Indiana. Our deposits are insured up to applicable
limits by the FDIC,  which is backed by the full  faith and credit of the United
States.

               Northeast  Indiana  Financial,   an  Indiana   corporation,   was
established  as a  subsidiary  of First  Federal to provide  brokerage  services
through an affiliation with VESTAX Securities Corporation (broker/dealer).

               Our principal  business has historically  consisted of attracting
retail  deposits from the general public and investing  those funds primarily in
first mortgage loans on owner-occupied,  single-family  residential real estate.
We also originate commercial real estate, construction,  consumer and commercial
business  loans.  We have in the past  purchased  a limited  number of loans and
equipment  leases.  At December 31, 1999,  substantially  all of the real estate
mortgage  loans,   including  commercial  and  multi-family,   were  secured  by
properties  located in our market area. We also invest in  obligations of states
and political subdivisions, mutual funds and other permissible investments.

               We offer  traditional  trust services,  including but not limited
to,   revocable   living  trusts,   testamentary   trusts,   investment   agency
relationships, estate administration,  guardianships and custodial accounts. The
professionals in our trust department have collectively over 30 years of banking
and investments experience.

               Our  revenues  are derived  principally  from  interest on loans,
interest on investment and other  securities  and service fee income.  We do not
originate  loans  to fund  leveraged  buyouts,  and  have no  loans  to  foreign
corporations or  governments.  While we generally  solicit  deposits only in our
primary  market  area,  at December  31,  1999,  we had $5.8 million in brokered
deposits.

               Our executive  offices are located at 648 North Jefferson Street,
Huntington,  Indiana  46750,  and its telephone  number at that address is (219)
356-3311.

                                       3
<PAGE>
Market Area

               Our  office  is  located  at  648  North   Jefferson   Street  in
Huntington,  Indiana.  The City of Huntington  is located in Huntington  County,
Indiana,  25 miles southwest of Fort Wayne,  Indiana.  The City of Huntington is
the County  Seat of  Huntington  County and has a  population  of  approximately
17,000.  Along with an  agricultural  base,  the major  employers in  Huntington
County are engaged in light  industry and include  Wabash  Technologies,  United
Technologies Electronic Controls,  Hayes Lemmerz, CFM Majestic,  Dana, Pyle Mfg,
LLC, Good  Humor-Breyer,  Bendix Commercial Vehicle System Corporation and Wayne
Metal Products.

Lending Activities

               Our loan  portfolio  consists  primarily of  conventional,  first
mortgage  loans  secured  by one- to  four-family  residences  and,  to a lesser
extent,  commercial  real  estate  loans,  construction  or  development  loans,
consumer loans and commercial  business loans. At December 31, 1999, gross loans
outstanding  totaled  $214.93  million,  of which $119.28 million or 55.50% were
one-to  four-family  residential  mortgage  loans.  Of the  one- to  four-family
mortgage  loans  outstanding at that date,  48.60% were  fixed-rate  loans,  and
51.40% were adjustable-rate loans. At that same date, commercial real estate and
multi-family loans totaled $28.25 million, of which 76.24% were fixed-rate loans
and  23.76%  were  adjustable-rate  loans.  Also at that date,  construction  or
development  loans totaled $12.61 million or 5.87% of the total loan  portfolio,
66.24% of which were  adjustable-rate  loans.  At December 31, 1999,  commercial
business loans totaled $24.18 million or 11.25% of the total loan portfolio,  of
which 46.17% were fixed-rate loans and 53.83% were adjustable-rate loans.

               At December 31, 1999, the balance of our consumer loans consisted
of  $30.59  million  of  loans,  which  represented  14.23%  of the  gross  loan
portfolio.  Of the consumer loans outstanding,  70.95% were fixed-rate loans and
29.05% were adjustable-rate loans.

               We also  invest  in  mutual  funds,  obligations  of  states  and
political   subdivisions,   and  other  debt   securities  and   mortgage-backed
securities.  At December 31, 1999,  mutual  funds  totaled  $814,000 or 0.32% of
total assets, mortgage-backed securities totaled $2.25 million or 0.88% of total
assets,  Government agencies totaled $25.04 million or 9.83% of total assets and
obligations of states and political  subdivisions  totaled  $183,000 or 0.07% of
total assets. See "Investment Activities."

               The aggregate  amount of loans that First Federal is permitted to
make under applicable federal regulations to any one borrower, including related
entities,  is generally  equal to the greater of 15% of  unimpaired  capital and
surplus or  $500,000.  At December  31,  1999,  the maximum  amount  which First
Federal could have lent to any one borrower and the borrower's  related entities
was approximately $3.78 million. See "Regulation - Federal Regulation of Savings
Associations."  At  December  31,  1999,  we had no loans or  groups of loans to
related  borrowers  with  outstanding  balances  in excess of this  amount.  Our
largest lending  relationship at December 31, 1999 was $3.34 million in loans to
one  borrower  secured  by a fleet of  automobiles  registered  in the  State of
Indiana.


                                       4
<PAGE>
               Loan   Portfolio   Composition.   The  following  is  information
concerning  the  composition  of the loan  portfolios  in dollar  amounts and in
percentages (before deductions for loans in process, deferred fees and discounts
and allowance for loan losses) as of the dates indicated.
<TABLE>
<CAPTION>
                                                                                       December 31,
                                                      -----------------------------------------------------------------------------
                                                              1999                        1998                         1997
                                                      ---------------------     ------------------------       ---------------------
                                                      Amount       Percent       Amount          Percent        Amount     Percent
                                                      ------       -------       ------          -------        ------     -------
<S>                                                  <C>            <C>         <C>               <C>          <C>          <C>
Real Estate Loans:
-----------------
 One- to four-family............................     $119,283       55.50%      $113,919          59.66%       $109,080     60.53%
 Multi-family...................................        3,779        1.76          2,908           1.52           2,606      1.45
 Commercial.....................................       24,471       11.39         16,514           8.65          16,734      9.29
 Construction or development....................       12,613        5.87         11,365           5.95          10,596      5.88
                                                     --------      ------       --------         ------        --------    ------
     Total real estate loans....................      160,146       74.52        144,706          75.78         139,016     77.15
                                                     --------      ------       --------         ------        --------    ------
Other Loans:
-----------
 Consumer Loans:
  Deposit account...............................           47        0.02            146           0.08              44      0.02
  Student.......................................          ---         ---            ---            ---             ---       ---
  Automobile....................................       15,442        7.18         12,248           6.41          11,573      6.42
  Home equity...................................        6,366        2.96          5,206           2.73           5,506      3.06
  Home improvement                                        805        0.37            742           0.39             656      0.36
  Other.........................................        7,935        3.70          6,521           3.41           5,873      3.26
                                                     --------      ------       --------         ------        --------    ------
     Total consumer loans.......................       30,595       14.23         24,863          13.02          23,652     13.12
                                                     --------      ------       --------         ------        --------    ------
 Commercial business loans......................       24,184       11.25         21,393          11.20          17,526      9.73
     Total loans................................      214,925      100.00%       190,962         100.00%        180,194    100.00%
                                                                  =======                        ======                   =======
Less:
----
 Undisbursed portion of construction loans......        4,088                      2,800                          3,981
 Loans in process...............................          443                        663                            355
 Deferred fees and discounts....................          233                        139                            125
 Allowance for loan losses......................        1,766                      1,454                          1,194
                                                     --------                   --------                       --------
 Total loans receivable, net....................     $208,395                   $185,906                       $174,539
                                                     ========                   ========                       ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                            December 31,
                                                        -----------------------------------------------------
                                                                1996                          1995
                                                        ----------------------      -------------------------
                                                        Amount         Percent       Amount          Percent
                                                        ------         -------       ------          -------
                                                                         (Dollars in Thousands)
<S>                                                    <C>              <C>          <C>               <C>
Real Estate Loans:
-----------------
 One- to four-family............................       $ 99,325          65.10%      $ 85,533            67.88%
 Multi-family...................................          2,993           1.96          2,029             1.61
 Commercial.....................................         12,301           8.06         11,742             9.32
 Construction or development....................         10,749           7.04          6,359             5.05
                                                       --------          -----       --------            -----
     Total real estate loans....................        125,368          82.16        105,663            83.86
                                                       --------          -----       --------            -----
Other Loans:
-----------
 Consumer Loans:
  Deposit account...............................            157           0.10            170             0.13
  Student.......................................            ---           ---            ---               ---
  Automobile....................................          8,820           5.78          7,756             6.16
  Home equity...................................          4,176           2.74          3,121             2.48
  Home improvement                                          291           0.19            258             0.20
  Other.........................................          4,204           2.76          3,245             2.58
                                                       --------          -----       --------            -----
     Total consumer loans.......................         17,648          11.57         14,550            11.55
                                                       --------          -----       --------            -----
 Commercial business loans......................          9,568           6.27          5,783             4.59
     Total loans................................        152,584         100.00%       125,996           100.00%
                                                                        ======                          ======
Less:
----
 Undisbursed portion of construction loans......          4,380                         2,210
 Loans in process...............................            208                           169
 Deferred fees and discounts....................            114                            95
 Allowance for loan losses......................          1,027                           881
                                                       --------                      --------
 Total loans receivable, net....................       $146,855                      $122,641
                                                       ========                      ========

</TABLE>
                                       5
<PAGE>
               The following  table shows the composition of the loan portfolios
by fixed- and adjustable-rate at the dates indicated.
<TABLE>
<CAPTION>
                                                                                    December 31,
                                                 -----------------------------------------------------------------------------------
                                                           1999                         1998                           1997
                                                 -----------------------     -----------------------      -------------------------
                                                  Amount        Percent       Amount         Percent       Amount         Percent
                                                 --------       -------      --------        ------       -------         -------
                                                                        (Dollars in Thousands)
<S>                                              <C>              <C>         <C>              <C>         <C>              <C>
Fixed-Rate Loans:
----------------
 Real estate:
  One- to four-family.......................     $ 57,974         26.97%      $49,993          26.18%      $44,203          24.53%
  Multi-family..............................        2,300          1.07         2,323           1.21         1,586           0.88
  Commercial................................       19,237          8.95        11,089           5.81         9,916           5.50
  Construction or development...............        4,258          1.98         3,935           2.06         2,163           1.20
                                                 --------        ------       -------         ------       -------         ------
     Total real estate loans................       83,769         38.97        67,340          35.26        57,868          32.11
                                                 --------        ------       -------         ------       -------         ------
 Consumer...................................       21,708         10.10        17,909           9.38        16,462           9.14
 Commercial business........................       11,166          5.20        14,683           7.69        11,694           6.49
                                                 --------        ------       -------         ------       -------         ------
     Total fixed-rate loans                       116,643         54.27        99,932          52.33        86,024          47.74

Adjustable-Rate Loans:
----------------------
 Real estate:
  One- to four-family.......................       61,309         28.53        63,926          33.48        64,877          36.00
  Multi-family..............................        1,479          0.69           585           0.31         1,020            .57
  Commercial................................        5,234          2.44         5,425           2.84         6,818           3.78
  Construction or development...............        8,355          3.89         7,430           3.89         8,433           4.68
                                                 --------        ------       -------         ------       -------         ------
     Total real estate loans................       76,377         35.55        77,366          40.52        81,148          45.03
                                                 --------        ------       -------         ------       -------         ------
 Consumer...................................        8,887          4.13         6,954           3.64         7,190           3.99
 Commercial business........................       13,018          6.05         6,710           3.51         5,832           3.24
                                                 --------        ------       -------         ------       -------         ------
     Total adjustable-rate loans............       98,282         45.73        91,030          47.67        94,170          52.26
                                                 --------        ------       -------         ------       -------         ------
     Total loans............................      214,925        100.00%      190,962         100.00%      180,194         100.00%
                                                                 ======                       ======                       ======

Less:
----
 Undisbursed portion of construction loans..        4,088                       2,800                        3,981
 Loans in process...........................          443                         663                          355
 Deferred fees and discounts................          233                         139                          125
 Allowance for loan losses..................        1,766                       1,454                        1,194
                                                 --------                    --------                     --------
    Total loans receivable, net.............     $208,395                    $185,906                     $174,539
                                                 ========                    ========                     ========

</TABLE>
                                       6

<PAGE>
               The following schedule  illustrates the interest rate sensitivity
of the loan portfolio at December 31, 1999.  Mortgages  which have adjustable or
renegotiable interest rates are shown as maturing in the period during which the
contract  is due.  The  schedule  does  not  reflect  the  effects  of  possible
prepayments or enforcement of due-on-sale clauses.
<TABLE>
<CAPTION>

                                                        Real Estate
                              One to Four             Multi/Commercial      Construction/Development            Consumer
                          -------------------       -------------------      -----------------------      ----------------------
                          Amount     Weighted       Amount     Weighted      Amount        Weighted       Amount       Weighted
                          ------     --------       ------     --------      ------        --------       ------       --------
<S>                      <C>            <C>       <C>            <C>       <C>              <C>         <C>             <C>
2000                     $  5,103       7.58%     $  1,703       8.82%     $  6,692          8.70%      $ 11,303        9.73%
2001 and 2002              19,943       7.44         1,635       8.50             -          0.00          3,520        9.15
2003 and 2004                 943       7.96         2,625       8.20             -          0.00          8,571        9.12
2005 to 2009               16,693       7.80         8,583       8.63            60          7.25          6,899        8.97
2010 to 2029               76,601       7.36        13,704       8.51         5,862          7.84            302        9.26
                         --------                 --------                 --------                     --------
                         $119,283       7.45      $ 28,250       8.54      $ 12,614          8.29       $ 30,595        9.32
                         ========                 ========                 ========                     ========

<CAPTION>
                                Commercial                 Total
                            --------------------      --------------------
                            Amount      Weighted      Amount      Weighted
                            ------      --------      ------      --------
<C>                        <C>            <C>       <C>               <C>
2000                       $ 12,736        9.02%     $ 37,537          8.97%
2001 and 2002                 3,893        8.71        28,991          7.88
2003 and 2004                 4,772        8.95        16,911          8.87
2005 to 2009                  1,912        9.50        34,147          8.34
2010 to 2029                    871        9.15        97,340          7.57
                           --------                  --------
                           $ 24,184        9.00      $214,926          8.08
                           ========                  ========

</TABLE>
(1) Includes demand loans, loans having no stated maturity and overdraft loans.


               The total amount of loans due after  December 31, 2000 which have
predetermined interest rates is $100.27 million, while the total amount of loans
due after such dates which have floating or adjustable  interest rates is $77.12
million.


                                       7
<PAGE>
               All  of our  lending  is  subject  to  our  written  underwriting
standards and loan origination  procedures.  Decisions on loan  applications are
made on the basis of detailed  applications and property valuations.  Properties
securing real estate loans made by us are generally  appraised by Board-approved
independent  appraisers.  In the loan approval process, we assess the borrower's
ability to repay the loan, the adequacy of the proposed security, the employment
stability of the borrower and the credit-worthiness of the borrower.

               We require  evidence  of  marketable  title and lien  position or
appropriate  title  insurance  on all loans  secured by real  property.  We also
require fire and extended coverage casualty  insurance in amounts at least equal
to the lesser of the principal  amount of the loan or the value of  improvements
on the  property,  depending  on the  type  of  loan.  As  required  by  federal
regulations,  we also require flood  insurance to protect the property  securing
its interest if such property is located in a designated flood area.

               One- to Four-Family  Residential  Mortgage  Lending.  Residential
loan originations are generated by our marketing efforts, our present customers,
walk-in  customers and referrals from real estate  brokers.  We have focused our
lending efforts primarily on the origination of loans secured by first mortgages
on owner-occupied,  single-family residences in its market area. At December 31,
1999, one- to four-family residential mortgage loans totaled $119.28 million, or
55.50%, of the gross loan portfolio.

               We currently offer fixed-rate and adjustable-rate mortgage loans.
For the year ended December 31, 1999, we originated $17.68 million of fixed-rate
loans and $11.42 million of adjustable-rate real estate loans, all of which were
secured by one- to four-family residential real estate. Substantially all of our
one- to four-family  residential mortgage originations are secured by properties
located in our market area.

               We offer  adjustable-rate  mortgage  loans at rates  and on terms
determined  in  accordance  with market and  competitive  factors.  We originate
adjustable-rate mortgage loans with a term of up to 30 years. We offer one-year,
three-year,  five-year and seven-year  adjustable-rate mortgage loans (where the
terms are fixed for the first one-year, three-years, five-years and seven-years,
respectively, and thereafter adjust annually) with a stated interest rate margin
over the United States Treasury.  Increases or decreases in the interest rate of
our  adjustable-rate  loans are generally limited to 1.0% at any adjustment date
and, for example the one year  adjustable  rate  mortgage  product has limits of
5.0% over the life of a loan. As a consequence of using caps, the interest rates
on these loans may not be as rate sensitive as is our cost of funds.  Currently,
all adjustable-rate  mortgage loans originated do provide for a minimum interest
rate based on margins and caps over the life of the loans. At December 31, 1999,
the total balance of one-to four-family adjustable-rate loans was $61.31 million
or 28.53% of our gross loan portfolio.

               We also offer fixed-rate  mortgage loans with maturities of up to
30 years.  At  December  31,  1999,  the total  balance  of one- to  four-family
fixed-rate loans was $57.97 million or 26.97% of our gross loan portfolio.


                                       8
<PAGE>
               Currently,  we will  lend up to 97% of the  lesser  of the  sales
price or appraised  value of the  security  property on owner  occupied  one- to
four-family  loans,  provided that private mortgage  insurance is obtained in an
amount  sufficient  to reduce our exposure to not more than 80% of the appraised
value or sales price, as applicable. Residential loans do not include prepayment
penalties,  are  non-assumable  (other  than  government-insured  or  guaranteed
loans), and do not produce negative  amortization.  Real estate loans originated
by us contain a "due on sale" clause allowing us to declare the unpaid principal
balance due and payable upon the sale of the security property.

               The  loans   currently   originated   by  us  are  not  typically
underwritten  and  documented  pursuant to the  guidelines of Freddie Mac. Under
current policy, we originate these loans for portfolio, except 30 year fixed.

               Commercial and  Multi-Family  Real Estate  Lending.  We have also
engaged in commercial and  multi-family  real estate lending in its market area.
At December 31, 1999, we had $24.47  million and $3.78 million of commercial and
multi-family  real estate  loans,  respectively,  which  represented  11.39% and
1.76%, respectively, of the gross loan portfolio.

               The  commercial  and  multi-family  real estate loan portfolio is
secured  primarily by retail  properties,  apartments,  churches and real estate
located in Huntington and Allen Counties,  Indiana.  Commercial and multi-family
real estate loans generally have terms that do not exceed 15 years and a variety
of rate adjustment  features and other terms.  Generally,  the loans are made in
amounts up to 70% of the  lesser of the  appraised  value or sales  price of the
security  property.  We  currently  offer  one-year,  three-year  and  five-year
adjustable-rate  commercial and multi-family  real estate loans (where the terms
are fixed for the first one-year, three-years and five-years,  respectively, and
thereafter   adjust  annually)  with  a  margin  over  a  designated  index.  In
underwriting  these loans,  we analyze the financial  condition of the borrower,
the borrower's  credit history,  and the reliability and  predictability  of the
cash flow  generated by the property  securing  the loan.  We generally  require
personal  guaranties  of  the  borrowers.   Appraisals  on  properties  securing
commercial  real estate loans  originated  by us are  performed  by  independent
appraisers, to the extent required by federal regulations.

               Multi-family and commercial real estate loans generally present a
higher level of risk than loans secured by one- to four-family residences.  This
greater risk is due to several factors, including the concentration of principal
in a limited  number of loans and  borrowers,  the  effect of  general  economic
conditions  on income  producing  properties  and the  increased  difficulty  of
evaluating and monitoring  these types of loans.  Furthermore,  the repayment of
loans secured by multi-family and commercial real estate is typically  dependent
upon the successful  operation of the related real estate  project.  If the cash
flow from the project is reduced  (for  example,  if leases are not  obtained or
renewed,  or a  bankruptcy  court  modifies a lease term,  or a major  tenant is
unable to fulfill its lease  obligations),  the borrower's  ability to repay the
loan may be impaired.

               Construction or Development Lending. At December 31, 1999, we had
$12.61  million of  construction  or development  loans.  We offer loans to both
builders and borrowers for the  construction of one- to four-family  residences,
and to a lesser extent, commercial real estate and multi-family properties.

<PAGE>

Currently, such loans are offered with fixed or adjustable rates of interest. At
December 31, 1999,  we had $4.26  million and $8.35  million of  fixed-rate  and
adjustable-rate   construction  or  development   loans,   respectively,   which
represented  1.98%  and  3.89%,  respectively,  of  our  gross  loan  portfolio.
Following the construction  period, these loans may become permanent loans, with
terms for up to 30 years for  adjustable-rate  loans and 20 years for fixed-rate
loans.


                                       9
<PAGE>
               Construction  lending is generally considered to involve a higher
level of credit risk than one- to four-family residential lending since the risk
of loss on  construction  loans is  dependent  largely  upon the accuracy of the
initial  estimate of the  individual  property's  value upon  completion  of the
project and the estimated cost (including  interest) of the project. If the cost
estimate proves to be inaccurate, we may be required to advance funds beyond the
amount originally committed to permit completion of the project.

               Consumer  Lending.  We offer a variety of secured consumer loans,
including  automobile,  home equity lines of credit,  second  mortgage and loans
secured  by  savings  deposits.  We also  offer  unsecured  consumer  loans.  We
currently  originate  substantially  all of our  consumer  loans in our  primary
market area.  We originate  consumer  loans on a direct basis and on an indirect
basis through the acquisition of installment  payment contracts from dealers who
extend credit to their customers for the purchase of an automobile, both new and
used.

               A significant  component of our consumer loan portfolio  consists
of automobile  loans.  These loans  generally have terms that do not exceed five
and a half  years and  carry a variety  of rate  adjustment  features  and other
terms. Generally, loans on new vehicles are made in amounts up to 100% of dealer
cost and loans on used vehicles are made in amounts up to its  published  value,
less certain adjustments.  At December 31, 1999, automobile loans totaled $15.44
million  or 7.18% of the gross loan  portfolio.  Of this  amount,  approximately
$5.51 million or 35.69% and $9.93 million or 64.31% were  originated on a direct
and indirect basis, respectively.

               We also originate fixed rate second mortgages and adjustable rate
home equity line of credit loans.  Home equity and second mortgage loans secured
by  mortgages,  together  with loans  secured by all prior liens,  are generally
limited to 90% or less of the appraised value (where we have the first mortgage)
of the property securing the loan or 80% or less of appraised value (where we do
not have the  first  mortgage  or where the  collateral  property  is  non-owner
occupied).  Generally,  such loans have a maximum term of up to 10 years.  As of
December  31, 1999,  home equity and second  mortgage  loans,  most of which are
secured by  mortgages,  amounted to $6.37  million and  $805,000,  respectively,
which represented 2.96% and 0.37%, respectively, of the gross loan portfolio.

               At December 31, 1999, the consumer loan portfolio  totaled $30.59
million,  or  14.23%  of  its  gross  loan  portfolio.  At  December  31,  1999,
approximately  70.96% of  consumer  loans  were  short-  and  intermediate-term,
fixed-rate consumer loans and 29.04% were adjustable rate consumer loans.

               Our   underwriting   standards  for  consumer  loans  include  an
application,  a determination of the applicant's  payment history on other debts
and an assessment of ability to meet  existing  obligations  and payments on the
proposed  loan.  Although   creditworthiness  of  the  applicant  is  a  primary
consideration,  the underwriting process also includes a comparison of the value
of the security, if any, in relation to the proposed loan amount.

               Consumer loans may entail greater credit risk than do residential
mortgage  loans,  particularly in the case of consumer loans which are unsecured
or are secured by rapidly depreciable assets, such as automobiles.  In addition,
consumer loan collections are dependent on the borrower's  continuing  financial
stability,  and  thus  are  more  likely  to be  affected  by  adverse  personal
circumstances.  Furthermore,  the application of various federal and state laws,
including  bankruptcy  and  insolvency  laws,  may limit the amount which can be
recovered on such loans.  At December 31, 1999,  $186,000 of our consumer  loans
were non-performing representing 0.09% of the gross loan portfolio.

                                       10
<PAGE>
               Commercial  Business  Lending.   We  also  originate   commercial
business   loans  and  purchase   commercial   leases.   At  December  31,  1999
approximately  $24.18  million,  or  11.25%  of our  gross  loan  portfolio  was
commercial  business lending.  The largest commercial business loan is a line of
credit of $3.40 million to an automobile leasing company, of which $3.34 million
was outstanding at December 31, 1999.

               Commercial  business loans typically are made on the basis of the
borrower's  ability  to make  repayment  from  the cash  flow of the  borrower's
business. As a result, the availability of funds for the repayment of commercial
business  loans may be  substantially  dependent  on the success of the business
itself  (which,  in turn,  is likely to be dependent  upon the general  economic
environment). Our commercial business loans are usually, but not always, secured
by business assets.  However,  the collateral  securing the loans may depreciate
over time,  may be difficult to appraise and may fluctuate in value based on the
success of the business.

               Our  commercial  business  lending  policy  includes  credit file
documentation  and analysis of the borrower's  character,  capacity to repay the
loan,  the  adequacy  of the  borrower's  capital and  collateral  as well as an
evaluation of conditions  affecting  the  borrower.  Analysis of the  borrower's
past,  present and future cash flows is also an  important  aspect of our credit
analysis.  Nonetheless,  such  loans  carry  a  higher  credit  risk  than  more
traditional thrift lending.

Originations, Purchases and Sales of Loans

               Loan  originations  are developed from  continuing  business with
depositors and borrowers,  soliciting realtors,  builders, walk-in customers and
other third-party sources.

               While we originate both adjustable-rate and fixed-rate loans, our
ability to originate  loans to a certain  extent is dependent  upon the relative
customer demand for loans in its market,  which is affected by the interest rate
environment,  among other  factors.  For the year ended  December 31,  1999,  we
originated  $61.59 million in fixed-rate  loans and $28.85 million in adjustable
rate loans.

               One- to four-family  originations decreased for the year to $29.1
million in 1999 from $37.6 million in 1998, reflecting the drop in refinances as
rates began increasing during 1999.
<PAGE>
               The following table shows our loan  origination,  purchase,  sale
and repayment activities for the periods indicated.
<TABLE>
<CAPTION>
                                                         Year Ended December 31,
                                                   -----------------------------------
                                                     1999          1998           1997
                                                   --------      --------      -------
                                                             (In Thousands)
<S>                                                <C>           <C>           <C>
Originations by type:
--------------------
 Fixed rate:
  Real estate - one- to four-family..............  $ 17,681      $ 17,332      $13,024
                    - multi-family...............       763           347          729
                    - commercial.................     6,363         1,988        3,757
                    - construction...............    14,629         4,334        2,962
  Non-real estate - consumer.....................    16,877        13,482       14,216
                    - commercial business........     5,273         4,586        7,658
                                                   --------      --------      -------
         Total fixed-rate........................    61,586        42,069       42,346
                                                   --------      --------      -------
 Adjustable rate:
  Real estate - one- to four-family..............    11,421        20,263        8,983
                    - multi-family...............     1,005           ---          ---
                    - commercial.................       835         1,382        2,632
                    - construction...............     2,080         8,122       10,551
  Non-real estate - consumer.....................     3,454         2,094        2,414
                    - commercial business........    10,056         6,653        7,661
                                                   --------      --------      -------
         Total adjustable-rate...................    28,851        38,514       32,241
                                                   --------      --------      -------

         Total loans originated..................    90,437        80,583       74,587
                                                   --------      --------      -------

Purchases:
---------
  Real estate - one- to four-family..............       ---           ---          ---
                    - multi-family...............       ---           ---          ---
                    - commercial.................     1,200           ---          300
   Non real estate - commercial..................     2,400         3,046        2,962
                                                   --------      --------      -------
         Total loans purchased...................     3,600         3,046        3,262

Sales and Repayments:
--------------------
  Real estate - multi-family.....................       ---           ---          352
                    - commercial.................       227           ---          ---
  Non real estate - commercial...................       ---         2,431          ---
                                                   --------      --------      -------
         Total loans sold........................       227         2,431          352
  Principal repayments...........................    69,847        70,430       49,887
                                                   --------      --------      -------

         Total reductions........................    70,074        72,861       50,239
                                                   --------      --------      -------
         Net increase (decrease).................  $ 23,963      $ 10,768      $27,610
                                                   ========      ========      =======
</TABLE>
<PAGE>

Asset Quality

               When a borrower  fails to make a required  payment on a loan,  we
contact the borrower in an attempt to cure the delinquency. In the case of loans
secured by real estate,  reminder  notices are sent to borrowers.  If payment is
late,  appropriate  late charges are  assessed,  and a notice of late charges is
sent to the borrower.  If the loan is in excess of 90 days delinquent,  the loan
will be  referred  to our legal  counsel  for  collection.  In all cases,  if we
believe  that  its  collateral  is at risk  and  added  delay  would  place  the
collectibility  of the  balance  of the loan in further  question,  we may refer
loans for collection even sooner than the 90 days described above.

                                       12
<PAGE>
               When a loan becomes delinquent 90 days or more, we place the loan
on non-accrual  status and  previously  accrued  interest  income on the loan is
charged against current income.  The loan will remain on a non-accrual status as
long as the loan is 90 days delinquent.

               Delinquent  consumer  loans are  handled  in a similar  manner as
those described above;  however,  shorter time frames for each step apply due to
the type of  collateral  generally  associated  with such  types of  loans.  Our
procedures  for  repossession  and sale of  consumer  collateral  are subject to
various requirements under Indiana consumer protection laws.

               The following table sets forth our loan delinquencies by type, by
amount and by percentage of type at December 31, 1999. The amounts  presented in
the table below represent the total remaining  principal  balances of the loans,
rather than the actual payment amounts which are overdue.

<TABLE>
<CAPTION>
                                       30 to 89 Days                  90 Days and Over               Total Delinquent Loans
                              ----------------------------      --------------------------         -----------------------------
                                                  Percent                         Percent                              Percent
                                                  of Loan                         of Loan                              of Loan
                              Number   Amount     Category      Number  Amount    Category        Number    Amount     Category
                              ------   ------     --------      ------  ------    --------        ------    ------     --------
<S>                             <C>    <C>          <C>          <C>    <C>           <C>           <C>     <C>       <C>
Real Estate:
    One- to four-family         19     $  794       0.67%         7     $  339        0.28%          26     $1,133     0.95%
    Commercial                   4      1,406       4.98          3        269        0.95            7      1,675     5.93
    Construction or              1        103       0.82          3        683        5.41            4        786     6.23
      Development
Consumer                        65        844       2.76         16        186        0.61           81      1,030     3.37
Commercial business             11        221       0.91          3        233        0.96           14        454     1.87
                                       ------                           ------                              ------
              Total            100     $3,368                    32     $1,710                      132     $5,078
                                       ======                           ======                              ======
</TABLE>
                                       13
<PAGE>
               Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing  assets in our loan portfolio.  Loans are placed on
non-accrual  status when the  collection of principal  and/or  interest  becomes
doubtful. For all years presented, we had no troubled debt restructurings (which
involve  forgiving  a portion of interest  or  principal  on any loans or making
loans at a rate  materially less than that of market rates).  Foreclosed  assets
include assets acquired in settlement of loans.

<TABLE>
<CAPTION>
                                                                December 31,
                                             ---------------------------------------------------
                                             1999       1998        1997       1996        1995
                                            ------     ------     ------      ------      ------
                                                           (Dollars in Thousands)
<S>                                         <C>        <C>        <C>         <C>         <C>
Non-accruing loans:
  One- to four-family                       $  339     $  149     $  334      $  470      $    9
  Multi-family                                  22        ---        ---         ---         ---
  Commercial real estate                       247        614        706         172         171
  Construction or development                  683        ---        ---         ---         ---
  Consumer                                     186        107         37          63          94
  Commercial business                          233        338         89         ---          10
                                            ------     ------     ------      ------      ------
     Total                                   1,710      1,208      1,166         705         284
                                            ------     ------     ------      ------      ------
Foreclosed assets:
  One- to four-family                           49         58        ---         ---         ---
  Commercial                                   ---         52        ---         ---         ---
                                            ------     ------     ------      ------      ------
     Total                                      49        110        ---         ---         ---
                                            ------     ------     ------      ------      ------
Repossessed assets:
  Consumer                                      14         10          7           8         ---
                                            ------     ------     ------      ------      ------
     Total                                      14         10          7           8         ---
                                            ------     ------     ------      ------      ------
Total non-performing assets                 $1,773     $1,328     $1,173      $  713      $  284
                                            ======     ======     ======        ====        ====

Total as a percentage of total assets .       0.70 %     0.63 %     0.58%       0.42%       0.21%
                                             =====      =====       ====        ====        ====
</TABLE>

               For the year ended December 31, 1999, gross interest income which
would have been recorded had the  non-accruing  loans been current in accordance
with their  original  terms was $84,000,  none of which was included in interest
income.
<PAGE>
               Classified Assets.  Federal regulations  classify loans and other
assets,  such as debt and equity  securities  considered by the Office of Thrift
Supervision to be of lesser quality, as "substandard,"  "doubtful" or "loss." An
asset is considered "substandard" if it is inadequately protected by the current
net worth and paying  capacity of the obligor or of the collateral  pledged,  if
any.   "Substandard"   assets  include  those  characterized  by  the  "distinct
possibility"  that the  insured  institution  will  sustain  "some  loss" if the
deficiencies are not corrected.  Assets classified as "doubtful" have all of the
weaknesses   inherent  in  those  classified   "substandard,"   with  the  added
characteristic  that the weaknesses  present make  "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable."  Assets  classified as "loss" are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without the establishment of a specific loss reserve is not warranted.

                                       14
<PAGE>
               When an insured  institution  classifies problem assets as either
substandard or doubtful, it may establish specific allowances for loan losses in
an amount  deemed  prudent by  management.  General  allowances  represent  loss
allowances which have been established to recognize the inherent risk associated
with lending activities,  but which, unlike specific  allowances,  have not been
allocated to particular problem assets. When an insured  institution  classifies
problem  assets as  "loss,"  it is  required  either  to  establish  a  specific
allowance for losses equal to 100% of that portion of the asset so classified or
to  charge  off  such  amount.   An   institution's   determination  as  to  the
classification  of its  assets  and the amount of its  valuation  allowances  is
subject to review by the regulatory authorities, who may order the establishment
of additional general or specific loss allowances.

               In  connection  with the filing of our periodic  reports with the
Office of Thrift Supervision and in accordance with our classification of assets
policy,  we regularly  review the problem  assets in our  portfolio to determine
whether  any  assets  require   classification  in  accordance  with  applicable
regulations. At December 31, 1999, we had classified $1.72 million of our assets
as  substandard,  none as doubtful and none as loss,  representing  6.70% of the
stockholders'  equity or 0.68% of assets.  We have also classified $5.08 million
of our assets as special mention.

               Other Loans of Concern.  Other than the non-performing  loans and
foreclosed  real  estate held for sale set forth in the tables  above,  impaired
loans  incorporated  by  reference  from the Annual  Report  and the  classified
assets,  there were no loans classified with respect to which known  information
about the  possible  credit  problems of the  borrowers or the cash flows of the
security properties have caused management to have some doubts as to the ability
of the  borrowers  to comply with  present  loan  repayment  terms and which may
result  in the  future  inclusion  of such  items  in the  non-performing  asset
categories.

               Allowance  for Loan  Losses.  The  allowance  for loan  losses is
established  through a provision for loan losses based on our  evaluation of the
risk inherent in our loan  portfolio and changes in the nature and volume of its
loan activity,  including  those loans which are being  specifically  monitored.
Such evaluation,  which includes a review of loans for which full collectibility
may  not  be  reasonably  assured,  considers  among  other  matters,  the  loan
classifications  discussed  above,  the estimated  fair value of the  underlying
collateral, economic conditions,  historical loan loss experience, the amount of
loans outstanding and other factors that warrant recognition in providing for an
adequate loan loss allowance.

               Although we believe that we use the best information available to
determine  the  allowance,   unforeseen   market   conditions  could  result  in
adjustments and net earnings could be  significantly  affected if  circumstances
differ   substantially   from  the   assumptions   used  in  making   the  final
determination.  Future additions to the allowance will be the result of periodic
loan,  property and collateral  reviews and thus cannot be predicted in advance.
At December 31, 1999, we had a total  allowance for loan losses of $1.77 million
or  99.66% of  non-performing  loans.  See Note 3 of the  Notes to  Consolidated
Financial Statements.


                                       15
<PAGE>
               The  distribution  of the  allowance for loan losses at the dates
indicated is summarized as follows:
<TABLE>
<CAPTION>
                                                   1999                                         1998
                                                   ----                                         ----
                                                                 Percent                                       Percent
                                                                of Loans                                      of Loans
                                                   Loan          in Each                         Loan          in Each
                                 Amount of       Amounts        Category       Amount of       Amounts        Category
                                 Loan Loss         by           to Total       Loan Loss         by           to Total
                                 Allowance      Category          Loans        Allowance      Category          Loans
                                 ---------      --------          -----        ---------      --------          -----
 <S>                             <C>             <C>              <C>           <C>           <C>                <C>
One- to four-family.             $   278         $119,283          55.50%       $ 266         $113,919           59.66%
Multi-family........                  35            3,779           1.76           27            2,908            1.52
Commercial real estate               272           24,471          11.39          204           16,514            8.65
Construction or  development         284           12,614           5.87          278           11,365            5.95
Consumer............                 273           30,594          14.23          183           24,863           13.02
Commercial business.                 413           24,184          11.25          305           21,393           11.20
Unallocated.........                 212               --             --          191               --              --
                                 -------        ---------         ------      -------        ---------          ------
     Total..........             $ 1,767        $ 214,925         100.00%     $ 1,454        $ 190,962          100.00%
                                 =======        =========         ======      =======        =========          =====
<CAPTION>
                                                 1997                                         1996
                                                 ----                                         ----
                                                               Percent                                       Percent
                                                              of Loans                                      of Loans
                                                 Loan          in Each                         Loan          in Each
                               Amount of       Amounts        Category       Amount of       Amounts        Category
                               Loan Loss         by           to Total       Loan Loss         by           to Total
                               Allowance      Category          Loans        Allowance      Category          Loans
                               ---------      --------          -----        ---------      --------          -----
<S>                             <C>           <C>             <C>            <C>             <C>              <C>
One- to four-family.            $240         $109,080          60.53%           $209         $ 99,325          65.10%
Multi-family........              22            2,606           1.45              74            2,993           1.96
Commercial real estate           163           16,734           9.29             106           10,996           7.20
Construction or  development     237           10,596           5.88             311           12,054           7.90
Consumer............             136           23,652          13.12              79           17,648          11.57
Commercial business.             244           17,526           9.73             165            9,568           6.27
Unallocated.........             152              ---            ---              83              ---             ---
                              ------         --------         ------          ------         --------         ------
     Total..........          $1,194         $180,194         100.00%         $1,027         $152,584         100.00%
                              ======         ========         ======          ======         ========         ======

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                1995
                                                ----
                                                                Percent
                                                               of Loans
                                                 Loan           in Each
                               Amount of       Amounts         Category
                               Loan Loss         by            to Total
                               Allowance      Category           Loans
                               ---------      --------           -----
<S>                              <C>          <C>                <C>
One- to four-family.             $180         $ 85,533            67.88%
Multi-family........               50            2,029             1.61
Commercial real estate            100           11,742             9.32
Construction or  development      200            6,359             5.05
Consumer............               65           14,550            11.55
Commercial business.              100            5,783             4.59
Unallocated.........              186              ---              ---
                                 ----          -------           ------
     Total..........             $881         $125,996           100.00%
                                 ====         ========           ======

</TABLE>

                                       16
<PAGE>
               The  following  table sets forth an analysis of the allowance for
loan losses activity.

<TABLE>
<CAPTION>
                                                   -----------------------------------------------------
                                                                    Year Ended December 31,
                                                   -----------------------------------------------------
                                                   1999        1998        1997        1996        1995
                                                   ----        ----        ----        ----        ----
                                                                   (Dollars in Thousands)
<S>                                               <C>         <C>         <C>         <C>         <C>
Balance at beginning of period                    $1,454      $1,194      $1,027      $  881      $  694

Charge-offs:
  One- to four-family                                  1          47           2           3         ---
  Commercial                                          26         ---           1         ---           9
  Consumer                                           159          99         133         131          65
                                                  ------      ------      ------      ------      ------
                                                     186         146         136         134          74
                                                  ------      ------      ------      ------      ------

Recoveries:
   One- to four-family                               ---           3         ---         ---         ---
   Consumer                                           50          42          38          45          10
   Commercial                                        ---           1         ---         ---         ---
                                                  ------      ------      ------      ------      ------
                                                      50          46          38          45          10
                                                  ------      ------      ------      ------      ------

Net charge-offs                                      136         100          98          89          64
Additions charged to operations                      449         360         265         235         251
                                                  ------      ------      ------      ------      ------
Balance at end of period                          $1,767      $1,454      $1,194      $1,027      $  881
                                                  ======      ======      ======      ======        ====

Ratio of net charge-offs during the period to
 average loans outstanding during the period        0.07%       0.06%       0.06%       0.07%       0.06%
                                                    ====        ====        ====        ====        ====

Ratio of net charge-offs during the period to
 average non-performing loans                       9.80%      12.99%      13.07%      20.23%      16.41%
                                                    ====       =====       =====       =====       =====

</TABLE>

Investment Activities

               Liquidity   may   increase   or  decrease   depending   upon  the
availability of funds and  comparative  yields on investments in relation to the
return on loans. Though our liquidity level is below our peers,  historically we
have generally maintained liquid assets at levels above the minimum requirements
that had been imposed by Office of Thrift Supervision  regulations and at levels
believed  adequate  to meet the  requirements  of normal  operations,  including
repayments  of maturing  debt and potential  deposit  outflows.  At December 31,
1999,  our liquidity  ratio (liquid  assets as a percentage of net  withdrawable
savings deposits and current borrowings) was 7.28%.
<PAGE>
               Federally  chartered  savings  institutions have the authority to
invest in various  types of liquid  assets,  including  United  States  Treasury
obligations,  securities of various federal  agencies,  certain  certificates of
deposit of insured banks and savings institutions, certain bankers' acceptances,
repurchase  agreements  and  federal  funds.  Subject to  various  restrictions,
federally  chartered  savings  institutions  may also  invest  their  assets  in
commercial  paper,  investment  grade corporate debt securities and mutual funds
whose  assets  conform to the  investments  that a federally  chartered  savings
institution is otherwise authorized to make directly.


                                       17
<PAGE>
               Generally, our investment policy is to invest funds among various
categories  of  investments  and  maturities  based  upon our  liquidity  needs,
asset/liability  management  policies,  investment  quality,  marketability  and
performance objectives.

               Securities  and Other  Interest-Earning  Assets.  At December 31,
1999, our  interest-earning  deposits with other financial  institutions totaled
$3.04  million,  or 1.19% of total  assets,  and our  securities,  consisting of
obligations of states and political subdivisions, money market mutual funds, and
other securities totaled $33.65 million, or 13.21% of total assets.  Included in
other securities,  as of such date, we had a $4.91 million investment in Federal
Home Loan Bank stock,  satisfying our  requirement for membership in the Federal
Home Loan Bank of Indianapolis.

               At December  31,  1999,  we had  $456,000 in  securities  held to
maturity  consisting of  obligations  of states and political  subdivisions  and
other debt  securities,  and securities  available for sale with a fair value of
$33.19  million.  See  Note  2  of  the  Notes  to  the  Consolidated  Financial
Statements.

               The following  table sets forth the composition of our securities
portfolio at the dates indicated.
<TABLE>
<CAPTION>
                                                             1999                         1998                      1997
                                                             ----                         ----                      ----
                                                   Carrying        % of        Carrying        % of        Carrying       % of
                                                   --------        ----        --------        ----        --------       ----
                                                                          (Dollars in Thousands)

<S>                                                 <C>             <C>         <C>             <C>         <C>            <C>
Debt securities:
  Obligations of states and political..........     $ 524           1.56%       $  612          4.31%       $  639         4.15%
  Mortgage-backed securities...................     2,246           6.67         5,354         37.74         6,599        42.89
  Federal agency obligations...................    25,036          74.41         4,080         28.76         4,044        26.29
  Corporate bonds..............................       116           0.34           116          0.82           118         0.77
                                                   ------         ------        ------        ------        ------       -----
     Total debt securities.....................    27,922          82.98        10,162         71.63        11,400        74.10
Equity securities:
  Mutual funds.................................       814           2.42           775          5.46           735         4.78
  Equity securities............................     4,913          14.60         3,250         22.91         3,250        21.12
                                                  -------         ------       -------        ------       -------       ------
     Total securities..........................   $33,649         100.00%      $14,187        100.00%      $15,385       100.00%
                                                  =======         ======       =======        ======       =======       ======

</TABLE>
                                       18

<PAGE>
Sources of Funds

               Our primary  sources of funds are deposits,  payment of principal
and  interest  on loans,  interest  earned  on  securities,  interest  earned on
interest-earning deposits with other banks, Federal Home Loan Bank advances, and
other funds provided from operations.

               Federal  Home  Loan Bank  advances  are used to  support  lending
activities and to assist in our asset/liability management strategy.  Typically,
we do not use other forms of  borrowings.  At December  31,  1999,  we had total
Federal Home Loan Bank advances of $80.50 million with the capacity to borrow as
of December 31, 1999 an  additional  $5.52  million.  See Note 6 of the Notes to
Consolidated Financial Statements.

               Deposits.  We offer a variety of deposit  accounts  having a wide
range of interest rates and terms.  Deposits consist of passbook,  savings, NOW,
checking,  money  market  deposit and time  deposit  accounts.  The time deposit
accounts currently range in terms from 90 days to five years.

               We rely primarily on advertising,  competitive  pricing  policies
and customer service to attract and retain these deposits.  We generally solicit
deposits  from  our  market  area and do not use  brokers  regularly  to  obtain
deposits.  The flow of deposits is influenced  significantly by general economic
conditions,   changes  in  money  market  and  prevailing   interest  rates  and
competition.

               We have become more  susceptible  to short-term  fluctuations  in
deposit flows as customers have become more interest rate conscious. We endeavor
to  manage  the  pricing  of our  deposits  in  keeping  with its  profitability
objectives giving consideration to its asset/liability  management.  Our ability
to attract and maintain savings accounts and time deposit accounts and the rates
paid on these deposits,  has been and will continue to be significantly affected
by market conditions.

               The  following  table sets  forth our  savings  flows  during the
periods indicated.
<TABLE>
<CAPTION>
                                                           Year Ended December 31,
                                               ----------------------------------------------------
                                                 1999                 1998                   1997
                                               --------             --------               -------
                                                            (Dollars in Thousands)
<S>                                            <C>                  <C>                    <C>
Opening balance.......................         $123,336             $107,550               $85,346
Deposits..............................          578,790              336,345               303,686
Withdrawals...........................          564,483              326,471               286,040
Interest credited.....................            5,569                5,912                 4,558
                                               --------             --------               -------
Ending balance........................         $143,212             $123,336              $107,550
                                               ========             ========              ========

Net increase (decrease)...............          $19,876              $15,786               $22,204
                                                =======              =======               =======

Percent increase (decrease)...........           16.12%               14.68%                26.02%
                                                 =====                =====                 =====
</TABLE>

                                       19
<PAGE>
               The  following  table sets forth the dollar amount of deposits in
the various types of deposit programs we offered for the periods indicated.

<TABLE>
<CAPTION>
                                                            1999                          1998                      1997
                                                            ----                          ----                      ----


                                                                  Percent                      Percent                    Percent
                                                       Amount     Of Total        Amount       Of Total      Amount       of Total
                                                       ------     --------        ------       --------      ------       --------
                                                                   (Dollars in Thousands)
<S>                                                   <C>            <C>        <C>              <C>          <C>         <C>
Transactions and Savings Deposits:
----------------------------------

Passbook Accounts (2.05%)....................          $ 9,709        6.78%      $ 9,812          7.96%        $ 9,336     8.68%
Demand and NOW Accounts (1.08%)..............           15,685       10.95        13,905         11.27          12,037    11.19
Money Market Accounts (4.83%)................           19,268       13.45        20,508         16.63          17,098    15.90
                                                      --------      ------      --------        ------        --------   ------
Total Non-Time Deposits......................           44,662       31.18        44,225         35.86          38,471    35.77
                                                      --------      ------      --------        ------        --------   ------

Time Deposits:
-------------

 2.00 -  3.99%...............................              873        0.61           939          0.76           1,045      .97
 4.00 -  5.99%...............................           53,627       37.45        72,690         58.94          38,467    35.77
 6.00 -  7.99%...............................           44,050       30.76         5,482          4.44          29,567    27.49
                                                      --------      ------      --------        ------        --------   ------
Total Time Deposits..........................           98,550       68.82        79,111         64.14          69,079    64.23
                                                      --------      ------      --------        ------        --------   ------
Total Deposits...............................         $143,212      100.00%     $123,336        100.00%       $107,550   100.00%
                                                      ========      ======      ========        ======        ========   ======
</TABLE>

                                       20
<PAGE>
               The following  table shows rate and maturity  information for our
time deposit accounts as of December 31, 1999.

<TABLE>
<CAPTION>
                            2.00-      4.00-       6.00-                   Percent
                            3.99%      5.99%       7.99%      Total        of Total
                            -----      -----       -----      -----        --------
                                         (Dollars in Thousands)
<S>                       <C>         <C>         <C>         <C>            <C>
Time deposit accounts
maturing in quarter ending:
---------------------------

March 31, 2000            $   374     $18,301     $ 1,437     $20,112        20.41%
June 30, 2000                 499      11,789      24,068      36,356        36.89
September 30, 2000              -       9,560       6,796      16,356        16.60
December 31, 2000               -       4,328       7,826      12,154        12.33
March 31, 2001                  -       4,399       1,320       5,719         5.80
June 30, 2001                   -       2,379           -       2,379         2.41
September 30, 2001              -       1,464         313       1,777         1.80
December 31, 2001               -         936       1,136       2,072         2.10
March 31, 2002                  -         228         348         576         0.59
June 30, 2002                   -         291           -         291         0.30
September 30, 2002              -         160           -         160         0.16
December 31, 2002               -         142           -         142         0.15
Thereafter                      -         456           -         456         0.46

                          -------      -------     -------     -------       ------
Total                     $   873      $54,433     $43,244     $98,550       100.00%
                          =======      =======     =======     =======       ======

 Percent of total.......    0.89%       55.23%     43.88%      100.00%
</TABLE>
               The  following  table  indicates  the amount of our time  deposit
accounts by time remaining until maturity as of December 31, 1999.

<TABLE>
<CAPTION>
                                                               Maturity
                                                            Over      Over
                                             3 Months      3 to 6    6 to 12      Over
                                             or Less       Months     Months    12 months      Total
                                             -------       ------     ------    ---------      -----
<S>                                           <C>         <C>         <C>         <C>         <C>
Time deposit accounts less than $100,000      $10,554     $13,478     $11,900     $ 9,508     $45,440

Time deposit accounts of $100,000 or more       8,558      22,852      16,218       3,989      51,617

Public funds (1)                                1,000          26         392          75       1,493
                                              -------     -------     -------     -------     -------
Total time deposit accounts                   $20,112     $36,356     $28,510     $13,572     $98,550
                                              =======     =======     =======     =======     =======
</TABLE>
(1)            Deposits from governmental and other public entities.

                                       21
<PAGE>
               Borrowings.  Although  deposits are our primary  source of funds,
our policy has been to utilize  borrowings when they are a less costly source of
funds or can be invested at a positive  rate of return.  We may obtain  advances
from the Federal Home Loan Bank of Indianapolis upon the security of our capital
stock in the Federal Home Loan Bank of Indianapolis  and certain of our mortgage
loans and  mortgage-backed  securities.  Such  advances may be made  pursuant to
several  different credit programs,  each of which has its own interest rate and
range of maturities. At December 31, 1999, we had $80.50 million in Federal Home
Loan Bank advances outstanding. For additional information regarding the term to
maturity and average rate paid on Federal Home Loan Bank advances, see Note 6 of
the  Notes  to  Consolidated   Financial  Statements  and  "Business  -  Lending
Activities."

               The following table sets forth the maximum  month-end balance and
average balance of Federal Home Loan Bank advances for the periods indicated.

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                               ---------------------------------
                                                 1999        1998         1997
                                               -------      -------      -------
                                                          (In Thousands)
<S>                                            <C>          <C>          <C>
Maximum Balance:
----------------

  Federal Home Loan Bank advances              $97,500      $62,100      $63,000

Average Balance:
----------------

  Federal Home Loan Bank advances              $74,466      $54,841      $58,859


</TABLE>

Service Corporation Activities

               At December 31, 1999, First Federal had one subsidiary, Northeast
Indiana Financial,  which is now functioning as our brokerage  subsidiary and we
have three registered representatives to provide this service to the customers.

Regulation

               First Federal is a federally chartered savings bank, the deposits
of which are  federally  insured  and backed by the full faith and credit of the
United  States  Government.   Accordingly,  we  are  subject  to  broad  federal
regulation  and oversight  extending to all its  operations.  First Federal is a
member of the Federal Home Loan Bank of  Indianapolis  and is subject to certain
limited  regulation by the Board of Governors of the Federal Reserve System.  As
the savings and loan holding company of First Federal, Northeast Indiana Bancorp
also is subject to federal  regulation and oversight.  However,  since Northeast
Indiana  Bancorp  existed as a unitary savings and loan holding company prior to
May 4, 1999, there is virtually no restriction on its activities.
<PAGE>
               Federal Regulation of Savings Associations.  The Office of Thrift
Supervision has extensive authority over the operations of savings associations.
As part of this  authority,  we are required to file  periodic  reports with the
Office of Thrift  Supervision  and are subject to periodic  examinations  by the
Office of Thrift Supervision and the FDIC. When these examinations are conducted
by the Office of Thrift  Supervision  and the FDIC,  the  examiners  may require
First Federal to provide for higher general or specific loan loss reserves.


                                       22
<PAGE>
               The Office of Thrift  Supervision also has extensive  enforcement
authority over all savings  institutions  and their holding  companies,  such as
First  Federal  and  Northeast  Indiana  Bancorp.   This  enforcement  authority
includes,  among other things,  the ability to assess civil money penalties,  to
issue cease-and-desist or removal orders, and to initiate injunctive actions.

               Our general permissible  lending limit for  loans-to-one-borrower
is equal to the  greater of $500,000  or 15% of  unimpaired  capital and surplus
(except for loans fully secured by certain  readily  marketable  collateral,  in
which case this limit is increased to 25% of unimpaired capital and surplus). At
December 31, 1999, our lending limit under this  restriction  was  approximately
$3.78  million.  At  December  31,  1999,  we  had no  loans  in  excess  of our
loans-to-one-borrower limit.

               Insurance of Accounts and Regulation by the FDIC. As insurer, the
FDIC  imposes   deposit   insurance   premiums  and  is  authorized  to  conduct
examinations of, and to require reporting by, FDIC-insured institutions. It also
may prohibit any FDIC-insured institution from engaging in any activity the FDIC
determines  by  regulation  or order to pose a serious  risk to the Federal Home
Loan Bank System or the Savings  Association  Insurance  Fund. The FDIC also has
the authority to initiate  enforcement  actions  against  savings  associations,
after  giving  the  Office of Thrift  Supervision  an  opportunity  to take such
action,   and  may  terminate  deposit  insurance  if  it  determines  that  the
institution  has engaged in unsafe or unsound  practices,  or is in an unsafe or
unsound condition.

               The FDIC's  deposit  insurance  premiums are  assessed  through a
risk-based  system under which all insured  depository  institutions  are placed
into one of nine  categories  and assessed  insurance  premiums based upon their
level of capital and  supervisory  evaluation.  Under the  system,  institutions
classified  as well  capitalized  (i.e.,  a core capital ratio of at least 5%, a
ratio of core  capital to  risk-weighted  assets of at least 6% and a risk-based
capital ratio of at least 10%) and considered  healthy,  pay the lowest premium,
while  institutions  that are  less  than  adequately  capitalized  (i.e.,  core
risk-based  capital ratios of less than 4% or a risk-based capital ratio of less
than 8%) and  considered  of  substantial  supervisory  concern  pay the highest
premium.  Risk  classification  of all insured  institutions is made by the FDIC
semi-annually.  At  December  31,  1999,  First  Federal  was  classified  as  a
well-capitalized institution.

               The current premium  schedule for Bank Insurance Fund and Savings
Association  Insurance  Fund  insured  institutions  ranged  from 0 to 27  basis
points.  However,  Savings Association  Insurance Fund insured  institutions and
Bank  Insurance  Fund  insured  institutions  are  required  to pay a  Financing
Corporation  assessment in order to fund the interest on bonds issued to resolve
thrift  failures in the 1980s.  For the quarter  ended  December 31, 1999,  this
amount was equal to 5.920 basis  points for each $100 in domestic  deposits  for
Savings  Association  Insurance  Fund members while Bank  Insurance Fund insured
institutions  pay an assessment  equal to about 1.184 basis points for each $100
in domestic  deposits.  These  assessments,  which may be revised based upon the
level of Bank  Insurance Fund and Savings  Association  Insurance Fund deposits,
will continue until the bonds mature in 2017 through 2019.

               Regulatory  Capital   Requirements.   Federally  insured  savings
associations, such as First Federal, are required to maintain a minimum level of
regulatory  capital.  The Office of Thrift  Supervision has established  capital
standards,  including a tangible capital requirement,  a leverage ratio (or core
capital)  requirement and a risk-based  capital  requirement  applicable to such
savings associations.

                                       23
<PAGE>
               The capital  standards  also require core capital  equal to 4% of
adjusted total assets,  depending on an institution's  supervisory  rating. Core
capital generally  consists of tangible capital plus certain  intangible assets,
including a limited amount of purchased credit card  relationships.  At December
31, 1999,  First  Federal had core capital  equal to $23.9  million,  or 9.4% of
adjusted total assets,  which is $13.7 million above the minimum  leverage ratio
requirement of 4% in effect on that date.

               The Office of Thrift Supervision  risk-based requirement requires
savings  associations  to have  total  capital  of at least 8% of  risk-weighted
assets.   Total  capital  consists  of  core  capital,  as  defined  above,  and
supplementary  capital.   Supplementary  capital  consists  of  certain  capital
instruments  that do not qualify as core capital and general  valuation loan and
lease  loss  allowances  up to a  maximum  of  1.25%  of  risk-weighted  assets.
Supplementary capital may be used to satisfy the risk-based  requirement only to
the extent of core  capital.  At  December  31,  1999,  First  Federal had $1.27
million of general  loss  reserves,  which was less than 0.78% of  risk-weighted
assets.

               In determining the amount of  risk-weighted  assets,  all assets,
including certain  off-balance sheet items, will be multiplied by a risk weight,
ranging from 0% to 100%,  based on the risk  inherent in the type of asset.  For
example,  the Office of Thrift Supervision has assigned a risk weight of 50% for
prudently  underwritten  permanent one- to four-family first lien mortgage loans
not more than 90 days  delinquent  and having a loan to value  ratio of not more
than 80% at origination,  unless insured to such ratio by an insurer approved by
Fannie Mae or Freddie Mac.

               On December 31, 1999, First Federal had total risk-based  capital
of $25.2 million, including approximately $23.9 million in core capital and $1.3
million in qualifying  supplementary  capital and risk-weighted assets of $162.6
million;  or total  capital of 15.5% of  risk-weighted  assets.  This amount was
$12.2 million above the 8% requirement in effect on that date.

               The Office of Thrift  Supervision is authorized to impose capital
requirements  in excess  of these  standards  on  individual  associations  on a
case-by-case basis. The Office of Thrift Supervision and the FDIC are authorized
and,  under certain  circumstances  required,  to take certain  actions  against
savings associations that fail to meet their capital requirements. The Office of
Thrift  Supervision  is  generally  required  to take  action  to  restrict  the
activities of an  "undercapitalized  association"  (generally  defined to be one
with less than either a 4% core capital  ratio, a 4% core  risked-based  capital
ratio or an 8% risk-based  capital ratio).  Any such  association  must submit a
capital restoration plan and until such plan is approved by the Office of Thrift
Supervision may not increase its assets, acquire another institution,  establish
a branch or engage in any new  activities,  and  generally  may not make capital
distributions.  The Office of Thrift  Supervision  is  authorized  to impose the
additional  restrictions  that are applicable to significantly  undercapitalized
associations.

               The Office of Thrift Supervision is also generally  authorized to
reclassify  an  association  into  a  lower  capital  category  and  impose  the
restrictions applicable to such category if the institution is engaged in unsafe
or unsound practices or is in an unsafe or unsound condition.

               The imposition by the Office of Thrift Supervision or the FDIC of
any of these measures on Northeast  Indiana  Bancorp or First Federal may have a
substantial adverse effect on our operations and profitability.

                                       24
<PAGE>
               Limitations  on Dividends  and Other Capital  Distributions.  The
Office  of  Thrift   Supervision   imposes   various   restrictions  on  savings
associations  with respect to their  ability to make  distributions  of capital,
which include dividends, stock redemptions or repurchases,  cash-out mergers and
other  transactions  charged  to the  capital  account.  The  Office  of  Thrift
Supervision  also prohibits a savings  association  from declaring or paying any
dividends or from  repurchasing any of its stock if, as a result of such action,
the  regulatory  capital of the  association  would be reduced  below the amount
required to be maintained for the liquidation  account established in connection
with the association's mutual to stock conversion.

               First  Federal  may  make  a  capital  distribution  without  the
approval  of the Office of Thrift  Supervision  provided we notify the Office of
Thrift  Supervision,  30 days before we declare the capital  distribution and we
meet the following  requirements:  (i) we have a regulatory rating in one of the
two top examination categories, (ii) we are not of supervisory concern, and will
remain  adequately-  or  well-capitalized,  as  defined  in the Office of Thrift
Supervision  prompt  corrective  action  regulations,   following  the  proposed
distribution,  and (iii) the distribution does not exceed our net income for the
calendar  year-to-date  plus  retained  net income for the previous two calendar
years (less any dividends  previously  paid). If we do not meet the above stated
requirements,  we must  obtain  the  prior  approval  of the  Office  of  Thrift
Supervision before declaring any proposed distributions.

               Qualified  Thrift  Lender  Test.  All  savings  institutions  are
required to meet a qualified thrift lender test to avoid certain restrictions on
their operations.  This test requires a savings institution to have at least 65%
of  its  portfolio  assets  (as  defined  by  regulation)  in  qualified  thrift
investments  on a monthly  average  for nine out of every 12 months on a rolling
basis.  As an  alternative,  the savings  institutions  may  maintain 60% of its
assets in those assets specified in Section  7701(a)(19) of the Internal Revenue
Code. Under either test, these assets primarily  consist of residential  housing
related loans and investments.  At December 31, 1999, First Federal met the test
and has always met the test since its effectiveness.  First Federal's  qualified
thrift lender percentage was 85.78% at December 31, 1999.

               Any savings  institution  that fails to meet the qualified thrift
lender test must convert to a national bank charter,  unless it requalifies as a
qualified thrift lender and remains a qualified thrift lender. If an institution
does not  requalify  and  converts to a national  bank  charter,  it must remain
Savings Association Insurance Fund-insured until the FDIC permits it to transfer
to the Banking  Insurance  Fund. If an  institution  has not yet  requalified or
converted to a national bank, its new  investments and activities are limited to
those permissible for both a savings  association and a national bank, and it is
limited to national bank branching  rights in its home state.  In addition,  the
institution is immediately  ineligible to receive any new Federal Home Loan Bank
borrowings  and is subject to national bank limits for payment of dividends.  If
the institution has not requalified or converted to a national bank within three
years after the failure,  it must sell all  investments  and stop all activities
not  permissible  for a national  bank. In addition,  it must repay promptly any
outstanding  Federal Home Loan Bank  borrowings,  which may result in prepayment
penalties.  If any  institution  that fails the qualified  thrift lender test is
controlled  by a holding  company,  then within one year after the failure,  the
holding  company must register as a bank holding  company and become  subject to
all restrictions on bank holding companies. See "- Holding Company Regulation."


                                       25
<PAGE>
               Community Reinvestment Act. Under the Community Reinvestment Act,
every FDIC insured  institution  has a continuing  and  affirmative  obligation,
consistent with safe and sound banking practices,  to help meet the credit needs
of its entire community, including low- and moderate- income neighborhoods.  The
Community  Reinvestment  Act  requires  the  Office  of Thrift  Supervision,  in
connection  with its examination of First Federal,  to assess the  institution's
record of meeting the credit needs of our community and to take this record into
account  in our  evaluation  of  certain  applications,  such as a merger or the
establishment of a branch,  by First Federal.  An  unsatisfactory  rating may be
used as the  basis  for the  denial of an  application  by the  Office of Thrift
Supervision.   First  Federal  was  examined  for  Community   Reinvestment  Act
compliance in March 1997 and received a rating of "satisfactory".

               Transactions with Affiliates.  Generally,  transactions between a
savings association or its subsidiaries and its affiliates are required to be on
terms as  favorable  to the  association  or  subsidiary  as  transactions  with
non-affiliates.  In addition, certain of these transactions, such as loans to an
affiliate,  are  restricted  to  a  percentage  of  the  association's  capital.
Affiliates of First Federal  include  Northeast  Indiana Bancorp and any company
which is under  common  control  with  First  Federal.  In  addition,  a savings
association may not lend to any affiliate  engaged in activities not permissible
for a bank holding  company or acquire the  securities of most  affiliates.  The
Office of Thrift Supervision has the discretion to treat subsidiaries of savings
associations as affiliates on a case by case basis.

               Certain  transactions  with  directors,  officers or  controlling
persons are also  subject to conflict  of interest  regulations  enforced by the
Office of Thrift Supervision.  These conflict of interest  regulations and other
statutes  also impose  restrictions  on loans to such persons and their  related
interests.  Among  other  things,  such  loans must  generally  be made on terms
substantially the same as for loans to unaffiliated individuals.

               Holding  Company  Regulation.  Northeast  Indiana  Bancorp  is  a
unitary savings and loan holding company subject to regulatory  oversight by the
Office of Thrift  Supervision.  As such,  we are  required to register  and file
reports with the Office of Thrift  Supervision and are subject to regulation and
examination  by the Office of Thrift  Supervision.  In  addition,  the Office of
Thrift Supervision has enforcement  authority over Northeast Indiana Bancorp and
its non-savings association subsidiaries which also permits the Office of Thrift
Supervision  to restrict  or prohibit  activities  that are  determined  to be a
serious risk to the subsidiary savings association.

               As a unitary savings and loan holding  company,  that has been in
existence since before May 4, 1999,  Northeast  Indiana Bancorp generally is not
subject to activity restrictions.  If Northeast Indiana Bancorp acquires control
of another  savings  association  as a separate  subsidiary,  it would  become a
multiple  savings and loan  holding  company,  and the  activities  of Northeast
Indiana  Bancorp and any of its  subsidiaries  (other than First  Federal or any
other Savings  Association  Insurance  Fund-insured  savings  association) would
become subject to certain restrictions.

               Additionally, if we fail the qualified thrift lender test, within
one year Northeast  Indiana Bancorp must register as and will become subject to,
the restrictions applicable to bank holding companies.

               Federal Securities Law. The stock of Northeast Indiana Bancorp is
registered  with the SEC under the Securities  Exchange Act of 1934, as amended.
Northeast  Indiana Bancorp is subject to the  information,  proxy  solicitation,
insider  trading  restrictions  and  other  requirements  of the SEC  under  the
Exchange Act of 1934.

                                       26
<PAGE>
               Northeast   Indiana   Bancorp  stock  held  by  persons  who  are
affiliates  (generally  officers,   directors  and  principal  stockholders)  of
Northeast Indiana Bancorp may not be resold without  registration or unless sold
in accordance  with certain resale  restrictions.  If Northeast  Indiana Bancorp
meets  specified  current  public  information  requirements,  each affiliate of
Northeast  Indiana  Bancorp  is  able  to sell  in the  public  market,  without
registration, a limited number of shares in any three-month period.

               Federal  Reserve  System.  The Federal Reserve Board requires all
depository  institutions to maintain  non-interest bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW and Super NOW
checking  accounts).  At December 31, 1999, First Federal was in compliance with
these  reserve  requirements.  The  balances  maintained  to  meet  the  reserve
requirements  imposed by the Federal  Reserve  Board may also be used to satisfy
liquidity requirements that may be imposed by the Office of Thrift Supervision.

               Savings  associations  are  authorized to borrow from the Federal
Reserve Bank "discount  window," but Federal Reserve Board  regulations  require
associations to exhaust other reasonable alternative sources of funds, including
Federal Home Loan Bank  borrowings,  before  borrowing from the Federal  Reserve
Bank.

               Federal Home Loan Bank System.  First  Federal is a member of the
Federal Home Loan Bank of Indianapolis, which is one of 12 regional Federal Home
Loan  Banks  that  administer  the home  financing  credit  function  of savings
associations.  Each  Federal  Home Loan Bank serves as a reserve or central bank
for its members  within its assigned  region.  It makes loans to members  (i.e.,
advances) in accordance with policies and  procedures,  established by the board
of directors of the Federal Home Loan Bank,  which are subject to the  oversight
of the Federal  Housing  Finance Board.  All advances from the Federal Home Loan
Bank are required to be fully secured by sufficient  collateral as determined by
the Federal Home Loan Bank. In addition, all long-term advances must be used for
residential home financing.

               As a member, First Federal is required to purchase and maintain a
minimum  amount  of stock in the  Federal  Home Loan  Bank of  Indianapolis.  At
December 31,  1999,  First  Federal had $4.91  million in Federal Home Loan Bank
stock, which was in compliance with this requirement.  For the fiscal year ended
December 31, 1999,  dividends paid by the Federal Home Loan Bank of Indianapolis
to First Federal totaled $322,000, which constitutes a $62,000 increase over the
amount of  dividends  received in fiscal  1998.  Over the past five fiscal years
these dividends have averaged 7.94% and were 8.00% for fiscal 1999.

Taxation

               Federal Taxation. We file consolidated federal income tax returns
on a  fiscal  year  basis  using  the  accrual  method  of  accounting.  Savings
institutions that met certain  definitional tests relating to the composition of
assets and other conditions  prescribed by the Internal Revenue Code of 1986, as
amended,  had been  permitted  to  establish  reserves for bad debts and to make
annual  additions which could,  within specified  formula limits,  be taken as a
deduction in  computing  taxable  income for federal  income tax  purposes.  The
amount of the bad debt reserve  deduction is now computed  under the  experience
method.


                                       27
<PAGE>
               In addition to the regular  income tax,  corporations,  including
savings  institutions,  generally  are subject to a minimum tax. An  alternative
minimum  tax is  imposed  at a minimum  tax rate of 20% on  alternative  minimum
taxable income, which is the sum of a corporation's regular taxable income (with
certain adjustments) and tax preference items, less any available exemption. The
alternative  minimum tax is imposed to the extent it exceeds  the  corporation's
regular  income  tax and net  operating  losses  can  offset no more than 90% of
alternative minimum taxable income.

               To the extent earnings  appropriated  to a savings  institution's
bad debt reserves for "qualifying  real property loans" and deducted for federal
income tax purposes exceed the allowable amount of such reserves  computed under
the  experience  method  and to the  extent  of the  institution's  supplemental
reserves  for  losses  on  loans,  such  excess  may not,  without  adverse  tax
consequences,   be  utilized  for  the  payment  of  cash   dividends  or  other
distributions   to  a  shareholder   (including   distributions  on  redemption,
dissolution or  liquidation) or for any other purpose (except to absorb bad debt
losses).  As of December  31,  1999,  First  Federal's  excess for tax  purposes
totaled approximately $1.30 million.

               We have not been  audited  by the IRS  recently  with  respect to
federal  income tax  returns.  In our  opinion,  any  examination  of still open
returns  would not result in a  deficiency  which could have a material  adverse
effect on our financial condition.

               Indiana Taxation.  The State of Indiana imposes an 8.5% franchise
tax on the net income of financial  (including thrift)  institutions,  exempting
them from the  current  gross  income,  supplemental  net income and  intangible
taxes.  Net income for franchise tax purposes will  constitute  federal  taxable
income before net operating loss deductions and special deductions, adjusted for
certain  items,  including  Indiana  income taxes,  tax exempt  interest and bad
debts. Other applicable Indiana taxes include sales, use and property taxes.

               Delaware Taxation. As a company incorporated under Delaware state
law,  Northeast  Indiana Bancorp is exempted from Delaware  corporate income tax
but is required  to file an annual  report  with,  and pay an annual fee to, the
State of Delaware. We are also subject to an annual franchise tax imposed by the
State of Delaware.

Competition

               We face strong competition, both in originating real estate loans
and in attracting  deposits.  Competition in originating real estate loans comes
primarily from commercial banks,  mortgage companies,  credit unions and savings
institutions located in our market area.  Commercial banks, savings institutions
and credit unions provide vigorous  competition in consumer lending.  We compete
for real  estate  and other  loans  principally  on the basis of the  quality of
services we provide to  borrowers,  the interest  rates and loan fees we charge,
and the types of loans we originate. See "- Lending Activities."


                                       28
<PAGE>
               We  attract  all of  our  deposits  through  our  retail  banking
offices,  primarily from the  communities in which those retail banking  offices
are located.  Therefore,  competition  for those  deposits is  principally  from
retail brokerage  offices,  commercial  banks,  savings  institutions and credit
unions located in these communities. We compete for these deposits by offering a
variety of account alternatives at competitive rates and by providing convenient
business  hours,   branch  locations  and  interbranch  deposit  and  withdrawal
privileges.

               We primarily serve  Huntington  County,  Indiana.  There are five
commercial  banks, one savings  institution,  other than First Federal,  and six
credit  unions which  compete for deposits and loans in  Huntington  County.  We
estimate  that  our  share  of  the  savings  market  in  Huntington  County  is
approximately  28%  and  our  share  of  the  residential   mortgage  market  is
approximately 30%.

Employees

               At December 31, 1999, we had a total of 47 full-time, 6 part-time
and 0 seasonal  employees.  Our employees are not  represented by any collective
bargaining group. Management considers its employee relations to be good.

Item 2.                      Description of Properties
                             -------------------------

               We conduct our business  through three offices,  all of which are
located in  Huntington,  Indiana and are owned by First  Federal.  The following
table sets forth information  relating to each of our offices as of December 31,
1999.  The total net book value of our premises and equipment  (including  land,
buildings and leasehold  improvements and furniture,  fixtures and equipment) at
December 31, 1999 was  approximately  $2.29 million.  See Note 4 of the Notes to
the Consolidated Financial Statements.

<TABLE>
<CAPTION>
                                          Date              Square        Net Book Value at
       Location                           Acquired          Footage       December 31, 1999
       --------                           --------          -------       -----------------
<S>                                         <C>                <C>                <C>
Main Office:
    648 North Jefferson Street              1974               5,200              774
    Huntington, Indiana  46750

Branch Offices:
    1240 South Jefferson Street             1981               1,700              243
    Huntington, Indiana  46750

    100 Frontage Road                       1995               5,000(1)         1,275
    Huntington, Indiana  46750

</TABLE>
(1)            Includes addition completed in early 1999.


                                       29

<PAGE>
               There was a 2,000 square foot  addition to the office  located at
100  Frontage  Road which was  completed  during the first  quarter  1999.  This
addition  provides  space  for the  financial  services  subsidiary,  the  Trust
Department and future growth.

               We believe that our current and planned  facilities  are adequate
to meet our present and foreseeable  needs. We also maintain an on-line database
with an independent service bureau servicing financial institutions.

Item 3.                      Legal Proceedings
                             -----------------

               We are involved,  from time to time, as plaintiff or defendant in
various legal actions  arising in the normal course of their  businesses.  While
the ultimate outcome of these proceedings cannot be predicted with certainty, it
is the opinion of management, after consultation with counsel representing us in
the  proceedings,  that the  resolution of these  proceedings  should not have a
material effect on our results of operations on a consolidated basis.

Item 4.                      Submission of Matters to a Vote of Security Holders
                             ---------------------------------------------------
               None


                                       30
<PAGE>
                                     PART II


Item 5.                      Market for Registrant's Common Equity and
                             Related Stockholder Matters
                             -----------------------------------------

               Page 37 of the attached  annual report to  stockholders is herein
incorporated by reference.

Item 6.                      Management's Discussion and Analysis of Financial
                             Condition and Results of Operation
                             -------------------------------------------------

               Pages 5 through 15 of the attached  annual report to stockholders
are herein incorporated by reference.

Item 7.                      Financial Statements
                             --------------------

               The  following  information  appearing  in our  annual  report to
stockholders  for the year ended December 31, 1999, is incorporated by reference
in this annual report on Form 10-KSB as Exhibit 13.


                                                                        Pages in
                                                                         Annual
                                                                         Report
                                                                         ------
Annual Report Section
---------------------

Report of Independent Auditors                                             16
Consolidated Balance Sheets as of December 31, 1999 and 1998               17
Consolidated Statements of Income for the Years Ended December 31,         18
 1999, 1998 and 1997
Consolidated Statements of Changes in Shareholders' Equity for the         19
 Years Ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the Years Ended December 31,     20
 1999, 1998 and 1997
Notes to Consolidated Financial Statements                                 21


               With the exception of the aforementioned information,  our annual
report to stockholders for the year ended December 31, 1999, is not deemed filed
as part of this annual report on Form 10-KSB.

Item 8.                      Changes in and Disagreements with Accountants on
                             Accounting and Financial Disclosure
                             ------------------------------------------------

               There  have been no current  reports on Form 8-K filed  within 24
months  prior to the date of the most recent  financial  statements  reporting a
change of accountants and/or reporting disagreements on any matter of accounting
principle or financial statement disclosure.


                                       31
<PAGE>
                                    PART III


Item 9.                      Directors, Executive Officers, Promoters and
                             Control Persons; Compliance with Section 16(a)
                             of the Exchange Act
                             ----------------------------------------------

Directors
---------

               Information  concerning our Directors is  incorporated  herein by
reference  from  the  definitive  proxy  statement  for the  annual  meeting  of
stockholders  to be held in 2000,  a copy of which  will be filed not later than
120 days after the close of the fiscal year.

Executive Officers of Northeast Indiana Bancorp and First Federal
-----------------------------------------------------------------

               The following table sets forth certain information  regarding our
executive officers who are not also a directors.

<TABLE>
<CAPTION>
                                                               Position held with the
                  Name                  Age(1)          First Federal and Northeast Indiana Bancorp
---------------------------------------------------------------------------------------------------
<S>        <C>                           <C>            <C>
           Darrell E. Blocker            46             Senior Vice President, Treasurer and
                                                        Chief Financial Officer

           Dee Ann Hammel                47             Senior Vice President, Secretary and Chief
                                                        Operating Officer

           Joseph A. Byers               47             Vice President and Senior Trust Officer

</TABLE>
--------------
(1)            At December 31, 1999

               The business  experience  of the  executive  officers who are not
also directors is set forth below.

               Darrell E. Blocker is Senior Vice President,  Treasurer and Chief
Financial  Officer,  positions he has held since March 1995.  Mr.  Blocker first
joined First Federal in 1988 as an accountant.  Mr.  Blocker is responsible  for
the overall financial functions of First Federal.

               Dee Ann  Hammel is Senior  Vice  President,  Secretary  and Chief
Operations  Officer,  positions she has held since March 1995.  Ms. Hammel first
joined  First  Federal  in 1975 as a  teller.  Ms.  Hammel  is  responsible  for
directing and controlling First Federal's daily activities.

               Joseph A. Byers is Vice  President  and Senior  Trust  Officer of
First Federal,  a position he has held since August 1998. Mr. Byers first joined
First Federal in July 1998 to help  establish  and manage the Trust  Department.
Mr.  Byers  is  responsible  for  management  of the  Trust  Department  and the
financial  services  subsidiary.  Mr.  Byers came to us with 28 years in banking
experience, including 20 years of Trust experience.

                                       32
<PAGE>
Compliance with Section 16(a)
-----------------------------

               Section 16(a) of the Securities Exchange Act of 1934 requires our
directors  and  executive  officers,  and  persons  who own  more  than 10% of a
registered class of Northeast Indiana Bancorp's equity securities,  to file with
the SEC initial  reports of  ownership  and reports of changes in  ownership  of
Common Stock and other equity securities of Northeast Indiana Bancorp. Officers,
directors and greater than 10%  stockholders  are required by SEC  regulation to
furnish us with copies of all Section 16(a) forms they file.

               To our knowledge,  based solely on a review of the copies of such
reports  furnished to the us and written  representations  that no other reports
were required, all Section 16(a) filing requirements applicable to its officers,
directors  and greater  than 10 percent  beneficial  owners were  complied  with
during the fiscal year ended December 31, 1999.

Item 10.       Executive Compensation
               ----------------------

               Information  concerning  executive  compensation  is incorporated
herein by reference from the definitive  proxy  statement for the annual meeting
of stockholders to be held in 2000, a copy of which will be filed not later than
120 days after the close of the fiscal year.

Item 11.       Security Ownership of Certain Beneficial
               Owners and Management
               ----------------------------------------

               Information  concerning  security ownership of certain beneficial
owners and  management is  incorporated  herein by reference from the definitive
proxy  statement for the annual  meeting of  stockholders  to be held in 2000, a
copy of which  will be filed  not  later  than 120 days  after  the close of the
fiscal year.

Item 12.       Certain Relationships and Related Transactions
               ----------------------------------------------

               Information   concerning   certain   relationships   and  related
transactions  is  incorporated  herein by reference  from the  definitive  proxy
statement for the annual meeting of  stockholders  to be held in 2000, a copy of
which will be filed not later than 120 days after the close of the fiscal year.


                                       33
<PAGE>
Item 13.       Exhibits and Reports on Form 8-K
               --------------------------------

                  (a)            Exhibits
<TABLE>
<CAPTION>
                                                                                                                    Sequential
                                                                                                                   Page Number
                                                                                                                 Where Attached
                                                                                                                   Exhibits Are
                                                                                                                 Located in This
                                                                                                                   Form 10-KSB
                                                                                                 Reference             Report
                                                                                                ---------------------------------
<S>   <C>                                                                                          <C>             <C>
      3(i)      Articles of Incorporation, including amendments thereto                              *             Not applicable
      3(ii)     By-Laws                                                                              *             Not applicable
      4         Instruments defining the rights of security holders, including debentures            *             Not applicable
      9         Voting Trust Agreement                                                             None            Not applicable
     10         Executive Compensation Plans and Arrangements
                (a)  Employment Contract between Stephen E. Zahn                                     *             Not applicable
                      and First Federal
                (b)  Employment Contract between Darrell Blocker                                     *             Not applicable
                      and First Federal
                (c)  Employment Contract between Dee Ann Hammel                                      *             Not applicable
                      and First Federal
                (d)  1995 Stock Option and Incentive Plan                                            *             Not applicable
                (e)  Recognition and Retention Plan                                                  *             Not applicable
     11         Statement re:  computation of per share earnings                                   None            Not applicable
     13         Annual Report to Security Holders                                                   13                   13
     16         Letter re:  change in certifying accountants                                       None            Not applicable
     18         Letter re:  change in accounting principles                                        None            Not applicable
     21         Subsidiaries of Registrant                                                          21                   21
     22         Published report regarding matters submitted to vote of security holders           None            Not applicable
     23         Consents of Experts and Counsel                                                     23                   23
     24         Power of Attorney                                                              Not required        Not applicable
     27         Financial Data Schedule                                                             27                   27
     99         Additional Exhibits                                                                None            Not applicable
</TABLE>

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

*              Filed as exhibits to our Form S-1 registration statement filed on
               March 23, 1995 (File No. 33-90558) of the Securities Act of 1933.
               All of such previously  filed  documents are hereby  incorporated
               herein by reference  in  accordance  with Item 601 of  Regulation
               S-B.

                                       35
<PAGE>
               (b)           Reports on Form 8-K
<TABLE>
<CAPTION>
<S>                          <C>
                             For the year ended December 31, 1999, we filed the following:

               (i)           Form 8-K filed on January 27, 1999, regarding fourth quarter earnings for 1998 and cash
                             dividend.

               (ii)          Form 8-K filed on February 8, 1999, regarding additional financial planning alternatives
                             offered by First Federal.

               (iii)         Form 8-K filed April 14, 1999, announcing first quarter earnings.

               (iv)         Form 8-K filed April 26, 1999,  announcing cash dividend and
                            annual shareholder meeting.

               (v)           Form 8-K filed June 30, 1999, announcing stock repurchase program.

               (vi)          Form 8-K filed July 19, 1999, announcing second quarter earnings.

               (vii)         Form 8-K filed July 29, 1999, announcing second quarter cash dividend.

               (viii)        Form 8-K filed October 22, 1999, announcing third quarter earnings.

               (ix)          Form 8-K filed October 28, 1999, declaring stock dividend and effective increase in cash dividend.

</TABLE>

                                       35
<PAGE>
                                   SIGNATURES
                                   ----------


               In  accordance  with Section 13 of 15(d) of the Exchange Act, the
Issuer  caused  this  report  to be signed  on its  behalf  by the  undersigned,
thereunto duly authorized.


                                     NORTHEAST INDIANA BANCORP, INC.


Date:    March 29, 2000             By:    /S/ Stephen E. Zahn
        ---------------                    -------------------
                                           Stephen E. Zahn
                                           (Duly Authorized Representative)


               In accordance  with the Exchange Act, this report has been signed
below by the following persons on behalf of the Issuer and in the capacities and
on the dates indicated.

<TABLE>
<CAPTION>
<S>                                                  <C>
By:      /s/ Stephen E. Zahn                         By:      /s/ Darrell E. Blocker
         -------------------                                  ----------------------
         Stephen E. Zahn, Chairman of the                     Darrell E. Blocker, Senior Vice
         Board, President and Chief                           President, Treasurer and Chief
         Executive Officer                                    Financial Officer
         (Principal Executive and Operating                   (Chief Financial and Accounting
         Officer)                                             Officer)

Date:    March 29, 2000                             Date:     March 29, 2000


By:      /s/ Dan L. Stephan                           By:     /s/ J. David Carnes
         ------------------                                   --------------------
         Dan L. Stephan, Director                             J. David Carnes, Director

Date:    March 29, 2000                             Date:     March 29, 2000


By:      /s/ Michael S. Zahn                          By:     /s/ Randall C. Rider
         -------------------                                  --------------------
         Michael S. Zahn, Director                            Randall C. Rider, Director

Date:    March 29, 2000                             Date:     March 29, 2000
</TABLE>