NOW MORE THAN EVER...FIRST IN HOMETOWN BANKING








                [GRAPHIC-LOGO OF NORTHEAST INDIANA Bancopr, Inc.










                                    1 9 9 9

                                 ANNUAL REPORT
<PAGE>
                    PRESIDENT'S MESSAGE TO OUR SHAREHOLDERS


[Graphic - photo]
Stephen E. Zahn
Chairman of the Board, President
and Chief Executive Officer

In 1999  Northeast  Indiana  Bancorp,  Inc. and its principal  subsidiary  First
Federal  Savings Bank completed its most  successful  year in our short four and
one half-year history as a public company.

Net income for the year was $2,590,000, an increase of 8.4% over 1998 income and
the fourth  straight  record year for the company.  This resulted in a return on
average  assets  (ROA) of 1.11%  and a return on  equity  (ROE) of  10.15%  with
diluted  earnings per share (E.P.S.) of $1.54, an increase of 20.3%.  The assets
of the  company  now stand at  $254,747,000  as of December  31,  1999,  a 19.9%
increase over December 31, 1998 and a 96.1% increase  (16.1%  compounded  annual
rate) over June 1995, the month we converted to a public company.

During the past year the profile of your company continued to change.  Dedicated
to continuing to expand  products and services to better serve our customers,  a
number of new initiatives were started and existing programs expanded. Our Debit
Card  Program is now in place and the first cards are being  distributed  to our
customers.  The Financial  Services Division and Trust Services completed a very
successful  first year and  continue to expand  their  customer  base.  New cash
management  programs  implemented  for our  business  clientele  and  our  basic
checking and savings  programs have been enhanced to better serve our customers.
Commercial and consumer lending  continues to become a larger  percentage of our
loan portfolio and management continued to upgrade systems and staff training in
these areas.

You, our stockholders,  continued to be rewarded by your faith and confidence in
Northeast Indiana Bancorp. In 1999 cash dividends were increased from $0.293 per
share to $0.345  per share and for the  second  time in two years  your Board of
Directors approved an additional 10% stock dividend.  The stock dividends effect
for the  shareholders  who have been with us since the initial  public  offering
provided a cash dividend yield of 4.84% over adjusted  cost. We also  understand
the importance of doing those things within our control that enhance shareholder
value.  To that end we continue to pursue a stock buy back  program.  In 1999 we
purchased  84,020  shares in the open market,  and as long as market  conditions
warrant, we will continue this strategy of repurchasing our own stock.

As proud as we are of our  tradition  of  achievement,  we're not resting on our
laurels.  As we look forward and approach the challenges of the new century,  we
are  confident  we have built a solid  foundation,  through  our  employees  and
technology,  to enhance  our  leadership  not only in our  community  but in the
ever-increasing  competitive financial service market place. We are confident in
our future  success due to the  dedication  of our  employees  and the excellent
guidance and judgement of our Board of Directors. All of us are grateful to you,
our  shareholders,  who put your faith and confidence in us and we will continue
to strive to justify your support.


Sincerely,



/S/Stephen E. Zahn
------------------
Stephen E. Zahn
Chairman of the Board,
President, Chief Executive Officer
<PAGE>
Table of Contents


               PRESIDENT'S MESSAGE TO OUR SHAREHOLDERS                   1

               FINANCIAL HIGHLIGHTS                                      3

               SELECTED CONSOLIDATED FINANCIAL INFORMATION               4

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS                     5

               REPORT OF INDEPENDENT AUDITORS                            16

               CONSOLIDATED FINANCIAL STATEMENTS                         17

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                21

               STOCKHOLDER INFORMATION                                   37

               DIRECTORS AND OFFICERS                                    38



Description of Business

Northeast  Indiana  Bancorp,  Inc.  (the  "Company")  was  formed as a  Delaware
corporation  in March,  1995 for the purpose of issuing  common stock and owning
all of the common  stock of First  Federal  Savings  Bank  ("First  Federal"  or
"Bank") as a unitary thrift holding company. The Bank conducts business from its
three offices located in Huntington,  Indiana.  The principal  business of First
Federal consists of attracting deposits from the general public and making loans
secured by residential real estate.  Historically,  First Federal has been among
the top real estate  lenders and is the largest  financial  institution by asset
size in Huntington County. In order to serve additional  financial needs of area
residents,  First Federal  established a Trust  Department  during 1998, and now
provides  brokerage  services  via its new wholly  owned  subsidiary,  Northeast
Indiana Financial,  Inc. First Federal has been serving the Huntington community
since 1912.


                                                                               2
<PAGE>
Financial Highlights

[Graphic - 5 bar charts]

Total Assets 1

Net Income

Earnings Per Share 2

Dividends Paid  2

Per Share Market Value 2

Return on Assets

Return on Equity


1 End of period
2 All share information restated to reflect the November 1998 and November 1999
  10% Stock Dividends

3
<PAGE>
<TABLE>
<CAPTION>
Selected Consolidated Financial Information
                                                                                    December 31
                                                           1999         1998           1997         1996           1995
                                                         --------      --------      --------      --------      --------
                                                                              (dollars in thousands)
<S>                                                      <C>           <C>           <C>           <C>           <C>
Selected Financial Condition Data:
Total assets .......................................     $254,747      $212,425      $199,369      $169,544      $137,569
Loans receivable, net ..............................      208,395       185,906       174,539       146,855       122,641
Securities .........................................       33,649        14,187        15,385        12,388         6,882
Deposits ...........................................      143,212       123,336       107,550        85,346        68,203
Total borrowings ...................................       84,754        63,080        63,522        56,000        37,500
Shareholders' equity ...............................       25,655        25,005        27,293        26,529        31,033

Selected Operations Data:
Total interest income ..............................     $ 17,722      $ 16,139      $ 14,316      $ 11,767      $  9,644
Total interest expense .............................        9,846         9,061         7,950         6,197         5,307
                                                         --------      --------      --------      --------      --------
  Net interest income ..............................        7,876         7,078         6,366         5,570         4,337
Provision for loan losses ..........................          449           360           265           235           251
                                                         --------      --------      --------      --------      --------
Net interest income after provision for loan
  losses ...........................................        7,427         6,718         6,101         5,335         4,086
Total noninterest income ...........................          832           731           565           402           347
Total noninterest expense ..........................        4,194         3,691         3,062         3,208         2,364
                                                         --------      --------      --------      --------      --------
Income before income taxes .........................        4,065         3,758         3,604         2,529         2,069
Income tax expense .................................        1,475         1,369         1,411           962           750
                                                         --------      --------      --------      --------      --------
Net income .........................................     $  2,590      $  2,389      $  2,193      $  1,567      $  1,319
                                                         ========      ========      ========      ========      ========

Basic earnings per common share (2)(3) .............     $   1.59      $   1.36      $   1.16      $   0.73      $   0.32
Diluted earnings per common share (2)(3) ...........     $   1.54      $   1.28      $   1.13      $   0.72      $   0.32

Selected Financial Ratios and Other Data:
Performance Ratios:
    Return on assets
       (ratio of net income to average total assets)         1.11%         1.17%         1.21%         1.03%         1.04%
    Return on equity
       (ratio of net income to average total equity)        10.15          9.15          8.12          5.43          6.55
    Interest rate spread information:
    Average during period ..........................         3.03          2.95          2.91          2.90          2.80
    End of period ..................................         3.02          3.11          2.95          2.70          2.77
    Net interest margin (1) ........................         3.50          3.57          3.63          3.81          3.57
    Ratio of operating expense to average total
       assets ......................................         1.80          1.81          1.69          2.12          1.87
    Ratio of average interest-earning assets to
       average interest-bearing liabilities ........       110.74        113.66        115.97        121.48        117.70
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                      <C>           <C>           <C>           <C>           <C>
Quality Ratios:
    Non-performing loans to total assets at end
       of period ...................................          .70           .56           .58           .42           .21
    Allowance for loan losses to non-performing
       loans .......................................        82.00        122.53        102.50        144.00        310.21
    Allowance for loan losses to total loans .......          .82           .76           .66           .67           .70

Capital Ratios:
    Shareholders' equity to total assets at end of
       period ......................................        10.07         11.77         13.69         15.65         22.56
    Average shareholders' equity to average total
       assets ......................................        10.94         12.80         14.89         19.03         15.92

Other Data:
    Dividends declared per share (2) (3) ...........     $  0.345      $  0.293      $  0.268      $  0.252      $  0.062
    Dividend payout ratio ..........................        21.70%        21.54%        23.10%        34.52%        19.38%
    Number of full-service offices .................            3             3             3             3             3
</TABLE>
(1)  Net interest income divided by average interest-earning assets.
(2)  1995 earnings per share amounts are subsequent to conversion.
(3)  All share and per share amounts have been restated to reflect the 10% stock
     dividends paid on November 23, 1998 to  shareholders  of record November 6,
     1998 and again on November 22, 1999 to  shareholders  of record November 6,
     1999.

                                                                               4
<PAGE>
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

General

Northeast Indiana Bancorp,  Inc.  ("Northeast  Indiana Bancorp") was formed as a
Delaware  corporation in March, 1995 for the purpose of issuing common stock and
owning all of the common stock of First Federal  Savings Bank ("First  Federal")
as a unitary thrift holding company.  First Federal  conducts  business from its
three  offices  located in  Huntington,  Indiana.  Northeast  Indiana  Bancorp's
primary business activity is its investment in First Federal, and therefore, the
following discussion relates primarily to its operations.

During 1998, First Federal established a trust department which began operations
in the fourth  quarter.  At the end of 1999,  $14.7 million was held under asset
management.   In  February  1999,   Northeast   Indiana  Bancorp  announced  the
establishment of Northeast Indiana Financial, Inc., a wholly-owned subsidiary of
the Bank.  Northeast Indiana  Financial,  Inc. will provide  brokerage  services
through  the  purchase  of mutual  funds,  annuities,  stocks  and bonds for its
customers.  Until these operations are well  established,  management  expects a
slight negative impact to net income.

The  principal  business  of  savings  banks,   including  First  Federal,   has
historically consisted of attracting deposits from the general public and making
loans secured by residential real estate. First Federal's earnings are primarily
dependent on net interest  income,  the difference  between  interest income and
interest  expense.  Interest  income is a function of the  balances of loans and
investments  outstanding  during the period and the yield earned on such assets.
Interest  expense is a function  of the  balances  of  deposits  and  borrowings
outstanding  during  the same  period and the rates  paid on such  deposits  and
borrowings.  Provisions for loan losses,  service  charge and fee income,  other
noninterest  income,  operating  expenses  and income  taxes also  affect  First
Federal's   earnings.   Operating   expenses   consist   primarily  of  employee
compensation and benefits,  occupancy and equipment  expenses,  data processing,
federal  deposit  insurance   premiums  and  other  general  and  administrative
expenses.

Prevailing  economic  conditions  as  well  as  federal  regulations  concerning
monetary and fiscal  policies and financial  institutions  significantly  affect
First Federal.  1999 ended with  inflation  continuing to stay low but with some
signs of rising.  The Federal Reserve in  anticipation,  raised short term rates
three  times for a total of 75 basis  points to help the United  States  economy
maintain low inflation.  The economy has stayed  relatively  stable during 1999.
Although we have had  fluctuations  throughout  1999, in general the economy was
favorable to First Federal's  lending growth for most of the year.  There can be
no assurance in periods of rising  interest  rates,  that First  Federal will be
able to  continue  to market  its  lending  products  successfully  or that such
interest rate movements will not adversely affect net income.
<PAGE>
Deposit balances are influenced by a number of factors including  interest rates
paid on  competing  personal  investments  and the level of personal  income and
savings within First Federal's market.  Lending activities are influenced by the
demand for  housing as well as  competition  from  other  lending  institutions.
Liquidity  levels and funds available to originate loans may also impact lending
activities.  The  primary  sources  of  funds  for  lending  activities  include
deposits, borrowed funds, loan payments and funds provided from operations.

5
<PAGE>
Forward-Looking  Statements

When used in this filing and in future filings by Northeast Indiana Bancorp with
the Securities and Exchange Commission, in our press releases or other public or
shareholder  communications,  or in oral statements made with the approval of an
authorized  executive  officer,  the words or phrases  "would be," "will allow,"
"intends to," "will likely  result," "are  expected  to," "will  continue,"  "is
anticipated,"  "estimate,"  "project"  or similar  expressions  are  intended to
identify  "forward-looking   statements"  within  the  meaning  of  the  Private
Securities  Litigation  Reform Act of 1995. Such statements are subject to risks
and uncertainties,  including but not limited to, changes in economic conditions
in our market area, changes in policies by regulatory agencies,  fluctuations in
interest rates, demand for loans in our market area and competition, all or some
of which  could  cause  actual  results  to differ  materially  from  historical
earnings and those presently anticipated or projected.

Northeast  Indiana Bancorp wishes to caution readers not to place undue reliance
on any such  forward-looking  statements,  which speak only as of the date made,
and advises  readers  that  various  factors,  including  regional  and national
economic  conditions,  substantial  changes in levels of market  interest rates,
credit and other risks of lending and investment  activities and competitive and
regulatory factors,  could affect our financial  performance and could cause our
actual results for future periods to differ materially from those anticipated or
projected.

Northeast  Indiana Bancorp does not undertake,  and  specifically  disclaims any
obligation,  to update any forward-looking  statements to reflect occurrences or
unanticipated events or circumstances after the date of such statements.

================================================================================

Impact of the Year 2000


At this point, we have not  experienced  any  significant  Year 2000 issues as a
result of the Year 2000  rollover and are not aware of any  customers  that have
experienced Year 2000 issues. This success can be attributed to the two years of
planning and preparation  efforts.  Part of the preparation included evaluating,
upgrading  and/or  replacing  hardware  and  software  that  was not  Year  2000
compliant.


Also,  to prepare for the Year 2000,  we  contacted  all vendors and  commercial
business  customers to assess their Year 2000  efforts.  While the rollover went
smoothly,  Year 2000  monitoring  will continue  throughout the remainder of the
year to assure that all Year 2000 issues have been addressed.


                                                                               6
<PAGE>
Financial Condition

Northeast  Indiana  Bancorp's  total  assets  increased  from $212.4  million at
December 31, 1998 to $254.7  million at December 31, 1999,  an increase of $42.3
million,  or 19.9%. The increase was due primarily to the increases in net loans
receivable  of $22.5  million or 12.1% and an increase  of $19.5  million in the
securities  available  for sale.  This  growth  was  funded  by a $19.9  million
increase in deposits and by a $21.7 million increase in borrowed funds.

The increase in the loan portfolio was partially attributable to mortgage loans,
which  increased  $15.4 million.  Mortgage  loans secured by one-to-four  family
residences  increased  $5.4  million to $119.3  million at December 31, 1999 and
represent  55.5% of First  Federal's  loan  portfolio.  The  increase  in one to
four-family  mortgage  loans was comprised of an $8.0 million  increase in fixed
rate loans offset by a $2.6 million decrease in adjustable rate loans.  Mortgage
loans secured by multi-family  and commercial real estate increased $8.8 million
to $28.2  million  at  December  31,  1999 and  construction  loans  secured  by
residential and non-residential real estate increased $1.2 to $12.6 million.

First  Federal  also offers a variety of consumer  loans  including  automobile,
credit card,  commercial,  home equity and second mortgage loans. Total consumer
and  commercial  business  loans  increased  $8.5  million  to $54.8  million at
December 31, 1999.  Automobile  loans  comprise  $15.4 million of total consumer
loans while home equity and second mortgage loans represent another $7.2 million
at December 31, 1999.

Future loan growth and  profitability  related  thereto,  are  dependent  on the
economy. First Federal currently anticipates slower growth in mortgages compared
to the last few years.  First Federal will continue to expand its commercial and
consumer  lending  and  anticipates   non-mortgage  lending  to  increase  as  a
percentage of total loans. While  non-mortgage  lending exposes First Federal to
additional  credit risks,  management is endeavoring to improve its underwriting
and  monitoring  capabilities  in these areas.  Total deposits  increased  $19.9
million to $143.2 million at December 31, 1999. The 16.1% growth in 1999 was due
to  aggressive  advertising,  pricing of selected  products  for a limited  time
slightly  above  local  market   competitors,   and  accepting   jumbo  deposits
competitively  priced from time to time during the year.  Jumbo  deposit  growth
contributed  $16.2  million  of the total  deposit  increase  and came from both
inside and outside of our market area.

Total  borrowed  funds  increased  $21.7  million,  from $63.1  million to $84.8
million at December 31, 1999. Borrowed funds include advances from the FHLB with
variable interest rates and stated maturities  ranging through 2009.  Management
plans to  continue  to utilize  FHLB  advances in  conjunction  with  efforts to
increase  our deposit  base to provide the  necessary  funding for loan  demand.
First  Federal's  borrowing limit at the FHLB as of December 31, 1999, was $86.1
million.  Borrowings  also  include  two  demand  notes  totaling  $140,000  for
investments in two low income housing limited liability  partnerships as well as
various repurchase agreements that started being offered in 1998. The securities
sold under repurchase agreements balance at December 31, 1999 was $4.1 million.
<PAGE>
Results of Operations

                           Comparison of Years Ended
                           December 31, 1999 and 1998

General. Net income for the year ended December 31, 1999 provided another record
year of $2.6  million in  earnings,  an increase of $200,000  over net income of
$2.4 million for 1998. This improvement was primarily a result of an increase in
net  interest  income  after   provision  for  loan  losses  of  $709,000,   and
non-interest  income  improvements  of $101,000.  These increases were partially
offset by increases in  non-interest  operating  expenses of $503,000 and higher
income tax expense of $107,000.  Further  details  regarding  the changes in the
income and expenses are discussed below.

Interest Income. Interest income increased $1.6 million or 9.8% to $17.7 million
for the year ended  December  31,  1999.  The  increase in  interest  income was
primarily  the result of mortgage loan interest

7
<PAGE>
income increasing  $454,000 to $11.4 million and an increase of $503,000 to $4.5
million in consumer and other loan  interest  income.  The average yield for the
year on the loan portfolio decreased to 8.08% in 1999 compared to 8.29% in 1998.
The increase in loan interest income was due to higher average balances of loans
outstanding in 1999 compared to 1998.

Interest  Expense.  Interest  expense  for 1999 rose  $785,000 or 8.7% over 1998
interest  expense.  The majority of the  increase was due to higher  balances in
FHLB advances  which  averaged  $19.6 million more in 1999 compared to 1998. The
average  rate for time  deposits  decreased  34 basis  points from 1998 to 1999.
Average money market account balances increased in 1999 by $870,000 or 4.2%. The
average rate for money market accounts decreased by 58 basis points to 4.31% for
1999.  Interest  expense for borrowed funds increased by $1.1 million  primarily
due to higher  average FHLB advance  balances  and higher  securities  sold with
repurchase agreements balances during 1999.

Net Interest Income.  Net interest income increased  $798,000 or 11.3% from $7.1
million to $7.9 million for the year ended December 31, 1999. The average spread
increased  by 8 basis  points to 3.03%.  Average  interest-earning  assets yield
decreased to 7.88% due to lower yielding  products offered during the first half
of  1999  but  was  offset  by  a  larger   decrease   in  the  rates  paid  for
interest-bearing liabilities.

Provision  for Loan Losses.  The provision for loan losses for 1999 was $449,000
compared to $360,000 in 1998,  an increase of $89,000.  The  provision  for loan
losses less net charge-offs for the year resulted in a $313,000  increase in the
allowance  for loan  losses.  The  allowance  for loan losses of $1.8 million at
December 31, 1999 was a 21.5% increase compared to December 31, 1998. Management
will  continue  to maintain  the  allowance  for loan  losses at a level  deemed
adequate by management based on its quarterly  analysis.  This analysis includes
looking at our mix of loans by major product lines.  We continue to increase our
allowance  for loan  losses  because of our growth in  commercial  and  consumer
lending as well as overall loan growth.

Noninterest  Income.  Noninterest  income  increased  from  $731,000  in 1998 to
$832,000  in 1999.  The  majority  of this  change was due to our  increases  in
deposit growth, service charges and fees on deposit accounts to $344,000 in 1999
compared to $287,000 for 1998, which was a $57,000 increase.

Noninterest  Expense.  Noninterest  expense  increased from $3.7 million to $4.2
million or $503,000.  Salaries and employee benefits  increased $284,000 in 1999
over 1998, the result of higher  personnel  costs,  additional  staff and salary
increases.  During 1999 data processing  increased  $94,000.  Primarily the data
processing costs increased due to higher volume and additional  processing costs
incurred as we grow and expand our product lines. Correspondent bank charges and
other expenses increased mainly due to increased volume in deposits and loans.

Income Tax  Expense.  Income tax  expense  increased  from $1.4  million to $1.5
million.  This  increase  was due to higher  taxable  income for 1999  partially
reduced by the tax benefits from the  investment in low income  housing  limited
liability partnerships.

                           Comparison of Years Ended
                           December 31, 1998 and 1997

General. Net income for the year ended December 31, 1998 provided another record
year of $2.4  million in  earnings,  an increase of $196,000  over net income of
$2.2 million for 1997. This  improvement was primarily a result of increased net
<PAGE>
interest income after provision for loan losses of $618,000, non-interest income
improvements  of  $165,000  and lower  income  tax  expense  of  $42,000.  These
increases were partially offset by increases in non-interest  operating expenses
of $629,000.  Further  details  regarding the changes in the income and expenses
are discussed below.

Interest  Income.  Interest  income  increased  $1.8  million  or 12.7% to $16.1
million for the year ended  December 31, 1998.  The increase in interest  income
was primarily the result of mortgage loan interest income increasing $777,000 to
$10.9  million and an increase of $903,000 to $3.9 million in consumer and other
loan interest income. The average yield for the

                                                                               8
<PAGE>
year on the loan  portfolio  increased  by just one basis point to 8.29% in 1998
compared to 8.28% in 1997. The increase in loan interest  income was largely due
to higher average balances of loans outstanding in 1998 compared to 1997.

Interest Expense. Interest expense for 1998 rose $1.1 million or 14.0% over 1997
interest  expense.  The majority of the  increase was due to higher  balances in
time deposits  which  averaged  $19.4 million more in 1998 compared to 1997. The
average  rate for time  deposits  decreased  2 basis  points  from 1997 to 1998.
Average  money  market  account  balances  increased  in 1998 by $6.5 million or
45.7%.  The average rate for money market accounts  decreased by 16 basis points
to 4.89% for 1998.  Interest  expense for borrowed  funds  decreased by $260,000
primarily due to lower average FHLB advance balances during 1998.

Net Interest Income.  Net interest income increased  $712,000 or 11.2% from $6.4
million to $7.1 million for the year ended December 31, 1998. The average spread
increased by 4 basis points to 2.95%.  Average loan yields increased slightly to
8.29%  due  to a  higher  percentage  of  new  commercial,  consumer  and  other
installment  loans being  added in 1998  offsetting  the  general  drop in rates
during 1998 by product type.

Provision  for Loan Losses.  The provision for loan losses for 1998 was $360,000
compared to $265,000 in 1997,  an increase of $95,000.  The  provision  for loan
losses less net charge-offs for the year resulted in a $260,000  increase in the
allowance  for loan  losses.  The  allowance  for loan losses of $1.5 million at
December 31, 1998 was a 21.8% increase compared to December 31, 1997.

Noninterest  Income.  Noninterest  income  increased  from  $566,000  in 1997 to
$731,000 in 1998.  The majority of this increase is due to the increase in other
services  charges and fees to $443,000  compared to $320,000 in 1997, a $123,000
increase.  Due to our  deposit  growth,  service  charges  and  fees on  deposit
accounts also increased to $287,000 in 1998 compared to $245,000 for 1997, which
was a $42,000 increase.

Noninterest  Expense.  Noninterest  expense  increased from $3.1 million to $3.7
million or $629,000.  Salaries and employee benefits  increased $311,000 in 1998
over  1997,  the  result of  higher  ESOP  costs,  additional  staff and  salary
increases.  During  1998 data  processing  increased  $125,000.  These costs are
primarily associated with the installation of a wide area network, communication
upgrades,  imaging  equipment  and new  software  which  will  enable  increased
efficiencies  of  operations.  Correspondent  bank  charges  and other  expenses
increased mainly due to increased volume in deposits and loans.

Income Tax Expense.  Income tax expense decreased $42,000 to $1.4 million.  This
reduction was mainly the result of the tax benefits in 1998 from the  investment
in the low income housing limited liability partnership.


9
<PAGE>
Asset/Liability Management

First Federal,  like other financial  institutions,  is subject to interest rate
risk to the extent that its interest-bearing  liabilities reprice on a different
basis than its  interest-earning  assets.  Office of Thrift Supervision  ("OTS")
regulations provide a Net Portfolio Value ("NPV") approach to the quantification
of interest  rate risk.  In essence,  this approach  calculates  the  difference
between the present  value of  liabilities,  expected cash flows from assets and
cash flows from off balance sheet contracts.

Management has  established  maximum  limits for changes in net portfolio  value
resulting  from  changes  in  interest  rates  based on  consideration  of First
Federal's  portfolio  mix  of  interest-earning   assets  and   interest-bearing
liabilities along with management's  objectives for managing these portfolios in
varying interest rate  environments.  Management  monitors various indicators of
interest rate risk,  including  NPV, and  expectations  regarding  interest rate
movements along with  consideration of First Federal's overall capital levels to
determine   acceptable   levels  of   interest   rate  risk.   First   Federal's
interest-earning  assets are composed  primarily of loans,  especially  mortgage
loans.  Management  has offered  adjustable  rate loan products to assist in the
management of interest rate risk.  At December 31, 1999,  adjustable  rate loans
comprised  45.73% of the total loan  portfolio.  The interest  rate  exposure as
outlined  in the NPV table  reflects  our  exposure  to a rising  interest  rate
environment  due to the  concentration  of longer term mortgage  loans funded by
relatively  shorter-term deposits and FHLB advances.  In addition,  the interest
rate risk is also  impacted by  adjustable  rate loans which are tied to indices
which lag behind market rates.  Management is aware of First Federal's  interest
rate risk  exposure  in a rising  interest  rate  environment.  To address  this
interest rate risk,  which we would  categorize as moderately high in comparison
to our peers,  management will continue to market adjustable rate mortgage loans
when possible and review longer term funding sources.  Management also considers
the current  capital  position of First Federal and the  composition of the loan
portfolio and monitors these factors in  conjunction  with its strategic plan of
offering  various  mortgage  loan  products  to  customers  in our market  area.
Nonetheless, our interest rate exposure,  particularly in a rising interest rate
environment,  will grow,  especially  to the extent  that loan  demand  produces
increases in balance sheet growth.  While management  monitors and, from time to
time,  takes  actions to adjust  our  interest  rate  risk,  we believe a rising
interest rate environment will have an adverse impact on our profitability.

Presented  below,  as of December  31, 1999,  is an analysis of First  Federal's
estimated interest rate risk as measured by changes in NPV for instantaneous and
sustained parallel shifts in interest rates, up and down 300 basis points in 100
point increments.  Assumptions used in calculating the amounts in this table are
those assumptions utilized by the OTS in assessing the interest rate risk of the
thrifts it regulates.  NPV is calculated by the OTS for the purposes of interest
rate risk  assessment  and should not be  considered as an indicator of value of
First Federal.
<PAGE>
<TABLE>
<CAPTION>
                                        At December 31, 1999

                                                                        Net Portfolio Value as % of
                                Net Portfolio Value                       Present Value of Assets
         Change In Rates      $ Amount       $ Change       % Change       NPV Ratio      Change
         ---------------      --------       --------       --------       ---------      ------
                                              (Dollars in Thousands)
<S>             <C>          <C>             <C>              <C>           <C>            <C>
               +300 bp       $ 12,802        $ (11,581)       (47)          5.35%          (425)
               +200            16,779          (7,604)        (31)          6.87           (273)
               +100            20,721          (3,661)        (15)          8.31           (129)
                  0            24,383               -           -           9.60              -
               -100            28,072           3,689          15          10.84            125
               -200            30,804           6,421          26          11.72            212
               -300            33,242           8,859          36          12.47            288
</TABLE>

                                                                              10
<PAGE>
Asset/Liability Management (continued)

In the event of a 300 basis point change in interest  rate based upon  estimates
as of December 31, 1999, First Federal would experience a 36% increase in NPV in
a  declining  rate  environment  and a 47%  decrease  in  NPV in a  rising  rate
environment.  During periods of rising rates,  the value of monetary  assets and
liabilities decline.  Conversely,  during periods of falling rates, the value of
monetary assets and liabilities increase. However, the amount of change in value
of specific  assets and liabilities due to changes in rates is not the same in a
rising rate  environment as in a falling rate  environment  (i.e., the amount of
value  increase  under a specific rate decline may not equal the amount of value
decrease  under  an  identical  upward  rate  movement).   Based  upon  the  NPV
methodology,  the  increased  level of interest rate risk  experienced  by First
Federal in recent periods was due to the increased use of relatively  short-term
deposits and FHLB advances to fund its  investment  in loans with  substantially
longer maturities and our use of an interest rate index which lags behind market
rate indices to adjust the interest  rate on its ARM loans  originated  prior to
June 1999.  Effective May 1, 1999 ARM loan  applications  are tied to the weekly
one year CMT which is a current  index.  To the extent  that we  continue to use
liabilities  with shorter terms to maturity than the assets in which it invests,
we will  continue to  experience  increased  levels of  interest  rate risk in a
rising interest rate environment.

In  evaluating  First  Federal's   exposure  to  interest  rate  risk,   certain
shortcomings inherent in the method of analysis presented in the foregoing table
must be considered.  For example,  although  certain assets and  liabilities may
have similar  maturities  or periods to  repricing,  they may react in different
degrees to changes in market interest rates. Also, the interest rates on certain
types of assets and  liabilities  may  fluctuate in advance of changes in market
interest  rates,  while  interest rates on other types may lag behind changes in
market rates.  Further, in the event of a change in interest rates,  prepayments
and early withdrawal  levels could deviate  significantly  from those assumed in
calculating the table.  Finally,  the ability of many borrowers to service their
debt may decrease in the event of an interest rate  increase.  As a result,  the
actual effect of changing  interest  rates may differ from that presented in the
foregoing table.


11
<PAGE>
Average Balances, Interest Rates and Yields

The following  table presents for the periods  indicated the total dollar amount
of interest  income  from  average  interest  earning  assets and the  resultant
yields, as well as the interest expense on average interest bearing liabilities,
expressed both in dollars and rates.  No tax equivalent  adjustments  were made.
All average balances are daily average  balances.  Non-accruing  loans have been
included in the table as loans carrying a zero yield.
<PAGE>
<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                         1999                                   1998
                                        ------------------------------------   ---------------------------------
                                           Average     Interest                Average        Interest
                                        Outstanding    Earned/      Yield/   Oustanding       Earned/     Yield/
                                           Balance      Paid         Rate       Balance        Paid        Rate
                                           -------      ----         ----       -------        ----        ----
                                                                           (Dollars in Thousands)
<S>                                        <C>          <C>          <C>        <C>          <C>          <C>
Interest-Earning Assets:
  Loans receivable(1) ................     $195,504     $ 15,806     8.08 %     $179,114     $ 14,848     8.29%
  Securities .........................       21,948        1,395     6.36         11,692          785     6.71
  FHLB stock .........................        4,026          322     8.00          3,250          260     8.00
  Other interest-earning
     assets ..........................        3,297          199     6.04          4,006          246     6.14
                                           --------     --------                --------     --------
      Total interest
        earning  assets(1) ...........      224,775       17,722     7.88        198,062       16,139     8.15
                                           --------     --------                --------     --------

Non-interest earning assets ..........        8,315                                6,086
                                           --------                             --------
      Total assets ...................     $233,090                             $204,148
                                           ========                             ========
Interest-Bearing Liabilities:
  Savings ............................     $  9,970          199     2.00       $  9,577          235     2.45
  Money market .......................       21,602          930     4.31         20,732        1,014     4.89
  Demand and NOW .....................       11,185          170     1.52          9,947          148     1.49
  Time deposit accounts ..............       79,487        4,271     5.37         79,156        4,516     5.71
  Borrowings .........................       80,734        4,276     5.30         54,841        3,148     5.74
                                           --------     --------                --------     --------
      Total interest
        bearing liabilities ..........      202,978        9,846     4.85        174,253        9,061     5.20
                                           --------     --------                --------     --------
Non-interest bearing
 liabilities .........................        4,607                               3,774
                                           --------                            --------
      Total liabilities ..............      207,585                             178,027
      Total equity ...................       25,505                              26,121
                                           --------                            --------
      Total liabilities and
        equity .......................     $233,090                            $204,148
                                           ========                            ========

Net interest income ..................                  $  7,876                              $ 7,078
                                                        ========                              =======
Net interest rate spread .............                               3.03%                                2.95%
                                                                     ====                                 ====
Net interest earning assets ..........     $ 21,797                            $ 23,809
                                           ========                            ========
Net yield on average
  interest-earning assets ............                               3.50%                                3.57%
                                                                     ====                                 ====
Average interest-earning assets to
  average interest-bearing liabilities                               1.11x                                1.14x
                                                                     ====                                 ====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                        1997
                                        -----------------------------------
                                           Average     Interest
                                        Outstanding    Earned/      Yield/
                                           Balance      Paid         Rate
                                           -------      ----         ----
                                              (Dollars in Thousands)
<S>                                        <C>          <C>         <C>
Interest-Earning Assets:
  Loans receivable(1) ................     $159,095     $ 13,167      8.28%
  Securities .........................       10,659          709      6.66
  FHLB stock .........................        3,054          244      7.99
  Other interest-earning
     assets ..........................        2,670          195      7.29
                                           --------     --------
      Total interest
        earning  assets(1) ...........      175,478       14,315      8.16
                                           --------     --------
Non-interest earning assets ..........        6,001
                                           --------
      Total assets ...................     $181,479
                                           ========
Interest-Bearing Liabilities:
  Savings ............................     $  9,655          265      2.75
  Money market .......................       14,232          719      5.05
  Demand and NOW .....................        8,960          148      1.65
  Time deposit accounts ..............       59,608        3,416      5.73
  Borrowings .........................       58,859        3,402      5.78
                                           --------     --------
      Total interest
        bearing liabilities ..........      151,314        7,950      5.25
                                           --------     --------
Non-interest bearing
 liabilities .........................        3,142
                                           --------
      Total liabilities ..............      154,456
      Total equity ...................       27,023
                                           --------
      Total liabilities and
        equity .......................     $181,479
                                           ========
Net interest income ..................                  $  6,365
                                                        ========
Net interest rate spread .............                                2.91%
                                                                      ====
Net interest earning assets ..........     $ 24,164
                                           ========
Net yield on average
  interest-earning assets ............                               3.63%
                                                                     ====
Average interest-earning assets to
  average interest-bearing liabilities                               1.16x
                                                                     ====
</TABLE>
(1) Calculated net of deferred loan fees, loan  discounts,  loans in process and
allowance for loan losses.
<PAGE>
Interest Rate Spread

The following table presents the weighted  average yields on loans,  investments
and other interest-earning assets, and the weighted average rate on deposits and
borrowings and the resulting interest rate spreads at the dates indicated.
<TABLE>
<CAPTION>
                                                              At December 31,
-----------------------------------------------------------------------------------
                                                          1999      1998      1997
<S>                                                       <C>       <C>       <C>
Weighted average yield on:

 Loans receivable ................................        8.14%     8.17%     8.38%

 Investment securities ...........................        6.72      6.88      6.90

 Other interest-earning assets ...................        4.96      4.68      5.65

   Combined weighted average yield on
    interest-earning assets ......................        7.91      8.00      8.26

Weighted average rate on:

Savings deposits .................................        2.00      2.00      2.75

Money market .....................................        4.28      4.29      5.10

NOW deposits .....................................        1.53      1.49      1.53

Time deposit accounts ............................        5.65      5.48      5.76

Borrowings .......................................        4.91      5.40      5.83

Repurchase agreements ...........................         5.38      4.53      0.00
  Combined weighted average rate on interest-
    bearing liabilities ..........................        4.89      4.89      5.31

Spread ...........................................        3.02      3.11      2.95
</TABLE>
The loans  receivable  yield,  which is the largest portion of interest  income,
dropped 3 basis  points to 8.14%,  a 0.4% drop at the end of period  1999  yield
compared to 8.17% at the end of 1998. The overall weighted average yield dropped
9 basis points to 7.91% at the end of 1999 down from 8.00% at the end of 1998, a
1.1% decrease. Interest-bearing liabilities rate changes were mixed on the major
liability products. Time deposits increased to 5.65% at the end of 1999 compared
to 5.48% at the end of 1998, a 17 basis point  increase.  Money market  accounts
dropped 1 basis  point to 4.28% at the end of 1999  compared to 4.29% at the end
of 1998, a 0.2% drop.  Borrowings rates dropped 49 basis points in 1999 to 4.91%
compared to 5.40% at the end of 1998. The repurchase  agreements reflect the end
of period rates paid on our sweep  accounts  which were  introduced  in 1998 for
commercial customers. The combined interest-bearing liabilities weighted average
rates remained the same at 4.89% at the end of 1999 compared to the end of 1998.
This  reflection of no change in interest  costs  compared to the earning assets
yields  reduction of 9 basis points  caused the spread to tighten to 3.02 at the
end of 1999 compared to 3.11% at the end of 1998, a 9 basis point reduction over
1998.

13
<PAGE>
Rate/Volume Analysis

The following  schedule presents the dollar amount of changes in interest income
and  interest  expense  for major  components  of  interest-earning  assets  and
interest-bearing  liabilities.  It distinguishes  between the changes related to
outstanding  balances  and that due to the changes in interest  rates.  For each
category   of   interest-earning   assets  and   interest-bearing   liabilities,
information is provided on changes attributable to:

Changes in volume
      (i.e., changes in volume multiplied by old rate)
Changes in rate
      (i.e., changes in rate multiplied by old volume)

For purposes of this table,  changes attributable to both rate and volume, which
cannot be segregated,  have been allocated  proportionately to the change due to
volume and the change due to rate.
<TABLE>
<CAPTION>
                                                      Year Ended December 31,
                                         1999 vs. 1998                       1998 vs. 1997
                             -------------------------------    -------------------------------
                                           Increase                             Increase
                                  (Decrease)         Total           (Decrease)           Total
                                    Due to         Increase            Due to          Increase
                             Volume       Rate    (Decrease)    Volume        Rate    (Decrease)
                             ------       ----    ----------    ------        ----    ----------
                                                  (Dollars in Thousands)
<S>                         <C>         <C>         <C>         <C>         <C>         <C>
Interest-earning assets:
    Loans receivable ...    $ 1,332     $  (374)    $   958     $ 1,659     $    22     $ 1,681
    Securities .........        654         (44)        610          69           7          76
    FHLB stock .........         62          --          62          16          --          16
    Other interest-
      earning assets ...        (43)         (4)        (47)         86         (35)         51
                            -------     -------     -------     -------     -------     -------
    Total interest-
      earning assets ...    $ 2,005     $  (422)    $ 1,583     $ 1,830     $    (6)    $ 1,824
                            =======     =======     =======     =======     =======     =======
Interest-bearing
  liabilities:
    Savings ............    $     9     $   (45)    $   (36)    $    (2)    $   (28)    $   (30)
    Money market .......         41        (125)        (84)        319         (24)        295
    NOW ................         19           3          22          15         (15)          -
    Time deposit
      accounts .........         19        (264)       (245)      1,115         (15)      1,100
    Borrowings .........      1,388        (260)      1,128        (224)        (30)       (254)
                            -------     -------     -------     -------     -------     -------
        Total interest-
          bearing
          liabilities ..    $ 1,476     $  (691)    $   785     $ 1,223     $  (112)    $ 1,111
                            =======     =======     =======     =======     =======     =======
Net interest income                                 $   798                             $   713
                                                    =======                             =======
</TABLE>


                                                                              14
<PAGE>
Liquidity and Capital Resources

Liquidity and Capital  Resources  First  Federal's  primary sources of funds are
deposits, borrowings from the FHLB and principal and interest payments on loans.
While scheduled  repayments of loans are a predictable source of funds,  deposit
flows and mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition. Though its liquidity is somewhat lower than
its peers,  First  Federal has managed this  fluctuation  in its source of funds
through borrowings from the FHLB.

A standard measure of liquidity for thrift institutions is the ratio of cash and
eligible  investments to a certain  percentage of net  withdrawable  savings and
borrowings due within one year. As of December 31, 1999, First Federal's average
liquidity  ratio  was  7.05%,  of  which  63.00%  was  comprised  of  short-term
investments.

During the year ended  December 31,  1999,  there was a net decrease in cash and
cash equivalents of $396,000. The major source of funds during the year included
an increase in deposits of $19.9  million and $21.7  million in borrowed  funds,
which were used to fund a net increase of $22.5 million in loans,  $19.5 million
in securities and $1.2 million to purchase treasury stock.

During the year ended  December 31,  1998,  there was a net increase in cash and
cash  equivalents  of $1.5  million.  The major  source of funds during the year
included an increase in deposits of $15.8  million which were used to fund a net
increase of $11.4 million in loans and $4.9 million to purchase  treasury stock.
During the year ended  December 31,  1997,  there was a net decrease in cash and
cash  equivalents  of $1.9  million.  The major  source of funds during the year
included net additional borrowings of $7.0 million from the FHLB and an increase
in deposits  of $22.2  million  which were used to fund a net  increase of $28.0
million in loans and a $3.0 million increase in securities.

Under currently effective capital regulations,  savings associations must meet a
4.0% core capital  requirement and a total capital to risk weighted assets ratio
of 8.0%. At December 31, 1999,  First  Federal's core capital ratio was 9.4% and
its total  capital to risk  weighted  assets ratio was 15.5%.  Therefore,  First
Federal's capital  significantly  exceeds all capital requirements  currently in
effect.

During 1999  Northeast  Indiana  Bancorp  completed  its fifth stock  repurchase
program  which  began in July 1998.  Northeast  Indiana  Bancorp  also  received
approval from the OTS to begin its sixth stock repurchase  program. As the stock
is repurchased,  it becomes treasury stock and can be used for general corporate
purposes.  The sixth repurchase program was approved in July 1999 for 10% of the
outstanding shares or 180,165 shares.  Northeast Indiana Bancorp had repurchased
43,100 of these shares at the end of December  1999. At December 31, 1999 we had
887,152 shares of treasury stock and 1,753,520 shares outstanding.

Impact of Inflation and Changing Prices

The  Financial  Statements  have been  prepared  in  accordance  with  generally
accepted  accounting  principles,  which  require the  measurement  of financial
position  and  operating   results  in  terms  of  historical   dollars  without
consideration  for changes in the relative  purchasing  power of money over time
due to inflation.  The impact of inflation can be found in the increased cost of
Northeast Indiana Bancorp's operations. Nearly all of our assets and liabilities
are financial,  unlike most industrial companies. As a result, Northeast Indiana
<PAGE>
Bancorp's  performance is directly impacted by changes in interest rates,  which
are indirectly influenced by inflationary expectations. Our ability to match the
financial assets to the financial liabilities in its asset/liability  management
will tend to minimize the change of interest rates on our  performance.  Changes
in investment rates do not necessarily move to the same extent as changes in the
price of goods and services.


15
<PAGE>
                                [Graphic - logo]
                           [letterhead CROWE CHIZEK]

                         REPORT OF INDEPENDENT AUDITORS

Board of Directors
Northeast Indiana Bancorp, Inc.
Huntington, Indiana

We have  audited  the  accompanying  consolidated  balance  sheets of  Northeast
Indiana  Bancorp,  Inc. and  Subsidiary as of December 31, 1999 and 1998 and the
related consolidated  statements of income,  changes in shareholders' equity and
cash flows for the years ended December 31, 1999, 1998 and 1997. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Northeast Indiana
Bancorp, Inc. and Subsidiary as of December 31, 1999 and 1998 and the results of
their  operations  and their cash flows for the years ended  December  31, 1999,
1998 and 1997 in conformity with generally accepted accounting principles.


                                                /s/Crowe, Chizek and Company LLP
                                                --------------------------------
                                                   Crowe, Chizek and Company LLP

South Bend, Indiana
February 4, 2000

                                                                              16
<PAGE>
<TABLE>
<CAPTION>
                                   NORTHEAST INDIANA BANCORP, INC.
                                     CONSOLIDATED BALANCE SHEETS
                                     December 31, 1999 and 1998


                                                                          1999                1998
                                                                     -------------      -------------
<S>                                                                  <C>                <C>
ASSETS
Interest earning cash and cash equivalents                           $   2,938,701      $   4,079,792
Noninterest earning cash and cash equivalents                            2,960,502          2,215,845
                                                                     -------------      -------------
    Total cash and cash equivalents                                      5,899,203          6,295,637
Interest-earning deposits in financial institutions                        100,000            100,000
Securities available for sale                                           33,192,217         13,658,691
Securities held to maturity (fair value: 1999 - $456,511;
  1998 - $528,424)                                                         456,511            528,424
Loans receivable, net of allowance for loan losses of
  $1,766,700 in 1999 and $1,454,000 in 1998                            208,394,576        185,906,309
Accrued interest receivable                                                839,967            487,393
Premises and equipment, net                                              2,292,342          2,265,347
Investments in limited liability partnerships                            1,332,128          1,400,000
Other assets                                                             2,239,874          1,782,791
                                                                     -------------      -------------

    Total assets                                                     $ 254,746,818      $ 212,424,592
                                                                     =============      =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits                                                      $   4,407,411      $   3,058,581
Savings                                                                  9,709,295          9,811,696
NOW and MMDA                                                            30,544,441         31,354,647
Time deposits                                                           98,550,446         79,110,658
                                                                     -------------      -------------
    Total deposits                                                     143,211,593        123,335,582
Borrowed funds                                                          84,753,919         63,080,275
Accrued expenses and other liabilities                                   1,126,007          1,004,099
                                                                     -------------      -------------
    Total liabilities                                                  229,091,519        187,419,956
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                  <C>                <C>
Shareholders' equity
    Preferred stock, no par value: 500,000 shares
      authorized, 0 shares issued                                                -                  -
    Common stock, $.01 par value: 4,000,000 shares
      authorized; 1999: 2,640,672 shares issued, 1,753,520
      shares outstanding; 1998: 2,400,466 shares issued,
      1,672,417 outstanding                                                 26,407             24,005
    Additional paid in capital                                          28,733,423         25,128,717
    Retained earnings, substantially restricted                         10,641,144         12,166,794
    Unearned employee stock ownership plan shares                       (1,018,325)        (1,163,800)
    Unearned recognition and retention plan shares                        (229,851)          (433,672)
    Accumulated other comprehensive income (loss),
      net of tax                                                          (543,742)            44,105
    Treasury stock, 887,152 and 728,049 common shares, at
      cost, at December 31, 1999 and 1998                              (11,953,757)       (10,761,513)
                                                                     -------------      -------------
        Total shareholders' equity                                      25,655,299         25,004,636
                                                                     -------------      -------------
          Total liabilities and shareholders' equity                 $ 254,746,818      $ 212,424,592
                                                                     =============      =============
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements

17
<PAGE>
<TABLE>
<CAPTION>
                               NORTHEAST INDIANA BANCORP, INC.
                              CONSOLIDATED STATEMENTS OF INCOME
                        Years ended December 31, 1999, 1998 and 1997

                                                     1999            1998            1997
                                                 -----------     -----------     -----------
<S>                                              <C>             <C>             <C>
Interest income
    Loans, including fees                        $15,805,546     $14,848,080     $13,167,279
    Taxable securities                             1,692,134       1,025,151         921,263
    Non-taxable securities                            25,031          19,706          32,587
    Deposits with banks                              198,964         246,175         194,647
                                                 -----------     -----------     -----------
      Total interest income                       17,721,675      16,139,112      14,315,776

Interest expense
    Deposits                                       5,569,243       5,912,572       4,547,834
    Borrowed funds                                 4,276,240       3,148,229       3,402,363
                                                 -----------     -----------     -----------
      Total interest expense                       9,845,483       9,060,801       7,950,197
                                                 -----------     -----------     -----------

Net interest income                                7,876,192       7,078,311       6,365,579

    Provision for loan losses                        448,647         359,988         265,300
                                                 -----------     -----------     -----------

Net interest income after provision for loan
  losses                                           7,427,545       6,718,323       6,100,279

Noninterest income
    Service charges on deposit accounts              343,928         287,480         245,304
    Other service charges and fees                   488,199         443,375         320,282
                                                 -----------     -----------     -----------
      Total noninterest income                       832,127         730,855         565,586

Noninterest expense
    Salaries and employee benefits                 2,126,443       1,841,998       1,530,579
    Occupancy                                        408,578         357,133         318,945
    Data processing                                  530,758         436,757         311,537
    Deposit insurance premium                         74,016          67,637          54,829
    Professional fees                                130,901         143,960         147,319
    Correspondent bank charges                       227,953         144,637         142,466
    Other expense                                    695,798         699,176         556,648
                                                 -----------     -----------     -----------
      Total noninterest expense                    4,194,447       3,691,298       3,062,323
                                                 -----------     -----------     -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                              <C>             <C>             <C>
Income before income taxes                         4,065,225       3,757,880       3,603,542

    Income tax expense                             1,475,288       1,368,526       1,410,563
                                                 -----------     -----------     -----------

Net income                                       $ 2,589,937     $ 2,389,354     $ 2,192,979
                                                 ===========     ===========     ===========

Basic earnings per common share                  $      1.59     $      1.36     $      1.16
                                                 ===========     ===========     ===========
Diluted earnings per common share                $      1.54     $      1.28     $      1.13
                                                 ===========     ===========     ===========
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements

                                                                              18
<PAGE>
<TABLE>
<CAPTION>
                                                   NORTHEAST INDIANA BANCORP, INC
                                     CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                            Years ended December 31, 1999, 1998 and 1997


                                                                                                         Unearned
                                                                                                         Employee
                                                                       Additional                          Stock
                                                        Common          Paid in          Retained        Ownership
                                                         Stock          Capital          Earnings       Plan Shares
                                                     ------------    ------------     ------------     ------------
<S>                                                  <C>             <C>              <C>              <C>
Balance, January 1, 1997                             $     21,821    $ 21,253,458     $ 12,338,919     $ (1,454,750)
Net income                                                    ---             ---        2,192,979              ---
Other comprehensive income:
  Net change in unrealized gains (losses)
    on securities available for sale                          ---             ---              ---              ---
  Total tax effect                                            ---             ---              ---              ---
    Total other comprehensive income                          ---             ---              ---              ---
Total comprehensive income                                    ---             ---              ---              ---
Cash dividends ($.27 per share)                               ---             ---         (575,558)             ---
Purchase of 78,936 shares of treasury stock -                 ---             ---              ---              ---
Sale and issuance of 600 shares of treasury stock
  including exercising of stock options                       ---           1,000              ---              ---
17,603 shares committed to be released
  under the ESOP                                              ---          95,868              ---          145,475
Purchase of 605 shares for RRP                                ---             ---              ---              ---
Amortization of RRP contributions                             ---             ---              ---              ---
                                                     ------------    ------------     ------------     ------------
Balance, December 31, 1997                                 21,821      21,350,326       13,956,340       (1,309,275)

Net income                                                    ---             ---        2,389,354              ---
Other comprehensive income:
  Net change in unrealized gains (losses)
    on securities available for sale                          ---             ---              ---              ---
    Total tax effect                                          ---             ---              ---              ---
    Total other comprehensive income                          ---             ---              ---              ---
Total comprehensive income
Cash dividends ($.29 per share)                               ---             ---         (576,273)             ---
Purchase of 257,591 shares of treasury stock                  ---             ---              ---              ---
Issuance of 23,220 shares of treasury stock
    upon exercise of stock options                            ---         (31,234)             ---              ---
Tax effect on stock plans                                     ---          50,762              ---              ---
17,603 shares committed to be released
  under the ESOP                                              ---         149,764              ---          145,475
Purchase of 1,210 treasury stock shares for RRP               ---           8,656              ---              ---
Amortization of RRP contributions                             ---             ---              ---              ---
Issuance of 218,341 common shares from
  declaration of 10% stock dividend                         2,184       3,600,443      (13,602,627)             ---
                                                     ------------    ------------     ------------     ------------
Balance, December 31, 1998                                 24,005      25,128,717       12,166,794       (1,163,800)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                                                                             Unearned
                                                                                                             Employee
                                                                       Additional                              Stock
                                                        Common           Paid in           Retained          Ownership
                                                         Stock           Capital           Earnings         Plan Shares
                                                      ------------     ------------      ------------      ------------
<S>                                                   <C>              <C>               <C>               <C>
Net income                                                    ---             ---        2,589,937              ---
Other comprehensive loss:
  Net change in unrealized gains (losses)
       on securities available for sale                       ---             ---              ---              ---
  Total tax effect                                            ---             ---              ---              ---
    Total other comprehensive loss                            ---             ---              ---              ---
Total comprehensive income                                    ---             ---              ---              ---
Cash dividends ($.35 per share)                               ---             ---         (617,467)             ---
Purchase of 84,020 shares of treasury stock -                 ---             ---              ---              ---
Issuance of 2,453 shares of treasury stock
    upon exercise of stock options                            ---          (3,298)             ---              ---
Tax effect on stock plans                                     ---          16,733              ---              ---
17,603 shares committed to be released
  under the ESOP                                              ---          93,570              ---          145,475
Purchase of 550 treasury stock shares for RRP                 ---           1,983              ---              ---
Amortization of RRP contributions                             ---             ---              ---              ---
    net of 5,281 RRP shares forfeited
Issuance of 240,206 common shares from
  declaration of 10% stock dividend                         2,402       3,495,718       (3,498,120)             ---
                                                     ------------    ------------     ------------     ------------

Balance, December 31, 1999                           $     26,407    $ 28,733,423     $ 10,641,144     $ (1,018,325)
                                                     ============    ============     ============     ============

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                      Accumulated
                                                        Unearned          Other
                                                      Recognition     Comprehensive                        Total
                                                     and Retention    Income (Loss)      Treasury       Shareholders'
                                                      Plan Shares      Net of Tax          Stock           Equity
                                                     -------------    ------------     ------------     ------------
<S>                                                  <C>              <C>              <C>              <C>
Balance, January 1, 1997                             $   (820,109)    $     15,799     $ (4,826,022)    $ 26,529,116
Net income                                                    ---              ---              ---        2,192,979
Other comprehensive income:
  Net change in unrealized gains (losses)
    on securities available for sale                          ---           42,836              ---              ---
  Total tax effect                                            ---          (16,963)             ---              ---
                                                                       -----------

    Total other comprehensive income                          ---           25,873              ---           25,873
Total comprehensive income                                    ---              ---              ---        2,218,852
Cash dividends ($.27 per share)                               ---              ---              ---         (575,558)
Purchase of 78,936 shares of treasury stock -                 ---                        (1,328,211)      (1,328,211)
Sale and issuance of 600 shares of treasury stock
  including exercising of stock options                       ---              ---            7,800            8,800
17,603 shares committed to be released
  under the ESOP                                              ---              ---              ---          241,343
Purchase of 605 shares for RRP                             (7,625)             ---              ---           (7,625)
Amortization of RRP contributions                         205,917              ---              ---          205,917
                                                     ------------      -----------     ------------     ------------
Balance, December 31, 1997                               (621,817)          41,672       (6,146,433)      27,292,634

Net income                                                    ---              ---              ---        2,389,354
Other comprehensive income:
  Net change in unrealized gains (losses)
    on securities available for sale                          ---            5,996              ---              ---
    Total tax effect                                          ---           (3,563)             ---              ---
                                                                                                        ------------


    Total other comprehensive income                          ---            2,433              ---            2,433
Total comprehensive income                                                                                 2,391,787
Cash dividends ($.29 per share)                               ---              ---              ---         (576,273)
Purchase of 257,591 shares of treasury stock                  ---              ---       (4,907,522)      (4,907,522)
Issuance of 23,220 shares of treasury stock
    upon exercise of stock options                            ---              ---          279,255          248,021
Tax effect on stock plans                                     ---              ---              ---           50,762
17,603 shares committed to be released
  under the ESOP                                              ---              ---              ---          295,239
Purchase of 1,210 treasury stock shares for RRP           (21,843)             ---           13,187              ---
Amortization of RRP contributions                         209,988              ---              ---          209,988
Issuance of 218,341 common shares from
  declaration of 10% stock dividend                           ---              ---              ---              ---
                                                     ------------      -----------     ------------     ------------
Balance, December 31, 1998                               (433,672)          44,105      (10,761,513)      25,004,636
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                         Accumulated
                                                          Unearned          Other
                                                         Recognition    Comprehensive                         Total
                                                       and Retention      Income (Loss)    Treasury       Shareholders'
                                                         Plan Shares      Net of Tax         Stock           Equity
                                                       ------------     -------------    ------------     ------------
<S>                                                    <C>              <C>              <C>              <C>
Net income                                                    ---              ---              ---        2,589,937

Other comprehensive loss:
  Net change in unrealized gains (losses)
       on securities available for sale                       ---         (975,223)             ---              ---
  Total tax effect                                            ---          387,376              ---              ---
                                                                       -----------
    Total other comprehensive loss                            ---         (587,847)             ---         (587,847)


Total comprehensive income                                    ---              ---              ---        2,002,090
Cash dividends ($.35 per share)                               ---              ---              ---         (617,467)
Purchase of 84,020 shares of treasury stock -                 ---       (1,166,525)      (1,166,525)
Issuance of 2,453 shares of treasury stock
    upon exercise of stock options                            ---              ---           27,114           23,816
Tax effect on stock plans                                     ---              ---              ---           16,733
17,603 shares committed to be released
  under the ESOP                                              ---              ---              ---          239,045
Purchase of 550 treasury stock shares for RRP              (8,063)             ---            6,080              ---
Amortization of RRP contributions                         211,884              ---          (58,913)         152,971
    net of 5,281 RRP shares forfeited
Issuance of 240,206 common shares from
  declaration of 10% stock dividend                           ---              ---              ---              ---
                                                     ------------      -----------     ------------     ------------

Balance, December 31, 1999                           $   (229,851)    $   (543,742)    $(11,953,757)    $ 25,655,299)
                                                     ============      ===========     ============     ============
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

19
<PAGE>
<TABLE>
<CAPTION>
                                     NORTHEAST INDIANA BANCORP, INC.
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                               Years ended December 31, 1999, 1998 and 1997

                                                             1999             1998               1997
                                                        -------------     -------------     -------------
<S>                                                     <C>               <C>               <C>
Cash flows from operating activities
   Net income                                           $   2,589,937     $   2,389,354     $   2,192,979
   Adjustments to reconcile net income
   to net cash from operating activities
   Depreciation and amortization                              239,731           161,240           144,898
   Provision for loan losses                                  448,647           359,988           265,300
   Net (gain) loss on sale of foreclosed real estate           13,925           (10,387)           (1,335)
   Net (gain) loss on sale of premises and equipment             (160)           (8,481)             (152)
   Reduction of obligation under ESOP                         239,045           295,239           241,343
   Amortization of RRP                                        152,971           209,988           205,917
Net change in:
   Other assets                                              (114,685)         (326,636)         (381,807)
   Accrued interest receivable                               (352,574)           24,557          (148,387)
   Accrued expenses and other liabilities                     121,908              (396)         (668,619)
                                                        -------------     -------------     -------------
   Total adjustments                                          748,808           705,112          (342,842)
                                                        -------------     -------------     -------------
   Net cash from operating activities                       3,338,745         3,094,466)        1,850,137

Cash flows from investing activities
   Purchases of securities available for sale             (25,002,756)       (5,334,188)       (4,803,829)
   Proceeds from maturities and principal payments
       of securities available for sale                     4,539,207         6,328,978         1,716,890
   Proceeds from maturities and principal payments
       of securities held to maturity                          71,913           228,422           135,190
   Purchases of loans                                      (2,400,000)       (3,045,695)       (3,261,911)
   Proceeds from sale of loans                                273,049         2,430,541           351,500
   Net change in loans                                    (20,932,437)      (11,390,311)      (25,136,614)
   Proceeds from sale of foreclosed real estate               170,261           177,750            98,843
   Expenditures on premises and equipment                    (244,245)         (481,452)         (110,826)
   Proceeds from sale of premises and equipment                   350             8,825             5,948
                                                        -------------     -------------     -------------
   Net cash from investing activities                     (43,524,658)      (11,077,130)      (31,004,809)
                                                        -------------     -------------     -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                     <C>               <C>               <C>
Cash flows from financing activities
   Net change in deposits                                  19,876,011        15,785,796        22,203,546
   Advances from FHLB                                     101,000,000        67,000,000        56,000,000
   Repayment of FHLB advances                             (82,598,967)      (67,898,967)      (48,998,968)
   Payments of demand notes                                  (641,250)         (393,750)              ---
   Net change in other borrowed funds                       3,913,861           201,310               ---
   Dividends paid                                            (617,467)         (576,273)         (575,558)
   Purchase of stock                                       (1,166,525)       (4,907,522)       (1,335,836)
   Sale of treasury stock                                      23,816           248,021             8,800
                                                        -------------     -------------     -------------
   Net cash from financing activities                      39,789,479         9,458,615        27,301,984
                                                        -------------     -------------     -------------

Net change in cash and cash equivalents                      (396,434)        1,475,951        (1,852,688)

Cash and cash equivalents at beginning of year              6,295,637         4,819,686         6,672,374
                                                        -------------     -------------     -------------

Cash and cash equivalents at end of year                $   5,899,203     $   6,295,637     $   4,819,686
                                                        =============     =============     =============

Cash paid for:
  Interest                                              $   9,754,294     $   9,093,839     $   7,909,627
  Income taxes                                              1,442,300         1,637,000         1,573,308

Non-cash transactions:
  Investment in obligation relative to limited
  partnership                                           $           -     $     650,000     $     525,000
  Transfer from loans to other real estate                    122,474           278,075            97,508
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                                                              20
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              NOTE 1 - Summary of Significant Accounting Policies

Nature of Operations and Principles of Consolidation: The consolidated financial
statements include the accounts of Northeast Indiana Bancorp,  Inc.  ("Northeast
Indiana  Bancorp") and its wholly-owned  subsidiary,  First Federal Savings Bank
("First Federal") and its wholly owned subsidiary  Northeast Indiana  Financial,
Inc.  ("Northeast  Indiana  Financial").  Northeast  Indiana  Bancorp,  Inc. was
organized  for the  purpose  of  owning  all of the  outstanding  stock of First
Federal  Savings  Bank.   Intercompany   transactions  and  balances  have  been
eliminated in consolidation.

The primary source of income for Northeast Indiana Bancorp is the origination of
commercial and  residential  real estate loans in  northeastern  Indiana.  Loans
secured by real estate mortgages comprise  approximately 80% and 82% of the loan
portfolio  at  December  31,  1999  and  1998,  and  are  primarily  secured  by
residential mortgages.

Use of Estimates: To prepare the consolidated financial statements in conformity
with generally accepted  accounting  principles,  management makes estimates and
assumptions  based on available  information.  These  estimates and  assumptions
affect the amounts  reported in the  financial  statements  and the  disclosures
provided,  and future results could differ. The collectibility of loans and fair
values of financial instruments are particularly subject to change.

Cash Flow Reporting:  Cash and cash equivalents are defined as cash and due from
banks and short-term  interest earning deposits in financial  institutions  with
original maturities under 90 days. Net cash flows are reported for customer loan
and  deposit  transactions  as well  as  securities  sold  under  agreements  to
repurchase.

Securities:  Securities  are  classified  as held to  maturity  and  carried  at
amortized cost when  management has the positive intent and ability to hold them
to maturity.  Securities are classified as available for sale when they might be
sold before maturity.  Securities  available for sale are carried at fair value,
with unrealized holding gains and losses reported in other comprehensive  income
or loss and shareholders'  equity, net of tax. Trading securities are carried at
fair value,  with changes in  unrealized  holding  gains and losses  included in
income.  Other  securities  such as Federal  Home Loan Bank stock are carried at
cost.

Interest income includes amortization of purchase premium or discount. Gains and
losses on sales are based on the amortized cost of the security sold. Securities
are written down to fair value when a decline in fair value is not temporary.


Loans:

Loans  are  reported  at the  principal  balance  outstanding,  net of  unearned
interest,  deferred  loan fees and  costs,  and an  allowance  for loan  losses.

Interest income is reported on the interest method and includes  amortization of
net  deferred  loan fees and costs  over the loan term.  Interest  income is not
reported  when  full loan  repayment  is in  doubt,  typically  when the loan is
impaired or payments are past due over 90 days.  Payments received on such loans
are reported as principal reductions.
<PAGE>
Allowance  for Loan  Losses:  The  allowance  for  loan  losses  is a  valuation
allowance for probable credit losses, increased by the provision for loan losses
and decreased by charge-offs less recoveries. Management estimates the allowance
balance  required using past loan loss  experience,  known and inherent risks in
the nature and volume of the  portfolio,  information  about  specific  borrower
situations  and estimated  collateral  values,  economic  conditions,  and other
factors.  Allocations of the allowance may be made for specific  loans,  but the
entire  allowance  is available  for any loan that,  in  management's  judgment,
should be charged-off.

A loan is  impaired  when full  payment  under the loan  terms is not  expected.
Impairment  is evaluated in total for  smaller-balance  loans of similar  nature
such as  residential  mortgage,  consumer,  and  credit  card  loans,  and on an
individual loan basis for other loans.  If a loan is impaired,  a portion of the
allowance is allocated so that the loan is reported,  net, at the present  value
of  estimated  future cash flows using the loan's  existing  rate or at the fair
value of collateral if repayment is expected solely from the  collateral.  Loans
are evaluated  for  impairment  when payments are delayed,  typically 90 days or
more, or when it is probable that all principal and interest amounts will not be
collected according to the original terms of the loan.

Foreclosed  Assets:  Assets acquired  through or instead of loan foreclosure are
initially  recorded at fair value when acquired,  establishing a new cost basis.
If fair value declines, a valuation allowance is recorded through expense. Costs
after acquisition are expensed.

Premises  and  Equipment:  Premises  and  equipment  are  stated  at  cost  less
accumulated  depreciation.  Depreciation  is computed over asset useful lives on
the  straight  line basis.

Long-term Assets:  These assets are reviewed for impairment when events indicate
their  carrying  amount may not be  recoverable  from future  undiscounted  cash
flows.


21
<PAGE>
         NOTE 1 - Summary of Significant Accounting Policies (Continued)

If impaired, the assets are recorded at discounted amounts.

Repurchase  Agreements:   Substantially  all  repurchase  agreement  liabilities
represent amounts advanced by various customers. Securities are pledged to cover
these  liabilities,  which are not covered by federal deposit  insurance.

Stock Compensation:  Employee  compensation  expense under stock option plans is
reported if options  are granted  below  market  price at grant date.  Pro forma
disclosures  of net income and earnings per share are shown using the fair value
method of SFAS No. 123 to measure expense for options granted after 1994,  using
an option pricing model to estimate fair value.

Income Taxes: Income tax expense is the total of the current year income tax due
or refundable  and the change in deferred tax assets and  liabilities.  Deferred
tax assets and liabilities are the expected future tax amounts for the temporary
differences  between  carrying  amounts and tax bases of assets and liabilities,
computed  using enacted tax rates.  A valuation  allowance,  if needed,  reduces
deferred tax assets to the amount expected to be realized.

Employee  Stock  Ownership  Plan: The cost of shares issued to the ESOP, but not
yet allocated to participants,  is shown as a reduction of shareholders' equity.
Compensation  expense  is  based  on the  market  price  of  shares  as they are
committed to be released to  participant  accounts.  Dividends on allocated ESOP
shares reduce retained  earnings;  dividends on unearned ESOP shares reduce debt
and accrued interest.

Financial Instruments: Financial instruments include credit instruments, such as
commitments to make loans and standby letters of credit, issued to meet customer
financing  needs.  The face amount for these items  represents  the  exposure to
loss, before considering  customer collateral or ability to repay.  Earnings Per
Common  Share:  Basic  earnings  per common  share is net income  divided by the
weighted  average number of common shares  outstanding  during the period.  ESOP
shares are considered outstanding for this calculation unless unearned.  Diluted
earnings per common share includes the dilutive  effect of additional  potential
common shares issuable under stock options.

Stock  Dividends:   Common  share  amounts  related  to  the  ESOP  plan,  stock
compensation  plans and earnings and  dividends per share are restated for stock
dividends.

Comprehensive  Income:  Comprehensive  income  consists  of net income and other
comprehensive   income  (loss).   Other  comprehensive  income  (loss)  includes
unrealized gains and losses on securities  available for sale, net of tax, which
are also recognized as separate components of equity.

Industry  Segment:  Northeast  Indiana  Bancorp and its subsidiary are primarily
organized  to operate in the banking  industry.  Substantially  all revenues and
services are derived from banking products and services in northeastern Indiana.
While Northeast Indiana Bancorp's chief decision makers monitor various products
and services, operations are managed and financial performance is evaluated on a
company-wide  basis.  Accordingly,  all of Northeast  Indiana  Bancorp's banking
operations  are  considered  by  Management  to be  aggregated  in one  business
segment.

New  Accounting  Pronouncements:  Beginning  January 1, 2001,  a new  accounting
standard  will  require all  derivatives  to be  recorded at fair value.  Unless
designated  as hedges,  changes in these fair  values  will be  recorded  in the
<PAGE>
income statement. Fair value changes involving hedges will generally be recorded
by offsetting  gains and losses on the hedge and on the hedged item, even if the
fair value of the hedged item is not otherwise recorded. This is not expected to
have a material  effect but the effect will depend on  derivative  holdings when
this standard applies.

Loss  Contingencies:  Loss  contingencies,  including  claims and legal  actions
arising in the ordinary course of business, are recorded as liabilities when the
likelihood  of loss is probable and an amount or range of loss can be reasonably
estimated. Management does not believe there now are such matters that will have
a material effect on the financial statements.

Dividend  Restriction:  Banking  regulations require maintaining certain capital
levels and may limit the dividends paid by the bank to the holding company or by
the holding company to shareholders.

Fair Value of Financial  Instruments:  Fair values of financial  instruments are
estimated using relevant market information and other assumptions, as more fully
disclosed in a separate note. Fair value  estimates  involve  uncertainties  and
matters  of  significant   judgment  regarding  interest  rates,   credit  risk,
prepayments,  and other factors,  especially in the absence of broad markets for
particular  items.   Changes  in  assumptions  or  in  market  conditions  could
significantly affect the estimates.

Reclassifications:   Some  items  in  prior   financial   statements  have  been
reclassified to conform with the current presentation.

                                                                              22
<PAGE>
NOTE 2 - SECURITIES

Year end securities were as follows:
<TABLE>
<CAPTION>
                                                    Gross             Gross
                                  Amortized      Unrealized       Unrealized          Fair
                                    Cost            Gains            Losses           Value
                                ------------        -------      ------------     ------------
<S>                             <C>                 <C>          <C>              <C>
Available for sale - 1999
    U.S. Government agencies    $ 25,874,381        $      -     $   (838,841)    $ 25,035,540
    Mutual funds                     814,409               -              ---          814,409
    Mortgage-backed                2,290,662               -          (44,594)       2,246,068
    States and political
      subdivisions                   200,000               -          (16,800)         183,200
    Equity securities              4,913,000               -              ---        4,913,000
                                ------------        -------      ------------     ------------

                                $ 34,092,452        $      -     $   (900,235)    $ 33,192,217
                                ============        =======      ============     ============

Available for sale - 1998
    U.S. Government agencies    $  4,057,809        $ 21,658     $        ---     $  4,079,467
    Mutual funds                     775,412               -              ---          775,412
    Mortgage-backed                5,300,481          60,362           (7,031)       5,353,812
    States and political
      subdivisions                   200,000               -              ---          200,000
    Equity securities              3,250,000               -              ---        3,250,000
                                ------------        -------      ------------     ------------

                                $ 13,583,702        $ 82,020     $     (7,031)    $ 13,658,691
                                ============        ========     ============     ============

Held to maturity - 1999
    States and political
      subdivisions              $    341,000       $     ---     $        ---     $    341,000
    Other debt securities            115,511             ---              ---          115,511
                                ------------        ---------    ------------     ------------

                                $    456,511       $     ---     $        ---     $    456,511
                                ============       ==========    ============     ============

Held to maturity - 1998
    States and political
      subdivisions              $    412,000       $     ---     $        ---     $    412,000
    Other debt securities            116,424             ---              ---          116,424
                                ------------        -------      ------------     ------------

                                $    528,424       $     ---     $        ---     $    528,424
                                ============       ======        =========        ============
</TABLE>


Contractual  maturities  of debt  securities  at year end 1999 were as  follows.
Securities  not  due  at  a  single  maturity  date,  primarily  mortgage-backed
securities, are shown separately.

23
<PAGE>
NOTE 2 - SECURITIES (Continued)
<TABLE>
<CAPTION>

                                   Available for Sale           Held to Maturity
                                Amortized       Fair        Amortized        Fair
                                  Cost          Value          Cost          Value
                              -----------    -----------    -----------    -----------
<S>                           <C>            <C>            <C>
Due in one year or less       $ 8,751,849    $ 8,434,810    $        --    $        --
Due from one to five years     17,122,532     16,600,730        341,511        341,511
Due from five to ten years        200,000        183,200        115,000        115,000
Mortgage backed securities      2,290,662      2,246,068             --             --
                              -----------    -----------    -----------    -----------

                              $28,365,043    $27,464,808    $   456,511    $   456,511
                              ===========    ===========    ===========    ===========
</TABLE>
There were no sales of securities for the years ended  December 31, 1999,  1998,
or 1997.

NOTE 3 - Loans Receivable, Net

Year end loans were as follows:
<TABLE>
<CAPTION>
                                                                  1999             1998
                                                             -------------     -------------
<S>                                                          <C>               <C>
Mortgage
    Secured by one-to-four family residences                 $ 119,283,175     $ 113,919,222
    Secured by other properties                                 28,249,799        19,421,609
    Construction - residential                                   7,475,391         6,065,036
    Construction - nonresidential                                5,138,236         5,300,066
Automobile                                                      15,441,586        12,247,990
Credit card                                                      2,364,346         1,365,708
Commercial                                                      24,184,104        21,392,663
Home equity and second mortgage                                  7,171,773         5,948,157
Other consumer                                                   5,616,721         5,301,984
                                                             -------------     -------------

    Subtotal                                                   214,925,131       190,962,435

Less:
    Loans in process                                              (443,138)         (663,499)
    Undisbursed portion of construction loans                   (4,087,965)       (2,799,621)
    Net deferred loan origination fees                            (232,752)         (139,006)
    Allowance for loan losses                                   (1,766,700)       (1,454,000)
                                                             -------------     -------------

    Loans receivable, net                                    $ 208,394,576     $ 185,906,309
                                                             =============     =============
</TABLE>
<PAGE>
NOTE 3 - LOANS RECEIVABLE, NET (Continued)

Activity in the allowance for loan losses was as follows:
<TABLE>
<CAPTION>
                                       1999              1998            1997
                                    -----------     -----------     -----------
<S>                                 <C>             <C>             <C>
    Balance at beginning of year    $ 1,454,000     $ 1,194,000     $ 1,027,300
    Provision charged to income         448,647         359,988         265,300
    Charge-offs                        (185,896)       (145,989)       (136,601)
    Recoveries                           49,949          46,001          38,001
                                    -----------     -----------     -----------

    Balance at end of year          $ 1,766,700     $ 1,454,000     $ 1,194,000
                                    ===========     ===========     ===========
</TABLE>


Impaired loans were as follows:
<TABLE>
<CAPTION>
                                                               1999            1998
                                                            ----------     ---------
<S>                                                         <C>            <C>
    Year-end loans with no allocated allowance
       for loan losses                                      $1,247,012     $      -
    Year-end loans with allocated allowance
       for loan losses                                       1,140,235            -
                                                            ----------     --------

    Total                                                   $2,387,247     $      -
                                                            ==========     ========

       Amount of the allowance for loan losses allocated    $  473,000     $      -

       Average of impaired loans during the year               869,454            -

       Interest income recognized during impairment            136,123            -

       Cash-basis interest income recognized                    47,087            -
</TABLE>

NOTE 4 - Premises and Equipment, Net

Year end premises and equipment were as follows:
<TABLE>
<CAPTION>
                                                        1999             1998
                                                    -----------     -----------
<S>                                                 <C>             <C>
    Land                                            $   458,331     $   458,331
    Buildings and leasehold improvements              1,914,117       1,665,995
    Furniture, fixtures and equipment                 1,091,242       1,114,069
                                                    -----------     -----------
      Total costs                                     3,463,690       3,238,395
    Accumulated depreciation and amortization        (1,171,348)       (973,048)
                                                    -----------     -----------

                                                    $ 2,292,342     $ 2,265,347
                                                    ===========     ===========
</TABLE>
<PAGE>
NOTE 5 - Deposits

Time deposits of $100,000 or more were  $52,999,000  and $36,827,000 at year end
1999 and 1998.

Scheduled maturities of time deposits for the next five years were as follows:

               2000          $   84,978,204
               2001              11,946,528
               2002               1,169,054
               2003                 316,140
               2004                 140,520
                             --------------

                             $   98,550,446
                             ==============


25
<PAGE>
NOTE 6 - Borrowed Funds

Year end borrowed funds were as follows:

<TABLE>
<CAPTION>
                                                        1999            1998
                                                     -----------     -----------
<S>                                                  <C>             <C>
Federal Home Loan Bank advances                      $80,498,748     $62,097,715
Securities sold under repurchase agreements            4,115,171         201,310
Demand notes                                             140,000         781,250
                                                     -----------     -----------

                                                     $84,753,919     $63,080,275
                                                     ===========     ===========
</TABLE>

The majority of the FHLB  advances  have  variable  interest  rates ranging from
4.05% to 6.54%. Scheduled maturities at year end 1999 were as follows:

               2000                    $ 44,099,085
               2001                         399,663
               2002                               -
               2003                      17,000,000
               2004                       6,000,000
               Thereafter                13,000,000
                                       ------------

                                       $ 80,498,748
                                       ============

FHLB  advances  are secured by Federal Home Loan Bank stock,  eligible  mortgage
loans and specifically pledged securities.  At December 31, 1999,  collateral of
approximately   $135  million  was  pledged  to  the  FHLB  to  secure  advances
outstanding.

An analysis of securities sold under agreements to repurchase is as follows:

<TABLE>
<CAPTION>
                                                                1999          1998
                                                           -----------    -----------
<S>                                                        <C>            <C>
       Highest month end balance                           $15,460,000    $   220,000
       Average balance                                       6,270,000        130,000
       Weighted average interest rate during the period           4.84%          4.77%
       Weighted average interest rate at end of period            5.38           4.53
</TABLE>

Securities with amortized cost of approximately $5,000,000 and $550,000 and fair
values of approximately  $4,985,000 and $564,000, at year end 1999 and 1998 were
pledged as collateral for securities sold under repurchase agreements.

At year end 1999 and 1998,  securities  sold under  agreements to repurchase had
maturities of one day.
<PAGE>
The  demand  notes  relate  to  investments  in  limited  partner  interests  in
partnerships formed for the construction, ownership and management of affordable
housing projects. The total original amount of the notes was $1,400,000 for 1999
and  1998,  with  $1,260,000  and  $618,750  funded  at year end 1999 and  1998.
Payments are required within five days of written demand;  however, the note may
be  prepaid  in full or in part at the  option  of  maker  at any  time  without
penalty. The obligation to make payment is absolute and unconditional.


                                                                              26
<PAGE>
NOTE 7 - Employee Benefits

Employee Pension Plan: First Federal is part of a noncontributory multi-employer
defined benefit pension plan covering substantially all employees.  The trustees
of the Financial  Institutions  Retirement Fund administer the plan. There is no
separate  actuarial  valuation of plan benefits nor  segregation  of plan assets
specifically  for First Federal  because the plan is a  multi-employer  plan and
separate actuarial valuations are not made with respect to each employer nor are
the plan assets so segregated. Expense for 1999, 1998 and 1997 was approximately
$108,000, $23,000, and $30,000.

401(k) Plan:  Northeast  Indiana Bancorp has a 401(k) plan for all employees who
have  completed  one  year of  service  (1,000  hours).  Participants  may  make
deferrals up to 15% of  compensation.  Northeast  Indiana Bancorp matches 50% of
elective  deferrals on the first 6% of the participant's  compensation.  Expense
for 1999, 1998 and 1997 was approximately $39,000, $32,000 and $23,000.

Supplemental  Retirement Plan: First Federal has a supplemental  retirement plan
for the  President  and a deferred  compensation  plan for certain  directors of
First Federal.  First Federal is recording an expense equal to the change in the
present value of the payment due at retirement based on the projected  remaining
years of service  using the  projected  unit credit  method.  The balance of the
plans was  approximately  $219,000 and $200,000 at year-end  1999 and 1998.  The
cost of the plan was approximately  $68,000,  $61,000 and $48,000 for 1999, 1998
and 1997.

First Federal has purchased  insurance on the lives of the  participants  in the
supplemental  retirement  plan and the  deferred  compensation  plan with  First
Federal as  beneficiary.  The cash  surrender  value of the life  insurance  was
approximately  $930,000  and  $887,000  at  year-end  1999 and 1998.  The income
derived  from the  investment  in life  insurance  included in other  income was
approximately $42,000, $40,000 and $38,000 for 1999, 1998 and 1997.

Employee  Stock  Ownership  Plan  (ESOP):  An ESOP  exists  for the  benefit  of
substantially  all  employees.  Contributions  to the ESOP are made by Northeast
Indiana  Bancorp  and  are  determined  by  the  Board  of  Directors  at  their
discretion.  The  contributions may be made in the form of cash or common stock.
The annual  contributions  may not be greater  than the  amount  deductible  for
federal  income tax  purposes  and cannot  cause  Northeast  Indiana  Bancorp to
violate regulatory capital requirements.

To fund the plan, the ESOP borrowed  $1,745,700  from Northeast  Indiana Bancorp
for the  purpose  of  purchasing  211,261  shares of stock at $8.26  per  share.
Principal payments on the loan are due in equal semi-annual  installments over a
twelve-year  period beginning June 30, 1995.  Interest is payable  semi-annually
during the term of the loan at 6.65%. The loan is  collateralized  by the shares
of Northeast Indiana Bancorp's common stock purchased with the proceeds and will
be repaid by the ESOP with funds from First Federal's  contributions to the ESOP
and earnings on ESOP assets.

Shares  are  allocated  among  participants  each  December  31 on the  basis of
principal  repayments  made  by the  ESOP on the  loan  from  Northeast  Indiana
Bancorp,  according to each participant's  relative  compensation.

During 1999, 1998 and 1997, contributions,  including dividends on unearned ESOP
shares,  were  approximately  $145,000 each year. ESOP compensation  expense was
approximately $239,000, $295,000, and $241,000 for 1999, 1998 and 1997.
<PAGE>
Shares held by the ESOP at year end are as follows:
<TABLE>
<CAPTION>

                                                       1999             1998
                                                    ----------        ----------
<S>                                                  <C>               <C>
Allocated shares                                        70,105            52,502
Shares released for allocation                          17,603            17,603
Unreleased shares                                      123,217           140,820
Shares vested and withdrawn                                336               336
                                                    ----------        ----------

  Total ESOP shares                                    211,261           211,261
                                                    ==========        ==========
  Fair value of unreleased shares                   $1,524,810        $2,144,302
                                                    ==========        ==========
</TABLE>

Recognition  and Retention  Plan (RRP):  The RRP provides for issue of shares to
directors,  officers and employees. The maximum total shares available under the
RRP are 105,620.  During 1997, an additional  605 shares were awarded at $12.60;
in 1998, there were an additional 1,210 shares awarded at $18.05; in 1999, there
were an additional 550 shares awarded at $14.66. Also in 1999, 5,281 shares were
forfeited and added to treasury stock.  The expense  associated with the RRP was
approximately $153,000, $210,000 and $206,000 in 1999, 1998 and 1997.

27
<PAGE>
NOTE 8 - Income Taxes Income tax expense is summarized as follows:


<TABLE>
<CAPTION>

                                     1999              1998              1997
                                -----------       -----------       -----------
<S>                             <C>               <C>               <C>
    Current federal             $ 1,301,712       $ 1,147,495       $ 1,154,613
    Deferred federal               (182,585)          (95,097)          (55,894)
    Current state                   384,969           329,538           327,116
    Deferred state                  (28,808)          (13,410)          (15,272)
                                -----------       -----------       -----------

Income tax expense              $ 1,475,288       $ 1,368,526       $ 1,410,563
                                ===========       ===========       ===========
</TABLE>



Total income tax expense differed from the amounts computed by applying the U.S.
federal  income tax rate of 34% to income before income taxes as a result of the
following:


<TABLE>
<CAPTION>
                                                       1999             1998             1997
                                                   -----------      -----------      -----------
<S>                                                <C>              <C>              <C>
Income taxes at statutory rate                     $ 1,382,177      $ 1,277,679      $ 1,225,204
Tax effect of:
    State tax, net of federal income tax effect        235,066          208,644          205,817
    Low income housing credit                         (138,000)         (72,372)         (14,000)
    Other, net                                          (3,955)         (45,425)          (6,458)
                                                   -----------      -----------      -----------
           Income tax expense                      $ 1,475,288      $ 1,368,526      $ 1,410,563
                                                   ===========      ===========      ===========

Effective tax rate                                        36.3%            36.4%            39.1%
                                                          ====             ====             ====
</TABLE>
<PAGE>

The  components  of the net deferred tax asset  recorded in the balance sheet at
year end are as follows:
<TABLE>
<CAPTION>
                                                                1999           1998
                                                            -----------     -----------
<S>                                                        <C>             <C>
    Deferred tax assets
      Deferred compensation                                $    87,117    $    79,080
      Bad debts                                                495,717        325,901
      Deferred loan fees                                        92,170         55,047
      Unearned compensation                                     60,809         68,957
      Unrealized loss on securities available for sale         356,493            ---
           Other                                                41,095         15,752
                                                            ----------     ----------
                                                             1,133,401        544,737
    Deferred tax liabilities
      Depreciation                                            (122,915)       (118,533)
      Other                                                    (89,495)        (73,099)
                                                            -----------     -----------
                                                              (212,410)       (191,632)
    Valuation allowance                                            ---             ---

                                                            -----------     -----------
      Net deferred tax asset                                $   920,991     $   353,105
                                                            ===========     ===========
</TABLE>

Retained  earnings at December  31, 1999 and 1998  include  approximately  $ 1.3
million for which no deferred  federal income tax liability has been recognized.
This amount  represents an allocation of income to bad debt  deductions  for tax
purposes only. Reduction of amounts so allocated for purposes other than tax bad
debt losses or adjustments  arising from carryback of net operating losses would
create income for tax purposes only,  which would be subject to the then-current
corporate  income tax rate.

The  unrecorded   deferred   income  tax  liability  on  the  above  amount  was
approximately  $449,000 at December  31,  1999 and 1998.  Legislation  passed in
August 1996 now requires the Company to deduct a provision for bad debts for tax
purposes  based on actual loss  experience  and to recapture the excess bad debt
reserve  accumulated in tax years after 1986. The related amount of deferred tax
liability,  which must be recaptured, is $276,000 and is payable over a six-year
period that began in 1998.


                                                                              28
<PAGE>
NOTE 9 - Regulatory Matters

First  Federal is subject to regulatory  capital  requirements  administered  by
federal regulatory  agencies.  Capital adequacy guidelines and prompt corrective
action regulations involve  quantitative  measures of assets,  liabilities,  and
certain   off-balance-sheet   items  calculated   under  regulatory   accounting
practices.  Capital amounts and  classifications are also subject to qualitative
judgments by regulators about  components,  risk weightings,  and other factors,
and the regulators can lower  classifications in certain cases.  Failure to meet
various capital  requirements can initiate  regulatory  action that could have a
direct material effect on the financial statements.

Prompt  corrective  action  regulations  provide  five   classifications:   well
capitalized,    adequately    capitalized,    undercapitalized,    significantly
undercapitalized, and critically undercapitalized,  although these terms are not
used to  represent  overall  financial  condition.  If  adequately  capitalized,
regulatory   approval   is   required   to   accept   brokered   deposits.    If
under-capitalized,  capital  distributions  are limited,  as is asset growth and
expansion, and capital restoration plans are required.

At year end,  actual First  Federal  capital  levels (in  millions)  and minimum
required levels were:

<TABLE>
<CAPTION>
                                                                                      Minimum Required
                                                                                          To Be Well
                                                             Minimum Required            Capitalized
                                                                For Capital         Under Prompt Corrective
                                             Actual          Adequacy Purposes        Action Regulations
                                       Amount      Ratio     Amount      Ratio        Amount      Ratio
                                       ------      -----     ------      -----        ------      -----
<S>                                  <C>            <C>      <C>          <C>          <C>        <C>
1999
Total capital
  (to risk weighted assets)          $    25.2      15.5%    $13.0        8.0%         $16.3      10.0%
Tier 1 (core) capital
  (to risk weighted assets)               23.9      14.7       6.5        4.0            9.8       6.0
Tier 1 (core) capital
  (to adjusted total assets)              23.9       9.4      10.2        4.0           12.7       5.0
Tier 1 (core) capital
  (to average assets)                     23.9      10.3       9.3        4.0           11.7       5.0

1998
Total capital
  (to risk weighted assets)          $    23.0      16.6%    $11.1        8.0%        $ 13.9      10.0%
Tier 1 (core) capital
  (to risk weighted assets)               21.6      15.6       5.5        4.0            8.3       6.0
Tier 1 (core) capital
  (to adjusted total assets)              21.6      10.2       8.5        4.0           10.6       5.0
Tier 1 (core) capital
  (to average assets)                     21.6      10.6       8.2        4.0           10.2       5.0
</TABLE>

First Federal was categorized as well capitalized at year end 1999 and 1998

Regulations  of the Office of Thrift  Supervision  limit the amount of dividends
and other capital distributions that may be paid by savings institutions without
prior approval of the Office of Thrift Supervision.  The regulatory  restriction
is based on a three-tiered  system with the greatest  flexibility being afforded
to well-capitalized  (Tier 1) institutions.  First Federal is currently a Tier 1
institution.  Accordingly,  First  Federal can make,  without  prior  regulatory
<PAGE> approval, distributions during a calendar year up to 100% of its retained
net  income  for the  calendar  year-to-date  plus  retained  net income for the
previous   two   calendar   years  as  long  as  First   Federal   would  remain
well-capitalized,  as  defined  by  the  Office  of  Thrift  Supervision  prompt
corrective action regulations,  following the proposed distribution. Under these
regulations,  no  dividendes  may be paid by First Federal in 2000 without prior
approval  of the  Office of  Thrift  Supervision.  First  Federal  has  obtained
approval  from the  Office of  Thrift  Supervision  for  $700,000  of  dividends
available to be paid to Northeast Indiana Bancorp, Inc. during 2000.

29
<PAGE>
NOTE 10 - Commitments and Contingencies and
    Financial Instruments with Off-Balance-Sheet Risk

Some financial instruments,  such as loan commitments,  credit lines, letters of
credit, and overdraft  protection,  are issued to meet customer financing needs.
These  agreements to provide credit or to support the credit of others,  as long
as  conditions  established  in the  contract are met,  usually have  expiration
dates.  Commitments  may expire  without being used.  Off-balance-sheet  risk to
credit loss exists up to the face amount of these instruments, although material
losses  are not  anticipated.  The same  credit  policies  are used to make such
commitments as are used for loans, including obtaining collateral at exercise of
the commitment.

Financial instruments with off-balance-sheet risk were as follows at year end.


                                              1999             1998

    Fixed rate commitments                $ 4,429,000      $ 8,525,000
    Variable rate commitments              13,901,000       13,628,000
    Credit card arrangements                4,462,000        2,835,000
    Letters of credit                       1,109,000          770,000


Most  loan  commitments  have  terms up to 60  days.  At year  end  1999,  fixed
commitments have contractual rates ranging from 6.88% to 9.75%. Credit cards are
fixed at 14.9% or 9.8%.  Most  variable  rate  arrangements  are tied  either to
national monthly median cost of funds,  prime or the U.S. Treasury bill rate and
have spreads between 0% and 5%.

NOTE 11 - Stock Options

Options to buy stock are granted to directors,  officers and employees under the
stock option and incentive  plan.  Exercise price is the market price at date of
grant. The maximum option term is ten years and options vest over five years. At
year end 1999, 19,312 shares were authorized for future grants.

Financial  Accounting  Standard  No.  123  requires  pro forma  disclosures  for
companies  that do not adopt its fair value  accounting  method for  stock-based
employee compensation. Accordingly, the following pro forma information presents
net income and earnings per share had the fair value method been used to measure
compensation  cost for stock option  plans.  No  compensation  cost was actually
recognized for stock options for 1999, 1998 and 1997.

                                                                              30
<PAGE>
NOTE 11 - Stock Options (Continued)

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

<S>                                                  <C>              <C>                 <C>
    Net income as reported                           $  2,589,937     $  2,389,354        $   2,192,979
    Pro forma net income                                2,412,455        2,215,835            2,022,367

    Basic earnings per common share as reported      $      1.59      $       1.36        $        1.16
    Diluted earnings per common share as reported           1.54              1.28                 1.13
       Pro forma basic earnings per common share            1.49              1.26                 1.07
    Pro forma diluted earnings per common share             1.43              1.19                 1.04
</TABLE>

In future years,  the pro forma effect of not applying this standard is expected
to increase as additional options are granted.

Information about option grants follows:
<TABLE>
<CAPTION>
                                               Number         Exercise       Fair Value
                                             of Options         Price          of Grants
                                             ----------         -----          ---------

<S>                                            <C>            <C>          <C>
Outstanding, beginning of 1997                 231,038
  Granted                                        1,815        $   12.60    $   3.98
  Exercised                                       (121)            9.71
                                               -------
Outstanding, end of 1997                       232,732
  Granted                                        1,815            17.62        3.88
  Granted                                        1,815            18.49        4.13
  Exercised                                    (25,542)            9.71
                                               -------
Outstanding, end of 1998                       210,820
  Granted                                        8,250            14.66        2.43
  Exercised                                     (2,456)            9.71
                                               -------
Outstanding, end of 1999                       216,614
                                               =======
</TABLE>

The fair value of options  granted during 1999, 1998 and 1997 is estimated using
the following  weighted-average  information:  risk-free interest rate of 4.76%,
5.49% and  5.75%,  expected  life of 7 years,  7 years  and 10  years,  expected
volatility of stock price of 22.3%,  17.5%, and 13.9% and expected  dividends of
1.92%, 1.47% and 1.61%per year.
<PAGE>
Options outstanding at year end were as follows:
<TABLE>
<CAPTION>

                                                  1999          1998           1997
                                                  ----          ----           ----
<S>                                           <C>            <C>            <C>
Number of options                                216,614        210,820        232,732
Minimum exercise price                           $  9.71        $  9.71       $   9.71
Maximum exercise price                             18.49          18.49          12.60
Weighted-average exercise price                    10.06           9.88           9.74
Weighted-average remaining option life         6.2 years      7.1 years      8.0 years
</TABLE>

The weighted  average  exercise price of options  outstanding at January 1, 1997
was $9.71.

There were 117,232, 75,035 and 46,088 options exercisable at year end 1999, 1998
and 1997. The weighted average exercise price of options exercisable at year end
1999 was $9.78.


31
<PAGE>
NOTE 12 - Related Party Transactions

Certain directors and officers of First Federal are loan customers. A summary of
related  party loan  activity for loans  aggregating  $60,000 or more to any one
related party is as follows:

               Balance - January 1, 1999    $ 2,860,622
                 New loans                      938,989
                 Repayments                    (822,889)

               Balance - December 31, 1999  $ 2,976,722


Related party deposits were  approximately  $301,000 at year end 1999.

NOTE 13 - Fair  Values  of  Financial  Instruments

Following are carrying amounts and estimated fair values at year end:

<TABLE>
<CAPTION>
                                                  1 9 9 9                             1 9 9 8
                                                  -------                             -------
                                           Carrying         Estimated          Carrying      Estimated
                                           Amount           Fair Value         Amount        Fair Value
                                       -------------     -------------     -------------     -------------
<S>                                    <C>               <C>               <C>               <C>
Financial assets:
    Cash and cash equivalents
      and interest earning deposits
      in financial institutions        $   5,999,000     $   5,999,000     $   6,396,000     $   6,396,000
    Securities available for sale         33,192,000        33,192,000        13,659,000        13,659,000
    Securities held to maturity              457,000           457,000           528,000           528,000
    Loans receivable, net                208,395,000       208,774,000       185,906,000       189,539,000
    Accrued interest receivable              840,000           840,000           487,000           487,000
    Investments in limited
       liability partnerships              1,332,000         1,332,000         1,400,000         1,400,000

Financial liabilities:
    Deposits                            (143,212,000)     (144,103,000)     (123,336,000)     (124,152,000)
    Borrowed funds                       (84,754,000)      (83,193,000)      (63,080,000)      (63,463,000)
    Accrued interest payable                (342,000)         (342,000)         (250,000)         (250,000)

</TABLE>
                                                                              32
<PAGE>
NOTE 13 - Fair Values of Financial Instruments (Continued)

For purposes of the above  disclosures  of estimated  fair value,  the following
assumptions  were used. The estimated  fair value for cash and cash  equivalents
and interest-earning  deposits in financial  institutions,  accrued interest and
investments in limited liability partnerships is considered to approximate cost.
The estimated fair value for securities is based on quoted market values for the
individual  securities or equivalent  securities.  The estimated  fair value for
loans is based on estimates of the rate Northeast  Indiana  Bancorp would charge
for  similar  such loans at  December  31,  1999 and 1998,  applied for the time
period  until  estimated  repayment.  The  estimated  fair  value for demand and
savings  deposits is based on their carrying value. The estimated fair value for
time  deposits  and borrowed  funds is based on estimates of the rate  Northeast
Indiana  Bancorp would pay on such  deposits or for such  borrowings at December
31, 1999 and 1998,  applied for the time period until  maturity.  The  estimated
fair value of other financial instruments and off-balance-sheet loan commitments
approximates cost and is not considered significant for this presentation.

While these  estimates of fair value are based on  management's  judgment of the
most  appropriate  factors,  there is no assurance that were  Northeast  Indiana
Bancorp  to have  disposed  of such  items at  December  31,  1999 or 1998,  the
estimated fair values would  necessarily  have been achieved at that date, since
market values may differ depending on various circumstances.  The estimated fair
values at December 31, 1999 and 1998 should not  necessarily  be  considered  to
apply at subsequent dates.

NOTE 14 - Parent Company Only Condensed
    Financial Information

Condensed  financial  information  of  Northeast  Indiana  Bancorp,  Inc.  is as
follows:
<TABLE>
<CAPTION>
                            CONDENSED BALANCE SHEETS
                           December 31, 1999 and 1998

                                                           1999              1998
                                                      ------------     ------------
<S>                                                   <C>              <C>
ASSETS
Cash and cash equivalents                             $    908,680     $  1,875,884
Securities available for sale                              183,200          200,000
Loan receivable from Employee Stock Ownership Plan       1,018,325        1,163,800
Investment in subsidiary bank                           23,542,192       21,649,524
Other assets                                                 8,302          119,229
                                                      ------------     ------------

    Total assets                                      $ 25,660,699     $ 25,008,437
                                                      ============     ============

LIABILITIES
Accrued expenses                                      $      5,400     $      3,801

SHAREHOLDERS' EQUITY                                    25,655,299       25,004,636
                                                      ------------     ------------

    Total liabilities and shareholders' equity        $ 25,660,699     $ 25,008,437
                                                      ============     ============
</TABLE>
33
<PAGE>
NOTE 14 - PARENT COMPANY ONLY CONDENSED
    FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>

                              CONDENSED STATEMENTS OF INCOME
                       Years ended December 31, 1999, 1998 and 1997

                                                     1999            1998            1997
                                                -----------     -----------    -----------
<S>                                             <C>             <C>            <C>
Interest income                                 $    84,295    $   118,569   $   263,767
Dividend from subsidiary                            600,000      5,000,000           ---
                                                -----------    -----------   -----------

    Total income                                    684,295      5,118,569       263,767

Operating expenses                                  167,947        189,742       166,532
                                                -----------    -----------   -----------

Income before income taxes and equity in
   undistributed earnings of subsidiary bank        516,348      4,928,827        97,235

Income tax expense/(benefit)                        (62,820)      (54,297)        11,774
                                                -----------    -----------   -----------

Income before equity in undistributed
   earnings of subsidiary bank                      579,168      4,983,124        85,461

Equity in undistributed (excess distributed)
    earnings of subsidiary bank                   2,010,769     (2,593,770)    2,107,518
                                                -----------    -----------   -----------


Net income                                      $ 2,589,937    $ 2,389,354   $ 2,192,979
                                                ===========    ===========   ===========
</TABLE>

                                                                              34
<PAGE>
NOTE 14 - PARENT COMPANY ONLY CONDENSED
    FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>

                            CONDENSED  STATEMENTS  OF  CASH  FLOWS  Years  ended
                       December 31, 1999, 1998 and 1997


                                                              1999          1998           1997
                                                        ------------     -----------   -----------

<S>                                                     <C>              <C>           <C>
Cash flows from operating activities
    Net income                                          $  2,589,937     $ 2,389,354   $ 2,192,979
    Adjustments to reconcile net income to cash
       provided by operations
        Equity in (undistributed) excess distributed
                   earnings of subsidiary bank           (2,010,769)      2,593,770     (2,107,518)
        Change in
          Other assets                                      117,580         (59,569)        57,050
          Accrued expenses                                    1,599          (5,159)     (288,197)
                                                        -----------     -----------     -----------
            Net cash from operating activities              698,347       4,918,396      (145,686)

Cash flows from investing activities
    Repayments on loan receivable from
      subsidiary bank                                           ---       2,000,000      1,750,000
    Repayments on loan receivable from ESOP                 145,475         145,475        145,475
    Purchase of securities available for sale                   ---        (200,000)           ---
                                                        -----------     -----------     -----------
      Net cash from investing activities                    145,475      1,945,475      1,895,475

Cash flows from financing activities
    Dividends paid                                         (617,467)       (576,273)       (575,558)
    Purchase of stock                                    (1,225,438)     (4,907,522)     (1,328,211)
    Proceeds from sales of stock                             31,879         269,864           8,800
                                                        -----------     -----------     -----------
      Net cash from financing activities                 (1,811,026)     (5,213,931)     (1,894,969)
                                                        -----------     -----------     -----------

Net change in cash and cash equivalents                    (967,204)      1,649,940        (145,180)

Cash and cash equivalents at beginning of period          1,875,884         225,944         371,124
                                                        -----------     -----------     -----------

Cash and cash equivalents at end of period              $   908,680     $ 1,875,884     $   225,944
                                                        ===========     ===========     ===========
</TABLE>

35
<PAGE>
NOTE 15 - Earnings Per Share

A  reconciliation  of the numerators and denominators of the earnings per common
share and earnings per common share assuming dilution computations for the years
ended December 31, 1999, 1998 and 1997 is presented below.
<TABLE>
<CAPTION>
                                                        1999          1998         1997
                                                    ----------    ----------    ----------
<S>                                                 <C>           <C>           <C>
Earnings Per Share

    Net income available to common
      shareholders                                  $2,589,937    $2,389,354    $2,192,979
                                                    ==========    ==========    ==========

    Weighted average common shares
        outstanding before adjustment                1,801,800     1,969,503     2,137,009

    Less: unallocated ESOP shares                      140,820       158,422       176,024

    Less: non-vested RRP shares                         36,545        53,673        74,117
                                                    ----------    ----------    ----------
    Weighted average common shares
      outstanding for basic earnings per share       1,624,435     1,757,408     1,886,868
                                                    ----------    ----------    ----------

    Earnings Per Share                              $     1.59    $     1.36    $     1.16
                                                    ==========    ==========    ==========

Earnings Per Share Assuming Dilution

    Net income available to common
      shareholders, per above                       $2,589,937    $2,389,354    $2,192,979
                                                    ==========    ==========    ==========

    Weighted average common shares
      outstanding                                    1,624,435     1,757,408     1,886,868

    Add: dilutive effects of assumed conversions
      and exercises of stock options                    58,665       101,209        51,738
                                                    ----------    ----------    ----------

    Weighted average common and dilutive
      potential common shares outstanding            1,683,100     1,858,617     1,938,606
                                                    ==========    ==========    ==========

Earnings Per Share Assuming Dilution                $     1.54    $     1.28    $     1.13
                                                    ==========    ==========    ==========

</TABLE>
                                                                              36
<PAGE>
Stockholder Information

Stock Listing Information

The  Company's  common stock is traded on the NASDAQ  National  Market under the
symbol "NEIB".

Stock Price Information

The  following  table  sets  forth  the high and low bid  prices  and  dividends
declared per share of common stock for the periods indicated.  The prices do not
represent actual  transactions  and do not include retail markups,  markdowns or
commissions.

                                                                       Dividends
               Quarter Ended                High           Low         Declared
               -------------                -----         ------       --------
               March 31, 1998               $18.80        $17.36        $.070
               June 30, 1998                $19.11        $17.25        $.070
               September 30, 1998           $19.01        $13.64        $.070
               December 31, 1998            $16.36        $13.54        $.082

               March 31, 1999               $15.32        $12.96        $.082
               June 30, 1999                $13.64        $12.05        $.082
               September 30, 1999           $14.77        $13.18        $.082
               December 31, 1999            $14.66        $11.59        $.100

Dividend payment  decisions are made with  consideration of a variety of factors
including earnings,  financial condition,  market  considerations and regulatory
restrictions.

As of February 11, 2000,  there were  approximately  526 shareholders of record,
not  including  those  shares  held in nominee or street  name  through  various
brokerage firms or banks.

Annual Report on Form 10-KSB

A copy of the Company's annual report on Form 10-KSB,  filed with the Securities
and Exchange  Commission,  is available  without  charge by writing:

Darrell E. Blocker
Chief  Financial  Officer
Northeast  Indiana  Bancorp,  Inc.
648 North Jefferson Street
Huntington, Indiana 46750

Stock Transfer Agent

Inquiries regarding stock transfer,  registration,  lost certificates or changes
in name and address should be directed to the stock transfer agent and registrar
by writing:

               Registrar and Transfer Company
               10 Commerce Drive
               Cranford, New Jersey 07016

Investor Information

Stockholders,  investors,  and analysts interested in additional information may
contact Darrell E. Blocker, Chief Financial Officer,  Northeast Indiana Bancorp,
Inc.
<PAGE>
Corporate Office
Northeast Indiana Bancorp, Inc.
648 North Jefferson Street
Huntington, Indiana 46750
(219) 356-3311

Special Counsel
Silver, Freedman & Taff, L.L.P
1100 New York Avenue, N.W.
Washington, D.C. 20005

Independent Auditor
Crowe, Chizek and Company LLP
330 E. Jefferson Blvd.
South Bend, Indiana 46624


37
<PAGE>
                             DIRECTORS AND OFFICERS

Board of Directors
Pictured left to right:
[Graphic - photo]

Randall C. Rider
President
 Lime City Manufacturing Company, Inc.

Dan L. Stephan
Past State Representative
 Indiana Legislature
Agent
 Variable Annuity Life Insurance Company

Stephen E. Zahn
Chairman of the Board
President and Chief Executive Officer

J. David Carnes
Medical Doctor and Associate
 Family Practice Associates

Samuel Preston, Jr.
Retired Pharmacist

                               Executive Officers

[Graphic - photo]

(L to R) Darrell E. Blocker, Senior Vice President,
Treasurer and Chief Financial Officer
Stephen E. Zahn, Chairman of the Board,
President and Chief Executive Officer
Dee Ann Hammel, Senior Vice President,
Secretary and Chief Operations Officer

Officers of
First Federal Savings Bank

Stephen E. Zahn, Chairman of the Board,
 President and Chief Executive Officer

Dee Ann Hammel, Senior Vice President,
 Secretary and Chief Operations Officer

Darrell E. Blocker, Senior Vice President,
 Treasurer and Chief Financial Officer

Donald G. Carender, Vice President - Consumer Lending

Lil M. Holloway, Vice President - Mortgage Lending

Michael S. Zahn, Vice President - Mortgage Lending
<PAGE>
Ronald J. Tinkle, Vice President - Consumer Lending,
 North Office Manager

James R. Landrum, Vice President - New Business Development

Joseph A. Byers, Vice President - Senior Trust Officer

Michael D. Brewer, Assistant Vice President,
 South Office Manager

Rise K. Buzzard, Assistant Vice President - Operations, and
Assistant Secretary

Cynthia A. Zay, Assistant Vice President - Mortgage Lending

James M. Ryan, Assistant Vice President - Indirect Lending

Sherri S. Chaney, Assistant Vice President - Trust Officer

Annual Meeting

The Annual Meeting of Stockholders of Northeast  Indiana  Bancorp,  Inc. will be
held on April 19,  2000 at 1:00 p.m.  at the North  Office  Board  Room of First
Federal Savings Bank, 100 Frontage Road, Huntington, Indiana.
<PAGE>
                 NOW MORE THAN EVER...FIRST IN HOMETOWN BANKING

                           First Federal Savings Bank
                                Office Locations





                     [GRAPHIC-PHOTOS OF THREE BANK OFFICES]


               [GRAPHIC-LOGO OF NORTHEAST INDIANA Bancorp, Inc.]





                                         Internet Address: www.firstfed-neib.com