PRESIDENT'S MESSAGE TO OUR SHAREHOLDERS
--------------------------------------------------------------------------------


Dear Shareholders,

The year 2000 proved a profitable  and  challenging  year for Northeast  Indiana
Bancorp, Inc. and its subsidiary First Federal Savings Bank. Increasing interest
rates  caused a decrease  in our net  interest  margin  during  the year.  First
Federal also took a significant provision for loan losses to provide an adequate
allowance  for losses net of  charge-offs  during  2000.  The  slowing  economy,
especially  in the  housing  and  automotive  sectors,  resulted in a decline in
assets at year end.  This  slowdown  did,  however,  provide  First  Federal the
opportunity  to improve  our  liquidity  position by  reducing  our  reliance on
Federal Home Loan Bank borrowings by over $12.0 million during 2000.

The past  fiscal  year also  provided  good news to you,  our  shareholders.  We
rewarded you with  continuous and  increasing  dividends,  which  increased from
$0.345 per share in 1999 to $0.41 per share in 2000, an increase of 18.8%.  Your
Company  also  repurchased  stock  during  2000 and  during  2001 will  actively
continue to repurchase stock while our stock price remains attractive.

We look toward 2001 with a sense of optimism and excitement. We believe that the
recent  actions  of the  Federal  Reserve to lower  interest  rates will lead to
improvements in your Company's net interest margin. The numbers aren't the whole
story; we continue our emphasis towards excellence in customer service.  To that
end, we continue to support  employees' efforts with additional staff in growing
departments  and  employee  training to provide  quality  customer  service.  We
continue to invest in technology to enhance our system  capabilities  to provide
valuable information to management and efficient service to our customers.

First  Federal's Trust Services  continued to increase  assets under  management
during 2000 and we anticipate this service will be profitable in 2001.

One area  that  remains  constant  is the  dedication  of our  employees  to our
customers  and our  community.  I am  honored to be  associated  with a group of
people who  believe,  as I do, that  superior  customer  service  and  community
support will provide for a stronger company.

In conclusion, I would like to recognize long time director Samuel Preston, Jr.,
who passed away this past year. He was a faithful and dedicated Board member who
was well liked and well respected by all of us.

On behalf of the directors and employees, thank you for your continued 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
SELECTED CONSOLIDATED FINANCIAL INFORMATION .........................    3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS ...............................    4
REPORT OF INDEPENDENT AUDITORS ......................................   15
CONSOLIDATED FINANCIAL STATEMENTS ...................................   16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ..........................   20
STOCKHOLDER INFORMATION .............................................   37
DIRECTORS AND OFFICERS ..............................................   38


Description of Business

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.  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 wholly owned subsidiary.  Northeast Indiana
Financial,  Inc. First Federal has been serving the Huntington  community  since
1912.

                                       2

<PAGE>

                   SELECTED CONSOLIDATED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                             At or for years ended December 31
                                                             ---------------------------------
                                                  2000         1999         1998         1997         1996
                                                  ----         ----         ----         ----         ----
Selected Financial Condition Data:                                  (dollars in thousands)
----------------------------------
<S>                                            <C>           <C>          <C>          <C>          <C>
Total assets................................   $ 247,094     $254,747     $ 212,425    $ 199,369    $ 169,544
Securities..................................      31,609       33,649        14,187       15,385       12,388
Loans receivable, net.......................     200,151      208,395       185,906      174,539      146,855
Deposits ...................................     146,806      143,212       123,336      107,550       85,346
Total borrowings............................      72,539       84,754        63,080       63,522       56,000
Shareholders' equity........................      26,573       25,655        25,005       27,293       26,529

Selected Operations Data:

Total interest income.......................   $  19,565     $ 17,722     $  16,139    $  14,316    $  11,767
Total interest expense......................      12,485        9,846         9,061        7,950        6,197
                                               ---------     --------     ---------    ---------    ---------
   Net interest income......................       7,080        7,876         7,078        6,366        5,570
Provision for loan losses...................       1,591          449           360          265          235
                                               ---------     --------     ---------    ---------    ---------
Net interest income after provision for loan
  losses....................................       5,489        7,427         6,718        6,101        5,335
Total noninterest income....................       1,010          832           731          565          402
Total noninterest expense...................       4,775        4,194         3,691        3,062        3,208
                                               ---------     --------     ---------    ---------    ---------
Income before income taxes..................       1,724        4,065         3,758        3,604        2,529
Income tax expense..........................         441        1,475         1,369        1,411          962
                                               ---------     --------     ---------    ---------    ---------
Net income..................................   $   1,283     $  2,590     $   2,389    $   2,193    $   1,567
                                               =========     ========     =========    =========    =========

Basic earnings per common share (2).........   $    0.80     $   1.59     $    1.36    $    1.16    $    0.73
Diluted earnings per common share (2).......   $    0.79     $   1.54     $    1.28    $    1.13    $    0.72

Selected Financial Ratios and Other Data:
-----------------------------------------

Performance Ratios:
   Return on assets (ratio of net income to
     average total assets)..................      0.50%        1.11%        1.17%        1.21%         1.03
   Return on equity (ratio of net income to
     average total equity)..................      4.88        10.15         9.15         8.12          5.43
   Interest rate spread information:
   Average during period....................      2.39         3.03         2.95         2.91          2.90
   End of period............................      2.34         3.02         3.11         2.95          2.70
   Net interest margin (1)..................      2.90         3.50         3.57         3.63          3.81
   Ratio of operating expense to average
     total assets...........................      1.88         1.80         1.81         1.69          2.12
   Ratio of average interest-earning assets
     to average interest-bearing liabilities    109.95       110.74       113.66       115.97        121.48

Quality Ratios:
   Non-performing loans to total assets at
     end of period..........................      1.79          .70          .56          .58           .42
   Allowance for loan losses to non-performing
     loans..................................     45.24        82.00       122.53       102.50        144.00
   Allowance for loan losses to total loans.       .98          .82          .76          .66           .67

Capital Ratios:
   Shareholders' equity to total assets at
     end of period..........................     10.75        10.07        11.77        13.69         15.65
  Average shareholders' equity to average
     total assets...........................     10.33        10.94        12.80        14.89         19.03

Other Data:
   Dividends declared per share (2) ........   $  0.41      $ 0.345      $ 0.293     $  0.268      $  0.252
   Dividend payout ratio....................     51.25%       21.70%       21.54%       23.10%        34.52
   Number of full-service offices...........       3            3            3            3             3
</TABLE>

------------
(1) Net interest income divided by average interest-earning assets.
(2) 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.

                                       3
<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 2000,  $25.0 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. provides brokerage services through
the purchase of mutual funds, annuities,  stocks and bonds for its customers and
has $11.2 million of assets held for our 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  policies,  fiscal  policies and financial  institutions  significantly
affect First Federal. 1999 ended with the economy showing continued inflationary
pressure.  The Federal Reserve during 2000 raised  short-term  rates three times
for a total of 100 basis  points in addition to the 1999  increases  to help the
United States economy maintain low inflation.  The effects caused the economy to
slow and  became  evident by the fourth  quarter of 2000.  Although  we have had
fluctuations  throughout  2000, in general the economy was  unfavorable to First
Federal's  lending growth for most of the year.  The rate  increases  during the
last half of 1999 and the first  half of 2000 put  significant  pressure  on our
interest  rate  margins.  There can be no  assurance  that in  periods of rising
interest  rates  First  Federal  can  continue  to market its  lending  products
successfully or that such interest rate movements will not adversely  affect net
income.  Subsequent to September  30, 2000,  Northeast  Indiana  became aware of
circumstances that had occurred involving loans originated by First Federal to a
single  borrower.  During the fourth  quarter  these loans were  written down to
estimated  fair value of the  collateral.  The collateral  included  repossessed
vehicles,  consumer auto leases and  contracts.  The estimated  present value of
leases and  contracts  ($1.5  million)  are  included in consumer  loans and are
considered both  non-performing and impaired.  At December 31, 2000, the balance
of the impaired loans was $8.5 million,  including $4.7 million with  allowances
allocated  specifically to them. These loans compare to $2.4 million of impaired
loans,  including $1.4 million with allowance allocated to them, at December 31,
1999.

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.


                                       4
<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.


                                       5
<PAGE>

Financial Condition

Northeast  Indiana  Bancorp's  total  assets  decreased  from $254.7  million at
December  31, 1999 to $247.1  million at December  31,  2000, a decrease of $7.6
million,  or 3.0%.  The decrease was due  primarily to the decrease in net loans
receivable  of $8.2  million  or 3.9%  and a  decrease  of $2.0  million  in the
securities  available for sale.  This reduction was reflected by a $12.3 million
decrease in borrowed  funds.  Deposits  increased by $3.6 million,  primarily in
time deposits.

Most  segments of the loan  portfolio  decreased  during 2000.  The decrease was
mostly  attributable to mortgage loans,  which decreased $6.4 million.  Mortgage
loans secured by one-to-four family residences  decreased $1.6 million to $117.7
million at December 31, 2000 and  represent  58.8% of First  Federal's  net loan
portfolio.  The decrease in one-to four-family mortgage loans was comprised of a
$0.5  million  increase  in fixed  rate  loans and a $2.1  million  decrease  in
adjustable rate loans.  First Federal sold approximately $1.2 million fixed rate
one-to-four  family  mortgages  in the second half of 2000 that were  originated
during that period.

Mortgage  loans secured by  multi-family  and commercial  real estate  increased
$646,000 to $28.9 million at December 31, 2000 and construction loans secured by
residential  and  non-residential  real estate  decreased  $5.4  million to $7.2
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  decreased  $4.3  million  to $50.4  million at
December 31, 2000.  Automobile  loans  comprise  $14.1 million of total consumer
loans while home equity and second mortgage loans represent another $8.2 million
at December 31, 2000.

Future  loan growth and  profitability  related  thereto,  is  dependent  on the
economy. First Federal currently anticipates slower growth in mortgages compared
to the last few years and will sell more fixed rate one-to-four family mortgages
into the secondary market. First Federal will continue to provide commercial and
consumer lending and anticipates non-residential mortgage lending to increase as
a percentage of total loans.

While  non-mortgage  lending  exposes the Company to  additional  credit  risks,
management is committed sound underwriting and monitoring  capabilities in these
areas.

Total  deposits  increased  $3.6 million to $146.8 million at December 31, 2000.
The 2.5% growth in 2000 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 time deposit growth contributed $6.3 million of the total deposit increase
and came from both inside and outside of our market area.

Total  borrowed  funds  decreased  $12.3  million,  from $84.8  million to $72.5
million at December 31, 2000. Borrowed funds include advances from the FHLB with
variable interest rates and stated maturities  ranging through 2010.  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, 2000, was $86.4
million based on collateral.  Borrowings at December 31, 2000,  also include two
demand notes totaling $175,000 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, 2000 was $5.0 million up from $4.1 million at December 31, 1999.


                                       6
<PAGE>

Results of Operations

              Comparison of Years Ended December 31, 2000 and 1999

General.   Net  income  for  the  year  ended   December  31,  2000  provided  a
disappointing  year of $1.3  million in  earnings,  a decrease  of $1.3 over net
income of $2.6 million for 1999.  This reduction in net income was primarily the
result of a decrease in net interest income along with additional  provision for
loan losses needed to adequately fund the allowance for loan losses, offset by a
slight  increase  in  non-interest  income.  The reduced net income was also the
result of an increase in  non-interest  expense.  The  reduction in earnings was
partially offset by a reduction of income tax expense. Further details regarding
the changes in the income and expenses are discussed below.

Interest  Income.  Interest  income  increased  $1.8  million  or 10.4% to $19.6
million for the year ended  December 31, 2000.  The increase in interest  income
was primarily the result of mortgage loan interest income increasing $798,000 to
$12.1  million and an increase of $459,000 to $4.9 million in consumer and other
loan  interest  income.  The  average  yield for the year on the loan  portfolio
increased  to 8.24% in 2000  compared  to 8.08% in 1999.  The  increase  in loan
interest  income was due to a combination  of higher  average  balances of loans
outstanding in 2000 compared to 1999 and higher average rates during 2000.

Interest Expense. Interest expense for 2000 increased $2.6 million or 26.8% over
1999 interest  expense.  The majority of the increase was due to higher interest
costs for FHLB advances,  which  increased 85 basis points in 2000,  compared to
1999. The average rate for time deposits  increased 75 basis points from 1999 to
2000. The average rate for money market accounts increased by 64 basis points to
4.95% for 2000.

Net interest income.  Net interest income decreased  $795,000 or 10.1% from $7.9
million to $7.1 million for the year ended December 31, 2000. The average spread
decreased by 64 basis points to 2.39%.  Average  interest-earning  assets margin
decreased to 2.90% due to slower  increases in income earnings  products offered
during 2000 offset by a larger  increase in the rates paid for  interest-bearing
liabilities.

Provision  for Loan  Losses.  The  provision  for loan  losses for 2000 was $1.6
million compared to $449,000 in 1999, an increase of $1.1 million. The provision
for  loan  losses  less net  charge-offs  for the year  resulted  in a  $234,000
increase in the allowance for loan losses. The allowance for loan losses of $2.0
million at December 31, 2000 was a 13.2% increase compared to December 31, 1999.
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 and these types of lending  making up a larger  portion of the
overall loan portfolio. Due to the loan losses mentioned earlier and as a result
of our review process, the provision for loan losses for the year ended December
31, 2000 was increased  over the provision for the year ended December 31, 1999.
Over half of the charge-offs for the year ended December 2000 were due to losses
from two borrowers.

Noninterest  income.  Noninterest income increased from $832,000 in 1999 to $1.0
million in 2000.  The majority of this change was due to our  increases in other
service  charges  and fees to $637,000  in 2000  compared to $488,000  for 1999,
which was a $149,000 increase.

Noninterest  expense.  Noninterest  expense  increased from $4.2 million to $4.8
million or $581,000.  Salaries and employee benefits  increased $405,000 in 2000
over 1999, the result of higher  personnel  costs,  additional  staff and salary
increases. During 2000, data processing costs increased $41,000 primarily due to
higher volume and additional  processing costs incurred as we expand our product
lines.  Correspondent  bank charges and other expenses  increased  mainly due to
increased volume in deposits and loans in the first three quarters of 2000.

Income tax expense.  Income tax expense decreased from $1.5 million to $441,000.
This decrease was due to lower taxable income for 2000  additionally  reduced by
the tax benefits from the  investment in low-income  housing  limited  liability
partnerships.

                                       7
<PAGE>

Results of Operations (continued)

              Comparison of Years Ended December 31, 1999 and 1998

General.  Net income for the year ended  December 31, 1999 provided $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  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.

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.

                                       8
<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, 2000,  adjustable  rate loans
comprised  44.6% 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.  As
stated  earlier,  First Federal is now using the  secondary  market to assist in
managing our interest rate risk  exposure.  We are also making  adjustable  rate
commercial  loans  when  possible.  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, 2000 and 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.

The rising rate scenarios  reflect the decreasing NPV of equity.  However,  even
during the rising rate  environment  of 2000 we improved  our  sensitivity  from
(273)bp  at  December  31,  1999  to  (220)bp  at  December  31,  2000,  a  53bp
improvement. As rates drop our NPV should improve.

<TABLE>
<CAPTION>
                              At December 31, 2000

                                                                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>
    +300 bp         $ 16,343     $ (10,083)          (38)%         6.97%            (359) bp
    +200              20,051        (6,374)          (24)          8.35             (220)
    +100              23,474        (2,951)          (11)          9.57              (99)
       0              26,426             -             -          10.56                -
    -100              28,419         1,993             8          11.17               62
    -200              29,552         3,127            12          11.47               91
    -300              31,068         4,642            18          11.89              133
</TABLE>


                                       9
<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>
     +300 bp      $ 12,802      $ (11,581)       (47)%      5.35%            (425) bp
     +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>

In the event of a 300 basis point change in interest  rates based upon estimates
as of December 31, 2000,  First Federal would  experience an 18% increase in NPV
in a  declining  rate  environment  and a 38%  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 the  investment  in loans with  substantially
longer  maturities and our prior use of an interest rate index which lags behind
market rate indices to adjust the interest  rate on  Adjustable  Rate  Mortgages
("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 we invest,  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.


                                       10
<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.

<TABLE>
<CAPTION>

                                                                       Year Ended December 31,
                                                         2 0 0 0                                       1 9 9 9
                                    --------------------------------------------    -------------------------------------------
                                       Average           Interest                        Average       Interest
                                     Outstanding          Earned/       Yield/         Outstanding      Earned/        Yield/
                                       Balance             Paid          Rate            Balance         Paid           Rate
                                       -------             ----          ----            -------         ----           ----
                                                                       (Dollars in Thousands)
Interest-earning assets:
<S>                                  <C>             <C>                  <C>       <C>             <C>                  <C>
     Loans receivable(1)             $    207,119    $     17,063         8.24%     $    195,504    $     15,806         8.08%
     Securities                            28,376           1,844         6.50            21,948           1,395         6.36
     FHLB stock                             4,913             405         8.24             4,026             322         8.00
     Other interest-earning assets          3,550             253         7.13             3,297             199         6.04
                                     ------------    ------------                   ------------    ------------
         Total interest earning

           assets(1)                      243,958          19,565         8.02           224,775          17,722         7.88
                                     ------------    ------------                   ------------    ------------

 Non-interest earning assets               10,549                                          8,315
                                     ------------                                   ------------
         Total assets                $    254,507                                   $    233,090
                                     ============                                   ============

Interest-bearing liabilities:
     Savings                         $      9,738             196         2.01      $      9,970             199         2.00
     Money market                          18,092             895         4.95            21,602             930         4.31
     Demand and NOW                        11,013             165         1.50            11,185             170         1.52
     Time deposit accounts                 90,979           5,564         6.12            79,487           4,271         5.37
     Borrowings                            92,065           5,665         6.15            80,734           4,276         5.30
                                     ------------    ------------                   ------------    ------------

         Total interest bearing
           liabilities                    221,887          12,485         5.63           202,978           9,846         4.85
                                     ------------    ------------                   ------------    ------------

 Non-interest bearing liabilities           6,339                                          4,607
                                     ------------                                   ------------
         Total liabilities                228,226                                        207,585
         Total equity                      26,281                                         25,505
                                     ------------                                   ------------
         Total liabilities and
           equity                    $    254,507                                   $    233,090
                                     ============                                   ============

 Net interest income                                 $      7,080                                   $      7,876
                                                     ============                                   ============

 Net interest rate spread                                                 2.39%                                          3.03%
                                                                      ========                                       ========
 Net interest earning assets         $     22,071                                   $     21,797
                                     ============                                   ============
Net yield on average interest-
  earning assets                                                          2.90%                                          3.50%
                                                                      ========                                       ========

Average interest-earning assets to
   average interest-bearing liabilities                                   1.10x                                          1.11x
                                                                      ========                                       ========

<CAPTION>

                                                                  Year Ended December 31,
                                                        -------------------------------------------
                                                                          1 9 9 8
                                                        -------------------------------------------
                                                            Average       Interest
                                                          Outstanding      Earned/          Yield/
                                                            Balance         Paid             Rate
                                                            -------         ----             ----
                                                                     (Dollars in Thousands)
Interest-earning assets:
     Loans receivable(1)                                $    179,114     $     14,848         8.29%
     Securities                                               11,692              785         6.71
     FHLB stock                                                3,250              260         8.00
     Other interest-earning assets                             4,006              246         6.14
                                                        ------------     ------------
         Total interest earning
           assets(1)                                         198,062           16,139         8.15
                                                        ------------     ------------

 Non-interest earning assets                                   6,086
                                                        ------------
         Total assets                                   $    204,148
                                                        ============

Interest-bearing liabilities:
     Savings                                            $      9,577              235         2.45
     Money market                                             20,732            1,014         4.89
     Demand and NOW                                            9,947              148         1.49
     Time deposit accounts                                    79,156            4,516         5.71
     Borrowings                                               54,841            3,148         5.74
                                                        ------------     ------------

         Total interest bearing
           liabilities                                       174,253            9,061         5.20
                                                        ------------     ------------

 Non-interest bearing liabilities                              3,774
                                                        ------------
         Total liabilities                                   178,027
         Total equity                                         26,121
                                                        ------------
         Total liabilities and
           equity                                       $    204,148
                                                        ============

 Net interest income                                                     $      7,078
                                                                         ============

 Net interest rate spread                                                                     2.95%
                                                                                         =========
 Net interest earning assets                                             $     23,809
                                                                         ============
Net yield on average interest-
  earning assets                                                                              3.57%
                                                                                         =========

Average interest-earning assets to
   average interest-bearing liabilities                                                       1.14x
                                                                                         =========
</TABLE>

(1)  Calculated net of deferred loan fees, loan discounts,  loans in process and
     allowance for loan losses.


                                       11
<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.

                                                          At December 31,
                                                          ---------------
                                                    2000       1999      1998
                                                    ----       ----      ----
Weighted average yield on:
    Loans receivable...........................     8.41%      8.14%     8.17%
    Investment securities......................     6.82       6.72      6.88
    Other interest-earning assets..............     6.12       4.96      4.68
        Combined weighted average yield on
          interest-earning assets                   8.16       7.91      8.00
Weighted average rate on:
    Savings....................................     2.00       2.00      2.00
    Money market...............................     5.27       4.28      4.29
    NOW .......................................     1.55       1.53      1.49
    Time deposit accounts......................     6.54       5.65      5.48
    Borrowings.................................     6.17       4.91      5.40
    Repurchase agreements......................     5.77       5.38      4.53
        Combined weighted average rate on
        interest-bearing liabilities                5.82       4.89      4.89

Spread  .......................................     2.34       3.02      3.11

The loans  receivable  yield,  which is the largest portion of interest  income,
increased  27 basis points to 8.41%,  a 3.3%  increase at the end of period 2000
yield compared to 8.14% at the end of 1999. The overall  weighted  average yield
increased  25 basis  points to 8.16% at the end of 2000 up from 7.91% at the end
of 1999, a 3.2% increase.  Interest-bearing  liabilities rate changes were mixed
on the major liability products.  Time deposits increased to 6.54% at the end of
2000  compared  to 5.65% at the end of 1999,  a 89 basis point  increase.  Money
market  accounts  increased 99 basis points to 5.27% at the end of 2000 compared
to 4.28% at the end of 1999, a 23.1%  increase.  Borrowing  rates  increased 126
basis  points  in 2000 to  6.17%  compared  to  4.91%  at the end of  1999.  The
repurchase  agreements  reflect the end of period  rates paid on our  repurchase
accounts that  compliment our sweep  accounts which were  introduced in 1998 for
commercial customers. The combined interest-bearing liabilities weighted average
rates  increased  to 5.82% at the end of 2000  compared  to 4.89 % at the end of
1999.  This 93 basis points  increase in interest  costs compared to the earning
assets yields  smaller  increase of 25 basis points caused the spread to tighten
to 2.34%  at the end of 2000  compared  to 3.02% at the end of 1999,  a 68 basis
point reduction over 1999.


                                       12
<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:

     o    Changes in volume (i.e., changes in volume multiplied by old rate)
     o    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,
                                          2000 vs. 1999                                 1999 vs. 1998
                          --------------------------------------------   ------------------------------------------
                                    Increase                                      Increase
                                   (Decrease)                Total               (Decrease)                Total
                                     Due to                Increase                Due to                Increase
                             Volume           Rate        (Decrease)       Volume           Rate        (Decrease)
                             ------           ----        ----------       ------           ----        ----------
                                                             (Dollars in Thousands)

Interest-earning assets:
<S>                        <C>            <C>             <C>            <C>            <C>             <C>
     Loans receivable      $       953    $       304     $     1,257    $     1,332    $      (374)    $       958
     Securities                    417             32             449            654            (44)            610
     FHLB stock                     73             10              83             62              -              62
     Other interest-
       earning assets               16             38              54            (43)            (4)            (47)
                           -----------    -----------     -----------    -----------    -----------     -----------

     Total interest-
       earning assets      $     1,459    $       384     $     1,843    $     2,005    $      (422)    $     1,583
                           ===========    ===========     ===========    ===========    ============    ===========

Interest-bearing
  liabilities:
     Savings               $        (5)   $         2     $        (3)   $         9    $       (45)    $       (36)
     Money market                 (163)           128             (35)            41           (125)            (84)
     NOW                            (3)            (2)             (5)            19             3               22
     Time deposit
       accounts                    661            632           1,293             19           (264)           (245)
     Borrowings                    645            744           1,389          1,388           (260)          1,128
                           -----------    -----------     -----------    -----------    -----------     -----------

         Total interest-
           bearing
           liabilities     $     1,135    $     1,504     $     2,639    $     1,476    $      (691)    $       785
                           ===========    ===========     ===========    ===========    ===========     ===========

Net interest income                                       $      (796)                                  $       798
                                                          ===========                                   ===========
</TABLE>

                                       13
<PAGE>

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, 2000, First Federal's average
liquidity   ratio  was  9.69%,  of  which  34.8%  was  comprised  of  short-term
investments.

During the year ended  December 31,  2000,  there was a net increase in cash and
cash equivalents of $677,000. The major source of funds during the year included
an increase in deposits of $3.6  million,  proceeds from  maturities,  principal
payments and sales of securities  of $7.9  million,  and a net decrease in loans
providing  $6.4  million.  These  proceeds were used to fund a decrease of $13.0
million in borrowed funds, $5.1 million in securities  purchased and $731,000 to
purchase treasury stock.

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.

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, 2000,  First  Federal's core capital ratio was 9.7% and
its total  capital to risk  weighted  assets ratio was 16.3%.  Therefore,  First
Federal's capital  significantly  exceeds all capital requirements  currently in
effect.

During 2000,  Northeast  Indiana  Bancorp  completed its sixth stock  repurchase
program  which  began in July 1999.  Northeast  Indiana  Bancorp  also  received
approval  from the OTS to begin its seventh  stock  repurchase  program.  As the
stock is  repurchased,  it becomes  treasury  stock and can be used for  general
corporate  purposes.  The seventh repurchase program was approved in August 2000
for 6.75% of the outstanding shares or 117,000 shares. Northeast Indiana Bancorp
had repurchased  40,500 of the shares  authorized  under the seventh  repurchase
plan as of December  31,  2000.  At December  31, 2000 we had 948,136  shares of
treasury stock and 1,692,536 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
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.

                                       14
<PAGE>


                         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, 2000 and 1999 and the
related consolidated  statements of income,  changes in shareholders' equity and
cash flows for the years ended December 31, 2000, 1999 and 1998. 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, 2000 and 1999 and the results of
their  operations  and their cash flows for the years ended  December  31, 2000,
1999 and 1998 in conformity with generally accepted accounting principles.

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


South Bend, Indiana
February 16, 2001

                                       15
<PAGE>

                         NORTHEAST INDIANA BANCORP, INC.
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                   2000                 1999
                                                                                   ----                 ----
ASSETS
<S>                                                                          <C>                  <C>
Interest earning cash and cash equivalents                                   $       3,208,993    $       2,938,701
Noninterest earning cash and cash equivalents                                        3,367,273            2,960,502
                                                                             -----------------    -----------------
     Total cash and cash equivalents                                                 6,576,266            5,899,203
Interest-earning deposits in financial institutions                                          -              100,000
Securities available for sale                                                       31,226,026           33,192,217
Securities held to maturity (fair value:  2000 - $383,000;
  1999 - $456,511)                                                                     383,000              456,511
Loans receivable, net of allowance for loan losses of
  $2,001,172 in 2000 and $1,766,700 in 1999                                        200,151,133          208,394,576
Accrued interest receivable                                                            895,612              839,967
Premises and equipment, net                                                          2,244,179            2,292,342
Investments in limited liability partnerships                                        1,703,839            1,332,128
Other assets                                                                         3,914,247            2,239,874
                                                                             -----------------    -----------------

     Total assets                                                            $     247,094,302    $     254,746,818
                                                                             =================    =================

LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits                                                              $       4,571,661    $       4,407,411
Savings                                                                              9,265,835            9,709,295
NOW and MMDA                                                                        30,896,868           30,544,441
Time deposits                                                                      102,071,754           98,550,446
                                                                             -----------------    -----------------
     Total deposits                                                                146,806,118          143,211,593
Borrowed funds                                                                      72,538,670           84,753,919
Accrued expenses and other liabilities                                               1,175,757            1,126,007
                                                                             -----------------    -----------------
     Total liabilities                                                             220,520,545          229,091,519

Shareholders' equity
     Preferred stock, no par value; 500,000 shares
       authorized; 0 shares issued                                                           -                    -
     Common stock, $.01 par value; 4,000,000 shares
       authorized; 2,640,672 shares issued;
       2000 - 1,692,536 shares outstanding;
       1999 - 1,753,520 shares outstanding                                              26,407               26,407
     Additional paid in capital                                                     28,817,843           28,733,423
     Retained earnings, substantially restricted                                    11,213,771           10,641,144
     Unearned employee stock ownership plan shares                                    (766,395)          (1,018,325)
     Unearned recognition and retention plan shares                                    (21,196)            (229,851)
     Accumulated other comprehensive loss,  net of tax                                 (55,418)            (543,742)
     Treasury stock, at cost; 2000 - 948,136 shares;
       1999 - 887,152  shares                                                      (12,641,255)         (11,953,757)
                                                                             -----------------    -----------------
         Total shareholders' equity                                                 26,573,757           25,655,299
                                                                             -----------------    -----------------

              Total liabilities and shareholders' equity                     $     247,094,302    $     254,746,818
                                                                             =================    =================
</TABLE>


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


                                       16
<PAGE>

                         NORTHEAST INDIANA BANCORP, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                  Years ended December 31, 2000, 1999 and 1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 2000                1999               1998
                                                                 ----                ----               ----
Interest income
<S>                                                          <C>                 <C>                <C>
     Loans, including fees                                   $    17,062,817     $    15,805,546    $    14,848,080
     Taxable securities                                            2,227,100           1,692,134          1,025,151
     Non-taxable securities                                           22,317              25,031             19,706
     Deposits with financial institutions                            253,305             198,964            246,175
                                                             ---------------     ---------------    ---------------
         Total interest income                                    19,565,539          17,721,675         16,139,112

Interest expense
     Deposits                                                      6,820,286           5,569,243          5,912,572
     Borrowed funds                                                5,665,012           4,276,240          3,148,229
                                                             ---------------     ---------------    ---------------
         Total interest expense                                   12,485,298           9,845,483          9,060,801
                                                             ---------------     ---------------    ---------------

Net interest income                                                7,080,241           7,876,192          7,078,311

     Provision for loan losses                                     1,590,546             448,647            359,988
                                                             ---------------     ---------------    ---------------

Net interest income after provision for loan
  losses                                                           5,489,695           7,427,545          6,718,323

Noninterest income
     Service charges on deposit accounts                             362,188             343,928            287,480
     Net loss on sale of securities                                  (11,886)                  -                  -
     Net gain on sale of loans                                        22,531                   -                  -
     Other service charges and fees                                  636,760             488,199            443,375
                                                             ---------------     ---------------    ---------------
         Total noninterest income                                  1,009,593             832,127            730,855

Noninterest expense
     Salaries and employee benefits                                2,530,911           2,126,443          1,841,998
     Occupancy                                                       440,456             408,578            357,133
     Data processing                                                 571,854             530,758            436,757
     Deposit insurance premium                                        27,335              74,016             67,637
     Professional fees                                               200,755             130,901            143,960
     Correspondent bank charges                                      233,658             227,953            144,637
     Other expense                                                   769,989             695,798            699,176
                                                             ---------------     ---------------    ---------------
         Total noninterest expense                                 4,774,958           4,194,447          3,691,298
                                                             ---------------     ---------------    ---------------

Income before income taxes                                         1,724,330           4,065,225          3,757,880

     Income tax expense                                              440,887           1,475,288          1,368,526
                                                             ---------------     ---------------    ---------------

Net income                                                   $     1,283,443     $     2,589,937    $     2,389,354
                                                             ===============     ===============    ===============

Basic earnings per common share                              $          0.80     $          1.59    $         1.36
                                                             ===============     ===============    ==============
Diluted earnings per common share                            $          0.79     $          1.54    $         1.28
                                                             ===============     ===============    ==============
</TABLE>

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


                                      17
<PAGE>

                         NORTHEAST INDIANA BANCORP, INC.
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                        December 31, 2000, 1999 and 1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                    Unearned
                                                                                                    Employee         Unearned
                                                                 Additional                          Stock          Recognition
                                                 Common            Paid in          Retained        Ownership      and Retention
                                                  Stock            Capital          Earnings       Plan Shares      Plan Shares
                                                  -----            -------          --------       -----------      -----------
<S>                                          <C>               <C>               <C>              <C>              <C>
Balance, January 1, 1998                     $       21,821    $   21,350,326    $   13,956,340   $  (1,309,275)   $    (621,817)

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                 -               -           (21,843)
Amortization of RRP contributions                         -                 -                 -               -           209,988

Issuance of 218,341 common shares from
  declaration of 10% stock dividend                   2,184         3,600,443        (3,602,627)              -                 -
                                             --------------    --------------    --------------   -------------    --------------
Balance, December 31, 1998                           24,005        25,128,717        12,166,794      (1,163,800)         (433,672)

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            -           -            (8,063)
Amortization of RRP contributions, net of
  5,281 RRP shares forfeited                              -                 -                 -               -           211,884

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)         (229,851)

Net income                                                -                 -         1,283,443               -                 -
Other comprehensive income:
  Net change in unrealized gains (losses)                 -                 -                 -               -                 -
    on securities available for sale, net of
    reclassification                                      -                 -                 -               -                 -
  Total tax effect                                        -                 -                 -               -                 -

     Total other comprehensive income                     -                 -                 -               -                 -


Total comprehensive income                                -                 -                 -               -                 -

Cash dividends ($.41 per share)                           -                 -          (710,816)              -                 -

Purchase of 64,922 shares of treasury stock               -                 -                 -               -                 -
Issuance of 4,422 shares of treasury stock upon on
  exercise of stock options                               -            (5,942)                -               -                 -
30,500 shares committed to be released
  under the ESOP                                          -            90,233                 -         251,930                 -
Purchase of 500 treasury stock shares for RRP             -               129                 -               -            (5,656)
Amortization of RRP contributions, net of
  984 RRP shares forfeited                                -                 -                 -               -           214,311
                                             --------------    --------------    --------------   -------------    --------------
Balance, December 31, 2000                   $       26,407    $   28,817,843    $   11,213,771   $    (766,395)   $      (21,196)
                                             ==============    ==============    ==============   =============    ==============
<CAPTION>

                                                     Accumulated
                                                       Other
                                                    Comprehensive                    Total
                                                    Income (Loss),   Treasury     Shareholders'
                                                     Net of Tax       Stock         Equity
                                                     ----------       -----         ------
<S>                                                 <C>            <C>           <C>
Balance, January 1, 1998                            $    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               -         13,187                -
Amortization of RRP contributions                             -              -          209,988

Issuance of 218,341 common shares from
  declaration of 10% stock dividend                           -              -                -
                                                   ------------    -----------   --------------
Balance, December 31, 1998                               44,105    (10,761,513)      25,004,636

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                 -          6,080               -
Amortization of RRP contributions, net of
  5,281 RRP shares forfeited                                  -        (58,913)         152,971

Issuance of 240,206 common shares from
  declaration of 10% stock dividend                           -              -                -
                                                   ------------    -----------   --------------
Balance, December 31, 1999                             (543,742)   (11,953,757)      25,655,299

Net income                                                    -              -        1,283,443
Other comprehensive income:
  Net change in unrealized gains (losses)                     -              -                -
    on securities available for sale, net of
    reclassification                                    806,828              -                -
  Total tax effect                                     (318,504)             -                -
                                                   -------------
     Total other comprehensive income                   488,324              -          488,324
                                                                                 --------------

Total comprehensive income                                    -              -        1,771,767

Cash dividends ($.41 per share)                               -              -         (710,816)

Purchase of 64,922 shares of treasury stock                   -       (730,927)        (730,927)
Issuance of 4,422 shares of treasury stock upon
  exercise of stock options                                   -         48,879           42,937
30,500 shares committed to be released
  under the ESOP                                              -              -          342,163
Purchase of 500 treasury stock shares for RRP                 -          5,527                -
Amortization of RRP contributions, net of
  984 RRP shares forfeited                                    -        (10,977)         203,334
                                                   ------------    -----------   --------------

Balance, December 31, 2000                         $    (55,418)  $(12,641,255)  $   26,573,757
                                                   ============    ===========   ==============
</TABLE>


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

                                       18
<PAGE>

                         NORTHEAST INDIANA BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years ended December 31, 2000, 1999 and 1998

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

<TABLE>
<CAPTION>
                                                                       2000             1999              1998
                                                                       ----             ----              ----
Cash flows from operating activities
<S>                                                               <C>               <C>              <C>
     Net income                                                   $    1,283,443    $   2,589,937    $    2,389,354
     Adjustments to reconcile net income
       to net cash from operating activities
         Depreciation and amortization                                   392,626          239,731           161,240
         Provision for loan losses                                     1,590,546          448,647           359,988
         Net (gain) loss on sale of:
              Foreclosed real estate and repossessed assets               68,474           13,925           (10,387)
              Premises and equipment                                      14,251             (160)           (8,481)
              Securities available for sale                               11,886                -                 -
              Loans held for sale                                        (22,531)               -                 -
         Originations of loans held for sale                          (1,158,650)               -                 -
         Proceeds from loans sold                                      1,181,181                -                 -
         Reduction of obligation under ESOP                              342,163          239,045           295,239
         Amortization of RRP                                             203,334          152,971           209,988
         Net change in:
              Other assets                                            (1,331,881)        (114,685)         (326,636)
              Accrued interest receivable                                (55,645)        (352,574)           24,557
              Accrued expenses and other liabilities                      49,750          121,908              (396)
                                                                  --------------    -------------    --------------
                  Total adjustments                                    1,285,504          748,808           705,112
                                                                  --------------    -------------    --------------
                      Net cash from operating activities               2,568,947        3,338,745         3,094,466

Cash flows from investing activities

     Net decrease in interest-bearing deposits in
       financial institutions                                            100,000                -                 -
     Purchases of securities available for sale                       (5,129,734)     (25,002,756)       (5,334,188)
     Proceeds from maturities and principal payments of:
         Securities available for sale                                   393,361        4,539,207         6,328,978
         Securities held to maturity                                      73,463           71,913           228,422
     Proceeds from sale of securities available for sale               7,479,825                -                 -
     Purchases of loans                                               (1,006,837)      (2,400,000)       (3,045,695)
     Proceeds from sale of participation loans                                 -          273,049         2,430,541
     Net change in loans                                               6,396,582      (20,932,437)      (11,390,311)
     Proceeds from sale of foreclosed real estate and
       repossessed assets                                                533,682          170,261           177,750
     Expenditures on premises and equipment                             (213,296)        (244,245)         (481,452)
     Proceeds from sale of premises and equipment                            600              350             8,825
                                                                  --------------    -------------    --------------
                  Net cash from investing activities                   8,627,646      (43,524,658)      (11,077,130)
                                                                  --------------    -------------    --------------

Cash flows from financing activities
     Net change in deposits                                            3,594,525       19,876,011        15,785,796
     Advances from FHLB                                              149,000,000      101,000,000        67,000,000
     Repayment of FHLB advances                                     (162,099,085)     (82,598,967)      (67,898,967)
     Payments of demand notes                                           (465,000)        (641,250)        (393,750)
     Net change in other borrowed funds                                  848,836        3,913,861          201,310
     Dividends paid                                                     (710,816)        (617,467)         (576,273)
     Purchase of stock                                                  (730,927)      (1,166,525)       (4,907,522)
     Sale of treasury stock                                               42,937           23,816           248,021
                                                                  --------------    -------------    --------------
                  Net cash from financing activities                 (10,519,530)      39,789,479         9,458,615
                                                                  --------------    -------------    --------------

Net change in cash and cash equivalents                                  677,063         (396,434)        1,475,951
Cash and cash equivalents at beginning of year                         5,899,203        6,295,637         4,819,686
                                                                  --------------    -------------    --------------

Cash and cash equivalents at end of year                          $    6,576,266    $   5,899,203    $    6,295,637
                                                                  ==============    =============    ==============

Cash paid for:
     Interest                                                     $   12,540,501    $   9,754,294    $    9,093,839
     Income taxes                                                        851,975        1,442,300         1,637,000
Non-cash transactions:
     Investment in obligation relative to limited partnership     $      500,000    $           -    $      650,000
     Transfer from loans to other real estate and
       repossessed assets                                              1,263,152          122,474           278,075
</TABLE>


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



                                       19
<PAGE>

                         NORTHEAST INDIANA BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2000, 1999 and 1998

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 81% and 80% of the loan
portfolio  at  December  31,  2000  and  1999,  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  that  management  has the  intent  and  ability  to hold  for the
foreseeable  future or until  maturity or payoff are  reported at the  principal
balance outstanding, net of unearned interest, deferred loan fees and costs, and
an allowance  for loan losses.  Loans held for sale are reported at the lower of
cost or market, on an aggregate basis.

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.

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,  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.  Loan losses
are charged against the allowance when management believes the  uncollectibility
of a loan balance is confirmed.

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

                                       20
<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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. 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


                                       21
<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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
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 standard did not
have a material effect on Northeast Indiana Bancorp at January 1, 2001.

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
                                          ----------------    -------------      -------------    --------------
Available for sale - 2000
<S>                                       <C>                 <C>                <C>              <C>
     U.S. Government agencies             $     18,408,303    $           -      $     (49,463)   $   18,358,840
     Mutual funds                                  865,598                -                  -           865,598
     Mortgage-backed                             6,903,937                -            (40,932)        6,863,005
     States and political
       subdivisions                                228,595                -             (3,012)          225,583
     Equity                                      4,913,000                -                  -         4,913,000
                                          ----------------    -------------      -------------    --------------

                                          $     31,319,433    $           -      $     (93,407)   $   31,226,026
                                          ================    =============      =============    ==============

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                                      4,913,000                -                  -         4,913,000
                                          ----------------    -------------      -------------    --------------

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

Held to maturity - 2000
     States and political
       subdivisions                       $        268,000    $           -     $           -    $       268,000
     Other debt securities                         115,000                -                 -            115,000
                                          ----------------    -------------     -------------    ---------------

                                          $        383,000    $           -     $           -    $       383,000
                                          ================    =============     =============    ===============

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

                                          $        456,511    $           -     $           -    $       456,511
                                          ================    =============     =============    ===============
</TABLE>

Contractual  maturities  of debt  securities  at year end 2000 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>               <C>
Due in one year or less       $     5,674,551    $    5,649,641     $            -    $             -
Due from one to five years         11,733,752        11,718,574            383,000            383,000
Due from five to ten years          1,228,595         1,216,208                  -                  -
Mortgage backed securities          6,903,937         6,863,005                  -                  -
                              ---------------    --------------     --------------    ---------------

                              $    25,540,835    $   25,447,428     $      383,000    $       383,000
                              ===============    ==============     ==============    ===============
</TABLE>

Sales of securities available for sale were as follows:

                          2000               1999               1998
                          ----               ----               ----

Proceeds             $    7,479,825     $            -    $             -
Gross gains                       -                  -                  -
Gross losses                (11,886)                 -                  -


NOTE 3 - LOANS RECEIVABLE, NET Year end loans were as follows:

<TABLE>
<CAPTION>
                                                         2000                 1999
                                                         ----                 ----
Mortgage
<S>                                              <C>                  <C>
    Secured by one-to-four family residences     $     117,682,798    $    119,283,175
    Secured by other properties                         28,896,465          28,249,799
    Construction - residential                           4,264,083           7,475,391
    Construction - nonresidential                        2,923,481           5,138,236
Automobile                                              14,098,321          15,441,586
Credit card                                              2,652,431           2,364,346
Commercial                                              20,729,529          24,184,104
Home equity and second mortgage                          8,212,495           7,171,773
Other consumer                                           4,822,030           5,616,721
                                                 -----------------    ----------------
    Subtotal                                           204,281,633         214,925,131
Less:
    Loans in process                                      (155,467)           (443,138)
    Undisbursed portion of construction loans           (1,745,399)         (4,087,965)
    Net deferred loan origination fees                    (228,462)           (232,752)
    Allowance for loan losses                           (2,001,172)         (1,766,700)
                                                 -----------------    ----------------
    Loans receivable, net                        $     200,151,133    $    208,394,576
                                                 =================    ================
</TABLE>


                                       24
<PAGE>


NOTE 3 - LOANS RECEIVABLE, NET (Continued)

Activity in the allowance for loan losses was as follows:

<TABLE>
<CAPTION>
                                             2000              1999               1998
                                             ----              ----               ----
<S>                                    <C>                <C>               <C>
     Balance at beginning of year      $    1,766,700     $    1,454,000    $     1,194,000
     Provision charged to income            1,590,546            448,647            359,988
     Charge-offs                           (1,410,039)          (185,896)          (145,989)
     Recoveries                                53,965             49,949             46,001
                                       --------------     --------------    ---------------

     Balance at end of year            $    2,001,172     $    1,766,700    $     1,454,000
                                       ==============     ==============    ===============
</TABLE>

Impaired loans were as follows:

<TABLE>
<CAPTION>
                                                             2000                1999
                                                             ----                ----
<S>                                                      <C>               <C>
     Year-end loans with no allocated allowance
       for loan losses                                   $    3,702,127    $     1,000,000
     Year-end loans with allocated allowance
       or loan losses                                         4,770,889          1,387,247
                                                         --------------    ---------------

     Total                                               $    8,473,016    $     2,387,247
                                                         ==============    ===============

     Amount of the allowance for loan losses allocated   $      912,313    $       510,052

     Average of impaired loans during the year                3,514,345            869,454

     Interest income recognized during impairment                18,748            136,123
     Cash-basis interest income recognized                       18,748             47,087
</TABLE>

NOTE 4 - PREMISES AND EQUIPMENT, NET

Year end premises and equipment were as follows:

                                                 2000                1999
                                                 ----                ----

Land$                                        $      458,331    $       458,331
Buildings and leasehold improvements              1,942,648          1,914,117
Furniture, fixtures and equipment                 1,154,469          1,091,242
                                             --------------    ---------------
    Total cost                                    3,555,448          3,463,690
Accumulated depreciation and amortization        (1,311,269)        (1,171,348)
                                             --------------    ---------------

                                             $    2,244,179    $     2,292,342
                                             ==============    ===============

Depreciation  expense was  $247,000,  $217,000 and  $180,000 for 2000,  1999 and
1998.


                                       25
<PAGE>

NOTE 5 - DEPOSITS

Time deposits of $100,000 or more were  $59,331,000  and $52,999,000 at year end
2000 and 1999.

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

      2001              $     76,386,574
      2002                    18,562,736
      2003                     4,613,015
      2004                     1,040,665
      2005                     1,468,764
                        ----------------
                        $    102,071,754


NOTE 6 - BORROWED FUNDS

Year end borrowed funds were as follows:

                                                  2000                 1999
                                                  ----                 ----

Federal Home Loan Bank advances              $     67,399,663   $     80,498,748
Securities sold under repurchase agreements         4,964,007          4,115,171
Demand notes                                          175,000            140,000
                                             ----------------   ----------------

                                             $     72,538,670   $     84,753,919
                                             ================   ================

The majority of the FHLB  advances  have  variable  interest  rates ranging from
4.92% to 6.88%. Scheduled maturities at year end 2000 were as follows:

      2001               $     25,399,663
      2003                     10,000,000
      2007                     10,000,000
      2008                      5,000,000
      2010                     17,000,000
      Thereafter                        -
                         ----------------
                         $     67,399,663

FHLB  advances  are secured by Federal Home Loan Bank stock,  eligible  mortgage
loans and  specifically  pledged  securities.  At  December  31,  2000 and 1999,
collateral  of  approximately  $124  million and $135 million was pledged to the
FHLB to secure advances outstanding.

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

                                                      2000            1999
                                                      ----            ----

Highest month end balance                         $ 18,271,163   $ 15,460,000
Average balance                                      7,305,166      6,270,000
Weighted average interest rate during the period          5.89%          4.84%
Weighted average interest rate at end of period           5.77%          5.38%

                                       26
<PAGE>

NOTE 6 - BORROWED FUNDS (Continued)

Securities  with amortized cost of  approximately  $5,000,000 and $5,000,000 and
fair values of  approximately  $5,006,000 and  $4,985,000,  at year end 2000 and
1999 were pledged as collateral for securities sold under repurchase agreements.

At year end 2000 and 1999,  securities  sold under  agreements to repurchase had
maturities of one day.

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 $1,900,000 for 2000
and $1,400,000 for 1999, with $1,725,000 and $1,260,000  funded at year end 2000
and 1999. Payments are required within five days of written demand; however, the
note may be  prepaid  in full or in part at the  option of the maker at any time
without penalty. The obligation to make payment is absolute and unconditional.

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 2000, 1999 and 1998 was approximately
$137,000, $108,000, and $23,000.

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 2000, 1999 and 1998 was approximately $39,000, $39,000 and $32,000.

Supplemental  Retirement Plans: 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  $320,000 and $219,000 at year-end  2000 and 1999.  The
cost of the plans was approximately $162,000, $68,000 and $61,000 for 2000, 1999
and 1998.

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  $1,889,000  and  $930,000 at year-end  2000 and 1999.  The income
derived  from the  investment  in life  insurance  included in other  income was
approximately $86,000, $42,000 and $40,000 for 2000, 1999 and 1998.

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.

                                       27
<PAGE>

NOTE 7 - EMPLOYEE BENEFITS (Continued)

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.

Contributions,  including  dividends on unearned ESOP shares, were approximately
$252,000  during 2000 and  $145,000  for both 1999 and 1998.  ESOP  compensation
expense was approximately  $342,000,  $239,000,  and $295,000 for 2000, 1999 and
1998.

Shares held by the ESOP at year end are as follows:

                                                2000               1999
                                                ----               ----

     Allocated shares                              87,706             70,105
     Shares released for allocation                30,500             17,603
     Unreleased shares                             92,717            123,217
     Shares vested and withdrawn                      338                336
                                           --------------    ---------------

         Total ESOP shares                        211,261            211,261
                                           ==============    ===============

         Fair value of unreleased shares   $      903,991    $     1,524,810
                                           ==============    ===============

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 1998, an additional 1,210 shares were awarded at $18.05;
in 1999,  there were an  additional  550  shares  awarded at $14.66 and in 2000,
there were an additional  500 shares  awarded at $11.31.  Also in 2000 and 1999,
984 and 5,281 shares were  forfeited  and added to treasury  stock.  The expense
associated  with the RRP was  approximately  $203,000,  $153,000 and $210,000 in
2000, 1999 and 1998.

NOTE 8 - INCOME TAXES

Income tax expense is summarized as follows:

                                2000              1999               1998
                                ----              ----               ----

Current federal           $      527,427     $    1,301,712    $     1,147,495
Deferred federal                (163,189)          (182,585)           (95,097)
Current state                    108,667            384,969            329,538
Deferred state                   (32,018)           (28,808)           (13,410)
                          --------------     --------------    ---------------

    Income tax expense    $      440,887     $    1,475,288    $     1,368,526
                          ==============     ==============    ===============

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>
                                                         2000              1999               1998
                                                         ----              ----               ----
<S>                                                <C>                <C>               <C>
Income taxes at statutory rate                     $      586,272     $    1,382,177    $     1,277,679
Tax effect of:
     State tax, net of federal income tax effect           50,588            235,066            208,644
     Low income housing credit                           (173,465)          (138,000)           (72,372)
     Other, net                                           (22,508)            (3,955)           (45,425)
                                                   --------------     --------------    ---------------
         Income tax expense                        $      440,887     $    1,475,288    $     1,368,526
                                                   ==============     ==============    ===============

Effective tax rate                                           25.6%              36.3%              36.4%
                                                             ====               ====               ====
</TABLE>


                                       28
<PAGE>

NOTE 8 - INCOME TAXES (Continued)

The  components  of the net deferred tax asset  recorded in the balance sheet at
year end are as follows:

<TABLE>
<CAPTION>

                                                           2000               1999
                                                           ----               ----
Deferred tax assets
<S>                                                   <C>               <C>
    Deferred compensation                             $      126,846    $        87,117
    Bad debts                                                633,174            495,717
    Deferred loan fees                                        90,494             92,170
    Unearned compensation                                     85,270             60,809
    Unrealized loss on securities available for sale          36,349            356,493
    Other                                                     67,391             41,095
                                                      --------------    ---------------
                                                           1,039,524          1,133,401
Deferred tax liabilities

    Depreciation                                            (104,590)          (122,915)
    Other                                                   (138,880)           (89,495)
                                                      --------------    ---------------
                                                            (243,470)          (212,410)
                                                      --------------    ---------------

    Net deferred tax asset                            $      796,054    $       920,991
                                                      ==============    ===============
</TABLE>

Retained  earnings at  December  31, 2000 and 1999  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  $442,000  at  December  31,  2000  and  1999.
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.

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.


                                       29
<PAGE>

NOTE 9 - REGULATORY MATTERS (Continued)

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
                                  ------      -----   ------      -----     ------     -----
2000
<S>                               <C>        <C>      <C>         <C>       <C>          <C>
Total capital
  (to risk weighted assets)       $  25.7    16.3%    $ 12.6      8.0%      $ 15.8       10.0%
Tier 1 (core) capital
  (to risk weighted  assets)         24.0    15.2        6.3      4.0          9.5        6.0
Tier 1 (core) capital
  (to adjusted total  assets)        24.0     9.7        9.9      4.0         12.3        5.0

Tier 1 (core) capital
  (to average assets)                24.0     9.4       10.2      4.0         12.7        5.0

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
</TABLE>

First Federal was categorized as well capitalized at year end 2000 and 1999.

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
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.   At  year  end  2000,
approximately  $1.4  million of the Bank's  retained  earnings  are  potentially
available for distribution without regulatory approval.


                                       30
<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.

                                        2000               1999
                                        ----               ----

     Fixed rate commitments         $   1,185,677     $   4,429,000
     Variable rate commitments         10,578,435        13,901,000
     Credit card arrangements           4,904,954         4,462,000
     Letters of credit                    794,101         1,109,000

Most  loan  commitments  have  terms up to 60  days.  At year  end  2000,  fixed
commitments  have contractual  rates ranging from 7.75% to 10.13%.  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%.

Certain executives of the Bank have employment  contracts,  which are based upon
changes of control.  The employment  contracts  range between one to three years
worth of the officers' salaries.

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 2000, 11,312 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 2000, 1999 and 1998.



                                       31
<PAGE>


NOTE 11 - STOCK OPTIONS (Continued)

<TABLE>
<CAPTION>
                                                     2000             1999            1998
                                                     ----             ----            ----
<S>                                            <C>              <C>             <C>
Net income as reported                         $     1,283,443  $    2,589,937  $     2,389,354
Pro forma net income                                 1,102,982       2,412,455        2,215,835

Basic earnings per common share as reported    $          .80   $         1.59  $         1.36
Diluted earnings per common share as reported             .79             1.54            1.28
Pro forma basic earnings per common share                 .69             1.49            1.26
Pro forma diluted earnings per common share               .68             1.43            1.19
</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:

                                       Number         Exercise       Fair Value
                                     of Options        Price          of Grants
                                     ----------       --------       ----------
Outstanding, beginning of 1998          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
  Granted                                 5,500         11.31            2.63
  Granted                                 2,500         10.19            2.06
  Exercised                              (4,422)         9.71
  Forfeited                              (1,573)         9.71
                                  -------------
Outstanding, end of 2000                218,619
                                  =============

The fair value of options  granted during 2000, 1999 and 1998 is estimated using
the following  weighted-average  information:  risk-free interest rate of 6.32%,
4.76% and  5.49%,  expected  life of 5.5  years,  7 years and 7 years,  expected
volatility  of stock price of 23.5%,  22.3% and 17.5% and expected  dividends of
3.76%, 1.92% and 1.47% per year.

Options outstanding at year end were as follows:

<TABLE>
<CAPTION>
                                              2000          1999            1998
                                              ----          ----            ----
<S>                                            <C>            <C>             <C>
Number of options                              218,619        216,614         210,820
Minimum exercise price                    $       9.71   $       9.71    $      9.71
Maximum exercise price                           18.49          18.49          18.49
Weighted-average exercise price                   9.99          10.06           9.88
Weighted-average remaining option life       5.0 years      6.2 years       7.1 years
</TABLE>

                                       32
<PAGE>

NOTE 11 - STOCK OPTIONS (Continued)

There were 159,113,  117,232 and 75,035  options  exercisable  at year end 2000,
1999 and 1998. The  weighted-average  exercise  price of options  exercisable at
year end 2000 was $9.86.

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, 2000              $   2,976,722
     New loans                             1,688,243
     Repayments                           (1,239,745)
     Change in persons included              150,138
                                       -------------
Balance - December 31, 2000            $   3,575,358
                                       =============

Related party deposits were approximately $553,000 at year end 2000.

NOTE 13 - FAIR VALUES OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>

                                                        2 0 0 0                              1 9 9 9
                                                        -------                              -------
                                               Carrying          Estimated         Carrying            Estimated
                                                Amount          Fair Value          Amount            Fair Value
                                               --------         ----------         --------           ----------

Financial assets:
----------------
<S>                                        <C>               <C>                <C>               <C>
     Cash and cash equivalents
       and interest-earning deposits
       in financial institutions           $     6,576,000   $     6,576,000    $     5,999,000   $       5,999,000
     Securities available for sale              31,226,000        31,226,000         33,192,000          33,192,000
     Securities held to maturity                   383,000           383,000            457,000             457,000
     Loans receivable, net                     200,151,000       201,182,000        208,395,000         208,774,000
     Accrued interest receivable                   896,000           896,000            840,000             840,000
     Investments in limited
       liability partnerships                    1,704,000         1,704,000          1,332,000           1,332,000

Financial liabilities:
----------------------
     Deposits                                 (146,806,000)     (147,743,000)      (143,212,000)       (144,103,000)
     Borrowed funds                            (72,539,000)      (72,725,000)       (84,754,000)        (83,193,000)
     Accrued interest payable                     (286,000)         (286,000)          (342,000)           (342,000)
</TABLE>

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,  2000 and 1999,  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, 2000 and 1999,  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.

                                       33
<PAGE>

NOTE 13 - FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)

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,  2000 or 1999,  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, 2000 and 1999 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, 2000 and 1999

                                                            2000                1999
                                                            ----                ----
ASSETS
<S>                                                     <C>                <C>
Cash and cash equivalents                               $     1,522,353    $        908,680
Securities available for sale                                   225,583             183,200
Loan receivable from Employee Stock Ownership Plan              872,850           1,018,325
Investment in subsidiary bank                                23,956,077          23,542,192
Other assets                                                      5,741               8,302
                                                        ---------------    ----------------

     Total assets                                       $    26,582,604    $     25,660,699
                                                        ===============    ================

LIABILITIES

Accrued expenses                                        $         8,847    $          5,400

SHAREHOLDERS' EQUITY                                         26,573,757          25,655,299
                                                        ---------------    ----------------

     Total liabilities and shareholders' equity         $    26,582,604    $     25,660,699
                                                        ===============    ================
</TABLE>

                                       34

<PAGE>


NOTE 14 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Continued)

                         CONDENSED STATEMENTS OF INCOME
                  Years ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                         2000              1999               1998
                                                         ----              ----               ----
<S>                                                <C>                <C>               <C>
Interest income                                    $       75,103     $       84,295    $       118,569
Dividend from subsidiary                                1,950,000            600,000          5,000,000
                                                   --------------     --------------    ---------------

     Total income                                       2,025,103            684,295          5,118,569

Operating expenses                                        197,972            167,947            189,742
                                                   --------------     --------------    ---------------


Income before income taxes and equity in

  undistributed earnings of subsidiary bank             1,827,131            516,348          4,928,827

Income tax benefit                                        (72,240)           (62,820)           (54,297)
                                                   --------------     --------------    ---------------


Income before equity in undistributed

  earnings of subsidiary bank                           1,899,371            579,168          4,983,124

Equity in undistributed (excess distributed)
  earnings of subsidiary bank                            (615,928)         2,010,769         (2,593,770)
                                                   --------------     --------------    ---------------


Net income                                         $    1,283,443     $    2,589,937    $     2,389,354
                                                   ==============     ==============    ===============
</TABLE>


                                       34
<PAGE>

NOTE 14 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION  (Continued)

                       CONDENSED STATEMENTS OF CASH FLOWS
                  Years ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                    2000              1999               1998
                                                                    ----              ----               ----
Cash flows from operating activities
<S>                                                            <C>               <C>                <C>
     Net income                                                $    1,283,443    $     2,589,937    $    2,389,354
                                                               ==============     ==============    ===============
     Adjustments to reconcile net income to cash
       provided by operations
         Equity in (undistributed) excess
           distributed earnings of subsidiary bank                    615,928         (2,010,769)         2,593,770
         Change in
              Other assets                                             (1,899)           117,580            (59,569)
              Accrued expenses                                          3,448              1,599             (5,159)
                                                               --------------     --------------    ---------------
                  Net cash from operating activities                1,900,920            698,347          4,918,396

Cash flows from investing activities
     Repayments on loan receivable from
       subsidiary bank                                                      -                  -          2,000,000
     Repayments on loan receivable from ESOP                          145,475            145,475            145,475
     Purchase of securities available for sale                        (28,595)                 -           (200,000)
                                                               --------------     --------------    ---------------
         Net cash from investing activities                           116,880            145,475          1,945,475

Cash flows from financing activities
     Dividends paid                                                  (710,816)          (617,467)          (576,273)
     Purchase of stock                                               (741,904)        (1,225,438)        (4,907,522)
     Proceeds from sales of stock                                      48,593             31,879            269,864
                                                               --------------     --------------    ---------------
         Net cash from financing activities                        (1,404,127)        (1,811,026)        (5,213,931)
                                                               --------------     --------------    ---------------

Net change in cash and cash equivalents                               613,673           (967,204)         1,649,940

Cash and cash equivalents at beginning of period                      908,680          1,875,884            225,944
                                                               --------------     --------------    ---------------

Cash and cash equivalents at end of period                     $    1,522,353     $      908,680    $     1,875,884
                                                               ==============     ==============    ===============
</TABLE>


                                       35
<PAGE>

NOTE 15 - EARNINGS PER SHARE

A  reconciliation  of the numerators and  denominators of the basic earnings per
common share and diluted  earnings per common share  computations  for the years
ended December 31, is presented below.

<TABLE>
<CAPTION>
                                                                     2000              1999              1998
                                                                     ----              ----              ----
Basic Earnings Per Common Share
<S>                                                            <C>                <C>               <C>
     Net income available to common
       shareholders                                            $    1,283,443     $    2,589,937    $  2,389,354
                                                               ==============     ==============    ============

     Weighted average common shares
       outstanding before adjustment                                1,731,741          1,801,800       1,969,503

     Less: unallocated ESOP shares                                    117,197            140,820         158,422

     Less: non-vested RRP shares                                       18,258             36,545          53,673
                                                               --------------     --------------    ------------

     Weighted average common shares
       outstanding for basic earnings per
       common share                                                 1,596,286          1,624,435       1,757,408
                                                               ==============     ==============    ============

         Basic Earnings Per Common Share                       $          .80     $         1.59    $       1.36
                                                               ==============     ==============    ============

Diluted Earnings Per Common Share

     Net income available to common
       shareholders, per above                                 $    1,283,443     $    2,589,937    $  2,389,354
                                                               ==============     ==============    ============

     Weighted average common shares
       outstanding                                                  1,596,286          1,624,435       1,757,408

     Add:  dilutive effects of assumed conversions
       and exercises of stock options                                  29,611             58,665         101,209
                                                               --------------     --------------    ------------

     Weighted average common and dilutive
       shares outstanding for dilutive earnings per
       common share                                                 1,625,897          1,683,100       1,858,617
                                                               ==============     ==============    ============

         Diluted Earnings Per Common Share                     $          .79     $         1.54    $       1.28
                                                               ==============     ==============    ============
</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, 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

 March 31, 2000            $    12.31      $     9.88        $     .100
 June 30, 2000                  11.88            9.63              .100
 September 30, 2000             11.88           11.00              .100
 December 31, 2000              12.00            8.50              .110

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

As of February 16, 2001,  there were  approximately  482 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.

     Corporate Office                       Special Counsel
  Northeast Indiana Bancorp, Inc.       Silver, Freedman & Taff, L.L.P.
  648 North Jefferson Street            1100 New York Avenue, N.W.
  Huntington, Indiana  46750            Washington, D.C. 20005
  (219) 356-3311


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


                                       37
<PAGE>


                        DIRECTORS AND EXECUTIVE OFFICERS

BOARD OF DIRECTORS                          EXECUTIVE OFFICERS
Stephen E. Zahn                             Stephen E. Zahn
Chairman of the Board                       President and Chief Executive
President and Chief Executive Officer         Officer

                                            Dee Ann Hammel
Dan L. Stephan                              Senior Vice President, Secretary
Past State Representative                     and Chief Operations Officer
  Indiana Legislature

Agent                                       Darrell E. Blocker
  Variable Annuity Life Insurance Company   Senior Vice President, Treasurer
                                              and Chief Financial Officer

J. David Carnes
Medical Doctor and Associate                Michael S. Zahn
  Family Practice Associates                Senior Vice President

Michael S. Zahn                             Joseph A. Byers
Senior Vice President                       Senior Vice President and
                                              Senior Trust Officer

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


                                 ANNUAL MEETING

The Annual Meeting of Stockholders of Northeast  Indiana Bancorp,  Inc., will be
held on April 25,  2001 at 1:00  p.m.  at the North  location  of First  Federal
Savings Bank, 100 Frontage Road, Huntington, Indiana.