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

                                   FORM 10-KSB

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

     For  the fiscal year ended December 31, 2000

                                       OR

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

     For the transition period from __________________  to  ___________________

                         Commission File Number 0-26012

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

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

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

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

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      None

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

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

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

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B contained herein, and no disclosure will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

     Our revenues for the most recent fiscal year: $20.6 million.

     The  aggregate  market  value of the voting  stock held by  non-affiliates,
computed by reference to the average of the bid and asked price of such stock as
of March 9, 2001,  was $14.8  million.  (The  exclusion  from such amount of the
market  value of the shares owned by any person shall not be deemed an admission
by the registrant that such person is an affiliate.)

     As of March 12,  2001,  there  were  1,688,036  shares  outstanding  of the
registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Parts II and IV of Form 10-KSB - Annual  Report to  Stockholders  for the fiscal
year ended December 31, 2000.

Part III of Form 10-KSB - Proxy Statement for Annual Meeting of Stockholders.

Transitional Small Business Disclosure Format: YES [ ]; NO [X]

<PAGE>

FORWARD-LOOKING STATEMENTS

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

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

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

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

                                        2

<PAGE>

                                     PART I

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

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

     At December 31,  2000,  we had $247.1  million of assets and  stockholders'
equity of $26.6 million (or 10.76% of total assets).

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

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

     Our  principal  business  consists of attracting  retail  deposits from the
general  public and investing  those funds  primarily in first mortgage loans on
owner-occupied,   single-family  residential  real  estate.  We  also  originate
commercial real estate, construction, consumer and commercial business loans. We
have in the past  purchased a limited number of loans and equipment  leases.  At
December  31,  2000,  substantially  all  of the  real  estate  mortgage  loans,
including commercial and multi-family, were secured by properties located in our
market area. We also invest in obligations of states and political subdivisions,
mutual funds and other permissible investments.

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

     Our revenues are derived principally from interest on loans, investment and
other  securities  and  service fee income.  We do not  originate  loans to fund
leveraged  buyouts,  and have no loans to foreign  corporations  or governments.
While we generally solicit deposits only in our primary market area, at December
31, 2000, we had $6.3 million in brokered deposits.

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

                                        3

<PAGE>

Market Area

     Our office is located at 648 North Jefferson Street in Huntington, Indiana.
The City of  Huntington  is  located in  Huntington  County,  Indiana,  25 miles
southwest of Fort Wayne,  Indiana.  The City of Huntington is the County Seat of
Huntington  County and has a population of approximately  17,000.  Along with an
agricultural  base, the major employers in Huntington  County are engaged in the
light  industry  and include  Wabash/Optek  Sensor  Group , United  Technologies
Electronic  Controls,  Hayes  Lemmerz,  CFM  Majestic,  Dana  Corporation,  Good
Humor-Breyer,   Bendix   Commercial   Vehicle  System  Co.   (Honeywell),   Lear
Corporation, Square D and Our Sunday Visitor.

Lending Activities

     Our loan portfolio consists primarily of conventional, first mortgage loans
secured by one- to four- family  residences  and, to a lesser  extent,  consumer
loans, commercial real estate loans, commercial business loans,  construction or
development loans and loans secured by multi-family real estate. At December 31,
2000, gross loans outstanding totaled $204.3 million, of which $117.7 million or
57.61%  were one- to  four-family  residential  mortgage  loans.  Of the one- to
four-family  mortgage  loans  outstanding at that date,  49.70% were  fixed-rate
loans, and 50.30% were adjustable-rate loans. At that same date, commercial real
estate and multi-  family  loans  totaled  $28.9  million,  of which 77.34% were
fixed-rate  loans and  22.66%  were  adjustable-rate  loans.  Also at that date,
construction  or  development  loans  totaled $7.2 million or 3.52% of the total
loan  portfolio,  72.57% of which were  adjustable-rate  loans.  At December 31,
2000,  commercial  business  loans  totaled $20.7 million or 10.15% of the total
loan  portfolio,   of  which  45.38%  were  fixed-rate  loans  and  54.62%  were
adjustable-rate loans.

     At December 31, 2000, the balance of our consumer loans  consisted of $29.8
million of loans, which represented  14.58% of the gross loan portfolio.  Of the
consumer  loans  outstanding,  70.52%  were  fixed-rate  loans and  29.48%  were
adjustable-rate loans.

     We also  invest in  mutual  funds,  obligations  of  states  and  political
subdivisions,  and other debt  securities  and  mortgage-backed  securities.  At
December  31,  2000,  mutual funds  totaled  $866,000 or 0.35% of total  assets,
mortgage-backed  securities  totaled  $6.9  million  or 2.78%  of total  assets,
Government  agencies  totaled  $18.4  million  or  7.43% of  total  assets,  and
obligations of states and political  subdivisions  totaled  $497,000 or 0.20% of
total assets. See "Investment Activities."

     The aggregate amount of loans that First Federal is permitted to make under
applicable federal regulations to any one borrower,  including related entities,
is generally  equal to the greater of 15% of  unimpaired  capital and surplus or
$500,000.  At December 31, 2000,  the maximum  amount which First  Federal could
have  lent  to  any  one  borrower  and  the  borrower's  related  entities  was
approximately  $3.8 million.  See  "Regulation  - Federal  Regulation of Savings
Associations."  At  December  31,  2000,  we had no loans or  groups of loans to
related  borrowers  with  outstanding  balances  in excess of this  amount.  Our
largest  lending  relationship at December 31, 2000 was $3.4 million in loans to
one  borrower  secured  by  real  estate,  inventory,  accounts  receivable  and
equipment.

                                        4

<PAGE>

     Loan  Portfolio  Composition.  The following  table sets forth  information
concerning  the  composition  of our loan  portfolio  in dollar  amounts  and in
percentages (before deductions for loans in process, deferred fees and discounts
and allowance for loan losses) as of the dates indicated.

<TABLE>
<CAPTION>

                                                                                   December 31,
                                                     -------------------------------------------------------------------------
                                                               2000                    1999                      1998
                                                     -----------------------  -----------------------  -----------------------
                                                       Amount       Percent     Amount       Percent     Amount       Percent
                                                     ---------     ---------  ----------   ----------  ---------     ---------
                                                                               (Dollars in Thousands)
Real Estate Loans:
-----------------
<S>                                                   <C>            <C>       <C>            <C>       <C>            <C>
 One- to four-family.............................     $117,683       57.61%    $119,283       55.50%    $113,919       59.66%
 Multi-family....................................        4,377        2.14        3,779        1.76        2,908        1.52
 Commercial......................................       24,519       12.00       24,471       11.39       16,514        8.65
 Construction or development.....................        7,188        3.52       12,613        5.87       11,365        5.95
                                                     ---------     ---------  ----------   ----------  ---------     ---------
     Total real estate loans.....................      153,767       75.27      160,146       74.52      144,706       75.78
                                                     ---------     ---------  ----------   ----------  ---------     ---------

Other Loans:
-----------
 Consumer Loans:
  Deposit account................................           53        0.03           47        0.02          146        0.08
  Automobile.....................................       14,098        6.90       15,442        7.18       12,248        6.41
  Home equity....................................        6,961        3.41        6,366        2.96        5,206        2.73
  Home improvement                                       1,251        0.61          805        0.37          742        0.39
  Other..........................................        7,422        3.63        7,935        3.70        6,521        3.41
                                                     ---------     ---------  ----------   ----------  ---------     ---------
     Total consumer loans........................       29,785       14.58       30,595       14.23       24,863       13.02
                                                     ---------     ---------  ----------   ----------  ---------     ---------
 Commercial business loans.......................       20,730       10.15       24,184       11.25       21,393       11.20
     Total loans.................................      204,282      100.00%     214,925      100.00%     190,962      100.00%
                                                                   =========               ==========                =========

Less:
----
 Undisbursed portion of construction loans.......        1,745                    4,088                    2,800
 Loans in process................................          156                      443                      663
 Deferred fees and discounts.....................          229                      233                      139
 Allowance for loan losses.......................        2,001                    1,766                    1,454
                                                     ---------                ----------               ---------
 Total loans receivable, net.....................     $200,151                 $208,395                 $185,906
                                                     =========                ==========               =========

<CAPTION>

                                                                        Decembr 31,
                                                      ---------------------------------------------------
                                                               1997                       1996
                                                      -----------------------   -------------------------
                                                        Amount       Percent      Amount         Percent
                                                      ---------     ---------   ----------      ---------

Real Estate Loans:
-----------------
<S>                                                    <C>            <C>         <C>             <C>
 One- to four-family.............................      $109,080       60.53%      $ 99,325        65.10%
 Multi-family....................................         2,606        1.45          2,993         1.96
 Commercial......................................        16,734        9.29         12,301         8.06
 Construction or development.....................        10,596        5.88         10,749         7.04
                                                      ---------     ---------   ----------      ---------
     Total real estate loans.....................       139,016       77.15        125,368        82.16
                                                      ---------     ---------   ----------      ---------

Other Loans:
-----------
 Consumer Loans:
  Deposit account................................            44        0.02            157         0.10
  Automobile.....................................        11,573        6.42          8,820         5.78
  Home equity....................................         5,506        3.06          4,176         2.74
  Home improvement                                          656        0.36            291         0.19
  Other..........................................         5,873        3.26          4,204         2.76
                                                      ---------     ---------   ----------      ---------
     Total consumer loans........................        23,652       13.12         17,648        11.57
                                                      ---------     ---------   ----------      ---------
 Commercial business loans.......................        17,526        9.73          9,568         6.27
     Total loans.................................       180,194      100.00%       152,584       100.00%
                                                                    =========                   =========

Less:
----
 Undisbursed portion of construction loans.......         3,981                      4,380
 Loans in process................................           355                        208
 Deferred fees and discounts.....................           125                        114
 Allowance for loan losses.......................         1,194                      1,027
                                                      ---------                 ----------
 Total loans receivable, net.....................      $174,539                   $146,855
                                                      =========                 ==========
</TABLE>

                                         5

<PAGE>

     The following  table shows the  composition of our loan portfolio by fixed-
and adjustable-rate at the dates indicated.

<TABLE>
<CAPTION>

                                                                                 December 31,
                                                    ----------------------------------------------------------------------
                                                             2000                    1999                    1998
                                                    ---------------------  ----------------------    ---------------------
                                                       Amount    Percent      Amount     Percent       Amount    Percent
                                                    ----------  ---------  ----------   ---------    ---------  ----------
                                                                            (Dollars in Thousands)
Fixed-Rate Loans:
----------------
 Real estate:
<S>                                                 <C>           <C>      <C>            <C>        <C>           <C>
  One- to four-family...........................    $  58,485     28.63%   $  57,974      26.97%     $ 49,993      26.18%
  Multi-family..................................        2,514      1.23        2,300       1.07         2,323       1.21
  Commercial....................................       19,835      9.71       19,237       8.95        11,089       5.81
    Construction or development.................        1,972      0.97        4,258       1.98         3,935       2.06
                                                    ----------  ---------  ----------   ---------    ---------  ----------
       Total real estate loans..................       82,806     40.54       83,769      38.97        67,340      35.26
                                                    ----------  ---------  ----------   ---------    ---------  ----------
   Consumer.....................................       21,005     10.28       21,708      10.10        17,909       9.38
   Commercial business..........................        9,408      4.61       11,166       5.20        14,683       7.69
                                                    ----------  ---------  ----------   ---------    ---------  ----------
       Total fixed-rate loans...................      113,219     55.43      116,643      54.27        99,932      52.33

Adjustable-Rate Loans:
---------------------
 Real estate:
  One- to four-family...........................       59,198     28.98       61,309      28.53        63,926      33.48
    Multi-family................................        1,863      0.91        1,479       0.69           585       0.31
    Commercial..................................        4,684      2.29        5,234       2.44         5,425       2.84
    Construction or development.................        5,216      2.55        8,355       3.89         7,430       3.89
                                                    ----------  ---------  ----------   ---------    ---------  ----------
       Total real estate loans..................       70,961     34.74       76,377      35.55        77,366      40.52
                                                    ----------  ---------  ----------   ---------    ---------  ----------
    Consumer....................................        8,780      4.30        8,887       4.13         6,954       3.64
    Commercial business.........................       11,322      5.54       13,018       6.05         6,710       3.51
                                                    ----------  ---------  ----------   ---------    ---------  ----------
     Total adjustable-rate loans................       91,063     44.58       98,282      45.73        91,030      47.67
                                                    ----------  ---------  ----------   ---------    ---------  ----------
     Total loans................................      204,282    100.00%     214,925     100.00%      190,962     100.00%
                                                                =========               =========               ==========


Less:
----
 Undisbursed portion of construction loans......        1,745                  4,088                    2,800
 Loans in process...............................          156                    443                      663
 Deferred fees and discounts....................          229                    233                      139
 Allowance for loan losses......................        2,001                  1,766                    1,454
                                                    ----------             ----------                ---------
    Total loans receivable, net.................     $200,151               $208,395                 $185,906
                                                    ==========             ==========                =========
</TABLE>

                                        6

<PAGE>

     The following  schedule  illustrates  the interest rate  sensitivity of our
loan  portfolio  at  December  31,  2000.  Mortgages  which have  adjustable  or
renegotiable interest rates are shown as maturing in the period during which the
contract  is due.  The  schedule  does  not  reflect  the  effects  of  possible
prepayments or enforcement of due-on-sale clauses.

<TABLE>
<CAPTION>
                                                              Real Estate
                          -----------------------------------------------------------------------------------
                                                           Multi-family and               Construction
                              One- to Four-Family             Commercial                 or Development
                          -----------------------------------------------------------------------------------
                                          Weighted                     Weighted                    Weighted
                                           Average                     Average                      Average
                             Amount         Rate         Amount          Rate         Amount         Rate
                          -----------------------------------------------------------------------------------
                                                       (Dollars in Thousands)
Due During the
Period Ending
December 31,
-------------------
<S>                       <C>              <C>          <C>              <C>         <C>             <C>
2001................      $    837         8.56%        $     54         8.42%       $ 3,926         8.27%
2002 and 2003.......           584         7.75              885         8.59            ---          ---
2004 and 2005.......         1,379         8.34            1,686         8.03            ---          ---
2006 to 2010........        18,621         7.86            9,536         8.83            ---          ---
2011 to 2030........        96,262         7.58           16,735         8.77          3,262         5.11
                          --------                      --------                     -------
                          $117,683                      $ 28,896                     $ 7,188
                          ========                      ========                     =======

<CAPTION>

                                                            Commercial
                                 Consumer                    Business                       Total
                        -------------------------------------------------------------------------------------
                                        Weighted                    Weighted                      Weighted
                                         Average                     Average                       Average
                           Amount         Rate         Amount         Rate          Amount          Rate
                        -------------------------------------------------------------------------------------
                                                       (Dollars in Thousands)
Due During the
Period Ending
December 31,
-------------------
<C>                       <C>             <C>         <C>            <C>          <C>                <C>
2001................      $  6,193        5.44%       $ 8,100        10.00%       $  19,110          8.09%
2002 and 2003.......         5,396        8.12          1,691         8.99            8,556          8.31
2004 and 2005.......        10,083        9.05          4,643         9.41           17,791          8.99
2006 to 2010........         7,760        9.49          4,482         9.07           40,399          8.54
2011 to 2030........           353        9.53          1,814         9.56          118,426          7.72
                          --------                    -------                     ---------
                          $ 29,785                    $20,730                     $ 204,282
                          ========                    =======                     =========
</TABLE>

     The  total  amount  of  loans  due  after  December  31,  2001  which  have
predetermined  interest rates is $107.3 million, while the total amount of loans
due after such dates which have floating or adjustable  interest  rates is $77.9
million.

                                        7

<PAGE>

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

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

     One-  to  Four-Family   Residential  Mortgage  Lending.   Residential  loan
originations  are generated by our  marketing  efforts,  our present  customers,
walk-in  customers and referrals from real estate  brokers.  We have focused our
lending efforts primarily on the origination of loans secured by first mortgages
on owner-occupied,  single-family residences in our market area. At December 31,
2000, one- to four-family  residential mortgage loans totaled $117.7 million, or
57.61%, of the gross loan portfolio.

     We currently offer fixed-rate and  adjustable-rate  mortgage loans. For the
year ended December 31, 2000, we originated $9.9 million of fixed-rate loans and
$6.3 million of adjustable-rate  real estate loans, all of which were secured by
one- to four-family  residential real estate.  Substantially  all of our one- to
four-family  residential mortgage originations are secured by properties located
in our market area.

     We offer adjustable-rate mortgage loans at rates and on terms determined in
accordance with market and  competitive  factors.  We originate  adjustable-rate
mortgage loans with terms of up to 30 years. We offer  one-year,  three-year and
five-year  adjustable-rate  mortgage  loans  (where  the terms are fixed for the
first one- year, three-years and five-years, respectively, and thereafter adjust
annually)  with a stated  interest rate margin over the United States  Treasury.
Increases or decreases in the  interest  rate of our  adjustable-rate  loans are
generally  limited to 1.0% at any adjustment  date and, for example the one year
adjustable rate mortgage  product has limits of 5.0% over the life of a loan. As
a  consequence  of using caps,  the interest  rates on these loans may not be as
rate sensitive as is our cost of funds. Currently,  all adjustable-rate mortgage
loans  originated  do provide for a minimum  interest  rate based on margins and
caps over the life of the loans. At December 31, 2000, the total balance of one-
to  four-family  adjustable-rate  loans was $59.2 million or 28.98% of our gross
loan portfolio.

     We also offer fixed-rate  mortgage loans with maturities of up to 30 years.
At December 31, 2000, the total balance of one- to four-family  fixed-rate loans
was $58.5 million or 28.63% of our gross loan portfolio.

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

     The  loans  currently  originated  by us  are  typically  underwritten  and
documented  pursuant to the guidelines of Freddie Mac. Under current policy,  we
originate  these loans for portfolio,  except the  conforming  fixed rate single
family mortgage loans are being sold.

                                        8

<PAGE>

     Commercial and  Multi-Family  Real Estate Lending.  We have also engaged in
commercial and multi-family  real estate lending in our market area. At December
31, 2000, we had $24.5 million and $4.4 million of commercial  and  multi-family
real  estate  loans,   respectively,   which   represented   12.00%  and  2.14%,
respectively, of the gross loan portfolio.

     The  commercial  and  multi-family  real estate loan  portfolio  is secured
primarily by retail properties,  apartments, churches and real estate located in
Huntington and Allen Counties,  Indiana. Commercial and multi-family real estate
loans  generally  have  terms  that do not exceed 15 years and a variety of rate
adjustment features and other terms. Generally, the loans are made in amounts up
to 75% of the  lesser  of the  appraised  value or sales  price of the  security
property. We currently offer one-year, three-year and five-year adjustable- rate
commercial and multi-family real estate loans (where the terms are fixed for the
first one-year, three-years and five-years,  respectively, and thereafter adjust
annually) with a margin over a designated index. In underwriting these loans, we
analyze the financial condition of the borrower,  the borrower's credit history,
and the  reliability  and  predictability  of the  cash  flow  generated  by the
property  securing the loan.  We generally  require  personal  guaranties of the
borrowers.  Appraisals  on  properties  securing  commercial  real estate  loans
originated by us are performed by independent appraisers, to the extent required
by federal regulations.

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

     Construction  or  Development  Lending.  At December 31, 2000,  we had $7.2
million of  construction  or development  loans. We offer loans to both builders
and borrowers for the construction of one- to four- family residences,  and to a
lesser extent,  commercial real estate and multi-family  properties.  Currently,
such loans are offered with fixed or adjustable  rates of interest.  At December
31, 2000, we had $2.0 million and $5.2 million of fixed-rate and adjustable-rate
construction or development  loans,  respectively,  which  represented 0.97% and
2.55%,  respectively,  of our gross loan portfolio.  Following the  construction
period,  these loans may become permanent  loans,  with terms for up to 25 years
for adjustable-rate loans and 20 years for fixed-rate loans.

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

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

     A  significant  component  of  our  consumer  loan  portfolio  consists  of
automobile loans. These loans generally have terms that do not exceed five and a
half years and carry a variety of rate adjustment features

                                        9

<PAGE>

and other terms. Generally, loans on new vehicles are made in amounts up to 100%
of  dealer  cost  and  loans on used  vehicles  are  made in  amounts  up to its
published  value,  less certain  adjustments.  At December 31, 2000,  automobile
loans  totaled  $14.1  million  or 6.90% of the gross  loan  portfolio.  Of this
amount,  approximately  $4.3  million or 30.50% and $9.8  million or 69.50% were
originated on a direct and indirect basis, respectively.

     We also  originate  fixed rate second  mortgages and  adjustable  rate home
equity line of credit loans.  Home equity and second  mortgage  loans secured by
mortgages, together with loans secured by all prior liens, are generally limited
to 90% or less of the appraised  value (where we have the first mortgage) of the
property  securing the loan or 80% or less of  appraised  value (where we do not
have the first mortgage) or 75% or less of appraised value (where the collateral
property is non-owner occupied). Generally, such loans have a maximum term of up
to 10 years.  As of December 31, 2000,  home equity and second  mortgage  loans,
most of which are  secured  by  mortgages,  amounted  to $7.0  million  and $1.3
million,  respectively,  which represented 3.41% and 0.61%, respectively, of the
gross loan portfolio.

     At December 31, 2000, the consumer loan portfolio totaled $29.8 million, or
14.58% of its gross loan portfolio.  At December 31, 2000,  approximately 70.52%
of consumer loans were short- and  intermediate-term,  fixed-rate consumer loans
and 29.48% were adjustable rate consumer loans.

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

     Consumer loans may entail greater credit risk than do residential  mortgage
loans,  particularly  in the case of consumer  loans which are  unsecured or are
secured  by  rapidly  depreciable  assets,  such as  automobiles.  In  addition,
consumer loan collections are dependent on the borrower's  continuing  financial
stability,  and  thus  are  more  likely  to be  affected  by  adverse  personal
circumstances.  Furthermore,  the application of various federal and state laws,
including  bankruptcy  and  insolvency  laws,  may limit the amount which can be
recovered  on such loans.  At December  31,  2000,  $1.7 million of our consumer
loans were non-performing, representing 0.83% of the gross loan portfolio.

     The  $1.7  million  includes  the  $1.5  million  of  present  value of the
collateral  received  from  the  fourth  quarter  foreclosure  of  a  commercial
borrower, which includes lease contracts and residual value of leased vehicles.

     Commercial  Business Lending.  We also originate  commercial business loans
and  purchase  commercial  leases.  At  December  31, 2000  approximately  $20.7
million,  or 10.15% of our gross loan portfolio was commercial business lending.
The largest commercial business loan was a combination real estate and equipment
loan of $3.4 million to a metal stamping company.

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

                                       10

<PAGE>

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

Originations, Purchases and Sales of Loans

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

     While we originate both  adjustable-rate  and fixed-rate loans, our ability
to originate  loans to a certain extent is dependent upon the relative  customer
demand  for  loans  in its  market,  which  is  affected  by the  interest  rate
environment,  among other  factors.  For the year ended  December 31,  2000,  we
originated  $33.1  million in  fixed-rate  loans and $22.4 million in adjustable
rate loans.

     One- to four-family originations decreased for the year to $16.2 million in
2000 from $29.1  million in 1999,  reflecting  the drop in  refinances  as rates
began increasing during 1999.

Asset Quality

     The following  table sets forth our loan  delinquencies  by type, by amount
and by  percentage  of type at December 31, 2000.  The amounts  presented in the
table  below  represent  the total  remaining  principal  balances of the loans,
rather than the actual payment amounts which are overdue.

<TABLE>
<CAPTION>
                                                          Loans Delinquent For:
                                 -----------------------------------------------------------------
                                            30 to 89 Days                 90 Days and Over             Total Delinquent Loans
                                 -------------------------------  -------------------------------   -------------------------------

                                                        Percent                          Percent                          Percent
                                                        of Loan                          of Loan                          of Loan
                                   Number     Amount   Category     Number    Amount    Category     Number    Amount    Category
                                 -------------------------------  -------------------------------   -------------------------------
                                                                      (Dollars in Thousands)

Real Estate:
<S>                                   <C>  <C>           <C>          <C>    <C>          <C>          <C>   <C>           <C>
    One- to four-family.........      20   $    967      0.82%        14     $   608      0.52%        34    $  1,575      1.34%
    Multi-family................     ---        ---       ---          1          29      0.66          1          29      0.66
    Commercial..................       7      1,270      5.18          4         708      2.89         11       1,978      8.07
    Construction or
      development...............       2        695      9.67          1         472      6.57          3       1,167     16.24
Consumer........................      93        998      3.35         20         191      0.64        113       1,189      3.99
Commercial business.............      10        516      2.49          4         181      0.87         14         697      3.36
                                  ------   --------    ------      -----     -------    ------      -----    --------    ------
      Total.....................     132   $  4,446      2.18%        44     $ 2,189      1.07%       176    $  6,635      3.25%
                                  ======   ========    ======      =====     =======    ======      =====    ========    ======
</TABLE>

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

                                       11

<PAGE>

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

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

     Non-Performing   Assets.  The  table  below  sets  forth  the  amounts  and
categories of non-performing  assets in our loan portfolio.  Loans are placed on
non-accrual  status when the  collection of principal  and/or  interest  becomes
doubtful. For all years presented, we had no troubled debt restructurings (which
involve  forgiving  a portion of interest  or  principal  on any loans or making
loans at a rate  materially less than that of market rates).  Foreclosed  assets
include assets acquired in settlement of loans.

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                         -------------------------------------------------------------
                                                            2000         1999       1998        1997          1996
                                                         -------------------------------------------------------------
                                                                             (Dollars in Thousands)

Non-accruing loans:
<S>                                                       <C>        <C>          <C>         <C>           <C>
  One- to four-family................................     $    608   $     339    $     149   $      334    $    470
  Multi-family.......................................           29          22          ---          ---         ---
  Commercial real estate.............................          708         247          614          706         172
  Construction or development........................          472         683          ---          ---         ---
  Consumer...........................................        1,691         186          107           37          63
  Commercial business................................          198         233          338           89         ---
                                                          --------   ---------    ---------   ----------    --------
     Total...........................................        3,706       1,710        1,208        1,166         705
                                                          --------   ---------    ---------   ----------    --------

Foreclosed assets:
  One- to four-family................................          ---          49           58          ---         ---
  Commercial and land................................          185         ---           52          ---         ---
                                                          --------   ---------    ---------   ----------    --------
     Total...........................................          185          49          110          ---         ---
                                                          --------   ---------    ---------   ----------    --------

Repossessed assets:
  Consumer and commercial............................          539          14           10            7           8
                                                          --------   ---------    ---------   ----------    --------
     Total...........................................          539          14           10            7           8
                                                          --------   ---------    ---------   ----------    --------

Total non-performing assets..........................     $  4,430   $   1,773    $   1,328   $    1,173    $    713
                                                          ========   =========    =========   ==========    ========
Total as a percentage of total assets................         1.79%       0.70%        0.63%        0.58%       0.42%
                                                          ========   =========    =========   ==========    ========
</TABLE>

     For the year ended  December 31, 2000,  gross  interest  income which would
have been recorded had the  non-accruing  loans been current in accordance  with
their  original  terms was  $188,000,  none of which was  included  in  interest
income.

     Classified  Assets.  Federal  regulations  classify loans and other assets,
such  as  debt  and  equity  securities  considered  by  the  Office  of  Thrift
Supervision  ("OTS") to be of lesser quality,  as  "substandard,"  "doubtful" or
"loss." An asset is considered  "substandard" if it is inadequately protected by
the  current net worth and paying  capacity of the obligor or of the  collateral
pledged,  if  any.  "Substandard"  assets  include  those  characterized  by the
"distinct  possibility" that the insured institution will sustain "some loss" if
the

                                       12

<PAGE>

deficiencies are not corrected.  Assets classified as "doubtful" have all of the
weaknesses   inherent  in  those  classified   "substandard,"   with  the  added
characteristic  that the weaknesses  present make  "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable."  Assets  classified as "loss" are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without the establishment of a specific loss reserve is not warranted.

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

     In connection  with the filing of our periodic  reports with the OTS and in
accordance with our  classification  of assets policy,  we regularly  review the
problem  assets  in our  portfolio  to  determine  whether  any  assets  require
classification in accordance with applicable regulations.  At December 31, 2000,
we had classified $6.8 million of our assets as substandard,  $0 as doubtful and
$0 as loss, representing 27.29% of the stockholders' equity or 2.93% of assets.

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

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

     Although we believe that we use the best information available to determine
the allowance,  unforeseen market conditions could result in adjustments and net
earnings could be significantly  affected if circumstances  differ substantially
from the assumptions used in making the final determination. Future additions to
the  allowance  will be the result of periodic  loan,  property  and  collateral
reviews and thus cannot be predicted in advance.  At December 31, 2000, we had a
total  allowance  for loan losses of $2.0  million or 45.17% of non-  performing
loans.  See Note 3 of the  Notes to  Consolidated  Financial  Statements  in our
Annual Report to  Stockholders  for the year ended  December 31, 2000,  attached
hereto as Exhibit 13 (the "Annual Report").

                                       13

<PAGE>

          The  distribution  of the  allowance  for  loan  losses  at the  dates
     indicated is summarized as follows:

<TABLE>
<CAPTION>
                                                                  December 31,
                        ----------------------------------------------------------------------------------------------------
                                      2000                            1999                             1998
                        ----------------------------------------------------------------------------------------------------
                                               Percent                          Percent                            Percent
                                               of Loans                         of Loans                           of Loans
                                      Loan     in Each                 Loan     in Each                   Loan     in Each
                         Amount of  Amounts    Category   Amount of  Amounts    Category     Amount of  Amounts    Category
                         Loan Loss     by      to Total   Loan Loss     by      to Total     Loan Loss     by      to Total
                         Allowance  Category    Loans     Allowance  Category    Loans       Allowance  Category    Loans
                        -------------------------------   ------------------------------    -------------------------------
                                                             (Dollars in Thousands)
<S>                        <C>      <C>          <C>      <C>      <C>           <C>         <C>        <C>         <C>
One- to four-family.....   $ 172    $117,683     57.61%   $  278   $119,283      55.50%      $  266     $113,919    59.66
Multi-family............       9       4,377      2.14        35      3,779       1.76           27        2,908     1.52
Commercial real estate..     595      24,519     12.00       272     24,471      11.39          204       16,514     8.65
Construction or
  development                182       7,188      3.52       284     12,614       5.87          278       11,365     5.95
Consumer................     608      29,785     14.58       273     30,594      14.23          183       24,863    13.02
Commercial business.....     435      20,730     10.15       413     24,184      11.25          305       21,393    11.20
Unallocated.............     ---         ---       ---       212        ---        ---          191          ---      ---
                          ------    --------    -------   ------   --------     -------      ------     --------   -------
     Total..............  $2,001    $204,282    100.00%   $1,767   $214,925     100.00%      $1,454     $190,962   100.00%

<CAPTION>

                                                        December 31,
                          --------------------------------------------------------------------------
                                         1997                                 1996
                          --------------------------------------------------------------------------
                                                  Percent                               Percent
                                                  of Loans                              of Loans
                                         Loan     in Each                     Loan      in Each
                            Amount of  Amounts    Category     Amount of     Amounts    Category
                            Loan Loss     by      to Total     Loan Loss       by       to Total
                            Allowance  Category    Loans       Allowance    Category     Loans
                           --------------------------------   ------------------------------------
<S>                          <C>       <C>         <C>         <C>         <C>            <C>
One- to four-family.....     $  240    $109,080    60.53%       $  209      $ 99,325      65.10%
Multi-family............         22       2,606     1.45            74         2,993       1.96
Commercial real estate..        163      16,734     9.29           106        10,996       7.20
Construction or
  development                   237      10,596     5.88           311        12,054       7.90
Consumer................        136      23,652    13.12            79        17,648      11.57
Commercial business.....        244      17,526     9.73           165         9,568       6.27
Unallocated.............        152         ---      ---            83           ---        ---
                             ------    --------   -------       ------      --------     -------
     Total..............     $1,194    $180,194   100.00%       $1,027      $152,584     100.00%
</TABLE>

                                       14

<PAGE>

     The  following  table  sets forth an  analysis  of the  allowance  for loan
losses.

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                         -------------------------------------------------------------
                                                             2000         1999         1998        1997         1996
                                                         -------------------------------------------------------------
                                                                              (Dollars in Thousands)

<S>                                                         <C>         <C>          <C>          <C>        <C>
Balance at beginning of period.......................       $1,767      $1,454       $1,194       $1,027      $  881

Charge-offs:
  One- to four-family................................            1           1           47            2           3
  Commercial.........................................        1,150          26          ---            1         ---
  Consumer...........................................          259         159           99          133         131
                                                           -------      ------       ------       ------      ------
                                                             1,410         186          146          136         134
                                                           -------      ------       ------       ------      ------

Recoveries:
   One- to four-family...............................          ---         ---            3          ---         ---
   Consumer..........................................           50          50           42           38          45
   Commercial........................................            4         ---            1          ---         ---
                                                           -------      ------       ------       ------      ------
                                                                54          50           46           38          45
                                                           -------      ------       ------       ------      ------

Net charge-offs......................................        1,356         136          100           98          89
Additions charged to operations......................        1,590         449          360          265         235
                                                           -------      ------       ------       ------      ------
Balance at end of period.............................       $2,001      $1,767       $1,454       $1,194      $1,027
                                                           =======      ======       ======       ======      ======

Ratio of net charge-offs during the period to
 average loans outstanding during the period.........        0.65%       0.07%        0.06%        0.06%       0.07%
                                                           ======       =====        =====        =====       =====
Ratio of net charge-offs during the period to
 average non-performing loans........................       51.77%       9.80%       12.99%       13.07%      20.23%
                                                           ======       =====        =====        =====       =====
</TABLE>

Investment Activities

     Liquidity may increase or decrease depending upon the availability of funds
and comparative yields on investments in relation to the return on loans. Though
our  liquidity  level  is  below  our  peers,  historically  we  have  generally
maintained liquid assets at levels above the minimum  requirements that had been
imposed  by  OTS  regulations  and at  levels  believed  adequate  to  meet  the
requirements  of normal  operations,  including  repayments of maturing debt and
potential  deposit  outflows.  At December 31, 2000, our liquidity ratio (liquid
assets  as a  percentage  of  net  withdrawable  savings  deposits  and  current
borrowings) was 9.69%.

     Federally  chartered  savings  institutions have the authority to invest in
various types of liquid assets,  including  United States Treasury  obligations,
securities  of various  federal  agencies,  certain  certificates  of deposit of
insured banks and savings institutions, certain bankers' acceptances, repurchase
agreements  and  federal  funds.  Subject  to  various  restrictions,  federally
chartered savings institutions may also invest their assets in commercial paper,
investment grade corporate debt securities and mutual funds whose assets conform
to the investments that a federally  chartered savings  institution is otherwise
authorized to make directly.

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

     Securities  and Other  Interest-Earning  Assets.  At December 31, 2000, our
interest-earning  cash and cash  equivalents  totaled $3.2 million,  or 1.30% of
total assets, and our securities, consisting of obligations of

                                       15

<PAGE>

states  and  political  subdivisions,  money  market  mutual  funds,  and  other
securities totaled $31.6 million,  or 12.79% of total assets.  Included in other
securities,  as of such date,  we had a $4.9 million  investment in Federal Home
Loan Bank ("FHLB") stock,  satisfying our requirement for membership in the FHLB
of Indianapolis.

     At  December  31,  2000,  we had  $383,000 in  securities  held to maturity
consisting of  obligations of states and political  subdivisions  and other debt
securities,  and  securities  available  for  sale  with a fair  value  of $31.2
million. See Note 2 of the Notes to the Consolidated Financial Statements in the
Annual Report.

     The following table sets forth the composition of our securities  portfolio
at the dates indicated.

<TABLE>
<CAPTION>
                                                                  2000                   1999                      1998
                                                      --------------------------------------------------------------------------
                                                         Carrying     % of        Carrying     % of          Carrying    % of
                                                      -----------------------   ----------------------      --------------------
                                                                                (Dollars in Thousands)
Debt securities:
<S>                                                       <C>          <C>         <C>          <C>          <C>         <C>
  Obligations of states and political................     $   493      1.56%       $   524      1.56%        $   612     4.31%
  Mortgage-backed securities.........................       6,863     21.71          2,246      6.67           5,354    37.74
  Federal agency obligations.........................      18,359     58.08         25,036     74.41           4,080    28.76
  Corporate bonds....................................         115      0.37            116      0.34             116     0.82
     Total debt securities...........................      25,830     81.72         27,922     82.98          10,162    71.63
Equity securities:
  Mutual funds.......................................         866      2.74            814      2.42             775     5.46
  Equity securities..................................       4,913     15.54          4,913     14.60           3,250    22.91
     Total securities................................     $31,609    100.00%       $33,649    100.00%        $14,187   100.00%
</TABLE>

     The following  table sets forth the amortized  cost of debt  securities and
mutual funds by maturity and weighted average yield for each range of maturities
at December 31, 2000.

<TABLE>
<CAPTION>
                                                                                    Maturity
                                                         Within One Year           1 to 5 years           5 to 10 years
                                                         ---------------          --------------          --------------
                                                      Amount        Yield      Amount         Yield      Amount      Yield
                                                      ------        -----      ------         -----      ------      -----
<S>                                                   <C>            <C>       <C>            <C>        <C>         <C>
U.S. Government Securities........................    $5,674         5.99%     $11,734        5.84%      $1,000      6.25%
Mutual Funds......................................       866         6.16          ---         ---          ---       ---
State and Political subdivision(1)................       ---          ---          268        4.55          229      4.26
Other debt securities.............................       ---          ---          115        8.55          ---       ---
                                                      ------        -----      -------        ----       ------      ----
  Total...........................................    $6,540         6.01%     $12,117        5.84%      $1,229      5.88%
                                                      ======        =====      =======        ====       ======      ====
</TABLE>

---------
(1)  Yields are not presented on a tax equivalent basis.

                                       16

<PAGE>

     The  weighted  average  rates  are based on  coupon  rates  for  securities
purchased  at par value  and on  effective  rates  considering  amortization  or
accretion if the securities were purchased at a premium or discount.

Sources of Funds

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

     FHLB advances are used to support  lending  activities and to assist in our
asset/liability  management  strategy.  Typically,  we do not use other forms of
borrowings.  At December 31, 2000,  we had total FHLB  advances of $67.4 million
with the capacity to borrow as of December 31, 2000 an additional $18.2 million.
See Note 6 of the  Notes to  Consolidated  Financial  Statements  in the  Annual
Report.

     Deposits.  We offer a variety  of deposit  accounts  having a wide range of
interest rates and terms.  Deposits consist of passbook savings,  NOW, checking,
money  market  deposit and time  deposit  accounts.  The time  deposit  accounts
currently range in terms from 182 days to five years.

     We rely primarily on advertising, competitive pricing policies and customer
service to attract and retain these deposits. We generally solicit deposits from
our market area and occasionally accept brokered funds and out of area jumbos as
a source of  deposits.  The flow of  deposits  is  influenced  significantly  by
general  economic  conditions,  changes in money market and prevailing  interest
rates and competition.

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

     The  following  table  sets forth our  savings  flows  during  the  periods
indicated.

<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                               -----------------------------------------
                                                   2000          1999          1998
                                               -----------------------------------------
                                                         (Dollars in Thousands)
<S>                                             <C>            <C>           <C>
Opening balance.............................    $  143,212     $ 123,336     $ 107,550
Deposits....................................       641,902       578,790       336,345
Withdrawals.................................       645,128       564,483       326,471
Interest credited...........................         6,820         5,569         5,912
                                                ----------     ---------     ---------

Ending balance..............................    $  146,806     $ 143,212     $ 123,336
                                                ==========     =========     =========

Net increase................................    $    3,594     $  19,876     $  15,786
                                                ==========     =========     =========

Percent increase............................          2.51%        16.12%        14.68%
                                                ==========     =========     =========
</TABLE>

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

                                       17

<PAGE>

<TABLE>
<CAPTION>
                                                                             December 31,
                                        -------------------------------------------------------------------------------------
                                                      2000                      1999                      1998
                                        -------------------------------------------------------------------------------------
                                                           Percent                 Percent                     Percent
                                               Amount      of Total       Amount   of Total         Amount    of Total
                                        -------------------------------------------------------------------------------------
                                                                       (Dollars in Thousands)
Transactions and Savings Deposits:
---------------------------------
<S>                                          <C>             <C>        <C>           <C>         <C>            <C>
Passbook Accounts (2.00%)(1)............     $  9,266        6.3$%      $  9,709      6.78%       $  9,812       7.96%
Demand and NOW Accounts (1.02%)(1)......       16,447       11.20         15,685     10.95          13,905      11.27
Money Market Accounts (5.27%)(1)........       19,021       12.96         19,268     13.45          20,508      16.63
Total Non-Time Deposits.................       44,734       30.47         44,662     31.18          44,225      35.86

Time Deposits:
-------------
 2.00 -  3.99%..........................          271        0.18            873      0.61             939       0.76
 4.00 -  5.99%..........................       10,996        7.49         53,627     37.45          72,690      58.94
 6.00 -  7.99%..........................       90,805       61.86         44,050     30.76           5,482       4.44
Total Time Deposits.....................      102,072       69.53         98,550     68.82          79,111      64.14
Total Deposits..........................     $146,806      100.00%      $143,212    100.00%       $123,336     100.00%
</TABLE>

----------------
(1)  End of year 2000 average rates.


                                       18

<PAGE>

     The  following  table  shows  rate and  maturity  information  for our time
deposit accounts as of December 31, 2000.

<TABLE>
<CAPTION>
                                            2.00-        4.00-         6.00-                     Percent
                                            3.99%        5.99%         7.99%        Total       of Total
                                         -------------------------------------------------------------------
                                                           (Dollars in Thousands)
Time deposit accounts maturing in
quarter ending:
---------------------------------
<S>                                          <C>       <C>           <C>         <C>              <C>
March 31, 2001......................         $271      $  2,498      $13,529     $  16,298        15.98%
June 30, 2001.......................           --         2,733       17,464        20,197        19.79
September 30, 2001..................           --         1,793       18,499        20,292        19.88
December 31, 2001...................           --         1,624       17,975        19,599        19.20
March 31, 2002......................           --           408        6,332         6,740         6.60
June 30, 2002.......................           --           509        5,402         5,911         5.79
September 30, 2002..................           --           106        2,818         2,924         2.86
December 31, 2002...................           --           102        2,886         2,988         2.93
March 31, 2003......................           --           144          299           443         0.43
June 30, 2003.......................           --           216          873         1,089         1.07
September 30, 2003..................           --           248          602           850         0.83
December 31, 2003...................           --           334        1,897         2,231         2.19
Thereafter..........................           --           281        2,229         2,510         2.45
                                             ----      --------      -------     ---------       ------

   Total............................         $271      $ 10,996      $90,805     $ 102,072       100.00%
                                             ====      ========      =======     =========       ======

   Percent of total.................         0.27%        10.77%       88.96%       100.00%
                                             ====      ========      =======     =========
</TABLE>

     The following  table  indicates the amount of our time deposit  accounts by
time remaining until maturity as of December 31, 2000.

<TABLE>
<CAPTION>
                                                                         Maturity
                                                     ----------------------------------------------
                                                                     Over       Over
                                                      3 Months      3 to 6     6 to 12       Over
                                                      or Less       Months     Months     12 months     Total
                                                     ---------------------------------------------------------
                                                                       (Dollars in Thousands)
<S>                                                   <C>          <C>        <C>          <C>        <C>
Time deposit accounts less than $100,000.........     $ 5,787      $ 7,740    $16,345      $12,869    $ 42,741
Time deposit accounts of $100,000 or more........       7,608       12,102     23,097       14,372      57,179
Public funds (1).................................       1,000          341        492          319       2,152
                                                      -------      -------    -------      -------    --------
Total time deposit accounts......................     $14,395      $20,183    $39,934      $27,560    $102,072
                                                      =======      =======    =======      =======    ========
</TABLE>

-----------
(1)  Deposits from governmental and other public entities, all over $100,000.

     Borrowings.  Although  deposits are our primary source of funds, our policy
has been to utilize  borrowings  when they are a less costly  source of funds or
can be invested at a positive  rate of return.  We may obtain  advances from the
FHLB of  Indianapolis  upon the  security  of our  capital  stock in the FHLB of
Indianapolis and certain of our mortgage loans and  mortgage-backed  securities.
Such advances may be made pursuant to several different credit programs, each of
which has its own interest rate and range of maturities.

                                       19

<PAGE>

At December 31, 2000,  we had $67.4 million in FHLB  advances  outstanding.  For
additional  information  regarding the term to maturity and average rate paid on
FHLB advances,  see Note 6 of the Notes to Consolidated  Financial Statements in
the Annual Report and "- Lending Activities."

     The following  table sets forth the maximum  month-end  balance and average
balance of FHLB advances for the periods indicated.

                                             Year Ended December 31,
                                    ---------------------------------------
                                        2000        1999        1998
                                    ---------------------------------------
                                             (Dollars in Thousands)
Maximum Balance:
---------------
  FHLB  advances..................     $96,400    $97,500     $62,100

Average Balance:
---------------
  FHLB advances...................     $84,761    $74,466     $54,841

Service Corporation Activities

     At  December  31,  2000,  First  Federal  had  one  subsidiary,   Northeast
Financial,  which is now  functioning  as our brokerage  subsidiary  and we have
three registered representatives to provide this service to the customers.

Regulation

     First Federal is a federally  chartered savings bank, the deposits of which
are  federally  insured  and  backed by the full  faith and credit of the United
States Government.  Accordingly,  we are subject to broad federal regulation and
oversight  extending to all of our operations.  First Federal is a member of the
FHLB of Indianapolis  and is subject to certain limited  regulation by the Board
of Governors of the Federal Reserve System  ("Federal  Reserve  Board").  As the
savings and loan holding  company of First  Federal,  Northeast  Indiana also is
subject to federal  regulation and oversight.  However,  since Northeast Indiana
existed as a unitary  savings  and loan  holding  company  prior to May 4, 1999,
there is virtually no restriction on its activities.

     Federal Regulation of Savings Associations. The OTS has extensive authority
over the operations of savings associations.  As part of this authority,  we are
required  to file  periodic  reports  with the OTS and are  subject to  periodic
examinations by the OTS and the FDIC. When these  examinations  are conducted by
the OTS and the FDIC,  the  examiners  may require  First Federal to provide for
higher general or specific loan loss reserves.

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

     Our general permissible lending limit for loans-to-one-borrower is equal to
the  greater of $500,000 or 15% of  unimpaired  capital and surplus  (except for
loans fully secured by certain readily marketable collateral, in which case this
limit is increased to 25% of unimpaired  capital and  surplus).  At December 31,
2000, our lending limit under this restriction was  approximately  $3.8 million.
At December  31,  2000,  we had no loans in excess of our  loans-to-one-borrower
limit.

                                       20

<PAGE>

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

     The FDIC's  deposit  insurance  premiums are assessed  through a risk-based
system under which all insured  depository  institutions  are placed into one of
nine  categories  and  assessed  insurance  premiums  based upon their  level of
capital and supervisory evaluation. Under the system, institutions classified as
well  capitalized  (i.e.,  a core capital  ratio of at least 5%, a ratio of core
capital to risk-weighted assets of at least 6% and a risk-based capital ratio of
at least 10%) and considered healthy, pay the lowest premium, while institutions
that are less than adequately  capitalized (i.e., core risk-based capital ratios
of less than 4% or a risk-based capital ratio of less than 8%) and considered of
substantial  supervisory concern pay the highest premium. Risk classification of
all insured  institutions  is made by the FDIC  semi-annually.  At December  31,
2000, First Federal was classified as a well-capitalized institution.

     The current  premium  schedule  for Bank  Insurance  Fund  ("BIF") and SAIF
insured  institutions  ranged from 0 to 27 basis points.  However,  SAIF insured
institutions  and BIF  insured  institutions  are  required  to pay a  Financing
Corporation  Assessment in order to fund the interest on bonds issued to resolve
thrift  failures in the 1980s.  For the quarter  ended  December 31, 2000,  this
amount was equal to 2.02 basis  points for each $100 in  domestic  deposits  for
SAIF  members  and BIF insured  institutions.  These  assessments,  which may be
revised based upon the level of BIF and SAIF  deposits,  will continue until the
bonds mature in 2017 through 2019.

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

     The  capital  regulations  require  tangible  capital  of at least  1.5% of
adjusted total assets (as defined by  regulation).  Tangible  capital  generally
includes  common   stockholders'   equity  and  retained  income,   and  certain
noncumulative perpetual preferred stock and related income and excluding certain
intangible  assets.  At December 31, 2000, First Federal had tangible capital of
$24.0 million,  or 9.7% of adjusted total assets,  which is approximately  $20.3
million above the minimum requirement of 1.5% of adjusted total assets in effect
on that date. At December 31, 2000,  First  Federal did not have any  intangible
assets.

     The capital  standards  also require  core capital  equal to 4% of adjusted
total assets,  depending on an institution's  supervisory  rating.  Core capital
generally consists of tangible capital plus certain intangible assets, including
a limited amount of purchased credit card  relationships.  At December 31, 2000,
First Federal had core capital equal to $24.0 million, or 9.7% of adjusted total
assets,  which is $14.1 million above the minimum leverage ratio  requirement of
4% in effect on that date.

     The OTS risk-based  capital  requirement  requires savings  associations to
have  total  capital  of at  least 8% of  risk-weighted  assets.  Total  capital
consists  of  core  capital,  as  defined  above,  and  supplementary   capital.
Supplementary  capital  consists  of  certain  capital  instruments  that do not
qualify as core capital and general  valuation loan and lease loss allowances up
to a maximum of 1.25% of risk-weighted assets. Supplementary capital may be used
to satisfy the  risk-based  requirement  only to the extent of core capital.  At
December 31,

                                       21

<PAGE>

2000,  First Federal had $1.6 million of general loss  reserves,  which was less
than 1.25% of risk-weighted assets.

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

     On December 31, 2000, First Federal had total  risk-based  capital of $25.7
million,  including approximately $24.0 million in core capital and $1.7 million
in qualifying supplementary capital and risk- weighted assets of $157.5 million,
or total capital of 16.3% of risk-weighted assets. This amount was $13.1 million
above the 8% requirement in effect on that date.

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

     The imposition by the OTS or the FDIC of any of these measures on Northeast
Indiana or First Federal may have a substantial adverse effect on our operations
and profitability and the value of Northeast  Indiana's common stock.  Northeast
Indiana shareholders do not have preemptive rights and, therefore,  if Northeast
Indiana is directed by the OTS or the FDIC to issue additional  shares of common
stock,  such issuance may result in the dilution of the  percentage of ownership
of Northeast Indiana.

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

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

     Qualified Thrift Lender Test. All savings institutions are required to meet
a  qualified  thrift  lender  test  to  avoid  certain   restrictions  on  their
operations. This test requires a savings institution to have at least 65%

                                       22

<PAGE>

of  its  portfolio  assets  (as  defined  by  regulation)  in  qualified  thrift
investments  on a monthly  average  for nine out of every 12 months on a rolling
basis.  As an  alternative,  the savings  institutions  may  maintain 60% of its
assets in those assets specified in Section  7701(a)(19) of the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"). Under either test, these
assets primarily  consist of residential  housing related loans and investments.
At December  31,  2000,  First  Federal met the test and has always met the test
since its effectiveness.  First Federal's qualified thrift lender percentage was
85.95% at December 31, 2000.

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

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

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

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

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

                                       23

<PAGE>

     As a unitary savings and loan holding  company,  that has been in existence
since before May 4, 1999, Northeast Indiana generally is not subject to activity
restrictions.   If  Northeast   Indiana  acquires  control  of  another  savings
association  as a separate  subsidiary,  it would become a multiple  savings and
loan holding  company,  and the  activities of Northeast  Indiana and any of its
subsidiaries  (other  than  First  Federal  or any  other  SAIF-insured  savings
association) would become subject to certain restrictions.  Additionally,  if we
fail the qualified  thrift lender test,  within one year Northeast  Indiana must
register as and will  become  subject to, the  restrictions  applicable  to bank
holding companies.

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

     Northeast  Indiana  stock held by  persons  who are  affiliates  (generally
officers, directors and 10% stockholders) of Northeast Indiana may not be resold
without   registration   or  unless  sold  in  accordance  with  certain  resale
restrictions.  If Northeast Indiana meets specified  current public  information
requirements,  each affiliate of Northeast Indiana is able to sell in the public
market,  without  registration,  a limited  number of shares in any  three-month
period.

     Federal Reserve  System.  The Federal Reserve Board requires all depository
institutions  to maintain  non-interest  bearing  reserves at  specified  levels
against  their  transaction  accounts  (primarily  checking,  NOW and  Super NOW
checking  accounts).  At December 31, 2000, First Federal was in compliance with
these reserve requirements.

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

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

     As a member,  First  Federal is required to purchase and maintain a minimum
amount of stock in the FHLB of Indianapolis. At December 31, 2000, First Federal
had $4.9 million in FHLB stock,  which was in compliance with this  requirement.
For the fiscal  year ended  December  31,  2000,  dividends  paid by the FHLB of
Indianapolis  to First Federal  totaled  $405,000,  which  constitutes a $83,000
increase  over the amount of dividends  received in fiscal  1999.  Over the past
five fiscal years these  dividends have averaged 8.01% and were 8.25% for fiscal
2000.

Taxation

     Federal  Taxation.  We file  consolidated  federal  income tax returns on a
fiscal year basis using the accrual method of accounting.  Savings  institutions
that met certain  definitional  tests relating to the  composition of assets and
other conditions  prescribed by the Internal Revenue Code, had been permitted to
establish  reserves  for bad debts and to make  annual  additions  which  could,
within specified formula limits, be

                                       24

<PAGE>

taken as a  deduction  in  computing  taxable  income  for  federal  income  tax
purposes. The amount of the bad debt reserve deduction is now computed under the
experience method.

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

     To the extent  earnings  appropriated to a savings  institution's  bad debt
reserves for  "qualifying  real property  loans" and deducted for federal income
tax purposes  exceed the allowable  amount of such reserves  computed  under the
experience method and to the extent of the institution's  supplemental  reserves
for losses on loans, such excess may not, without adverse tax  consequences,  be
utilized  for  the  payment  of  cash  dividends  or  other  distributions  to a
shareholder (including distributions on redemption,  dissolution or liquidation)
or for any other purpose (except to absorb bad debt losses).  As of December 31,
2000,  First  Federal's  excess  for tax  purposes  totaled  approximately  $1.3
million.

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

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

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

Competition

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

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

                                       25

<PAGE>

     We primarily serve Huntington  County,  Indiana.  There are five commercial
banks, one savings institution,  other than First Federal, and six credit unions
which compete for deposits and loans in Huntington  County. We estimate that our
share  of the  savings  market  in  Huntington  County  based  on  FDIC  insured
institutions  is  approximately  30% and our share of the  residential  mortgage
market is approximately 26%.

Employees

     At December 31, 2000,  we had a total of 48  full-time,  4 part-time  and 0
seasonal  employees.  Our  employees  are  not  represented  by  any  collective
bargaining group. Management considers its employee relations to be good.

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

     We conduct our business through three offices,  all of which are located in
Huntington,  Indiana and are owned by First  Federal.  The following  table sets
forth  information  relating to each of our offices as of December 31, 1999. The
total net book value of our premises and equipment  (including  land,  buildings
and leasehold  improvements  and furniture,  fixtures and equipment) at December
31,  2000  was  approximately  $2.2  million.  See  Note 4 of the  Notes  to the
Consolidated Financial Statements in the Annual Report.

<TABLE>
<CAPTION>
                                                                    Total
                                                      Owned       Approximate
                                       Year            or           Square       Net Book Value at
           Location                  Acquired        Leased         Footage      December 31, 2000
----------------------------------------------------------------------------------------------------
<S>                                   <C>             <C>            <C>              <C>
Main Office:
    648 North Jefferson Street         1974           Owned          5,200               784
    Huntington, Indiana  46750

Branch Offices:
    1240 South Jefferson Street        1981           Owned          1,700               241
    Huntington, Indiana  46750

    100 Frontage Road                  1995           Owned          5,000             1,219
    Huntington, Indiana  46750
</TABLE>

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

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

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

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

     No  matter  was  submitted  to a vote  of  security  holders,  through  the
solicitation  of proxies or  otherwise,  during the quarter  ended  December 31,
2000.

                                       26

<PAGE>

                                     PART II

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

         Page 37 of the Annual Report is herein incorporated by reference.

Item 6.  Management's Discussion and Analysis or Plan of Operation
         ---------------------------------------------------------

         Pages 4 through 14 of the Annual  Report  are  herein  incorporated  by
reference.

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

         The   following   information   appearing  in  the  Annual   Report  is
incorporated herein by reference.

                                                                       Pages in
                                                                        Annual
Annual Report Section                                                   Report
---------------------                                                  --------
Report of Independent Auditors                                            15
Consolidated Balance Sheets as of December 31, 2000 and 1999              16
Consolidated Statements of Income for the Years Ended December 31,
 2000, 1999 and 1998                                                      17
Consolidated Statements of Changes in Shareholders' Equity for the
 Years Ended December 31, 2000, 1999 and 1998                             18
Consolidated Statements of Cash Flows for the Years Ended
 December 31, 2000, 1999 and 1998                                         19
Notes to Consolidated Financial Statements                                20

     With the exception of the aforementioned information in Part II of the Form
10-KSB,  the Annual  Report is not deemed filed as part of this annual report on
Form 10-KSB.

Item 8.  Changes In and Disagreements With Accountants on Accounting and
         ---------------------------------------------------------------
         Financial Disclosure
         --------------------

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

                                       27

<PAGE>

                                    PART III

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

Directors

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

Executive Officers of Northeast Indiana and First Federal

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

                                              Position held with the
        Name             Age(1)         First Federal and Northeast Indiana
--------------------------------------------------------------------------------
Darrell E. Blocker        47         Senior Vice President, Treasurer and
                                     Chief Financial Officer
Dee Ann Hammel            48         Senior Vice President and Chief Operating
                                     Officer
Joseph A. Byers           48         Vice President and Senior Trust Officer

----------
(1)  At December 31, 2000

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

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

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

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

                                       28

<PAGE>

Compliance with Section 16(a)

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

     To our  knowledge,  based  solely on a review of the copies of such reports
furnished  to the us and  written  representations  that no other  reports  were
required,  all Section  16(a) filing  requirements  applicable  to our officers,
directors and greater than 10%  beneficial  owners were complied with during the
fiscal year ended December 31, 2000.

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

     Information  concerning  executive  compensation is incorporated  herein by
reference  from  the  definitive  proxy  statement  for the  annual  meeting  of
stockholders  to be held in 2001,  a copy of which  will be filed not later than
120 days after the close of the fiscal year.

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

     Information  concerning security ownership of certain beneficial owners and
management  is  incorporated  herein  by  reference  from the  definitive  proxy
statement for the annual meeting of  stockholders  to be held in 2001, a copy of
which will be filed not later than 120 days after the close of the fiscal year.

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

     Information  concerning certain  relationships and related  transactions is
incorporated  herein by reference  from the definitive  proxy  statement for the
annual meeting of stockholders to be held in 2001, a copy of which will be filed
not later than 120 days after the close of the fiscal year.

                                       29

<PAGE>

Item 13.   Exhibits and Reports on Form 8-K
           --------------------------------

           (a)  Exhibits

<TABLE>
<CAPTION>
                                                                                                Reference to
Regulation                                                                                    Prior Filing or
S-B Exhibit                                                                                    Exhibit Number
Number        Document                                                                        Attached Hereto
-----------   ---------------------------------------------------------------------------     ---------------
<S>           <C>                                                                                  <C>
  2           Plan of acquisition, reorganization, arrangement, liquidation or succession           None
  3(i)        Certificate of Incorporation, including amendments thereto                             *
  3(ii)       By-Laws                                                                                *
  4           Instruments defining the rights of security holders, including debentures              *
  9           Voting trust agreement                                                                None
 10           Executive Compensation Plans and Arrangements
              (a)  Employment Contract between Stephen E. Zahn and First Federal                     *
              (b)  Employment Contract between Darrell Blocker and First Federal                     *
              (c)  Employment Contract between Dee Ann Hammel and First Federal                      *
              (d)  1995 Stock Option and Incentive Plan                                              *
              (e)  Recognition and Retention Plan                                                    *
              (f)  Shareholder Benefit Plan                                                         10
 11           Statement re:  computation of per share earnings                                      **
 13           Annual report to shareholders                                                         13
 16           Letter on change in certifying accountants                                           None
 18           Letter on change in accounting principles                                            None
 21           Subsidiaries of registrant                                                            21
 22           Published report regarding matters submitted to vote                                 None
 23           Consents of experts                                                                   23
 24           Power of attorney                                                                Not required
 99           Additional exhibits                                                                  None
</TABLE>

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

*    Filed as an  exhibit  to our  Form S-1  Registration  Statement  (File  No.
     33-90558).  All of such previously filed documents are hereby  incorporated
     herein by reference in accordance with Item 601 of Regulation S-B.

**   See Note 15 of the Notes to Consolidated Financial Statements in the Annual
     Report attached hereto as Exhibit 13.

     (b)  Reports on Form 8-K

     During the quarter ended December 31, 2000, we filed the following  Current
     Reports on Form 8-K:

     (i)  Form 8-K filed on October 24, 2000, announcing third quarter earnings;
     (ii) Form 8-K filed on October 25, 2000,  announcing  increased  quarterly
          cash dividend;
     (iii)Form 8-K filed on November 15,  2000,  announcing  intention to amend
          third quarter earnings announcement; and
     (iv) Form 8-K filed on November 21, 2000,  announcing revised third quarter
          earnings.

                                       30

<PAGE>

                                   SIGNATURES
                                   ----------

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

                                             NORTHEAST INDIANA BANCORP, INC.

Date:  March 30, 2001                        By:   /s/ Stephen E. Zahn
                                                -------------------------------
                                                      Stephen E. Zahn
                                                (Duly Authorized Representative)

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

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

Date:  March 30, 2001                        Date:    March 30, 2001

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

Date:  March 30, 2001                        Date:    March 30, 2001

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

Date:  March 30, 2001                        Date:    March 30, 2001

                                       31


<PAGE>

                                INDEX TO EXHIBITS
                                -----------------


     Exhibit No.       Document
     -----------       --------

         13            Annual Report
         21            Subsidiaries of the Registrant
         23            Consent of Crowe, Chizek and Company LLP


                                       32