ASB
                                    FINANCIAL
                                      CORP.




                                      2000
                                     ANNUAL
                                     REPORT
                                       TO
                                  SHAREHOLDERS



<PAGE>


Dear Fellow Shareholder:

I am pleased to present this Annual Report to our  Shareholders  which  reflects
another year of solid earnings and growth for ASB Financial.

The completion of our first fiscal year in the new millennium reflected positive
results  that will  strengthen  our  ability to sustain  continued  success  and
prosperity.  Specifically,  we have  expanded  our product  lines and  services,
increased our  accessibility  to the  community,  and developed a  comprehensive
strategic  plan  focused on  maintaining  your  Corporation's  common stock as a
strong and sound investment into the future.

Net earnings for the fiscal year ended June 30, 2000,  totaled $1.1 million,  or
$.70 per diluted share,  which  represents an increase of $4,000 compared to the
net earnings  reported for fiscal 1999. More  importantly,  diluted earnings per
share  increased by 5% during the year.  Total assets amounted to $131.9 million
at June 30, 2000, an increase of $8.7 million,  or 7.0% over June 30, 1999.  The
loan  portfolio grew by a record $12.7  million,  or 15.4%,  during fiscal 2000,
while deposits increased by a record $ 9.1 million, or 9.0%, during the year.

Your  Corporation was able to report stable earnings by posting strong growth in
loans,  funded by  competitively  priced deposit  products,  which resulted in a
10.4%  increase  in net  interest  income and a 13.7%  increase in the return on
equity during the year.  Our  increased  earnings per share and return on equity
can be attributed to our successful  treasury share  repurchase  program and our
$1.00 per share special dividend paid during the year. The continued improvement
of these key  operating  statistics  is a  constant  goal of your  Corporation's
management and directors.

Our  corporate  focus for fiscal 2001 and beyond is a continuing  commitment  to
growth  and  service to our  community,  while  embracing  the  benefits  of new
technology  in our business.  ASB Financial and American  Savings Bank have long
stood for the promotion of our local  community,  and this  operating  objective
will  continue  as we meet the  needs of our  customers  through  new  products,
services  and  the  expansion  of  our  already  successful  loan,  deposit  and
investment products. The growth of our business will be accomplished through the
tireless  efforts  of our  employees,  without  whom we could  not have  built a
valuable franchise.

We remain  committed to the  enhancement of shareholder  value, as most recently
evidenced by a 10%  increase in our  quarterly  dividends  paid per share during
fiscal 2001 from $.10 to $.11, which was reflected in the dividends you received
in July 2000.

We wish to thank you as always for your continued support and patronage and look
forward to our continued successes together in 2001 and beyond.

Very truly yours,

ASB FINANCIAL CORP.


/s/Robert M. Smith

Robert M. Smith
President


<PAGE>


                         BUSINESS OF ASB FINANCIAL CORP.

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

ASB Financial  Corp.  ("ASB" or the  "Corporation"),  a unitary savings and loan
holding  company  incorporated  under the laws of the State of Ohio, owns all of
the  issued  and  outstanding  common  shares  of  American  Savings  Bank,  fsb
("American" or the "Savings  Bank"),  a savings bank chartered under the laws of
the United States.  ASB was formed in 1995 in connection  with the conversion of
American from a mutual savings  association to a stock savings  association (the
"Conversion") which was completed in May 1995. Other than investing excess funds
from the Conversion in investment and  mortgage-backed  and related  securities,
ASB's  activities  have been limited  primarily to holding the common  shares of
American.

Serving the Portsmouth,  Ohio, area since 1892,  American conducts business from
its office at 503 Chillicothe Street in Portsmouth, Ohio. The principal business
of  American  is the  origination  of  loans  secured  by  one-  to  four-family
residential  real  estate  located in  American's  primary  market  area,  which
consists of the City of Portsmouth and contiguous areas of Scioto County,  Ohio.
American also  originates  loans secured by  multifamily  residences  (over four
units)  and  nonresidential   real  estate  and  purchases  interests  in  loans
originated   by  other   lenders   secured  by   multifamily   real  estate  and
nonresidential real estate located outside of American's primary market area. In
addition to real estate lending, American invests in mortgage-backed securities,
U.S.  Government  and agency  obligations  and other  investments  permitted  by
applicable law. Funds for lending and other  investment  activities are obtained
primarily from savings  deposits,  which are insured up to applicable  limits by
the Federal Deposit Insurance Corporation (the "FDIC"), and from borrowings from
the Federal Home Loan Bank (the "FHLB") of Cincinnati.

ASB is subject  to  regulation,  supervision  and  examination  by the Office of
Thrift  Supervision of the United States Department of the Treasury (the "OTS").
American is subject to regulation,  supervision  and  examination by the OTS and
the FDIC. American is also a member of the FHLB of Cincinnati.

ASB's office is located at 503 Chillicothe Street,  Portsmouth,  Ohio 45662. The
telephone number is (740) 354-3177.


                              MARKET PRICE OF ASB'S
                  COMMON SHARES AND RELATED SHAREHOLDER MATTERS
===============================================================================

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

There were 1,569,558 common shares of ASB outstanding on September 6, 2000, held
of record by approximately 821 shareholders.  Price information for ASB's common
shares is quoted on the  Nasdaq  National  Market  ("Nasdaq")  under the  symbol
"ASBP."









                                       2
<PAGE>


The table below sets forth the high and low closing prices for the common shares
of ASB, as quoted by Nasdaq,  together with  dividends  declared per share,  for
each quarter of fiscal 2000 and 1999.

<TABLE>
<CAPTION>
                                                                 Cash dividends
Quarter Ended                   High Close      Low Close           declared
<S>                                <C>             <C>                <C>
Fiscal 1999
   September 30, 1998            $13.38           $10.88             $.10
   December 31, 1998             $12.75           $ 9.81             $.10
   March 31, 1999                $12.38           $10.88             $.10
   June 30, 1999                 $12.75           $10.38             $.10

Fiscal 2000
   September 30, 1999            $12.75           $10.13            $1.10
   December 31, 1999             $11.25           $ 9.00            $ .10
   March 31, 2000                $10.00           $ 7.19            $ .10
   June 30, 2000                 $10.75           $ 7.88            $ .11
</TABLE>


The  income  of ASB  consists  of  interest  and  dividends  on  investment  and
mortgage-backed  and related  securities and dividends which may periodically be
declared and paid by the Board of Directors of American on the common  shares of
American held by ASB.

In addition to certain federal income tax considerations, OTS regulations impose
limitations  on the payment of  dividends  and other  capital  distributions  by
savings  associations.  Under OTS  regulations  applicable to converted  savings
associations,  American is not  permitted  to pay a cash  dividend on its common
shares if American's  regulatory  capital  would,  as a result of the payment of
such dividend,  be reduced below the amount required for the liquidation account
established in connection with the Conversion or applicable  regulatory  capital
requirements prescribed by the OTS.

Under the regulations,  a savings association that, immediately prior to, and on
a pro-forma basis after giving effect to a proposed  capital  distribution,  has
total capital (as defined by OTS  regulations)  that is equal to or greater than
the  amount  of  its  "well-capitalized"   capital  requirement,   is  generally
permitted,  without OTS approval (but subsequent to 30 days' prior notice of the
planned  dividend to the OTS) to make  capital  distributions  during a calendar
year in an amount  not to exceed  its net  income for that year to date plus its
retained net income for the preceding two years. Savings associations which have
total capital in excess of the "well-capitalized" capital requirement, and which
have  been  notified  by the OTS  that  they  are in need  of more  than  normal
supervision can be subject to greater restrictions on dividends.  In addition, a
savings  association that fails to meet current minimum capital  requirements is
prohibited from making any capital  distributions  without the prior approval of
the  OTS.  American  currently  meets  the  definition  of a  "well-capitalized"
institution  and,  unless the OTS  determines  that  American is an  institution
requiring more than normal supervision, may pay dividends in accordance with the
foregoing provisions of the OTS regulations.










                                       3

<PAGE>



                              SELECTED CONSOLIDATED
                      FINANCIAL INFORMATION AND OTHER DATA

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

The following table sets forth certain  information  concerning the consolidated
financial condition,  earnings and other data regarding ASB at the dates and for
the periods indicated.
<TABLE>
<CAPTION>

Selected consolidated financial                                                At June 30,
condition data:                                           -------------------------------------------------------
                                                           2000        1999         1998        1997        1996
                                                          ------      ------       ------      ------      ------
                                                                             (In thousands)
Total amount of:
<S>                                                         <C>         <C>          <C>         <C>          <C>
  Assets                                                 $131,898    $123,248     $116,437    $112,469    $112,922
  Cash and cash equivalents (1)                             5,069       7,566       13,890       3,850       3,836
  Certificates of deposit in other financial                    -         293        2,004       4,258       6,702
    institutions
  Investment securities available for sale - at market     19,112      19,372       11,835      18,660      19,284
  Mortgage-backed securities available for sale - at
    market                                                  8,616      10,232        8,924       8,560      10,728
  Loans receivable - net                                   95,084      82,430       76,550      74,136      68,455
  Real estate acquired through foreclosure - net                -           -          157           -         663
  Deposits                                                110,007     100,954       93,477      89,752      83,395
  Advances from the FHLB                                    7,790       5,823        4,354       2,884       2,413
  Shareholders' equity, restricted (2)                     12,581      15,040       14,490      17,701      25,613

</TABLE>

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

(1)  Consists of cash and due from banks and interest-bearing  deposits in other
     financial institutions.

(2)  At June 30, 2000, 1999, 1998, 1997 and 1996, includes $(592,000), $265,000,
     $714,000, $412,000 and $124,000, respectively, of unrealized (losses) gains
     on securities designated as available for sale, net of related tax effects,
     pursuant to Statement of Financial Accounting Standards ("SFAS") No. 115.





















                                       4
<PAGE>




<TABLE>
<CAPTION>

Selected consolidated operating                                          Year ended June 30,
data:                                                ---------------------------------------------------------
                                                      2000        1999         1998         1997         1996
                                                     ------      ------       ------       ------       ------
                                                              (In thousands, except per share data)
<S>                                                    <C>          <C>         <C>          <C>          <C>
Interest income                                      $9,257       $8,580      $8,541       $8,393       $8,173
Interest expense                                      5,427        5,112       4,961        4,686        4,310
                                                      -----        -----       -----        -----        -----
Net interest income                                   3,830        3,468       3,580        3,707        3,863
Provision for (recoveries of) losses on loans             1           (1)         (5)          28            -
                                                      -----        -----       -----        -----        -----
Net interest income after provision for
   (recoveries of) losses on loans                    3,829        3,469       3,585        3,679        3,863
Other income                                            354          330         281          364          195
General, administrative and other expense             2,673        2,286       2,345        3,054        2,373
                                                      -----        -----       -----        -----        -----
Earnings before income taxes                          1,510        1,513       1,521          989        1,685
Federal income taxes                                    426          433         445          322          574
                                                      -----        -----       -----        -----        -----
Net earnings                                         $1,084       $1,080      $1,076       $  667       $1,111
                                                      =====        =====       =====        =====        =====

Earnings per share
  Basic                                                $.70         $.68        $.68         $.42         $.69
                                                        ===          ===         ===          ===          ===
  Diluted                                              $.70         $.67        $.67         $.41         $.69
                                                        ===          ===         ===          ===          ===
</TABLE>








                                       5
<PAGE>


<TABLE>
<CAPTION>
                                                                      Year ended June 30,
Selected financial ratios:                            2000         1999        1998         1997        1996
                                                      ------       ------     -------      ------      ------
<S>                                                     <C>           <C>        <C>         <C>          <C>
Return on average assets                                 .86%         .90%        .95%         .59%       1.01%
Average interest rate spread during period              2.74         2.54        2.46         2.41        2.55
Net interest margin                                     3.15         3.04        3.25         3.39        3.69
Return on average equity                                8.21         7.22        6.38         3.15        4.30
Equity to total assets at end of period                 9.54        12.20       12.44        15.74       22.68
Average interest-earning assets to average
 interest-bearing liabilities                         109.25       111.02      117.41       122.77      127.55
Net interest income to general, administrative
 and other expense                                    143.28       151.71      152.67       121.38      162.79
General, administrative and other expense to
 average total assets                                   2.13         1.91        2.08         2.70        2.16
Nonperforming assets to total assets                     .21          .31         .34         1.02        1.61
Loan loss allowance to nonperforming loans            257.30       193.40      316.25        71.62       76.34
Dividend payout ratio                                 201.43        58.82      352.94     1,285.71       47.10

</TABLE>



<PAGE>


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

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

                                     GENERAL


ASB was  incorporated  for the purpose of owning all of the  outstanding  common
shares of American  following the  Conversion.  As a result,  the discussion and
analysis that follows focuses  primarily on the financial  condition and results
of  operations  of  American.  The  following  discussion  and  analysis  of the
consolidated  financial  condition and results of operations of ASB and American
should  be read in  conjunction  with and  with  reference  to the  consolidated
financial statements, and the notes thereto, presented in this Annual Report.


                         CHANGES IN FINANCIAL CONDITION
                       FROM JUNE 30, 1999 TO JUNE 30, 2000


ASB's total assets  amounted to $131.9  million at June 30, 2000, an increase of
$8.7 million, or 7.0%, over 1999 levels. The increase in total assets was funded
primarily from a $9.1 million  increase in deposits and a $2.0 million  increase
in FHLB advances.

Cash, interest-bearing deposits and certificates of deposit totaled $5.1 million
at June 30,  2000,  a decrease  of $2.8  million,  or 35.5%,  from 1999  levels.
Investment  securities  totaled  $19.1  million at June 30,  2000, a decrease of
$260,000, or 1.3%, from the balance at June 30, 1999. Mortgage-backed securities
decreased by $1.6  million,  or 15.8%,  due  primarily  to principal  repayments
totaling $1.3 million.

Loans  receivable  increased  by $12.7  million,  or 15.4%,  to a total of $95.1
million at June 30,  2000,  compared  to $82.4  million at June 30,  1999.  Loan
disbursements of $30.0 million and purchases of $1.9 million exceeded  principal
repayments  of $19.2  million  during  fiscal 2000.  Growth in loans  secured by
residential real estate totaled $5.1 million,  or 8.1%, while the nonresidential
portfolio  increased by $3.2 million,  or 37.5%, and the consumer loan portfolio
increased by $4.4 million, or 38.0%.

At June 30,  2000,  American's  allowance  for  loan  losses  totaled  $723,000,
representing .74% of total loans and 257.3% of nonperforming  loans. At June 30,
1999, the allowance for loan losses totaled $733,000, or .85% of total loans and
193.4% of  nonperforming  loans.  Nonperforming  loans  amounted to $281,000 and
$379,000 at June 30, 2000 and 1999,  respectively.  Although management believes
that its allowance for loan losses at June 30, 2000,  was adequate  based on the
available facts and circumstances,  there can be no assurances that additions to
such allowance will not be necessary in future  periods,  which could  adversely
affect ASB's results of operations.

Deposits  increased by $9.1 million,  or 9.0%,  during fiscal 2000 to a total of
$110.0  million  at  June  30,  2000.  The  increase  resulted   primarily  from
management's continuing efforts to maintain growth in deposits through marketing
and pricing strategies.  Borrowings  increased by $2.0 million, or 33.8%, during
fiscal 2000,  compared to 1999.  Proceeds  from  advances and growth in deposits
were generally used to fund new loan originations.




                                       6
<PAGE>

Shareholders'  equity totaled $12.6 million at June 30, 2000, a decrease of $2.5
million,  or 16.3%, from June 30, 1999 levels.  The decrease resulted  primarily
from dividends paid of $2.1 million, treasury stock repurchases of $949,000, and
an $857,000 decline in unrealized gains on available for sale securities,  which
were partially offset by net earnings of $1.1 million.


                         COMPARISON OF OPERATING RESULTS
                   FOR THE YEARS ENDED JUNE 30, 2000 AND 1999


General.  Net  earnings  amounted to $1.1 million for the fiscal year ended June
30,  2000,  an increase of $4,000,  or .4%,  over fiscal  1999.  The increase in
earnings  resulted  primarily from a $362,000 increase in net interest income, a
$24,000  increase in other  income and a $7,000  decrease in the  provision  for
federal income taxes, which were substantially  offset by a $387,000 increase in
general, administrative and other expense.

Net Interest  Income.  Total  interest  income  amounted to $9.3 million for the
fiscal year ended June 30, 2000, an increase of $677,000,  or 7.9%,  over fiscal
1999.  Interest income on loans totaled $7.2 million in fiscal 2000, an increase
of $759,000,  or 11.9%.  This increase was due primarily to an $8.0 million,  or
10.1%,  increase in the weighted-average  balance of loans outstanding,  coupled
with a 13 basis  point  increase  in the  average  yield year to year.  Interest
income on  mortgage-backed  securities  decreased  by $108,000,  or 15.2%,  as a
result  of an  $854,000,  or  8.0%,  decrease  in the  weighted-average  balance
outstanding and a 52 basis point decline in yield year to year.  Interest income
on investment securities and interest-bearing  deposits increased by $26,000, or
1.8%,  due primarily to a 7 basis point increase in the  weighted-average  yield
and a $125,000,  or .5%, increase in the  weighted-average  balance  outstanding
year to year.

Interest  expense  totaled $5.4 million for the fiscal year ended June 30, 2000,
an increase of $315,000, or 6.2%, over the $5.1 million total recorded in fiscal
1999. Interest expense on deposits increased by $236,000, or 4.9%, due primarily
to  a  $7.3  million,  or  7.5%,  increase  in  the   weighted-average   balance
outstanding,  which was  partially  offset by a 12 basis  point  decrease in the
weighted-average  cost of deposits year to year.  Interest expense on borrowings
increased  by $79,000,  or 25.1%,  due  primarily to a $1.0  million,  or 17.5%,
increase  in the  weighted-average  balance  outstanding  and a 34  basis  point
increase in the average cost of borrowings, to 5.72% in fiscal 2000.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest income increased by $362,000,  or 10.4%, to a total of $3.8 million
for the fiscal  year ended June 30,  2000,  compared  to $3.5  million in fiscal
1999.  The interest rate spread  increased by 20 basis points to 2.74% in fiscal
2000 from 2.54% in fiscal 1999, and the net interest  margin  increased to 3.15%
in 2000 from 3.04% in 1999.

Provision for Losses on Loans.  American charges a provision for losses on loans
to earnings to bring the total  allowance for loan losses to a level  considered
appropriate by management based on historical experience, the volume and type of
lending  conducted by American,  the status of past due  principal  and interest
payments, general economic conditions, particularly as such conditions relate to
American's  market area,  and other  factors  related to the  collectibility  of
American's loan portfolio.  As a result of such analysis,  management determined
that the  allowance  for loan losses was  adequate  and elected to record only a
minimal  provision  for losses on loans for the fiscal year ended June 30, 2000.
There can be no  assurance  that the loan loss  allowance  will be  adequate  to
absorb  losses  on known  nonperforming  assets  or that the  allowance  will be
adequate to cover losses on nonperforming assets in the future.


                                       7
<PAGE>

Other Income.  Other income totaled  $354,000 for the fiscal year ended June 30,
2000,  an increase of $24,000,  or 7.3%,  over the  $330,000  recorded in fiscal
1999.  The  increase  resulted  primarily  from an  increase of $73,000 in other
operating  income,  which was partially offset by a $52,000 decrease in the gain
on sale of investment  securities  year to year. The increase in other operating
income was  comprised of a $35,000,  or 53.8%,  increase in revenues  related to
sales of non-deposit  investment  products through an agency  arrangement with a
third-party  vendor,  coupled  with an  increase  in fees on loans and  deposits
transactions.

General,  Administrative  and Other Expense.  General,  administrative and other
expense  totaled  $2.7  million  for the fiscal  year ended  June 30,  2000,  an
increase of $387,000,  or 16.9%,  over the total  recorded in fiscal  1999.  The
increase  resulted  primarily  from a $315,000,  or 26.1%,  increase in employee
compensation  and  benefits,  a $31,000,  or 27.9%,  increase in  occupancy  and
equipment expense, a $55,000, or 22.5%,  increase in data processing costs and a
$14,000, or 3.0%, increase in other operating expense.  The increase in employee
compensation  and benefits was due  primarily to an increase in staffing  levels
year to year and an  increase  in expense  related to  employee  benefit  plans,
coupled with a decrease in deferred loan  origination  costs  resulting from the
decrease in loan volume in fiscal 2000.  The increase in occupancy and equipment
expense resulted  primarily from  depreciation  expense  associated with capital
additions in 1999 and 2000. The increase in data processing was due primarily to
American's  overall growth year to year,  coupled with costs related to enhanced
computer programs for loan underwriting and item-processing.

Federal Income Taxes.  The provision for federal  income taxes totaled  $426,000
for the fiscal year ended June 30, 2000, a decrease of $7,000, or 1.6%, from the
$433,000  recorded in fiscal 1999. The decrease was due primarily to the effects
of tax credits  realized  from  American's  investment  in a low income  housing
project.  ASB's  effective  tax rates were 28.2% and 28.6% for the fiscal  years
ended June 30, 2000 and 1999, respectively.



















                                       8
<PAGE>



                         COMPARISON OF OPERATING RESULTS
                   FOR THE YEARS ENDED JUNE 30, 1999 AND 1998


General.  Net  earnings  amounted to $1.1 million for the fiscal year ended June
30,  1999,  an increase of $4,000,  or .4%,  over fiscal  1998.  The increase in
earnings  resulted  primarily from a $49,000 increase in other income, a $59,000
decrease in general,  administrative and other expense and a $12,000 decrease in
the provision for federal  income taxes,  which were  substantially  offset by a
$112,000 decrease in net interest income.

Net Interest  Income.  Total  interest  income  amounted to $8.6 million for the
fiscal year ended June 30,  1999,  an increase of $39,000,  or .5%,  over fiscal
1998.  Interest income on loans totaled $6.4 million in fiscal 1999, an increase
of $31,000,  or .5%.  This  increase was due  primarily  to a $500,000,  or .6%,
increase in the weighted-average  balance of loans outstanding in 1999. Interest
income on  mortgage-backed  securities  increased  by $115,000,  or 19.4%,  as a
result of a $2.5 million,  or 31.0%,  increase in the  weighted-average  balance
outstanding,  which was  partially  offset by a 65 basis point decline in yield.
Interest income on investment securities and interest-bearing deposits decreased
by  $107,000,  or 6.8%,  due  primarily  to a 73  basis  point  decrease  in the
weighted-average yield, which was partially offset by a $1.0 million increase in
the weighted-average balance outstanding year to year.

Interest  expense  totaled $5.1 million for the fiscal year ended June 30, 1999,
an increase of $151,000, or 3.1%, over the $5.0 million total recorded in fiscal
1998.  Interest expense on deposits increased by $71,000, or 1.5%, due primarily
to a $6.7 million, or 7.4%, increase in the weighted-average balance outstanding
year to year,  which was  partially  offset by a 29 basis point  decrease in the
weighted-average  yield  from  year to  year.  Interest  expense  on  borrowings
increased by $80,000,  or 34.0%, due primarily to a $2.3 million increase in the
weighted-average balance outstanding,  which was partially offset by a 132 basis
point decrease in the average cost of borrowings, to 5.38% in fiscal 1999.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest income  decreased by $112,000,  or 3.1%, to a total of $3.5 million
for the fiscal  year ended June 30,  1999,  compared  to $3.6  million in fiscal
1998.  The  interest  rate spread  increased  by eight basis  points to 2.54% in
fiscal 1999 from 2.46% in fiscal 1998,  while the net interest margin  decreased
to 3.04% in 1999 from 3.25% in 1998.

Provision  for  Losses  on  Loans.  As a result  of an  analysis  of  American's
historical experience, the volume and type of lending conducted by American, the
status of past due principal and interest payments, general economic conditions,
particularly  as such  conditions  relate to American's  market area,  and other
factors related to the  collectibility of American's loan portfolio,  management
determined that the allowance for loan losses was adequate and elected to record
no  provision  for losses on loans for the fiscal  years ended June 30, 1999 and
1998.

Other Income.  Other income totaled  $330,000 for the fiscal year ended June 30,
1999,  an increase of $49,000,  or 17.4%,  over the $281,000  recorded in fiscal
1998.  The increase  resulted  primarily  from an increase of $39,000 in gain on
sale of investment  securities year to year, coupled with an increase of $13,000
in other operating income.

General,  Administrative  and Other Expense.  General,  administrative and other
expense totaled $2.3 million for the fiscal year ended June 30, 1999, a decrease
of $59,000,  or 2.5%,  from the total  recorded  in fiscal  1998.  The  decrease
resulted primarily from a $44,000,  or 3.5%,  decrease in employee  compensation


                                       9
<PAGE>

and benefits,  coupled with a $43,000, or 17.6% decline in franchise taxes and a
$14,000,  or 2.9%,  decrease in other  operating  expense,  which were partially
offset by a $48,000,  or 24.5%,  increase in data processing costs. The decrease
in employee compensation and benefits was due primarily to a decline in staffing
levels year to year, coupled with an increase in deferred loan origination costs
resulting  from the  increase in loan  volume in fiscal  1999.  The  decrease in
franchise  taxes  resulted  from ASB's  decrease  in equity  capital  due to its
dividend  distributions  in fiscal  1998 and 1997,  coupled  with a decrease  in
franchise  tax rates.  The  increase in data  processing  was due  primarily  to
American's overall growth year to year.

Federal Income Taxes.  The provision for federal  income taxes totaled  $433,000
for the fiscal year ended June 30,  1999, a decrease of $12,000,  or 2.7%,  from
the  $445,000  recorded in fiscal 1998.  The  decrease  was due  primarily to an
$8,000,  or .5%,  decrease in pretax  earnings  year to year,  coupled  with the
effects of tax  credits  realized  from  American's  investment  in a low income
housing  project.  ASB's effective tax rates were 28.6% and 29.3% for the fiscal
years ended June 30, 1999 and 1998, respectively.















                                       10
<PAGE>




                  AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA


The  following  table sets forth certain  information  relating to ASB's average
balance sheet and reflects the average yield on interest-earning  assets and the
average cost of  interest-bearing  liabilities for the periods  indicated.  Such
yields and costs are  derived  by  dividing  income or  expense  by the  average
monthly  balance of  interest-earning  assets or  interest-bearing  liabilities,
respectively,  for the periods  presented.  Average  balances  are derived  from
average monthly balances, which include nonaccruing loans in the loan portfolio,
net of the allowance for loan losses.
<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                          ---------------------------------------------------------------------------------------------------
                                       2000                             1999                               1998
                          -------------------------------   -------------------------------   -------------------------------
                            Average     Interest              Average    Interest               Average     Interest
                          outstanding    earned/   Yield/   outstanding   earned/   Yield/    outstanding    earned/    Yield/
                            balance      paid      rate      balance      paid     rate        balance       paid       rate

                                                       (Dollars in thousands)
<S>                         <C>         <C>       <C>        <C>         <C>       <C>          <C>          <C>        <C>
Interest-earning assets:
  Loans receivable          $ 87,363      $7,153      8.19%    $ 79,368     $6,394     8.06%     $ 78,868      $6,363      8.07%
  Mortgage-backed
    securities                 9,779         601      6.15       10,633        709     6.67         8,118         594      7.32
  Investment securities and
    other interest-earning
    assets                    24,351       1,503      6.17       24,226      1,477     6.10        23,177       1,584      6.83
                             -------       -----      ----      -------      -----     ----       -------       -----      ----

   Total interest-earning
     assets                  121,493       9,257      7.62      114,227      8,580     7.51       110,163        8,541     7.75

Non-interest-earning assets    3,951                              5,710                             2,824
                             -------                            -------                           -------

Total assets                $125,444                           $119,937                          $112,987
                             =======                            =======                           =======

Interest-bearing liabilities:
  Deposits                  $104,324       5,033      4.82     $ 97,032      4,797     4.94      $ 90,317        4,726     5.23
  Borrowings                   6,884         394      5.72        5,857        315     5.38         3,508          235     6.70
                             -------       -----      ----      -------      -----     ----       -------       -----      ----

   Total interest-bearing
     liabilities             111,208       5,427      4.88      102,889      5,112     4.97        93,825        4,961     5.29
                                           -----      ----                   -----     ----                      -----     ----

Non-interest-bearing
  liabilities                  1,032                              2,088                             2,289
                             -------                            -------                           -------

   Total liabilities         112,240                            104,977                            96,114

Shareholders' equity          13,204                             14,960                            16,873
                             -------                            -------                           -------

   Total liabilities and
     shareholders' equity   $125,444                           $119,937                          $112,987
                             =======                            =======                           =======

Net interest income                       $3,830                            $3,468                             $3,580
                                           =====                             =====                              =====

Interest rate spread                                  2.74%                            2.54%                               2.46%
                                                      ====                             ====                                ====

Net interest margin (net
  interest income as a
  percent of average
  interest-earning assets)                            3.15%                            3.04%                               3.25%
                                                      ====                             ====                                ====

Average interest-earning
  assets to average interest-
  bearing liabilities                               109.25%                          111.02%                             117.41%
                                                    ======                           ======                              ======
</TABLE>

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



                                       11
<PAGE>


The table below  describes  the extent to which  changes in  interest  rates and
changes in volume of interest-earning  assets and  interest-bearing  liabilities
have affected ASB's interest income and expense during the years indicated.  For
each  category  of  interest-earning  assets and  interest-bearing  liabilities,
information is provided on changes attributable to (i) changes in volume (change
in volume  multiplied by prior year rate),  (ii) changes in rate (change in rate
multiplied by prior year volume) and (iii) total changes in rate and volume. The
combined  effects of changes in both volume and rate, which cannot be separately
identified,  have been allocated proportionately to the change due to volume and
the change due to rate:
<TABLE>
<CAPTION>

                                                               Year ended June 30,
                                                    2000 vs. 1999              1999 vs. 1998
                                            --------------------------    --------------------------
                                                Increase                      Increase
                                               (decrease)                    (decrease)
                                                 due to                        due to
                                            ---------------               ---------------
                                            Volume     Rate      Total    Volume     Rate     Total
                                            ------     ----      -----    ------     ----     -----
                                                                 (In thousands)
<S>                                            <C>       <C>         <C>      <C>      <C>        <C>
Interest-earning assets:
   Loans receivable                           $652      $107        $759    $  40     $ (9)     $  31
   Mortgage-backed securities                  (54)      (54)       (108)     174      (59)       115
   Investment securities and interest -
     bearing assets                              8        18          26       67     (174)      (107)
                                               ---       ---         ---     ----      ---       ----

       Total interest-earning assets           606        71         677      281     (242)        39
                                               ---       ---         ---     ----      ---       ----

Interest-bearing liabilities:
   Deposits                                    353      (117)        236      341     (270)        71
   Borrowings                                   83        (4)         79      117      (37)        80
                                               ---       ---         ---     ----      ---       ----

Total interest-bearing liabilities             436      (121)        315      458     (307)       151
                                               ---       ---         ---     ----      ---       ----

 Increase (decrease) in net interest
   income                                     $170      $192        $362    $(177)     $ 65     $(112)
                                               ===       ===         ===     ====       ===      ====
</TABLE>


                         ASSET AND LIABILITY MANAGEMENT


American, like other financial institutions, is subject to interest rate risk to
the  extent  that  its  interest-earning  assets  reprice  differently  than its
interest-bearing  liabilities.  As a part of its effort to monitor its  interest
rate  risk,  American  reviews  the  reports  of the OTS  which  set  forth  the
application of the "net portfolio value" ("NPV")  methodology adopted by the OTS
as  part  of  its  risk-based  capital  regulations.  Although  American  is not
currently subject to the NPV regulation,  the application of the NPV methodology
may illustrate American's interest rate risk.

Generally,  NPV is the  discounted  present  value  of  the  difference  between
incoming cash flows on interest-earning and other assets and outgoing cash flows
on interest-bearing  liabilities. The application of the methodology attempts to
quantify  interest  rate risk as the change in the NPV which would result from a
theoretical  200  basis  point (1 basis  point  equals  .01%)  change  in market
interest  rates.  Both a 200 basis point increase in market interest rates and a
200 basis point decrease in market interest rates are considered.

The  following  table  presents,  at June 30, 2000 and 1999,  an analysis of the
interest rate risk of American,  as measured by changes in NPV for instantaneous
and sustained  parallel  shifts of 100 basis point  movements in market interest
rates.  The table also  contains the policy limits set by the Board of Directors

                                       12
<PAGE>

of  American  as the  maximum  change in NPV that the Board of  Directors  deems
advisable in the event of various  changes in interest  rates.  Such limits have
been established with consideration of the dollar impact of various rate changes
and the strong capital position of American.
<TABLE>
<CAPTION>

                                                At June 30, 2000                   At June 30, 1999
                                           -------------------------            -------------------------
Changes in interest rate   Board limit     $ change         % change            $ change        % change
     (basis points)        % changes       in NPV           in NPV              in NPV            in NPV
------------------------   -----------     ---------        --------            --------         --------

                                         (Dollars in thousands)
<S>                             <C>             <C>             <C>                <C>              <C>
        +300                  (40)%        $(5,088)            (41)%           $(3,945)            (26)%
        +200                  (30)          (3,358)            (27)             (2,489)            (16)
        +100                  (20)          (1,633)            (13)             (1,109)             (7)
           -                    -                -               -                   -               -
        -100                   20            1,224              10                 560               4
        -200                   30            1,613              13                 837               5
        -300                   40            2,066              17               1,345               9
</TABLE>


While the  model  reflects  a 41%  decline  in NPV  assuming  a 300 basis  point
increase in interest  rates,  which would exceed the Board approved limit of 40%
by 1%, management has taken steps to ensure immediate compliance with the policy
during the first quarter of fiscal 2001.

In the event that interest rates should rise from current levels, American's net
interest income could be expected to be negatively  affected.  Moreover,  rising
interest rates could  negatively  affect  American's  earnings due to diminished
loan demand.























                                       13
<PAGE>


                         LIQUIDITY AND CAPITAL RESOURCES


Liquidity refers to the ability of an institution to generate sufficient cash to
fund current loan demand,  meet deposit  withdrawals and pay operating expenses.
Liquidity is influenced by financial market conditions, fluctuations in interest
rates, general economic conditions and regulatory requirements. ASB's liquidity,
primarily  represented by cash equivalents,  interest-bearing  deposits in other
financial institutions and investment securities,  is a result of the operating,
investing and financing activities of American.  These activities are summarized
below on a consolidated basis for the years ended June 30, 2000, 1999, and 1998:

<TABLE>
<CAPTION>
                                                                              Year ended June 30,
                                                                   2000                1999               1998
                                                                 -------             -------            -------
                                                                                 (In thousands)
<S>                                                               <C>                  <C>                 <C>
Net cash from operating activities                               $ 1,554             $ 1,323            $ 1,145
Net cash from investing activities                               (12,065)            (13,629)             6,618
Net cash from financing activities                                 8,014               5,982              2,277
                                                                  ------              ------             ------
Net change in cash and cash equivalents                           (2,497)             (6,324)            10,040
Cash and cash equivalents at the beginning of the year             7,566              13,890              3,850
                                                                  ------              ------             ------
Cash and cash equivalents at the end of the year                 $ 5,069             $ 7,566            $13,890
                                                                  ======              ======             ======

</TABLE>

American   generally   strives  to   maintain   liquidity   (defined   as  cash,
interest-bearing deposits and investment securities with terms of less than five
years) in a range of 10% to 25% of total assets. OTS regulations  require that a
savings  association  maintain an average  daily balance of liquid assets (cash,
certain time deposits and specified United States  Government,  state or federal
agency  obligations)  equal to a monthly  average of not less than 4% of its net
withdrawable  savings  deposits  plus  borrowings  payable  in one year or less.
Federal  regulations  also require each association to maintain an average daily
balance of short-term liquid assets at a specified percentage,  currently 1%, of
the total of its net withdrawable savings accounts and borrowings payable in one
year or less.  Monetary  penalties may be imposed upon  associations  failing to
meet liquidity  requirements.  At June 30, 2000, eligible liquidity of American,
as computed under current  regulations,  was  approximately  $23.6  million,  or
20.5%,   and  exceeded  the  then  applicable  4.0%  liquidity   requirement  by
approximately $19.0 million, or 16.5%.

At June 30, 2000,  American had outstanding  commitments of  approximately  $1.3
million to originate  loans.  Additionally,  American was obligated under unused
lines and letters of credit totaling $4.3 million. In the opinion of management,
all loan  commitments  had  interest  rates  which  equaled or  exceeded  market
interest  rates as of June 30,  2000,  and will be funded from  existing  excess
liquidity and normal cash flow from operations.

American is required by OTS regulations to maintain specified minimum amounts of
capital.  At June 30, 2000,  American  exceeded all applicable  minimum  capital
requirements.  The following table sets forth the amount and percentage level of
regulatory  capital of American at June 30,  2000,  and the minimum  requirement
amounts.  Tangible  and core capital are  reflected as a percentage  of adjusted
total  assets.  Risk-based  (or  total)  capital,  which  consists  of core  and
supplementary capital, is reflected as a percentage of risk-weighted assets.







                                       14
<PAGE>

<TABLE>
<CAPTION>

                                                 June 30, 2000
                                                                                   Excess of
                                                                             regulatory capital
                                Regulatory                Current                over current
                                 capital                requirement               requirement
                             -----------------       -----------------       -----------------
                              Amount   Percent        Amount   Percent        Amount   Percent
                                                   (Dollars in thousands)
<S>                             <C>        <C>          <C>      <C>            <C>       <C>
Tangible capital             $10,265      7.9%        $1,949     1.5%          $8,316    6.4%

Core capital                 $10,265      7.9%        $5,196     4.0%          $5,069    3.9%

Risk-based capital           $10,988    15.1%         $5,824     8.0%          $5,164    7.1%
</TABLE>


                   EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS


In June 1998, the Financial  Accounting Standards Board (the "FASB") issued SFAS
No. 133,  "Accounting for Derivative  Instruments and Hedging Activities," which
requires entities to recognize all derivatives in their financial  statements as
either assets or liabilities measured at fair value. SFAS No. 133 also specifies
new methods of accounting  for hedging  transactions,  prescribes  the items and
transactions  that may be hedged,  and specifies  detailed criteria to be met to
qualify for hedge accounting.

The definition of a derivative  financial instrument is complex, but in general,
it is an instrument  with one or more  underlyings,  such as an interest rate or
foreign exchange rate, that is applied to a notional  amount,  such as an amount
of currency,  to determine the settlement  amount(s).  It generally  requires no
significant initial investment and can be settled net or by delivery of an asset
that is  readily  convertible  to cash.  SFAS No.  133  applies  to  derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

SFAS No.  133,  as amended  by SFAS no.  137,  is  effective  for  fiscal  years
beginning  after June 15, 2000. On adoption,  entities are permitted to transfer
held-to-maturity  debt securities to the  available-for-sale or trading category
without  calling into  question  their intent to hold other debt  securities  to
maturity in the future. The Corporation adopted SFAS No. 133 as of July 1, 2000,
as  required,  without  material  effect on  financial  condition  or results of
operations.
















                                       15
<PAGE>


                         REPORT OF INDEPENDENT CERTIFIED
                             PUBLIC ACCOUNTANTS AND
                        CONSOLIDATED FINANCIAL STATEMENTS

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

                                                                  PAGE

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                 17


FINANCIAL STATEMENTS

  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION                   18

  CONSOLIDATED STATEMENTS OF EARNINGS                              19

  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                  20

  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                  21

  CONSOLIDATED STATEMENTS OF CASH FLOWS                            22

  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                       24


















                                       16
<PAGE>


               Report of Independent Certified Public Accountants

Board of Directors
ASB Financial Corp.

We have audited the accompanying  consolidated statements of financial condition
of  ASB  Financial  Corp.  as of  June  30,  2000  and  1999,  and  the  related
consolidated statements of earnings,  comprehensive income, shareholders' equity
and cash flows for each of the three years ended June 30,  2000,  1999 and 1998.
These   consolidated   financial   statements  are  the  responsibility  of  the
Corporation's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  consolidated  financial  position of ASB Financial
Corp.  as of June  30,  2000  and  1999,  and the  consolidated  results  of its
operations  and its cash flows for each of the years ended June 30,  2000,  1999
and 1998, in conformity with generally accepted accounting principles.




/s/GRANT THORNTON LLP


Cincinnati, Ohio
August 21, 2000









                                       17
<PAGE>


                               ASB Financial Corp.
<TABLE>
<CAPTION>

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                    June 30,
                        (In thousands, except share data)

         ASSETS                                                                                2000                1999
<S>                                                                                           <C>                   <C>
Cash and due from banks                                                                    $    917            $    466
Interest-bearing deposits in other financial institutions                                     4,152               7,100
                                                                                            -------             -------
         Cash and cash equivalents                                                            5,069               7,566

Certificates of deposit in other financial institutions                                          -                  293
Investment securities available for sale - at market                                         19,112              19,372
Mortgage-backed securities available for sale - at market                                     8,616              10,232
Loans receivable - net                                                                       95,084              82,430
Office premises and equipment - at depreciated cost                                           1,366               1,047
Federal Home Loan Bank stock - at cost                                                          733                 778
Accrued interest receivable on loans                                                             63                  78
Accrued interest receivable on mortgage-backed securities                                        59                  66
Accrued interest receivable on investments and
  interest-bearing deposits                                                                     355                 290
Prepaid expenses and other assets                                                               542                 714
Prepaid federal income taxes                                                                    228                 200
Deferred federal income tax assets                                                              671                 182
                                                                                            -------             -------

         Total assets                                                                      $131,898            $123,248
                                                                                            =======             =======

         LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                                   $110,007            $100,954
Advances from the Federal Home Loan Bank                                                      7,790               5,823
Advances by borrowers for taxes and insurance                                                   173                 168
Accrued interest payable                                                                         89                  93
Other liabilities                                                                             1,258               1,170
                                                                                            -------             -------
         Total liabilities                                                                  119,317             108,208

Commitments                                                                                      -                   -

Shareholders' equity
  Preferred stock, 1,000,000 shares authorized, no par value;
    no shares issued                                                                             -                   -
  Common stock, 4,000,000 shares authorized, no par value; 1,746,924 and
    1,740,854 shares issued at June 30, 2000 and 1999, respectively                              -                   -
  Additional paid-in capital                                                                  8,454               8,306
  Retained earnings, restricted                                                               7,870               8,909
  Shares acquired by stock benefit plans                                                     (1,059)             (1,297)
  Accumulated comprehensive income (loss), unrealized gains (losses) on securities
    designated as available for sale, net of related tax effects                               (592)                265
  Less 177,366 and 86,066 shares of treasury stock - at cost                                 (2,092)             (1,143)
                                                                                            -------             -------
         Total shareholders' equity                                                          12,581              15,040
                                                                                            -------             -------

         Total liabilities and shareholders' equity                                        $131,898            $123,248
                                                                                            =======             =======
</TABLE>


The accompanying notes are an integral part of these statements.



                                       18
<PAGE>


                               ASB Financial Corp.
<TABLE>
<CAPTION>

                       CONSOLIDATED STATEMENTS OF EARNINGS

                           For the year ended June 30,
                        (In thousands, except share data)


                                                                                2000             1999              1998
<S>                                                                             <C>              <C>                <C>
Interest income
  Loans                                                                       $7,153           $6,394            $6,363
  Mortgage-backed securities                                                     601              709               594
  Investment securities                                                        1,491            1,405             1,390
  Interest-bearing deposits and other                                             12               72               194
                                                                               -----            -----             -----
         Total interest income                                                 9,257            8,580             8,541

Interest expense
  Deposits                                                                     5,033            4,797             4,726
  Borrowings                                                                     394              315               235
                                                                               -----            -----             -----
         Total interest expense                                                5,427            5,112             4,961
                                                                               -----            -----             -----

         Net interest income                                                   3,830            3,468             3,580

Provision for (recoveries of) losses on loans                                      1               (1)               (5)
                                                                               -----            -----             -----

         Net interest income after provision
           for (recoveries of) losses on loans                                 3,829            3,469             3,585

Other income
  Gain on sale of investment securities                                            9               61                22
  Loss on sale of real estate acquired through foreclosure                        -                (3)               -
  Other operating                                                                345              272               259
                                                                               -----            -----             -----
         Total other income                                                      354              330               281

General, administrative and other expense
  Employee compensation and benefits                                           1,522            1,207             1,251
  Occupancy and equipment                                                        142              111               116
  Federal deposit insurance premiums                                              40               56                57
  Franchise taxes                                                                190              202               245
  Data processing                                                                299              244               196
  Other operating                                                                480              466               480
                                                                               -----            -----             -----
         Total general, administrative and other expense                       2,673            2,286             2,345
                                                                               -----            -----             -----

         Earnings before income taxes                                          1,510            1,513             1,521

Federal income taxes
  Current                                                                        474              355               438
  Deferred                                                                       (48)              78                 7
                                                                               -----            -----             -----
         Total federal income taxes                                              426              433               445
                                                                               -----            -----             -----

         NET EARNINGS                                                         $1,084           $1,080            $1,076
                                                                               =====            =====             =====

         EARNINGS PER SHARE
           Basic                                                                $.70             $.68              $.68
                                                                                 ===              ===               ===

           Diluted                                                              $.70             $.67              $.67
                                                                                 ===              ===               ===
</TABLE>


The accompanying notes are an integral part of these statements.


                                       19

<PAGE>


                               ASB Financial Corp.
<TABLE>
<CAPTION>

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                           For the year ended June 30,
                                 (In thousands)


                                                                                    2000            1999           1998
<S>                                                                                  <C>            <C>             <C>
Net earnings                                                                      $1,084          $1,080         $1,076

Other comprehensive income, net of tax:
  Unrealized holding gains (losses) on securities
    during the period, net of tax of $(437), $(210) and $163
    in 2000, 1999 and 1998, respectively                                            (851)           (409)           317

Reclassification adjustment for realized gains
  included in earnings, net of tax of $3, $21 and $7
  in 2000, 1999 and 1998, respectively                                                (6)            (40)           (15)
                                                                                   -----           -----          -----

Comprehensive income                                                              $  227          $  631         $1,378
                                                                                   =====           =====          =====

Accumulated comprehensive income (loss)                                           $ (592)         $  265         $  714
                                                                                   =====           =====          =====

</TABLE>


























The accompanying notes are an integral part of these statements.


                                       20
<PAGE>


                               ASB Financial Corp.
<TABLE>
<CAPTION>

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                For the years ended June 30, 2000, 1999 and 1998
                        (In thousands, except share data)
                                                                                               Unrealized
                                                                                              gains (losses)
                                                                                    Shares    on securities
                                                        Additional                 acquired   designated as
                                                Common    paid-in   Retained       by stock     available      Treasury
                                                 stock    capital   earnings    benefit plans   for sale          stock      Total
<S>                                               <C>       <C>        <C>            <C>          <C>           <C>          <C>
Balance at July 1, 1997                           $ -     $8,023    $11,187        $(1,921)      $ 412        $    -        $17,701

Amortization of expense related to stock
  benefit plans                                     -         85         -             244          -              -            329
Issuance of shares under stock option plan          -        196         -              -           -              -            196
Net earnings for the year ended June 30, 1998       -         -       1,076             -           -              -          1,076
Cash dividends of $2.40 per share                   -         -      (3,971)            -           -              -         (3,971)
Purchase of treasury shares - at cost               -         -          -              -           -          (1,143)       (1,143)
Unrealized gains on securities designated as
  available for sale, net of related tax effects    -         -          -              -          302             -            302
                                                   ---     -----    -------         ------         ---         ------        ------

Balance at June 30, 1998                            -      8,304      8,292         (1,677)        714         (1,143)       14,490

Amortization of expense related to stock
  benefit plans                                     -          2         -             380          -              -            382
Net earnings for the year ended June 30, 1999       -         -       1,080             -           -              -          1,080
Cash dividends of $.40 per share                    -         -        (463)            -           -              -           (463)
Unrealized losses on securities designated as
  available for sale, net of related tax effects    -         -          -              -         (449)            -           (449)
                                                   ---     -----    -------         ------         ---         ------        ------

Balance at June 30, 1999                            -      8,306      8,909         (1,297)        265         (1,143)       15,040

Amortization of expense related to stock
  benefit plans                                     -         87         -             238          -              -            325
Net earnings for the year ended June 30, 2000       -         -       1,084             -           -              -          1,084
Cash dividends of $1.41 per share                   -         -      (2,123)            -           -              -         (2,123)
Purchase of treasury shares - at cost               -         -          -              -           -            (949)         (949)
Issuance of shares under stock option plan          -         61         -              -           -              -             61
Unrealized losses on securities designated as
  available for sale, net of related tax effects    -         -          -              -         (857)            -           (857)
                                                   ---      -----     -----         ------        ----         ------        ------

Balance at June 30, 2000                          $ -      $8,454    $7,870        $(1,059)      $(592)       $(2,092)      $12,581
                                                   ===      =====     =====         ======        ====         ======        ======

</TABLE>


The accompanying notes are an integral part of these statements.



                                       21
<PAGE>


                               ASB Financial Corp.
<TABLE>
<CAPTION>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                           For the year ended June 30,
                                 (In thousands)


                                                                                    2000            1999           1998
<S>                                                                                  <C>            <C>            <C>
Cash flows from operating activities:
  Net earnings for the year                                                      $ 1,084         $ 1,080        $ 1,076
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of discounts and premiums on loans,
      investments and mortgage-backed securities - net                                32              38             33
    Amortization of deferred loan origination fees                                   (47)            (67)           (85)
    Amortization of expense related to stock benefit plans                           325             382            329
    Depreciation and amortization                                                     86              66             73
    Provision for (recoveries of) losses on loans                                      1              (1)            (5)
    Gain on sale of investment securities                                             (9)            (61)           (22)
    Loss on sale of real estate acquired through foreclosure                          -                3             -
    Federal Home Loan Bank stock dividends                                           (55)            (53)           (50)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable on loans                                            15              47            (30)
      Accrued interest receivable on mortgage-backed securities                        7               4              8
      Accrued interest receivable on investments and
        interest-bearing deposits                                                    (65)             18             48
      Prepaid expenses and other assets                                              172             (49)           (61)
      Accrued interest payable                                                        (4)            (25)             6
      Other liabilities                                                               88            (159)           (22)
      Federal income taxes
        Current                                                                      (28)             22           (160)
        Deferred                                                                     (48)             78              7
                                                                                  ------          ------         ------
         Net cash provided by operating activities                                 1,554           1,323          1,145

Cash flows provided by (used in) investing activities:
  Proceeds from maturity of investment securities                                    350          11,264         13,970
  Proceeds from sale of investment securities                                      1,011              60          1,007
  Purchase of investment securities                                               (2,116)        (19,259)        (7,768)
  Purchase of mortgage-backed securities                                              -           (5,625)        (3,327)
  Proceeds from sale of mortgage-backed securities                                    -              838            119
  Principal repayments on mortgage-backed securities                               1,310           3,221          2,905
  Purchase of loans                                                               (1,875)           (778)        (2,183)
  Loan principal repayments                                                       19,232          28,170         24,815
  Loan disbursements                                                             (29,965)        (33,204)       (25,113)
  Purchase of office premises and equipment                                         (405)           (181)           (61)
  Proceeds from sale of real estate acquired through foreclosure                      -              154             -
  Redemption of Federal Home Loan Bank stock                                         100              -              -
  Decrease in certificates of deposit in other financial
    institutions - net                                                               293           1,711          2,254
                                                                                  ------          ------         ------
         Net cash provided by (used in) investing activities                     (12,065)        (13,629)         6,618
                                                                                  ------          ------         ------

         Net cash provided by (used in) operating and investing
           activities (subtotal carried forward)                                 (10,511)        (12,306)         7,763
                                                                                  ------          ------         ------
</TABLE>





                                       22
<PAGE>


                               ASB Financial Corp.
<TABLE>
<CAPTION>

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                           For the year ended June 30,
                                 (In thousands)


                                                                                    2000            1999           1998
<S>                                                                                <C>              <C>             <C>
         Net cash provided by (used in) operating and investing activities
           (subtotal brought forward)                                           $(10,511)       $(12,306)       $ 7,763

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts                                                 9,053           7,477          3,725
  Proceeds from Federal Home Loan Bank advances                                    9,500           2,000          4,000
  Proceeds from other borrowed money                                                  -               -           2,500
  Repayment of Federal Home Loan Bank advances                                    (7,533)           (531)        (2,530)
  Repayment of other borrowed money                                                   -           (2,500)          (500)
  Advances by borrowers for taxes and insurance                                        5              (1)            -
  Proceeds from issuance of shares under stock option plan                            61              -             196
  Purchase of treasury stock                                                        (949)             -          (1,143)
  Dividends paid on common stock                                                  (2,123)           (463)        (3,971)
                                                                                 -------         -------         ------
         Net cash provided by financing activities                                 8,014           5,982          2,277
                                                                                 -------         -------         ------

Net increase (decrease) in cash and cash equivalents                              (2,497)         (6,324)        10,040

Cash and cash equivalents at beginning of year                                     7,566          13,890          3,850
                                                                                 -------         -------         ------

Cash and cash equivalents at end of year                                        $  5,069        $  7,566        $13,890
                                                                                 =======         =======         ======


Supplemental disclosure of cash flow information:
 Cash paid during the year for:
    Federal income taxes                                                        $    547        $    377        $   618
                                                                                 =======         =======         ======

    Interest on deposits and borrowings                                         $  5,431        $  5,137        $ 4,955
                                                                                 =======         =======         ======

Supplemental disclosure of noncash investing activities:
  Transfers from loans to real estate acquired
    through foreclosure                                                         $     -         $     -         $   157
                                                                                 =======         =======         ======

  Unrealized gains (losses) on securities designated as available
    for sale, net of related tax effects                                        $   (857)       $   (449)       $   302
                                                                                 =======         =======         ======
</TABLE>










The accompanying notes are an integral part of these statements.



                                       23
<PAGE>


                               ASB Financial Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 2000, 1999 and 1998



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    ASB  Financial  Corp.  (the  "Corporation")  is a savings  and loan  holding
    company  whose  activities  are  primarily  limited to holding  the stock of
    American Savings Bank, fsb (the "Savings Bank"). The Savings Bank conducts a
    general banking  business in southeastern  Ohio which consists of attracting
    deposits from the general  public and primarily  applying those funds to the
    origination of loans for residential,  consumer and nonresidential purposes.
    The Savings Bank's profitability is significantly  dependent on net interest
    income,  which is the  difference  between  interest  income  generated from
    interest-earning  assets  (i.e.  loans  and  investments)  and the  interest
    expense paid on  interest-bearing  liabilities  (i.e.  customer deposits and
    borrowed  funds).  Net interest income is affected by the relative amount of
    interest-earning  assets and  interest-bearing  liabilities and the interest
    received  or paid on these  balances.  The level of  interest  rates paid or
    received by the Savings Bank can be significantly  influenced by a number of
    environmental  factors,  such as  governmental  monetary  policy,  that  are
    outside of management's control.

    The consolidated financial information presented herein has been prepared in
    accordance  with  generally  accepted  accounting  principles  ("GAAP")  and
    general  accounting  practices within the financial  services  industry.  In
    preparing   consolidated  financial  statements  in  accordance  with  GAAP,
    management  is required to make  estimates and  assumptions  that affect the
    reported  amounts of assets and liabilities and the disclosure of contingent
    assets and liabilities at the date of the financial  statements and revenues
    and expenses during the reporting  period.  Actual results could differ from
    such estimates.

    The  following  is a summary  of the  Corporation's  significant  accounting
    policies  which have been  consistently  applied in the  preparation  of the
    accompanying consolidated financial statements.

    1.  Principles of Consolidation

     The  consolidated   financial   statements  include  the  accounts  of  the
     Corporation and the Savings Bank, and its subsidiary A.S.L. Services,  Inc.
     All  significant   intercompany   balances  and   transactions   have  been
     eliminated.

    2.  Investment Securities and Mortgage-Backed Securities

    The Corporation  accounts for investment and  mortgage-backed  securities in
    accordance with Statement of Financial Accounting Standards ("SFAS") No. 115
    "Accounting for Certain Investments in Debt and Equity Securities." SFAS No.
    115 requires that  investments in debt and equity  securities be categorized
    as held-to-maturity,  trading, or available for sale.  Securities classified
    as  held-to-maturity  are  carried at cost only if the  Corporation  has the
    positive  intent and ability to hold these  securities to maturity.  Trading
    securities  and  securities  designated as available for sale are carried at
    fair value with resulting  unrealized gains or losses recorded to operations
    or shareholders' equity, respectively.



                                       24
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    2.  Investment Securities and Mortgage-Backed Securities (continued)

    At June 30, 2000, the  Corporation's  shareholders'  equity  reflected a net
    unrealized loss on securities  designated as available for sale of $592,000,
    compared to a net unrealized gain of $265,000 at June 30, 1999.

     Realized gains and losses on sales of securities  are recognized  using the
     specific identification method.

    3.  Loans Receivable

    Loans  receivable are stated at the principal amount  outstanding,  adjusted
    for  deferred  loan  origination  fees and the  allowance  for loan  losses.
    Interest is accrued as earned  unless the  collectibility  of the loan is in
    doubt.  Interest on loans that are contractually past due is charged off, or
    an allowance is established based on management's  periodic evaluation.  The
    allowance  is  established  by a  charge  to  interest  income  equal to all
    interest previously accrued,  and income is subsequently  recognized only to
    the extent that cash payments are received until, in management's  judgment,
    the borrower's  ability to make periodic interest and principal payments has
    returned to normal, in which case the loan is returned to accrual status. If
    the ultimate  collectibility  of the loan is in doubt,  in whole or in part,
    all payments  received on nonaccrual  loans are applied to reduce  principal
    until such doubt is eliminated.

    4.  Loan Origination Fees

    The Savings Bank accounts for loan  origination fees in accordance with SFAS
    No.  91  "Accounting  for  Nonrefundable  Fees  and  Costs  Associated  with
    Originating or Acquiring Loans and Initial Direct Cost of Leases."  Pursuant
    to the provisions of SFAS No. 91,  origination fees received from loans, net
    of direct  origination  costs, are deferred and amortized to interest income
    using the  level-yield  method,  giving  effect to actual loan  prepayments.
    Additionally,   SFAS  No.  91  generally   limits  the  definition  of  loan
    origination  costs  to  the  direct  costs  of  originating  a  loan,  i.e.,
    principally  actual personnel costs. Fees received for loan commitments that
    are expected to be drawn upon,  based on the Savings Bank's  experience with
    similar  commitments,  are deferred and amortized  over the life of the loan
    using the level-yield  method.  Fees for other loan commitments are deferred
    and amortized over the loan commitment period on a straight-line basis.












                                       25
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    5.  Allowance for Loan Losses

    It is  the  Savings  Bank's  policy  to  provide  valuation  allowances  for
    estimated losses on loans based on past loss experience, trends in the level
    of delinquent  and problem  loans,  adverse  situations  that may affect the
    borrower's   ability  to  repay,  the  estimated  value  of  any  underlying
    collateral and current and  anticipated  economic  conditions in the primary
    lending area. When the collection of a loan becomes  doubtful,  or otherwise
    troubled, the Savings Bank records a loan charge-off equal to the difference
    between  the fair  value of the  property  securing  the loan and the loan's
    carrying  value.  Major loans  (including  development  projects)  and major
    lending areas are reviewed  periodically to determine  potential problems at
    an early date.  The  allowance  for loan losses is  increased  by charges to
    earnings and decreased by charge-offs (net of recoveries).

    The Savings Bank  accounts for impaired  loans in  accordance  with SFAS No.
    114, "Accounting by Creditors for Impairment of a Loan," which requires that
    impaired loans be measured  based upon the present value of expected  future
    cash  flows  discounted  at the  loan's  effective  interest  rate or, as an
    alternative,  at the  loan's  observable  market  price or fair value of the
    collateral.  The Savings Bank's current  procedures for evaluating  impaired
    loans result in carrying such loans at the lower of cost or fair value.

    A loan is  defined  under SFAS No. 114 as  impaired  when,  based on current
    information  and events,  it is probable  that a creditor  will be unable to
    collect all  amounts  due  according  to the  contractual  terms of the loan
    agreement.  In applying  the  provisions  of SFAS No. 114,  the Savings Bank
    considers  its  investment  in one- to  four-family  residential  loans  and
    consumer  installment  loans to be homogeneous  and therefore  excluded from
    separate  identification  for evaluation of impairment.  With respect to the
    Savings Bank's investment in multi-family and nonresidential  loans, and its
    evaluation of impairment thereof, such loans are collateral  dependent,  and
    as a result,  are carried as a practical  expedient  at the lower of cost or
    fair value.

    It is the Savings  Bank's  policy to charge off  unsecured  credits that are
    more than  ninety days  delinquent.  Similarly,  collateral-dependent  loans
    which are more than ninety days delinquent are considered to constitute more
    than a minimum delay in repayment and are  evaluated  for  impairment  under
    SFAS No. 114 at that time.

    At June 30, 2000 and 1999, the Savings Bank's  investment in impaired loans,
    as defined, totaled approximately $454,000 and $459,000,  respectively.  The
    Savings Bank  maintained  an  allowance  for credit  losses  related to such
    impaired loans of $46,000 at each of those respective dates.




                                       26
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    6.  Office Premises and Equipment

    Office  premises and equipment are carried at cost and include  expenditures
    which extend the useful lives of existing assets.  Maintenance,  repairs and
    minor   renewals  are  expensed  as  incurred.   For  financial   reporting,
    depreciation  and  amortization  are  provided  on  the   straight-line  and
    accelerated  methods  over the useful  lives of the assets,  estimated to be
    forty years for buildings, ten to forty years for building improvements, and
    five to ten years for furniture and equipment. An accelerated method is used
    for tax reporting purposes.

    7.  Real Estate Acquired Through Foreclosure

    Real  estate  acquired  through  foreclosure  is carried at the lower of the
    loan's unpaid principal  balance (cost) or fair value less estimated selling
    expenses  at the  date of  acquisition.  Real  estate  loss  provisions  are
    recorded  if the  properties'  fair value  subsequently  declines  below the
    amount determined at the recording date. In determining the lower of cost or
    fair value at acquisition,  costs relating to development and improvement of
    property are  capitalized.  Costs  relating to holding real estate  acquired
    through  foreclosure,  net of rental income, are charged against earnings as
    incurred.

    8.  Federal Income Taxes

    The  Corporation  accounts for federal  income taxes in accordance  with the
    provisions of SFAS No. 109,  "Accounting for Income Taxes."  Pursuant to the
    provisions  of SFAS No. 109, a deferred tax  liability or deferred tax asset
    is computed by applying  the current  statutory  tax rates to net taxable or
    deductible  differences  between the tax basis of an asset or liability  and
    its  reported  amount in the  consolidated  financial  statements  that will
    result in taxable or  deductible  amounts in future  periods.  Deferred  tax
    assets are  recorded  only to the extent  that the amount of net  deductible
    temporary  differences or  carryforward  attributes may be utilized  against
    current period earnings,  carried back against prior years earnings,  offset
    against  taxable  temporary  differences  reversing  in future  periods,  or
    utilized to the extent of management's  estimate of future taxable income. A
    valuation  allowance  is provided for deferred tax assets to the extent that
    the  value  of  net  deductible   temporary   differences  and  carryforward
    attributes exceeds management's estimates of taxes payable on future taxable
    income.  Deferred  tax  liabilities  are provided on the total amount of net
    temporary differences taxable in the future.

    The Corporation's  principal temporary  differences between pretax financial
    income and taxable  income result from  different  methods of accounting for
    deferred  loan  origination  fees and  costs,  Federal  Home Loan Bank stock
    dividends,  the general  loan loss  allowance,  deferred  compensation,  and
    percentage of earnings bad debt deductions. Additional temporary differences
    result  from  depreciation   computed  using  accelerated  methods  for  tax
    purposes.



                                       27
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    9.  Salary Continuation Agreement

    The  Savings  Bank has  entered  into salary  continuation  agreements  with
    certain key members of management.  These agreements provide for payments of
    up to fifteen years of compensation under certain circumstances. Recognition
    of  compensation  expense  related to these salary  continuation  agreements
    totaled  $26,000,  $19,000 and  $10,000 for the fiscal  years ended June 30,
    2000, 1999 and 1998, respectively.

    10.  Benefit Plans

    The Corporation has an Employee Stock Ownership Plan ("ESOP") which provides
    retirement  benefits for  substantially all employees who have completed one
    year of service and have  attained the age of 21. The  Corporation  accounts
    for the  ESOP  in  accordance  with  Statement  of  Position  ("SOP")  93-6,
    "Employers'  Accounting  for  Employee  Stock  Ownership  Plans".  SOP  93-6
    requires  that  compensation  expense  recorded by employers  equal the fair
    value of ESOP shares  allocated to participants  during a given fiscal year.
    Expense  related to the ESOP totaled  approximately  $270,000,  $172,000 and
    $274,000  for  the  fiscal  years  ended  June  30,  2000,  1999  and  1998,
    respectively.

    The  Corporation  also  has a  Management  Recognition  Plan  ("MRP")  which
    provides for the issuance and grant of 68,558 shares to members of the board
    of directors and  management.  During fiscal 1996, the MRP purchased  68,558
    shares of the  Corporation's  common stock in the open  market.  At June 30,
    2000,  48,302 shares had been awarded.  Common shares  awarded under the MRP
    vest ratably over a five year period, commencing with the date of the award.
    Expense  recognized  under  the MRP  plan  totaled  approximately  $132,000,
    $167,000 and  $153,000  for the fiscal  years ended June 30, 2000,  1999 and
    1998, respectively.

    11.  Earnings Per Share

    Basic earnings per share for the fiscal years ended June 30, 2000,  1999 and
    1998 is based upon the weighted-average  shares outstanding during the year,
    less  49,633,  62,795  and 77,756  unallocated  ESOP  shares,  respectively.
    Weighted-average   common  shares  deemed  outstanding   totaled  1,548,144,
    1,584,451 and  1,586,217 for the fiscal years ended June 30, 2000,  1999 and
    1998, respectively.

    Diluted  earnings  per share is computed  taking into  consideration  common
    shares  outstanding and dilutive  potential common shares to be issued under
    the Corporation's stock option plan.  Weighted-average  common shares deemed
    outstanding  for purposes of computing  diluted  earnings per share  totaled
    1,548,144, 1,611,751 and 1,615,737 for the fiscal years ended






                                       28
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    11.  Earnings Per Share (continued)

    June 30, 2000, 1999 and 1998,  respectively.  Incremental  shares related to
    the assumed exercise of stock options included in the computation of diluted
    earnings per share totaled 27,300 and 29,520 for the fiscal years ended June
    30,  1999 and 1998,  respectively.  Options to  purchase  164,557  shares of
    common  stock  with  a  weighted-average   exercise  price  of  $10.08  were
    outstanding  at June 30, 2000,  but were  excluded from the  computation  of
    common stock  equivalents  because their  exercise price was higher than the
    average market price of the common stock.

    12.  Fair Value of Financial Instruments

    SFAS No.  107,  "Disclosures  about  Fair Value of  Financial  Instruments,"
    requires disclosure of the fair value of financial instruments,  both assets
    and liabilities  whether or not recognized in the consolidated  statement of
    financial condition, for which it is practicable to estimate that value. For
    financial  instruments  where quoted market prices are not  available,  fair
    values  are based on  estimates  using  present  value  and other  valuation
    methods.

    The methods used are greatly affected by the assumptions applied,  including
    the discount  rate and estimates of future cash flows.  Therefore,  the fair
    values  presented  may not  represent  amounts  that could be realized in an
    exchange for certain financial instruments.

    The  following  methods  and  assumptions  were used by the  Corporation  in
    estimating its fair value disclosures for financial  instruments at June 30,
    2000 and 1999:

                  Cash and cash equivalents:  The financial  statement  carrying
                  amounts   for  cash  and  cash   equivalents   are  deemed  to
                  approximate fair value.

                  Certificates of deposit in other financial  institutions:  The
                  financial  statement  carrying  amounts  for  certificates  of
                  deposit  in  other  financial   institutions   are  deemed  to
                  approximate fair value.

                  Investment and mortgage-backed  securities: For investment and
                  mortgage-backed  securities, fair value is deemed to equal the
                  quoted market price.

                  Loans receivable:  The loan portfolio has been segregated into
                  categories  with  similar  characteristics,  such  as  one- to
                  four-family   residential,    multi-family   residential   and
                  nonresidential real estate. These loan categories were further
                  delineated into fixed-rate and adjustable-rate loans. The fair
                  values for the  resultant  loan  categories  were computed via
                  discounted  cash flow analysis,  using current  interest rates
                  offered for loans with  similar  terms to borrowers of similar
                  credit quality. For loans on deposit accounts and consumer and
                  other  loans,  fair values  were deemed to equal the  historic
                  carrying  values.  The historical  carrying  amount of accrued
                  interest on loans is deemed to approximate fair value.




                                       29
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    12.  Fair Value of Financial Instruments (continued)

                  Federal Home Loan Bank stock: The carrying amount presented in
                  the consolidated  statements of financial  condition is deemed
                  to approximate fair value.

                  Deposits: The fair values of NOW accounts,  passbook accounts,
                  money market  demand  accounts  and advances by borrowers  are
                  deemed to  approximate  the amount  payable  on  demand.  Fair
                  values  for  fixed-rate  certificates  of  deposit  have  been
                  estimated using a discounted cash flow  calculation  using the
                  interest  rates  currently  offered  for  deposits  of similar
                  remaining maturities.

                  Advances  from the Federal  Home Loan Bank:  The fair value of
                  these advances are estimated using the rates currently offered
                  for similar advances with similar remaining maturities.

                  Commitments   to   extend    credit:    For   fixed-rate   and
                  adjustable-rate  loan  commitments,  the fair  value  estimate
                  considers the  difference  between  current levels of interest
                  rates and  committed  rates.  At June 30,  2000 and 1999,  the
                  difference  between the fair value and notional amount of loan
                  commitments was not material.

    Based on the foregoing methods and assumptions,  the carrying value and fair
    value of the Corporation's financial instruments at June 30 are as follows:

<TABLE>
<CAPTION>

                                                                       2000                                1999
                                                             Carrying           Fair            Carrying           Fair
                                                                value          value               value          value
                                                                                    (In thousands)
<S>                                                              <C>            <C>                 <C>            <C>
    Financial assets
      Cash and cash equivalents                              $  5,069       $  5,069            $  7,566       $  7,566
      Certificates of deposit in other financial
        institutions                                               -              -                  293            293
      Investment securities                                    19,112         19,112              19,372         19,372
      Mortgage-backed securities                                8,616          8,616              10,232         10,232
      Loans receivable                                         95,084         91,278              82,430         82,127
      Federal Home Loan Bank stock                                733            733                 778            778
                                                              -------        -------             -------        -------

                                                             $128,614       $124,808            $120,671       $120,368
                                                              =======        =======             =======        =======

    Financial liabilities
      Deposits                                               $110,007       $110,135            $100,954       $101,403
      Advances from the Federal Home Loan Bank                  7,790          7,748               5,823          5,750
      Escrow deposits                                             173            173                 168            168
                                                              -------        -------             -------        -------

                                                             $117,970       $118,056            $106,945       $107,321
                                                              =======        =======             =======        =======
</TABLE>


                                       30

<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    13.  Cash and Cash Equivalents

    For purposes of reporting cash flows, cash and cash equivalents include cash
    and due from banks and  interest-bearing  deposits due from other  financial
    institutions with original maturities of less than ninety days.

    14.  Advertising

    Advertising costs are expensed when incurred. The Corporation's  advertising
    expense totaled $46,000, $41,000 and $44,000 for the fiscal years ended June
    30, 2000, 1999 and 1998, respectively.

    15.  Reclassifications

    Certain  prior year  amounts have been  reclassified  to conform to the 2000
consolidated financial statement presentation.


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES

    The amortized cost, gross  unrealized  gains,  gross  unrealized  losses and
    estimated fair values of investment  securities  designated as available for
    sale at June 30, 2000 and 1999 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                 2000
                                                                       Gross             Gross       Estimated
                                                   Amortized      unrealized        unrealized            fair
                                                        cost           gains            losses           value
                                                                           (In thousands)
<S>                                                    <C>            <C>                 <C>            <C>
    Available for sale:
      U.S. Government agency obligations             $19,532            $  4            $1,273         $18,263
      FHLMC stock                                         18             711                -              729
      Corporate equity securities                        169              -                 49             120
                                                      ------             ---             -----          ------

                                                     $19,719            $715            $1,322         $19,112
                                                      ======             ===             =====          ======
</TABLE>


<TABLE>
<CAPTION>
                                                                                 1999
                                                                       Gross             Gross       Estimated
                                                   Amortized      unrealized        unrealized            fair
                                                        cost           gains            losses           value
                                                                           (In thousands)
<S>                                                    <C>            <C>                 <C>            <C>
    Available for sale:
      U.S. Government agency obligations             $18,764          $   33              $664         $18,133
      FHLMC stock                                         19           1,083                -            1,102
      Corporate equity securities                        169               1                33             137
                                                      ------           -----               ---          ------

                                                     $18,952          $1,117              $697         $19,372
                                                      ======           =====               ===          ======
</TABLE>



                                       31
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES (continued)

    The  amortized  cost and  estimated  fair  value of U.S.  Government  agency
    obligations by contractual term to maturity at June 30 are shown below:

<TABLE>
<CAPTION>
                                                                  2000                           1999
                                                                    Estimated                        Estimated
                                                     Amortized           fair         Amortized           fair
                                                          cost          value              cost          value
                                                                            (In thousands)
<S>                                                       <C>          <C>                <C>             <C>
    Due after three years through
      five years                                       $    -         $    -            $ 1,000        $   983
    Due after five years                                19,532         18,263            17,764         17,150
                                                        ------         ------            ------         ------

                                                       $19,532        $18,263           $18,764        $18,133
                                                        ======         ======            ======         ======
</TABLE>


    The amortized cost, gross  unrealized  gains,  gross  unrealized  losses and
    estimated fair values of mortgage-backed  securities designated as available
    for sale at June 30, 2000 and 1999 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                    2000
                                                                             Gross          Gross    Estimated
                                                         Amortized      unrealized     unrealized         fair
                                                              cost           gains         losses        value
    Available for sale:                                                        (In thousands)
<S>                                                         <C>              <C>              <C>          <C>
      Federal Home Loan Mortgage
        Corporation participation certificates              $1,020            $  5           $  9       $1,016
      Government National Mortgage
        Association participation certificates               2,596              15             56        2,555
      Federal National Mortgage Association
        participation certificates                             931               3             37          897
      Collateralized mortgage obligations                    4,359              -             211        4,148
                                                             -----             ---            ---        -----

         Total mortgage-backed securities                   $8,906            $ 23           $313       $8,616
                                                             =====             ===            ===        =====
</TABLE>


<TABLE>
<CAPTION>
                                                                                    1999
                                                                             Gross          Gross    Estimated
                                                         Amortized      unrealized     unrealized         fair
                                                              cost           gains         losses        value
    Available for sale:                                                        (In thousands)
<S>                                                          <C>             <C>            <C>           <C>
      Federal Home Loan Mortgage
        Corporation participation certificates             $ 1,266            $ 18           $ 12      $ 1,272
      Government National Mortgage
        Association participation certificates               3,301              35             43        3,293
      Federal National Mortgage Association
        participation certificates                           1,035               8             35        1,008
      Collateralized mortgage obligations                    4,649              13              3        4,659
                                                            ------             ---            ---       ------

         Total mortgage-backed securities                  $10,251            $ 74           $ 93      $10,232
                                                            ======             ===            ===       ======
</TABLE>




                                       32
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES (continued)

    The amortized cost of  mortgage-backed  securities,  by contractual terms to
    maturity,  are shown below. Expected maturities will differ from contractual
    maturities  because  borrowers  may  generally  prepay  obligations  without
    prepayment penalties.
<TABLE>
<CAPTION>
                                                          June 30,
                                                 2000                1999
                                                       (In thousands)
<S>                                              <C>                  <C>
    Due within three years                     $   33             $    88
    Due in three to five years                    116                  -
    Due in five to ten years                      431                 701
    Due in ten to twenty years                  1,795               2,052
    Due after twenty years                      6,531               7,410
                                                -----              ------

                                               $8,906             $10,251
                                                =====              ======
</TABLE>


    Proceeds from sales of investment and mortgage-backed securities amounted to
    $1.0  million,  $898,000  and $1.1  million  during the years ended June 30,
    2000,  1999 and 1998,  respectively,  and resulted in gross  realized  gains
    totaling $9,000, $61,000 and $22,000, for those respective periods.


NOTE C - LOANS RECEIVABLE

    The composition of the loan portfolio at June 30 is as follows:
<TABLE>
<CAPTION>

                                                            2000                1999
                                                                  (In thousands)
<S>                                                        <C>                 <C>
    Residential real estate
      One- to four- family                               $65,618             $60,810
      Multi-family                                         3,160               3,404
      Construction                                           992               2,162
    Nonresidential real estate and land                   11,691               8,504
    Consumer and other                                    15,804              11,449
                                                          ------              ------
                                                          97,265              86,329
    Less:
      Undisbursed portion of loans in process              1,255               2,966
      Deferred loan origination fees                         203                 200
      Allowance for loan losses                              723                 733
                                                          ------              ------

                                                         $95,084             $82,430
                                                          ======              ======
</TABLE>






                                       33

<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE C - LOANS RECEIVABLE (continued)

    The Savings  Bank's  lending  efforts have  historically  focused on one- to
    four-family and multi-family  residential real estate loans,  which comprise
    approximately $68.5 million, or 72%, of the total loan portfolio at June 30,
    2000,  and $63.4  million,  or 77%, of the total loan  portfolio at June 30,
    1999.  Generally,  such loans have been underwritten on the basis of no more
    than an 80% loan-to-value ratio, which has historically provided the Savings
    Bank  with   adequate   collateral   coverage   in  the  event  of  default.
    Nevertheless,  the Savings Bank, as with any lending institution, is subject
    to the risk that real estate values could deteriorate in its primary lending
    area of southeastern  Ohio, thereby impairing  collateral  values.  However,
    management  is of the belief  that  residential  real  estate  values in the
    Savings Bank's primary lending area are presently stable.

    In the normal course of business, the Savings Bank has made loans to some of
    its directors,  officers and employees.  Related party loans were previously
    made  on  substantially  the  same  terms,   including  interest  rates  and
    collateral, as those prevailing at the time for comparable transactions with
    unrelated  persons  and  did  not  involve  more  than  the  normal  risk of
    collectibility.  However,  regulations  now permit officers and directors to
    receive the same terms through benefit or compensation plans that are widely
    available  to other  employees,  as long as the  director  or officer is not
    given preferential treatment compared to other participating  employees. The
    aggregate  dollar  amount of loans  outstanding  to  directors  and officers
    totaled  approximately  $474,000  and  $514,000  at June 30,  2000 and 1999,
    respectively.


NOTE D - ALLOWANCE FOR LOAN LOSSES

    The activity in the  allowance  for loan losses is summarized as follows for
the years ended June 30:
<TABLE>
<CAPTION>

                                                               2000           1999           1998
                                                                        (In thousands)
<S>                                                             <C>           <C>             <C>
    Balance at beginning of year                               $733           $759           $820
    Provision for (recoveries of) losses on loans                 1             (1)            (5)
    Charge-offs of loans                                        (11)           (25)           (56)
                                                                ---            ---            ---

    Balance at end of year                                     $723           $733           $759
                                                                ===            ===            ===
</TABLE>


    As of June 30, 1999, the Savings Bank's allowance for loan losses was solely
    general in nature, and is includible as a component of regulatory risk-based
    capital, subject to certain percentage limitations.





                                       34
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE D - ALLOWANCE FOR LOAN LOSSES (continued)

    Nonperforming and nonaccrual loans totaled approximately $281,000,  $379,000
    and $240,000 at June 30, 2000, 1999 and 1998, respectively.

    During the years  ended June 30,  2000,  1999 and 1998,  interest  income of
    approximately  $3,000,  $5,000  and  $6,000,  respectively,  would have been
    recognized had such  nonperforming  and nonaccrual  loans been performing in
    accordance with contractual terms.


NOTE E - OFFICE PREMISES AND EQUIPMENT

    Office premises and equipment at June 30 are comprised of the following:
<TABLE>
<CAPTION>

                                                          2000                1999
                                                                (In thousands)
<S>                                                       <C>                 <C>
    Land and improvements                               $  389              $  376
    Office buildings and improvements                    1,581               1,358
    Furniture, fixtures and equipment                      648                 479
                                                         -----               -----
                                                         2,618               2,213
      Less accumulated depreciation and
        amortization                                     1,252               1,166
                                                         -----               -----

                                                        $1,366              $1,047
                                                         =====               =====
</TABLE>



















                                       35
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE F - DEPOSITS

Deposits consist of the following major classifications at June 30:
<TABLE>
<CAPTION>

Deposit type and weighted-
average interest rate                                        2000                  1999
                                                                    (In thousands)
<S>                                                         <C>                   <C>
NOW accounts
  2000 - 2.06%                                           $  7,237
  1999 - 2.03%                                                                 $  6,680
Passbook
  2000 - 2.94%                                              7,735
  1999 - 2.94%                                                                    7,862
Money market deposit accounts
  2000 - 3.31%                                             15,790
  1999 - 3.85%                                                                   11,785
                                                          -------               -------
Total demand, transaction and
  passbook deposits                                        30,762                26,327

Certificates of deposit
  Original maturities of:
    Less than 12 months
      2000 - 5.74%                                          6,935
      1999 - 4.60%                                                                6,182
    12 months to 24 months
      2000 - 5.80%                                         44,778
      1999 - 5.37%                                                               40,671
    30 months to 36 months
      2000 - 5.56%                                          6,612
      1999 - 5.53%                                                                6,324
    More than 36 months
      2000 - 5.85%                                            612
      1999 - 6.05%                                                                  923
  Individual retirement accounts
    2000 - 5.90%                                           14,991
    1999 - 5.57%                                                                 14,690
  Jumbo accounts
    2000 - 5.28%                                            5,317
    1999 - 5.26%                                                                  5,837
                                                          -------               -------
Total certificates of deposit                              79,245                74,627
                                                          -------               -------

Total deposit accounts                                   $110,007              $100,954
                                                          =======               =======
</TABLE>


At June 30, 2000 and 1999, the Corporation  had certificate of deposit  accounts
with balances  greater than $100,000  totaling  $10.3 million and $15.7 million,
respectively.



                                       36
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE F - DEPOSITS (continued)

    Interest  expense on deposits  for the year ended June 30 is  summarized  as
follows:
<TABLE>
<CAPTION>

                                                 2000           1999           1998
                                                          (In thousands)
<S>                                             <C>             <C>           <C>
    Passbook                                   $  230         $  224         $  212
    NOW and money market deposit
      accounts                                    611            489            376
    Certificates of deposit                     4,192          4,084          4,138
                                                -----          -----          -----

                                               $5,033         $4,797         $4,726
                                                =====          =====          =====
</TABLE>


    Maturities of outstanding  certificates of deposit at June 30 are summarized
as follows:
<TABLE>
<CAPTION>

                                                      2000           1999
                                                         (In thousands)
<S>                                                  <C>            <C>
    Less than one year                             $52,822        $46,943
    One to three years                              26,199         27,318
    Over three years                                   224            366
                                                    ------         ------

                                                   $79,245        $74,627
                                                    ======         ======
</TABLE>


NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

    Advances from the Federal Home Loan Bank, collateralized at June 30, 2000 by
    pledges of certain residential mortgage loans totaling $11.7 million and the
    Savings Bank's investment in Federal Home Loan Bank stock, are summarized as
    follows:
<TABLE>
<CAPTION>

                                Maturing
                                year ending                              June 30,
    Interest rate               June 30,                        2000                1999
                                                                  (Dollars in thousands)
<S>                              <C>                           <C>                  <C>
    6.15%                       2000                          $   -               $  500
    6.10%                       2001                           2,500                  -
    4.40% - 6.12%               2004                           1,000               1,000
    3.16% - 6.18%               2008                           3,290               3,323
    4.80% - 5.53%               2009                           1,000               1,000
                                                               -----               -----

                                                              $7,790              $5,823
                                                               =====               =====

           Weighted-average interest rate                       5.85%               5.06%
                                                                ====                ====
</TABLE>




                                       37
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE H - FEDERAL INCOME TAXES

    Federal  income  taxes  differ  from the amounts  computed at the  statutory
    corporate tax rate for the years ended June 30 as follows:
<TABLE>
<CAPTION>

                                                              2000           1999           1998
                                                                       (In thousands)
<S>                                                           <C>            <C>            <C>
    Federal income taxes computed at
      statutory rate                                          $513           $514           $517
    Increase (decrease) in taxes resulting from
      Low income housing investment tax credits                (79)           (79)           (70)
      Nontaxable interest income                                (3)            (2)            (2)
      Other                                                     (5)            -              -
                                                               ---            ---            ---
    Federal income tax provision per consolidated
      financial statements                                    $426           $433           $445
                                                               ===            ===            ===
</TABLE>


    The composition of the Corporation's net deferred tax asset at June 30 is as
follows:

<TABLE>
<CAPTION>
                                                                       2000           1999
                                                                           (In thousands)
<S>                                                                     <C>           <C>
     Taxes (payable) refundable on temporary
     differences at estimated corporate tax rate:
       Deferred tax assets:
         General loan loss allowance                                 $  246           $251
         Deferred compensation                                          516            503
         Employee stock benefit plans                                    36             42
         Book/tax depreciation                                           15             12
         Unrealized loss on securities designated as
           available for sale                                           305             -
                                                                      -----            ---
           Total deferred tax assets                                  1,118            808

       Deferred tax liabilities:
         Percentage of earnings bad debt deduction                     (151)          (220)
         Deferred loan origination costs                               (125)          (118)
         Federal Home Loan Bank stock dividends                        (171)          (152)
         Unrealized gain on securities designated as
           available for sale                                            -            (136)
                                                                      -----            ---
           Total deferred tax liabilities                              (447)          (626)
                                                                      -----            ---

           Net deferred tax asset                                    $  671           $182
                                                                      =====            ===
</TABLE>







                                       38
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE H - FEDERAL INCOME TAXES (continued)

    The Savings Bank was allowed a special bad debt deduction, generally limited
    to 8% of otherwise taxable income, and subject to certain  limitations based
    on aggregate loans and deposit  account  balances at the end of the year. If
    the amounts that  qualified as deductions for federal income taxes are later
    used for purposes  other than bad debt losses,  including  distributions  in
    liquidation,  such  distributions will be subject to federal income taxes at
    the then current  corporate income tax rate.  Retained  earnings at June 30,
    2000 includes approximately $2.3 million for which federal income taxes have
    not been  provided.  The  amount  of  unrecognized  deferred  tax  liability
    relating to the cumulative bad debt deduction was approximately  $660,000 at
    June 30, 2000.  The Savings Bank is required to recapture as taxable  income
    approximately  $780,000 of its tax bad debt reserve,  which  represents  the
    post-1987  additions  to the  reserve,  and will be  unable to  utilize  the
    percentage  of  earnings  method to compute  its bad debt  deduction  in the
    future.  The Savings  Bank has provided  deferred  taxes for this amount and
    will  continue to amortize the  recapture of the bad debt reserve in taxable
    income over a six year period, which commenced in fiscal 1998.


NOTE I - LOAN COMMITMENTS

    The Savings Bank is a party to financial instruments with  off-balance-sheet
    risk in the normal  course of  business to meet the  financing  needs of its
    customers, including commitments to extend credit. Such commitments involve,
    to varying degrees,  elements of credit and interest-rate  risk in excess of
    the amount recognized in the consolidated  statement of financial condition.
    The contract or notional  amounts of the  commitments  reflect the extent of
    the Savings Bank's involvement in such financial instruments.

    The Savings Bank's exposure to credit loss in the event of nonperformance by
    the other party to the financial instrument for commitments to extend credit
    is represented by the contractual notional amount of those instruments.  The
    Savings  Bank  uses the same  credit  policies  in  making  commitments  and
    conditional obligations as those utilized for on-balance-sheet instruments.

    At June 30, 2000, the Savings Bank had outstanding  commitments to originate
    loans totaling approximately $1.3 million. In addition, the Savings Bank was
    obligated under unused lines and letters of credit totaling $4.3 million. In
    the  opinion  of  management,  all  loan  commitments  equaled  or  exceeded
    prevalent market interest rates as of June 30, 2000, and will be funded from
    normal cash flow from operations.


NOTE J - REGULATORY CAPITAL

    The  Savings  Bank  is  subject  to  minimum  regulatory  capital  standards
    promulgated by the Office of Thrift Supervision (the "OTS"). Failure to meet
    minimum capital  requirements can initiate certain mandatory -- and possibly
    additional discretionary -- actions by regulators that, if undertaken, could
    have a direct  material  effect on the  consolidated  financial  statements.
    Under capital  adequacy  guidelines and the regulatory  framework for prompt
    corrective action,



                                       39
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE J - REGULATORY CAPITAL (continued)

    the  Savings  Bank  must  meet  specific  capital  guidelines  that  involve
    quantitative measures of the Savings Bank's assets, liabilities, and certain
    off-balance-sheet items as calculated under regulatory accounting practices.
    The Savings Bank's capital  amounts and  classification  are also subject to
    qualitative  judgments by the regulators about components,  risk weightings,
    and other factors.

    The minimum capital  standards of the OTS generally  require the maintenance
    of regulatory  capital  sufficient to meet each of three tests,  hereinafter
    described as the tangible capital requirement,  the core capital requirement
    and the risk-based  capital  requirement.  The tangible capital  requirement
    provides for minimum tangible capital (defined as shareholders'  equity less
    all  intangible  assets) equal to 1.5% of adjusted  total  assets.  The core
    capital requirement provides for minimum core capital (tangible capital plus
    certain  forms of  supervisory  goodwill  and  other  qualifying  intangible
    assets)  generally  equal to 4.0% of adjusted  total assets except for those
    associations  with the highest  examination  rating and acceptable levels of
    risk. The risk-based  capital  requirement  provides for the  maintenance of
    core capital plus general  loss  allowances  equal to 8.0% of  risk-weighted
    assets. In computing  risk-weighted  assets, the Savings Bank multiplies the
    value of each asset on its  statement  of  financial  condition by a defined
    risk-weighting  factor, e.g., one- to four-family  residential loans carry a
    risk-weighted factor of 50%.

    During  the  2000  fiscal  year,  the  Savings  Bank was  notified  from its
    regulator that it was categorized as "well-capitalized" under the regulatory
    framework   for   prompt   corrective   action.   To   be   categorized   as
    "well-capitalized"  the Savings Bank must maintain minimum capital ratios as
    set forth in the following tables.

    As of June 30, 2000 and 1999,  management believes that the Savings Bank met
    all capital adequacy requirements to which it was subject.
<TABLE>
<CAPTION>

                                                                As of June 30, 2000
                                                                                                 To be "well-
                                                                                              capitalized" under
                                                                     For capital               prompt corrective
                                             Actual                adequacy purposes          action provisions
                                         Amount      Ratio         Amount     Ratio            Amount      Ratio
                                                               (Dollars in thousands)
<S>                                       <C>        <C>            <C>         <C>             <C>           <C>
    Tangible capital                    $10,265      7.9%        =>$1,949    =>1.5%          =>$6,495     => 5.0%

    Core capital                        $10,265      7.9%        =>$5,196    =>4.0%          =>$7,794     => 6.0%

    Risk-based capital                  $10,988     15.1%        =>$5,824    =>8.0%          =>$7,280     =>10.0%
</TABLE>





                                       40
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE J - REGULATORY CAPITAL (continued)
<TABLE>
<CAPTION>

                                                                As of June 30, 1999
                                                                                                 To be "well-
                                                                                              capitalized" under
                                                                     For capital               prompt corrective
                                             Actual                adequacy purposes          action provisions
                                         Amount      Ratio         Amount     Ratio            Amount      Ratio
                                                               (Dollars in thousands)
<S>                                        <C>       <C>             <C>        <C>              <C>         <C>
    Tangible capital                    $12,769     10.4%        =>$1,833    =>1.5%          =>$6,110     => 5.0%

    Core capital                        $12,769     10.4%        =>$4,888    =>4.0%          =>$7,332     => 6.0%

    Risk-based capital                  $13,502     21.3%        =>$5,069    =>8.0%          =>$6,336     =>10.0%
</TABLE>


    The Savings Bank's  management  believes that, under the current  regulatory
    capital  regulations,  the  Savings  Bank will  continue to meet its minimum
    capital requirements in the foreseeable future.  However,  events beyond the
    control of the Savings Bank, such as increased  interest rates or a downturn
    in the economy in the Savings  Bank's market area,  could  adversely  affect
    future  earnings  and,  consequently,  the  ability to meet  future  minimum
    regulatory capital requirements.


NOTE K - STOCK OPTION PLAN

    During fiscal 1996 the Board of Directors  adopted the ASB  Financial  Corp.
    Stock Option and Incentive  Plan (the "Plan") that provided for the issuance
    of 171,396 shares of authorized but unissued  shares of common stock at fair
    value at the date of  grant.  In  November  1995,  the  Corporation  granted
    options to purchase  145,684  shares at an exercise  price equal to the fair
    value of $13.875  per share.  The number of option  shares  granted  and the
    exercise price were adjusted during fiscal 1997 to give effect to the return
    of capital  distribution.  The Plan  provides  for  one-fifth  of the shares
    granted to be  exercisable  on each of the first five  anniversaries  of the
    date of grant.

    The  Corporation  accounts  for the Plan in  accordance  with SFAS No.  123,
    "Accounting for Stock-Based Compensation," which contains a fair value-based
    method for valuing  stock-based  compensation  that entities may use,  which
    measures  compensation cost at the grant date based on the fair value of the
    award.  Compensation is then  recognized  over the service period,  which is
    usually the vesting period. Alternatively,  SFAS No. 123 permits entities to
    continue to account for stock options and similar equity  instruments  under
    Accounting  Principles  Board ("APB") Opinion No. 25,  "Accounting for Stock
    Issued to  Employees."  Entities  that continue to account for stock options
    using APB Opinion No. 25 are required to make pro forma  disclosures  of net
    earnings  and  earnings  per  share,  as if the fair  value-based  method of
    accounting defined in SFAS No. 123 had been applied.






                                       41
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE K - STOCK OPTION PLAN (continued)

    The Corporation  applies APB Opinion No. 25 and related  Interpretations  in
    accounting  for  the  Plan.  Accordingly,  no  compensation  cost  has  been
    recognized for the Plan. The pro-forma  disclosures  required under SFAS No.
    123 are not  applicable,  as the  Corporation  made no stock  option  grants
    during the fiscal years ended June 30, 2000, 1999 and 1998.

    A summary of the status of the Corporation's  Plan as of June 30, 2000, 1999
    and 1998,  and changes during the periods ending on those dates is presented
    below:

<TABLE>
<CAPTION>
                                                   2000                      1999                    1998
                                                       Weighted-                 Weighted-                    Weighted-
                                                         average                   average                      average
                                                        exercise                  exercise                     exercise
                                             Shares        price       Shares        price          Shares        price
<S>                                           <C>           <C>         <C>          <C>             <C>           <C>
    Outstanding at beginning of year        170,627       $10.08      170,627       $10.08         190,069       $10.08
    Granted                                      -            -            -            -               -            -
    Exercised                                (6,070)       10.08           -            -          (19,442)       10.08
    Forfeited                                    -            -            -            -               -            -
                                            -------        -----      -------        -----         -------       ------

    Outstanding at end of year              164,557       $10.08      170,627       $10.08         170,627       $10.08
                                            =======        =====      =======        =====         =======        =====

    Options exercisable at year-end         125,052       $10.08       91,618       $10.08          52,114       $10.08
                                            =======        =====      =======        =====         =======        =====
</TABLE>

    The following information applies to options outstanding at June 30, 2000:

    Number outstanding                                                164,557
    Range of exercise prices                                           $10.08
    Weighted-average exercise price                                    $10.08
    Weighted-average remaining contractual life                     5.4 years













                                       42
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE L - CONDENSED FINANCIAL STATEMENTS OF ASB FINANCIAL CORP.

    The  following  condensed  financial   statements  summarize  the  financial
    position of the Corporation as of June 30, 2000 and 1999, and the results of
    its  operations and its cash flows for the fiscal years ended June 30, 2000,
    1999 and 1998.

                               ASB Financial Corp.
<TABLE>
<CAPTION>
                        STATEMENTS OF FINANCIAL CONDITION
                                    June 30,
                                 (In thousands)
     ASSETS                                                                              2000             1999
<S>                                                                                    <C>               <C>
    Interest-bearing deposits in American Savings Bank, fsb                           $   497          $   429
    Interest-bearing deposits in other financial institutions                             724              639
    Investment securities                                                               1,106              138
    Loan receivable from ESOP                                                             539              679
    Investment in American Savings Bank, fsb                                            9,716           13,055
    Prepaid expenses and other                                                            172              265
                                                                                       ------           ------

          Total assets                                                                $12,754          $15,205
                                                                                       ======           ======

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Dividends payable                                                                 $   173          $   165

    Shareholders' equity
      Common stock and additional paid-in capital                                       8,454            8,306
      Retained earnings                                                                 7,870            8,909
      Shares acquired by stock benefit plans                                           (1,059)          (1,297)
      Treasury shares                                                                  (2,092)          (1,143)
      Unrealized gains (losses) on securities designated as available for sale, net      (592)             265
                                                                                       ------           ------
          Total shareholders' equity                                                   12,581           15,040
                                                                                       ------           ------

          Total liabilities and shareholders' equity                                  $12,754          $15,205
                                                                                       ======           ======
</TABLE>

                               ASB Financial Corp.
<TABLE>
<CAPTION>
                             STATEMENTS OF EARNINGS
                               Year ended June 30,
                                 (In thousands)
                                                                              2000           1999         1998
<S>                                                                           <C>            <C>          <C>
    Revenue
      Interest income                                                       $   82         $   90       $  163
      Equity in earnings of American Savings Bank, fsb                       1,171          1,199        1,034
                                                                             -----          -----        -----
          Total revenue                                                      1,253          1,289        1,197

    General and administrative expenses                                        225            272          103
                                                                             -----          -----        -----

    Earnings before income taxes (credits)                                   1,028          1,017        1,094

    Federal income taxes (credits)                                             (56)           (63)          18
                                                                             -----          -----        -----

          NET EARNINGS                                                      $1,084         $1,080       $1,076
                                                                             =====          =====        =====
</TABLE>




                                       43
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE L - CONDENSED FINANCIAL STATEMENTS OF ASB FINANCIAL CORP.
(continued)

                               ASB Financial Corp.
<TABLE>
<CAPTION>
                            STATEMENTS OF CASH FLOWS
                               Year ended June 30,
                                 (In thousands)
                                                                              2000           1999         1998
<S>                                                                           <C>            <C>          <C>
    Cash provided by (used in) operating activities:
      Net earnings for the year                                             $1,084         $1,080       $1,076
      Adjustments to reconcile net earnings to net
      cash provided by (used in) operating activities
        (Undistributed earnings of) excess of distributions
          from consolidated subsidiary                                       1,828          2,303       (1,034)
        Increase (decrease) in cash due to changes in:
          Prepaid expenses and other assets                                    104           (122)         (32)
          Other liabilities                                                      8             -            (7)
                                                                             -----          -----        -----
          Net cash provided by operating activities                          3,024          3,261            3

    Cash flows provided by (used in) investing activities:
      Proceeds from repayment of loan                                          140            140          140
      Proceeds from return of capital on investment securities                  -              21           -
      Purchase of investment securities                                         -             (51)        (136)
                                                                             -----          -----        -----
          Net cash provided by investing activities                            140            110            4

    Cash flows provided by (used in) financing activities:
      Proceeds from borrowed money                                              -              -         2,500
      Proceeds from exercise of stock options                                   61             -           196
      Repayment of borrowed money                                               -          (2,500)          -
      Payment of dividends on common stock                                  (2,123)          (463)      (3,971)
      Purchase of treasury shares                                             (949)            -        (1,143)
                                                                             -----          -----        -----
          Net cash used in financing activities                             (3,011)        (2,963)      (2,418)
                                                                             -----          -----        -----

    Net increase (decrease) in cash and cash equivalents                       153            408       (2,411)

    Cash and cash equivalents at beginning of year                           1,068            660        3,071
                                                                             -----          -----        -----

    Cash and cash equivalents at end of year                                $1,221         $1,068       $  660
                                                                             =====          =====        =====


    Supplemental disclosure of cash flow information:
      Dividend received from subsidiary in the form of
        investment securities designated as available for sale              $1,000         $   -        $   -
                                                                             =====          =====        =====
</TABLE>




                                       44
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE L - CONDENSED FINANCIAL STATEMENTS OF ASB FINANCIAL CORP.
(continued)

    As  a  condition  to  regulatory   approval  of  the  stock  conversion  and
    reorganization  to the holding  company form of ownership,  the Savings Bank
    agreed  to  limit  the  amount  of  dividends  payable  to the  Corporation.
    Regulations of the Office of Thrift  Supervision (OTS) impose limitations on
    the  payment  of  dividends  and  other  capital  distributions  by  savings
    associations. Generally, the Savings Bank's payment of dividends is limited,
    without prior OTS approval, to net income for the current calendar year plus
    the two preceding  calendar years, less capital  distributions paid over the
    comparable  time  period.  Insured  institutions  are  required  to  file an
    application  with  the OTS  for  capital  distributions  in  excess  of this
    limitation. During fiscal 2000, the Savings Bank distributed $4.0 million to
    the Corporation,  which exceeds the above described limitation. As a result,
    the Savings Bank will be required to request OTS approval for any  dividends
    payable through December 31, 2000.


NOTE M - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

    The following table summarizes the  Corporation's  quarterly results for the
    fiscal years ended June 30, 2000 and 1999.  Certain  amounts,  as previously
    reported, have been reclassified to conform to the 2000 presentation.
<TABLE>
<CAPTION>

                                                                        Three Months Ended
                                                   September 30,      December 31,      March 31,     June 30,
    2000:                                                       (In thousands, except per share data)
<S>                                                         <C>              <C>            <C>           <C>
    Total interest income                                 $2,221            $2,295         $2,350       $2,391
    Total interest expense                                 1,289             1,318          1,399        1,421
                                                           -----             -----          -----        -----

    Net interest income                                      932               977            951          970
    Provision for losses on loans                              1                -              -            -
    Other income                                              72                77             69          136
    General, administrative and other expense                625               689            685          674
                                                           -----             -----          -----        -----

    Earnings before income taxes                             378               365            335          432
    Federal income taxes                                     105               106             90          125
                                                           -----             -----          -----        -----

    Net earnings                                          $  273            $  259         $  245       $  307
                                                           =====             =====          =====        =====

    Earnings per share
      Basic                                                 $.17             $.17            $.16         $.20
                                                             ===              ===             ===          ===

      Diluted                                               $.17             $.17            $.16         $.20
                                                             ===              ===             ===          ===
</TABLE>







                                       45
<PAGE>


                               ASB Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2000, 1999 and 1998


NOTE M - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (continued)
<TABLE>
<CAPTION>


                                                                        Three Months Ended
                                                   September 30,      December 31,      March 31,     June 30,
    1999:                                                      (In thousands, except per share data)
<S>                                                        <C>               <C>             <C>          <C>
    Total interest income                                 $2,149            $2,120         $2,136       $2,175
    Total interest expense                                 1,322             1,287          1,269        1,234
                                                           -----             -----          -----        -----

    Net interest income                                      827               833            867          941
    Recoveries of losses on loans                             -                 (1)            -            -
    Other income                                              59               100             97           74
    General, administrative and other expense                542               573            586          585
                                                           -----             -----          -----        -----

    Earnings before income taxes                             344               361            378          430
    Federal income taxes                                     101               103            103          126
                                                           -----             -----          -----        -----

    Net earnings                                          $  243            $  258         $  275       $  304
                                                           =====             =====          =====        =====

    Earnings per share
      Basic                                                 $.16             $.16            $.17         $.19
                                                             ===              ===             ===          ===

      Diluted                                               $.15             $.16            $.17         $.19
                                                             ===              ===             ===          ===

</TABLE>


















                                       46
<PAGE>


                               ASB FINANCIAL CORP.
                             DIRECTORS AND OFFICERS

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

Gerald R. Jenkins                             Director and Chairman of the Board

Robert M. Smith                               Director and President
President and Chief Executive Officer
American Savings Bank, fsb

William J. Burke                              Director
Director and Chief Executive Officer
OSCO Industries, Inc.

Lee O. Fitch                                  Director
Shareholder and Director
Miller, Searl & Fitch, L.P.A.

Louis M. Schoettle, M.D.                      Director
Physician
Retired

M. Kathryn Fish                               Secretary
Secretary
American Savings Bank, fsb

Carlisa R. Baker                              Treasurer
Treasurer
American Savings Bank, fsb


                           AMERICAN SAVINGS BANK, fsb
                             DIRECTORS AND OFFICERS

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

Gerald R. Jenkins                             Director and Chairman of the Board

Robert M. Smith                               Director, President and CEO

William J. Burke                              Director

Lee O. Fitch                                  Director and Attorney

Louis M. Schoettle, M.D.                      Director

Jack A. Stephenson                            Vice President

Carlisa R. Baker                              Treasurer

M. Kathryn Fish                               Secretary







                                       47
<PAGE>


                              SHAREHOLDER SERVICES

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

The Fifth Third Bank serves as transfer  agent and dividend  distributing  agent
for ASB's  shares.  Communications  regarding  change of  address,  transfer  of
shares, lost certificates and dividends should be sent to:

                              The Fifth Third Bank
                            Stock Transfer Department
                                Mail Drop 1090F5
                            38 Fountain Square Plaza
                             Cincinnati, Ohio 45263
                                 (513) 579-5320
                                 (800) 837-2755


                                 ANNUAL MEETING

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

The Annual  Meeting  of  Shareholders  of ASB  Financial  Corp.  will be held on
October 25, 2000,  at 11:00 a.m.,  Eastern  Time,  at Best Western  Motor Inn of
Portsmouth,  U.S. Route 23 North,  Portsmouth,  Ohio. Shareholders are cordially
invited to attend.


                          ANNUAL REPORT ON FORM 10-KSB

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

A copy of ASB's Annual Report on Form 10-KSB,  as filed with the  Securities and
Exchange Commission, will be available at no charge to shareholders upon written
request to:

                           American Savings Bank, fsb
                             503 Chillicothe Street
                             Portsmouth, Ohio 45662
                      Attention: Robert M. Smith, President

























                                       48