ASB
                                    FINANCIAL
                                      CORP.




                                      2001
                                     ANNUAL
                                     REPORT
                                       TO
                                  SHAREHOLDERS



<PAGE>


Dear Fellow Shareholder:

It is with a great deal of pleasure that we present our Annual Report to
Shareholders covering the fiscal year ended June 30, 2001.

We were very pleased with another year of solid operating results in fiscal
2001. Net earnings for the fiscal year ended June 30, 2001, totaled $1.1
million, or $.73 per diluted share, which represents an increase of $50,000
compared to the net earnings reported for fiscal 2000. Basic earnings per share
increased by 7.1% during fiscal 2001. More importantly, fiscal 2001 culminated
in your Corporation attaining a number of financial milestones. Total assets
amounted to $141.0 million at June 30, 2001, an increase of $9.1 million, or
6.9% over June 30, 2000. The loan portfolio grew by $8.6 million, or 9.0%,
during fiscal 2001, ending the year with a record total of $103.3 million.
Similarly, deposits increased by $10.7 million, or 9.7%, during the fiscal year,
attaining a previously unsurpassed level of $120.7 million at June 30, 2001.

Your Corporation's focus for fiscal 2002 and beyond is a continuing commitment
to the community we serve. The growth of our business will be accomplished
through the tireless efforts of our employees who provide the excellent customer
service that has become synonymous with our name.

We remain committed to increasing shareholder value, as most recently evidenced
by a 9% increase in our quarterly dividends paid per share during fiscal 2001
from $.11 to $.12, which was reflected in the dividends you received in July
2001. Consistent with the Board's intention to manage capital, we continue to
repurchase our shares, when prudent, enabling our remaining shareholders to
further enhance their participation in our Corporation's long-term success.

As we look to the future, we see continued opportunity for growth in this
market. We believe we can be very competitive by providing personal service and
products to our customers that the larger regional banks are unable or unwilling
to provide. We believe this focus on service and products will serve your
Corporation well, and in so doing, continue to provide you, the shareholder,
with a high performing investment. Thank you for your continued support of ASB
Financial Corp.


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.


















                                       2
<PAGE>


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

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

There were 1,538,779 common shares of ASB outstanding on September 10, 2001,
held of record by approximately 830 shareholders. Price information for ASB's
common shares is quoted on the Nasdaq National Market ("Nasdaq") under the
symbol "ASBP."

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 2001 and 2000.
<TABLE>
<CAPTION>

                                                                         Cash dividends
Quarter ended                     High close         Low close              declared
-------------                     ----------         ---------               --------
<S>                                  <C>                 <C>                    <C>
Fiscal 2001
   September 30, 2000              $10.75               $8.75                  $.11
   December 31, 2000               $ 9.94               $8.63                  $.11
   March 31, 2001                  $ 9.38               $8.63                  $.11
   June 30, 2001                   $10.00               $8.63                  $.12

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 earnings for that year to date plus its
retained net earnings 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 tables set forth certain information concerning the consolidated
financial condition, earnings and other data regarding ASB at the dates and for
the periods indicated.
<TABLE>
<CAPTION>

                                                                                 At June 30,
                                                           ----------------------------------------------------
Selected consolidated financial
condition data:                                            2001        2000         1999        1998       1997
                                                           ----        ----         ----        ----       ----
                                                                             (In thousands)
<S>                                                         <C>         <C>          <C>        <C>         <C>
Total amount of:
  Assets                                                 $140,987    $131,898     $123,248    $116,437    $112,469
  Cash and cash equivalents (1)                             4,649       5,069        7,566      13,890       3,850
  Certificates of deposit in other financial                    -           -          293       2,004       4,258
    institutions
  Investment securities available for sale - at market     20,658      19,112       19,372      11,835      18,660
  Mortgage-backed securities available for sale - at
    market                                                  8,716       8,616       10,232       8,924       8,560
  Loans receivable - net                                  103,308      94,744       82,430      76,550      74,136
  Real estate acquired through foreclosure - net                -           -            -         157           -
  Deposits                                                120,725     110,007      100,954      93,477      89,752
  Advances from the FHLB                                    4,257       7,790        5,823       4,354       2,884
  Shareholders' equity, restricted (2)                     14,503      12,581       15,040      14,490      17,701
</TABLE>

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

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

(2)  At June 30, 2001, 2000, 1999, 1998 and 1997, includes $779,000, $(592,000),
     $265,000, $714,000 and $412,000, respectively, of unrealized gains (losses)
     on securities designated as available for sale, net of related tax effects,
     pursuant to Statement of Financial Accounting Standards ("SFAS") No. 115.

<TABLE>
<CAPTION>
                                                                      Year ended June 30,
                                                      ----------------------------------------------------
Selected consolidated operating
   data:                                              2001         2000        1999         1998        1997
                                                      ----         ----        ----         ----        ----
                                                              (In thousands, except per share data)
<S>                                                   <C>            <C>        <C>         <C>          <C>
Interest income                                     $10,262       $9,257      $8,580       $8,541       $8,393
Interest expense                                      6,379        5,427       5,112        4,961        4,686
                                                     ------        -----       -----        -----        -----
Net interest income                                   3,883        3,830       3,468        3,580        3,707
Provision for (recoveries of) losses on loans             1            1          (1)          (5)          28
                                                     ------        -----       -----        -----        -----
Net interest income after provision for
   (recoveries of) losses on loans                    3,882        3,829       3,469        3,585        3,679
Other income                                            495          354         330          281          364
General, administrative and other expense             2,783        2,673       2,286        2,345        3,054
                                                     ------        -----       -----        -----        -----
Earnings before income taxes                          1,594        1,510       1,513        1,521          989
Federal income taxes                                    460          426         433          445          322
                                                     ------        -----       -----        -----        -----
Net earnings                                        $ 1,134       $1,084      $1,080       $1,076       $  667
                                                     ======        =====       =====        =====        =====

Earnings per share
  Basic                                                $.75         $.70        $.68         $.68         $.42
                                                        ===          ===         ===          ===          ===
  Diluted                                              $.73         $.70        $.67         $.67         $.41
                                                        ===          ===         ===          ===          ===
</TABLE>







                                       4
<PAGE>



<TABLE>
<CAPTION>



                                                                      Year ended June 30,
Selected financial ratios:                            2001         2000        1999         1998        1997
                                                      ----         ----        ----         ----         ----
<S>                                                     <C>           <C>         <C>          <C>          <C>
Return on average assets                                 .83%         .86%        .90%         .95%        .59%
Average interest rate spread during period              2.46         2.74        2.54         2.46        2.41
Net interest margin                                     2.94         3.15        3.04         3.25        3.39
Return on average equity                                8.22         8.21        7.22         6.38        3.15
Equity to total assets at end of period                10.29         9.54       12.20        12.44       15.74
Average interest-earning assets to average
 interest-bearing liabilities                         109.93       109.25      111.02       117.41      122.77
Net interest income to general, administrative
 and other expense                                    139.53       143.28      151.71       152.67      121.38
General, administrative and other expense to
 average total assets                                   2.05         2.13        1.91         2.08        2.70
Nonperforming assets to total assets                     .44          .21         .31          .34        1.02
Loan loss allowance to nonperforming loans            115.37       257.30      193.40       316.25       71.62
Dividend payout ratio                                  60.00       201.43       58.82       352.94    1,285.71
</TABLE>



























                                       5
<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, 2000 TO JUNE 30, 2001


ASB's total assets amounted to $141.0 million at June 30, 2001, an increase of
$9.1 million, or 6.9%, over 2000 levels. The increase in total assets was funded
primarily from a $10.7 million increase in deposits and a $1.9 million increase
in shareholders' equity, which were partially offset by a $3.5 million decline
in advances from the FHLB.

Cash and interest-bearing deposits totaled $4.6 million at June 30, 2001, a
decrease of $420,000, or 8.3%, from 2000 levels. Investment securities totaled
$20.7 million at June 30, 2001, an increase of $1.5 million, or 8.1%, over the
balance at June 30, 2000. Mortgage-backed securities totaled $8.7 million at
June 30, 2001, an increase of $100,000, or 1.2%, year to year. During fiscal
2001, purchases of investment and mortgage-backed securities totaled $9.1
million, while the unrealized gain recorded on securities designated as
available for sale increased by $2.1 million. These increases were partially
offset by maturities, sales and principal repayments totaling $9.6 million.

Loans receivable increased by $8.6 million, or 9.0%, to a total of $103.3
million at June 30, 2001, compared to $94.7 million at June 30, 2000. Loan
disbursements of $28.6 million and purchases of $2.9 million exceeded principal
repayments of $23.0 million during fiscal 2001. Growth in loans secured by
residential real estate totaled $7.5 million, or 10.8%, and the consumer loan
portfolio increased by $1.9 million, or 11.9%, year to year.

At June 30, 2001, American's allowance for loan losses totaled $713,000,
representing .67% of total loans and 115.4% of nonperforming loans. At June 30,
2000, the allowance for loan losses totaled $723,000, or .75% of total loans and
257.3% of nonperforming loans. Nonperforming loans amounted to $618,000 and
$281,000 at June 30, 2001 and 2000, respectively. Although management believes
that its allowance for loan losses at June 30, 2001, 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 $10.7 million, or 9.7%, during fiscal 2001 to a total of
$120.7 million at June 30, 2001. The increase resulted primarily from
management's continuing efforts to maintain growth in deposits through marketing


                                       6
<PAGE>

and pricing strategies. The growth in deposits was generally used to fund new
loan originations and to repay borrowings. Borrowings decreased by $3.5 million,
or 45.4%, during fiscal 2001, as repayments of $6.5 million exceeded new
borrowings of $3.0 million.

Shareholders' equity totaled $14.5 million at June 30, 2001, an increase of $1.9
million, or 15.3%, over June 30, 2000 levels. The increase resulted primarily
from net earnings of $1.1 million, a $1.4 million increase in unrealized gains
on available for sale securities and the effects of $306,000 of amortization
related to employee stock benefit plans, which were partially offset by
dividends paid of $611,000 and treasury stock repurchases of $278,000 during the
year.


                         COMPARISON OF OPERATING RESULTS
                   FOR THE YEARS ENDED JUNE 30, 2001 AND 2000


General. Net earnings amounted to $1.1 million for the fiscal year ended June
30, 2001, an increase of $50,000, or 4.6%, over fiscal 2000. The increase in
earnings resulted primarily from a $53,000 increase in net interest income and a
$141,000 increase in other income, which were partially offset by a $110,000
increase in general, administrative and other expense and a $34,000 increase in
the provision for federal income taxes.

Net Interest Income. Total interest income amounted to $10.3 million for the
fiscal year ended June 30, 2001, an increase of $1.0 million, or 10.9%, over
fiscal 2000. Interest income on loans totaled $8.2 million in fiscal 2001, an
increase of $1.0 million, or 14.2%. This increase was due primarily to an $11.4
million, or 13.0%, increase in the weighted-average balance of loans
outstanding, coupled with a 9 basis point increase in the average yield year to
year. Interest income on mortgage-backed securities decreased by $45,000, or
7.5%, as a result of a $1.4 million, or 14.7%, decrease in the weighted-average
balance outstanding, which was partially offset by a 52 basis point increase in
yield year to year. Interest income on investment securities and
interest-bearing deposits increased by $34,000, or 2.3%, due primarily to an
$893,000, or 3.7%, increase in the weighted-average balance outstanding, which
was partially offset by an 8 basis point decrease in the average yield year to
year.

Interest expense totaled $6.4 million for the fiscal year ended June 30, 2001,
an increase of $952,000, or 17.5%, over the $5.4 million total recorded in
fiscal 2000. Interest expense on deposits increased by $1.0 million, or 19.9%,
due primarily to a $10.8 million, or 10.4%, increase in the weighted-average
balance outstanding and a 42 basis point increase in the weighted-average cost
of deposits year to year. Interest expense on borrowings decreased by $48,000,
or 12.2%, due primarily to a $1.7 million, or 24.2%, decrease in the
weighted-average balance outstanding, which was partially offset by a 91 basis
point increase in the average cost of borrowings, to 6.63% in fiscal 2001.

As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $53,000, or 1.4%, to a total of $3.9 million
for the fiscal year ended June 30, 2001, compared to $3.8 million in fiscal
2000. The interest rate spread decreased by 28 basis points to 2.46% in fiscal
2001 from 2.74% in fiscal 2000, and the net interest margin decreased by 21
basis points to 2.94% in 2001 from 3.15% in 2000.

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


                                       7
<PAGE>

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 a minimal
provision for losses on loans during the fiscal years ended June 30, 2001 and
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.

Other Income. Other income totaled $495,000 for the fiscal year ended June 30,
2001, an increase of $141,000, or 39.8%, over the $354,000 recorded in fiscal
2000. The increase resulted primarily from a $108,000 increase in the gain on
sale of investment securities year to year and an increase of $33,000 in other
operating income. The increase in other operating income was comprised of an
increase in fees on loans and deposits transactions.

General, Administrative and Other Expense. General, administrative and other
expense totaled $2.8 million for the fiscal year ended June 30, 2001, an
increase of $110,000, or 4.1%, over the total recorded in fiscal 2000. The
increase resulted primarily from a $36,000, or 25.4%, increase in occupancy and
equipment expense, a $49,000, or 16.4%, increase in data processing costs and a
$78,000, or 16.3%, increase in other operating expense, which were partially
offset by a decrease of $24,000, or 12.6%, in franchise taxes and a $15,000, or
37.5%, decrease in federal deposit insurance premiums. The increase in occupancy
and equipment expense resulted primarily from an increase in depreciation
expense on capital additions in fiscal 2001 and 2000 for renovations to the main
office and the completion of a new drive-through location. 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,
item-processing and advanced system upgrades. The increase in other operating
expense was due primarily to expense related to the Savings Bank's investment in
a low income housing project, as well as increased advertising and supplies
expense and pro-rata increases in operating costs connected with the
Corporation's overall growth year to year.

Federal Income Taxes. The provision for federal income taxes totaled $460,000
for the fiscal year ended June 30, 2001, an increase of $34,000, or 8.0%, over
the $426,000 recorded in fiscal 2000. The increase was due primarily to the
effects of an $84,000, or 5.6%, increase in pre-tax earnings, which was
partially offset by tax credits realized from American's investment in a low
income housing project. ASB's effective tax rates were 28.9% and 28.2% for the
fiscal years ended June 30, 2001 and 2000, respectively.














                                       8
<PAGE>



                         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. Based upon an analysis of 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 a minimal provision
for losses on loans for the fiscal year ended June 30, 2000.

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.


                                       9
<PAGE>

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.

























                                       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,
                             -------------------------------------------------------------------------------------------------
                                          2001                            2000                               1999
                             ----------------------------   -----------------------------     --------------------------------
                              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            $ 98,713   $ 8,169   8.28%    $ 87,363      $7,153     8.19%       $ 79,368     $6,394      8.06%
  Mortgage-backed
    securities                   8,338       556   6.67        9,779         601     6.15          10,633        709      6.67
  Investment securities and
    other interest-earning
    assets                      25,244     1,537   6.09       24,351       1,503     6.17          24,226      1,477      6.10
                               -------    ------   ----      -------       -----     ----         -------      -----      ----

   Total interest-earning
     assets                    132,295    10,262   7.76      121,493       9,257     7.62         114,227      8,580      7.51

Non-interest-earning assets      3,780                         3,951                                5,710
                               -------                       -------                              -------

Total assets                  $136,075                      $125,444                             $119,937
                               =======                       =======                              =======

Interest-bearing liabilities:
  Deposits                    $115,126     6,033   5.24     $104,324       5,033     4.82       $  97,032      4,797      4.94
  Borrowings                     5,217       346   6.63        6,884         394     5.72           5,857        315      5.38
                               -------    ------   ----      -------       -----     ----         -------      -----      ----

   Total interest-bearing
     liabilities               120,343     6,379   5.30      111,208       5,427     4.88         102,889      5,112      4.97
                                          ------   ----                   ------     ----                     ------      ----

Non-interest-bearing
  liabilities                    1,933                         1,032                                2,088
                               -------                       -------                              -------

   Total liabilities           122,276                       112,240                              104,977

Shareholders' equity            13,799                        13,204                               14,960
                               -------                       -------                              -------

   Total liabilities and
     shareholders' equity     $136,075                      $125,444                             $119,937
                               =======                       =======                              =======

Net interest income                     $  3,883                          $3,830                              $3,468
                                         =======                           =====                               =====

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

Net interest margin (net
  interest income as a
  percent of average
  interest-earning assets)                         2.94%                             3.15%                                3.04%
                                                   ====                              ====                                 ====

Average interest-earning
  assets to average interest-
  bearing liabilities                            109.93%                           109.25%                              111.02%
                                                 ======                            ======                               ======
</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,
                                            --------------------------------------------------------
                                                   2001 vs. 2000                 2000 vs. 1999
                                            --------------------------    --------------------------
                                                Increase                      Increase
                                               (decrease)                    (decrease)
                                                   due                           due
                                                   to                            to
                                            ---------------               ---------------
                                            Volume     Rate      Total    Volume     Rate     Total
                                            ------     ----      -----    ------     ----     -----
                                                                 (In thousands)
<S>                                           <C>       <C>         <C>       <C>     <C>       <C>
Interest-earning assets:
   Loans receivable                           $938     $  78      $1,016     $652     $107       $759
   Mortgage-backed securities                 (106)       61         (45)     (54)     (54)      (108)
   Investment securities and interest -
     bearing assets                             53       (19)         34        8       18         26
                                              ----      ----       -----      ---      ---        ---

       Total interest-earning assets           885       120       1,005      606       71        677
                                               ---      ----       -----      ---      ---        ---

Interest-bearing liabilities:
   Deposits                                    544       456       1,000      353     (117)       236
   Borrowings                                 (140)       92         (48)      83       (4)        79
                                               ---      ----       -----      ---      ---        ---

       Total interest-bearing liabilities      404       548         952      436     (121)       315
                                               ---      ----       -----      ---      ---        ---

        Increase (decrease) in net
          interest   income                   $481     $(428)     $   53     $170     $192       $362
                                               ===      ====       =====      ===      ===        ===
</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, 2001 and 2000, 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.




                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                  At June 30, 2001                   At June 30, 2000
                                           ---------------------------        -----------------------------
                                           NPV as a % of                      NPV as a % of
 Changes in interest rate   Board limit     PV of Assets        Change         PV of Assets          Change
     (basis points)         % changes          Ratio            in NPV              Ratio            in NPV
 ------------------------   -----------    -------------        ------        --------------         ------
                                         (Dollars in thousands)
<S>                            <C>               <C>              <C>                <C>                <C>
        +300                   (6)%              6.96%            (457)bp           5.82%             (352)bp
        +200                   (6)               8.68             (285)             7.07              (227)
        +100                   (6)              10.42             (111)             8.26              (108)
           -                    -               11.53                -              9.34                 -
        -100                    6               12.14               61             10.10                76
        -200                    6               12.18               65             10.29                95
        -300                    6               12.21               68             10.51               117

</TABLE>

The model reflects that American's NPV is more sensitive to an increase in
interest rates than a decrease in interest rates. This occurs principally
because, as rates rise, the market value of the Savings Bank's investments,
adjustable-rate mortgage loans, fixed-rate loans and mortgage-backed securities
declines due to the rate increases. The value of the Savings Bank's deposits and
borrowings change in approximately the same proportion in rising or falling rate
scenarios.

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.

As with any method of measuring interest rate risk, certain shortcomings are
inherent in the method of analysis presented in the foregoing table. For
example, although certain assets and liabilities may have similar maturities or
periods of repricing, they may react in different degrees to changes in market
interest rates. Also, the interest rates on certain types of assets and
liabilities may fluctuate in advance of changes in market interest rates, while
interest rates on other types may lag behind changes in market rates.
Additionally, certain assets, such as adjustable-rate loans, have features which
restrict changes in interest rates on a short-term basis and over the life of
the assets. Further, in the event of a change in interest rates, expected rates
of prepayment on loans and early withdrawal from certificates could likely
deviate significantly from those assumed in calculating the table.















                                       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, 2001, 2000, and 1999:

<TABLE>
<CAPTION>
                                                                               Year ended June 30,
                                                                   2001                2000               1999
                                                                   ----                ----               ----
                                                                                 (In thousands)
<S>                                                                  <C>                <C>                <C>
Net cash from operating activities                                $1,437             $ 1,554            $ 1,323
Net cash from investing activities                                (8,151)            (12,065)           (13,629)
Net cash from financing activities                                 6,294               8,014              5,982
                                                                   -----              ------             ------
Net change in cash and cash equivalents                             (420)             (2,497)            (6,324)
Cash and cash equivalents at the beginning of the year             5,069               7,566             13,890
                                                                   -----              ------             ------
Cash and cash equivalents at the end of the year                  $4,649             $ 5,069            $ 7,566
                                                                   =====              ======             ======
</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. At June 30, 2001, eligible
liquidity of American was approximately $11.7 million, or 8.4%.

At June 30, 2001, American had outstanding commitments of approximately $1.6
million to originate loans. Additionally, American was obligated under unused
lines and letters of credit totaling $3.4 million. In the opinion of management,
all loan commitments had interest rates which equaled or exceeded market
interest rates as of June 30, 2001, 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, 2001, 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, 2001, 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.
<TABLE>
<CAPTION>
                                                 June 30, 2001
                                                                                   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             $11,728      8.4%        $2,098    1.5%          $9,630    6.9%

Core capital                 $11,728      8.4%        $5,595    4.0%          $6,133    4.4%

Risk-based capital           $12,441     15.9%        $6,248    8.0%          $6,193    7.9%
</TABLE>







                                       14
<PAGE>



                   EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS


In September 2000, the Financial Accounting Standards Board (the "FASB") issued
SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", which revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but carries over most of the provisions of SFAS
No. 125 without reconsideration. SFAS No. 140 is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after
March 31, 2001. The Statement is effective for recognition and reclassification
of collateral and for disclosures relating to securitization transactions and
collateral for fiscal years ending after December 15, 2000. Management adopted
SFAS No. 140 effective April 1, 2001, as required, without material effect on
the Corporation's financial position or results of operations.

In June 2001, the FASB issued SFAS No. 141 "Business Combinations," which
requires that all business combinations initiated after June 30, 2001 be
accounted for using the purchase method. The pooling-of-interests method of
accounting is prohibited except for combinations initiated before June 30, 2001.
The remaining provisions of SFAS No. 141 relating to business combinations
accounted for by the purchase method, including identification of intangible
assets, accounting for negative goodwill, financial statement presentation and
disclosure, are effective for combinations completed after June 30, 2001.
Management adopted SFAS No. 141 effective July 1, 2001, as required, without
material effect on the Corporation's financial position or results of
operations.

In June 2001, the FASB issued SFAS No. 142 "Goodwill and Intangible Assets,"
which prescribes accounting for all purchased goodwill and intangible assets.
Pursuant to SFAS No. 142, acquired goodwill is not amortized, but is tested for
impairment at the reporting unit level annually and whenever an impairment
indicator arises. All goodwill should be assigned to reporting units that are
expected to benefit from the goodwill. Goodwill impairment should be tested with
a two-step approach. First, the fair value of the reporting unit should be
compared to its carrying value, including goodwill. If the reporting unit's
carrying value exceeds its fair value, then any goodwill impairment should be
measured as the excess of the goodwill's carrying value over its implied fair
value. The implied fair value of goodwill should be calculated in the same
manner as goodwill is calculated for a business combination, using the reporting
unit's fair value as the "purchase price." Therefore, the goodwill's implied
fair value will be the excess of the "purchase price" over the amounts allocated
to assets, including unrecognized intangible assets, and liabilities of the
reporting unit. Goodwill impairment losses should be reported in the income
statement as a separate line item within operations, except for such losses
included in the calculation of a gain or loss from discontinued operations.

An acquired intangible asset, other than goodwill, should be amortized over its
useful economic life. The useful life of an intangible asset is indefinite if it
extends beyond the foreseeable horizon. If an asset's life is indefinite, the
asset should not be amortized until the life is determined to be finite.
Intangible assets being amortized should be tested for impairment in accordance
with SFAS No. 121. Intangible assets not being amortized should be tested for
impairment annually and whenever there are indicators of impairment, by
comparing the asset's fair value to its carrying amount.

SFAS No. 142 is effective for fiscal years beginning after December 15, 2001.
Early adoption is permitted for companies with fiscal years beginning after
March 15, 2001, but only if the first quarter financial statements have not
previously been issued. SFAS No. 142 is not expected to have a material effect
on the Corporation's financial position 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, 2001 and 2000, and the related
consolidated statements of earnings, comprehensive income, shareholders' equity
and cash flows for each of the three years in the period ended June 30, 2001.
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 auditing standards generally accepted
in the United States of America. 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, 2001 and 2000, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
June 30, 2001, in conformity with accounting principles generally accepted in
the United States of America.





/s/GRANT THORNTON LLP

Cincinnati, Ohio
July 27, 2001







                                       17
<PAGE>


                               ASB FINANCIAL CORP.
<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                    June 30,
                        (In thousands, except share data)

         ASSETS                                                                                2001                2000
<S>                                                                                           <C>                  <C>
Cash and due from banks                                                                    $    640            $    917
Interest-bearing deposits in other financial institutions                                     4,009               4,152
                                                                                            -------             -------
         Cash and cash equivalents                                                            4,649               5,069

Investment securities available for sale - at market                                         20,658              19,112
Mortgage-backed securities available for sale - at market                                     8,716               8,616
Loans receivable - net                                                                      103,308              94,744
Office premises and equipment - at depreciated cost                                           1,394               1,366
Federal Home Loan Bank stock - at cost                                                          788                 733
Accrued interest receivable on loans                                                            188                  63
Accrued interest receivable on mortgage-backed securities                                        50                  59
Accrued interest receivable on investments and
  interest-bearing deposits                                                                     295                 355
Prepaid expenses and other assets                                                               902                 882
Prepaid federal income taxes                                                                     39                 228
Deferred federal income taxes                                                                    -                  671
                                                                                            -------             -------

         Total assets                                                                      $140,987            $131,898
                                                                                            =======             =======

         LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                                   $120,725            $110,007
Advances from the Federal Home Loan Bank                                                      4,257               7,790
Advances by borrowers for taxes and insurance                                                   171                 173
Accrued interest payable                                                                        129                  89
Other liabilities                                                                             1,201               1,258
Deferred federal income taxes                                                                     1                  -
                                                                                            -------             -------
         Total liabilities                                                                  126,484             119,317

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 shares issued                                                                      -                   -
  Additional paid-in capital                                                                  8,482               8,454
  Retained earnings, restricted                                                               8,393               7,870
  Shares acquired by stock benefit plans                                                       (781)             (1,059)
  Accumulated comprehensive income (loss), unrealized gains (losses) on securities
    designated as available for sale, net of related tax effects                                779                (592)
  Less 208,145 and 177,366 shares of treasury stock - at cost, at June 30, 2001 and
    2000, respectively                                                                       (2,370)             (2,092)
                                                                                            -------             -------
         Total shareholders' equity                                                          14,503              12,581
                                                                                            -------             -------

         Total liabilities and shareholders' equity                                        $140,987            $131,898
                                                                                            =======             =======
</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 per share data)


                                                                                2001             2000              1999
<S>                                                                             <C>              <C>               <C>
Interest income
  Loans                                                                      $ 8,169           $7,153            $6,394
  Mortgage-backed securities                                                     556              601               709
  Investment securities                                                        1,533            1,491             1,405
  Interest-bearing deposits and other                                              4               12                72
                                                                              ------            -----             -----
         Total interest income                                                10,262            9,257             8,580

Interest expense
  Deposits                                                                     6,033            5,033             4,797
  Borrowings                                                                     346              394               315
                                                                              ------            -----             -----
         Total interest expense                                                6,379            5,427             5,112
                                                                              ------            -----             -----

         Net interest income                                                   3,883            3,830             3,468

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

         Net interest income after provision
           for (recoveries of) losses on loans                                 3,882            3,829             3,469

Other income
  Gain on sale of investment securities                                          117                9                61
  Loss on sale of real estate acquired through foreclosure                        -                -                 (3)
  Other operating                                                                378              345               272
                                                                              ------            -----             -----
         Total other income                                                      495              354               330

General, administrative and other expense
  Employee compensation and benefits                                           1,508            1,522             1,207
  Occupancy and equipment                                                        178              142               111
  Federal deposit insurance premiums                                              25               40                56
  Franchise taxes                                                                166              190               202
  Data processing                                                                348              299               244
  Other operating                                                                558              480               466
                                                                              ------            -----             -----
         Total general, administrative and other expense                       2,783            2,673             2,286
                                                                              ------            -----             -----

         Earnings before income taxes                                          1,594            1,510             1,513

Federal income taxes
  Current                                                                        494              474               355
  Deferred                                                                       (34)             (48)               78
                                                                              ------            -----             -----
         Total federal income taxes                                              460              426               433
                                                                              ------            -----             -----

         NET EARNINGS                                                        $ 1,134           $1,084            $1,080
                                                                              ======            =====             =====

         EARNINGS PER SHARE
           Basic                                                                $.75             $.70              $.68
                                                                                 ===              ===               ===

           Diluted                                                              $.73             $.70              $.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)


                                                                                    2001            2000           1999
<S>                                                                                 <C>             <C>             <C>
Net earnings                                                                      $1,134          $1,084         $1,080

Other comprehensive income, net of tax:
  Unrealized holding gains (losses) on securities during the period,
    net of taxes (benefits) of $746, $(437) and $(210)
    in 2001, 2000 and 1999, respectively                                           1,448            (851)          (409)

Reclassification adjustment for realized gains
  included in earnings, net of tax of $40, $3 and $21
  in 2001, 2000 and 1999, respectively                                               (77)             (6)           (40)
                                                                                   -----           -----          -----

Comprehensive income                                                              $2,505          $  227         $  631
                                                                                   =====           =====          =====

Accumulated comprehensive income (loss)                                           $  779          $ (592)        $  265
                                                                                   =====           =====          =====
</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, 2001, 2000 and 1999
                        (In thousands, except share data)


                                                                                             Unrealized gains
                                                                                Shares          (losses) on
                                                        Additional             acquired         securities
                                                Common    paid-in   Retained   by stock       designated as      Treasury
                                                 stock    capital   earnings benefit plans  available for sale     stock     Total
<S>                                               <C>       <C>        <C>        <C>               <C>             <C>       <C>
Balance at July 1, 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

Amortization of expense related to stock benefit
  plans                                            -         28         -         278                -                -         306
Net earnings for the year ended June 30, 2001      -         -       1,134         -                 -                -       1,134
Cash dividends of $.45 per share                   -         -        (611)        -                 -                -        (611)
Purchase of treasury shares - at cost              -         -          -          -                 -              (278)      (278)
Unrealized gains on securities designated as
  available for sale, net of related tax effects   -         -          -          -              1,371               -       1,371
                                                  ---     -----      -----      -----             -----           ------     ------

Balance at June 30, 2001                         $ -     $8,482     $8,393     $ (781)           $  779          $(2,370)   $14,503
                                                  ===     =====      =====      =====             =====           ======     ======
</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)


                                                                                    2001            2000           1999
<S>                                                                                 <C>             <C>             <C>
Cash flows from operating activities:
  Net earnings for the year                                                      $ 1,134         $ 1,084        $ 1,080
  Adjustments to reconcile net earnings to net cash
  from operating activities:
    Amortization of discounts and premiums on loans,
      investments and mortgage-backed securities - net                                35              32             38
    Amortization of deferred loan origination fees                                   (51)            (47)           (67)
    Amortization of expense related to stock benefit plans                           306             325            382
    Depreciation and amortization                                                    122              86             66
    Provision for (recoveries of) losses on loans                                      1               1             (1)
    Gain on sale of investment securities                                           (117)             (9)           (61)
    Loss on sale of real estate acquired through foreclosure                          -               -               3
    Federal Home Loan Bank stock dividends                                           (55)            (55)           (53)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable on loans                                          (125)             15             47
      Accrued interest receivable on mortgage-backed securities                        9               7              4
      Accrued interest receivable on investments and
        interest-bearing deposits                                                     60             (65)            18
      Prepaid expenses and other assets                                              (20)            172            (49)
      Accrued interest payable                                                        40              (4)           (25)
      Other liabilities                                                              (57)             88           (159)
      Federal income taxes
        Current                                                                      189             (28)            22
        Deferred                                                                     (34)            (48)            78
                                                                                  ------          ------         ------
         Net cash provided by operating activities                                 1,437           1,554          1,323

Cash flows from investing activities:
  Proceeds from maturity of investment securities                                  7,986             350         11,264
  Proceeds from sale of investment securities                                        119           1,011             60
  Purchase of investment securities                                               (7,812)         (2,116)       (19,259)
  Purchase of mortgage-backed securities                                          (1,260)             -          (5,625)
  Proceeds from sale of mortgage-backed securities                                    -               -             838
  Principal repayments on mortgage-backed securities                               1,480           1,310          3,221
  Purchase of loans                                                               (2,872)         (1,875)          (778)
  Loan principal repayments                                                       23,005          19,232         28,170
  Loan disbursements                                                             (28,647)        (29,965)       (33,204)
  Purchase of office premises and equipment                                         (150)           (405)          (181)
  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
                                                                                  ------          ------         ------
         Net cash used in investing activities                                    (8,151)        (12,065)       (13,629)
                                                                                  ------          ------         ------

         Net cash used in operating and investing activities
           (subtotal carried forward)                                             (6,714)        (10,511)       (12,306)
                                                                                  ------          ------         ------
</TABLE>






                                       22
<PAGE>


                               ASB FINANCIAL CORP.
<TABLE>
<CAPTION>

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                           For the year ended June 30,
                                 (In thousands)


                                                                                    2001            2000           1999

<S>                                                                                 <C>             <C>             <C>
         Net cash used in operating and investing activities
           (subtotal brought forward)                                            $(6,714)       $(10,511)      $(12,306)

Cash flows from financing activities:
  Net increase in deposit accounts                                                10,718           9,053          7,477
  Proceeds from Federal Home Loan Bank advances                                    3,000           9,500          2,000
  Repayment of Federal Home Loan Bank advances                                    (6,533)         (7,533)          (531)
  Repayment of other borrowed money                                                   -               -          (2,500)
  Advances by borrowers for taxes and insurance                                       (2)              5             (1)
  Proceeds from issuance of shares under stock option plan                            -               61             -
  Purchase of treasury stock                                                        (278)           (949)            -
  Dividends paid on common stock                                                    (611)         (2,123)          (463)
                                                                                  ------         -------        -------
         Net cash provided by financing activities                                 6,294           8,014          5,982
                                                                                  ------         -------        -------

Net decrease in cash and cash equivalents                                           (420)         (2,497)        (6,324)

Cash and cash equivalents at beginning of year                                     5,069           7,566         13,890
                                                                                  ------         -------        -------

Cash and cash equivalents at end of year                                         $ 4,649        $  5,069       $  7,566
                                                                                  ======         =======        =======


Supplemental disclosure of cash flow information:
 Cash paid during the year for:
    Federal income taxes                                                         $   435        $    547       $    377
                                                                                  ======         =======        =======

    Interest on deposits and borrowings                                          $ 6,339        $  5,431       $  5,137
                                                                                  ======         =======        =======

Supplemental disclosure of noncash investing activities:
  Unrealized gains (losses) on securities designated as available
    for sale, net of related tax effects                                         $ 1,371        $   (857)      $   (449)
                                                                                  ======         =======        =======
</TABLE>












        The accompanying notes are an integral part of these statements.


                                       23
<PAGE>


                               ASB FINANCIAL CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 2001, 2000 and 1999


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 its
    wholly-owned subsidiary, 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 amounts 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 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 accounting principles generally accepted in the United
    States of America ("U. S. GAAP") and general accounting practices within the
    financial services industry. In preparing consolidated financial statements
    in accordance with U. S. 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.

       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.

       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, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

       Investment Securities and Mortgage-Backed Securities (continued)

       At June 30, 2001 and 2000, the Corporation had designated all investment
       and mortgage-backed securities as available for sale.

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

       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.

       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.

       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





                                       25
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

       Allowance for Loan Losses (continued)

       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, 2001 and 2000, the Savings Bank's investment in impaired
       loans, as defined, totaled approximately $450,000 and $454,000,
       respectively. The Savings Bank maintained a component of the allowance
       for loan losses related to such impaired loans of $46,000 at each of
       those respective dates.

       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.




                                       26
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

       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.

       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.

       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 $24,000, $26,000 and $19,000 for the fiscal years
       ended June 30, 2001, 2000 and 1999, respectively.





                                       27
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

       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 $162,000, $270,000 and $172,000 for the fiscal years ended
       June 30, 2001, 2000 and 1999, respectively.

       The Corporation also has a Management Recognition Plan ("MRP") which
       provides for awards of up to 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,
       2001, all 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 totaled approximately $93,000,
       $132,000 and $167,000 for the fiscal years ended June 30, 2001, 2000 and
       1999, respectively.

       Earnings Per Share

       Basic earnings per share for the fiscal years ended June 30, 2001, 2000
       and 1999 is based upon the weighted-average shares outstanding during the
       year, less 34,918, 49,633 and 62,795 unallocated ESOP shares,
       respectively. Weighted-average common shares deemed outstanding totaled
       1,515,886, 1,548,144 and 1,584,451 for the fiscal years ended June 30,
       2001, 2000 and 1999, 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 1,547,607, 1,548,144 and 1,611,751 for the fiscal years ended
       June 30, 2001, 2000 and 1999, respectively. Incremental shares related to
       the assumed exercise of stock options included in the computation of
       diluted earnings per share totaled 31,721 and 27,300 for the fiscal years
       ended June 30, 2001 and 1999, 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.







                                       28
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

       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, 2001 and 2000:

                  Cash and cash equivalents: The financial statement carrying
                  amounts for cash and cash equivalents 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.

                  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.


                                       29
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

       Fair Value of Financial Instruments (continued)

                  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, 2001 and 2000, 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>

                                                                       2001                                2000
                                                            Carrying          Fair             Carrying          Fair
                                                              value           value              value           value
                                                                                    (In thousands)
<S>                                                           <C>              <C>                 <C>             <C>
       Financial assets
         Cash and cash equivalents                           $  4,649       $  4,649            $  5,069       $  5,069
         Investment securities                                 20,658         20,658              19,112         19,112
         Mortgage-backed securities                             8,716          8,716               8,616          8,616
         Loans receivable                                     103,308        105,299              94,744         91,278
         Federal Home Loan Bank stock                             788            788                 733            733
                                                              -------        -------             -------        -------

                                                             $138,119       $140,110            $128,274       $124,808
                                                              =======        =======             =======        =======

       Financial liabilities
         Deposits                                            $120,725       $120,362            $110,007       $110,135
         Advances from the Federal Home Loan Bank               4,257          4,245               7,790          7,748
         Escrow deposits                                          171            171                 173            173
                                                              -------        -------             -------        -------

                                                             $125,153       $124,778            $117,970       $118,056
                                                              =======        =======             =======        =======
</TABLE>

       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.

       Advertising

       Advertising costs are expensed when incurred. The Corporation's
       advertising expense totaled $49,000, $46,000 and $41,000 for the fiscal
       years ended June 30, 2001, 2000 and 1999, respectively.

       Reclassifications

       Certain prior year amounts have been reclassified to conform to the 2001
       consolidated financial statement presentation.




                                       30
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES

    The amortized cost, gross unrealized gains, gross unrealized losses and
    estimated fair values of investment securities at June 30, 2001 and 2000 are
    summarized as follows:

<TABLE>
<CAPTION>
                                                                                 2001
                                                                       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             $19,359        $     89             $  41         $19,407
      FHLMC stock                                         16           1,073                -            1,089
      Corporate equity securities                        169              14                21             162
                                                      ------           -----              ----          ------

                                                     $19,544          $1,176             $  62         $20,658
                                                      ======           =====              ====          ======

                                                                                 2000
                                                                       Gross              Gross       Estimated
                                                    Amortized       unrealized         unrealized       fair
                                                      cost             gains             losses         value
                                                                           (In thousands)
    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>

    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>

                                                                  2001                           2000
                                                                      Estimated                        Estimated
                                                   Amortized            fair          Amortized          fair
                                                     cost               value           cost             value
                                                                            (In thousands)
<S>                                                    <C>               <C>              <C>             <C>
    Due after three years through
      five years                                     $ 2,000          $ 2,002           $    -         $    -
    Due after five years                              17,359           17,405            19,532         18,263
                                                      ------           ------            ------         ------

                                                     $19,359          $19,407           $19,532        $18,263
                                                      ======           ======            ======         ======
</TABLE>

    The Corporation had $5.0 million of investment securities pledged to secure
public deposits at June 30, 2001.





                                       31
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


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

    The amortized cost, gross unrealized gains, gross unrealized losses and
    estimated fair values of mortgage-backed securities at June 30, 2001 and
    2000 are summarized as follows:
<TABLE>
<CAPTION>
                                                                                    2001
                                                                              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              $  772            $ 22           $ -        $  794
      Government National Mortgage
        Association participation certificates               3,207              42             13        3,236
      Federal National Mortgage Association
        participation certificates                             475               9             -           484
      Collateralized mortgage obligations                    4,196              18             12        4,202
                                                             -----             ---            ---        -----

         Total mortgage-backed securities                   $8,650            $ 91           $ 25       $8,716
                                                             =====             ===            ===        =====

                                                                                    2000
                                                                              Gross          Gross     Estimated
                                                           Amortized       unrealized     unrealized     fair
                                                             cost             gains         losses       value
    Available for sale:                                                        (In thousands)
      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>












                                       32
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


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.
                                                               June 30,
                                                      2001                2000
                                                            (In thousands)

    Due within three years                          $   23              $   33
    Due in three to five years                          80                 116
    Due in five to ten years                           324                 431
    Due in ten to twenty years                       1,202               1,795
    Due after twenty years                           7,021               6,531
                                                     -----               -----

                                                    $8,650              $8,906
                                                     =====               =====

    Proceeds from sales of investment and mortgage-backed securities amounted to
    $119,000, $1.0 million and $898,000 during the years ended June 30, 2001,
    2000 and 1999, respectively, and resulted in gross realized gains totaling
    $117,000, $9,000 and $61,000, for those respective periods.


NOTE C - LOANS RECEIVABLE

    The composition of the loan portfolio at June 30 is as follows:
                                                          2001          2000
                                                           (In thousands)
    Residential real estate
      One- to four- family                            $ 71,817       $65,278
      Multi-family                                       3,452         3,160
      Construction                                       1,649           992
    Nonresidential real estate and land                 11,684        11,691
    Consumer and other                                  17,688        15,804
                                                       -------        ------
                                                       106,290        96,925
    Less:
      Undisbursed portion of loans in process            2,065         1,255
      Deferred loan origination fees                       204           203
      Allowance for loan losses                            713           723
                                                       -------        ------

                                                      $103,308       $94,744
                                                       =======        ======







                                       33
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


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 $74.9 million, or 72%, of the total loan portfolio at June 30,
    2001, and $68.2 million, or 72%, of the total loan portfolio at June 30,
    2000. 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. In the opinion of management, such
    loans are consistent with sound lending practices and are within applicable
    regulatory lending limitations. The aggregate dollar amount of loans
    outstanding to directors and officers totaled approximately $663,000 and
    $474,000 at June 30, 2001 and 2000, 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>

                                                                    2001           2000           1999
                                                                             (In thousands)
<S>                                                                  <C>            <C>            <C>
    Balance at beginning of year                                    $723           $733           $759
    Provision for (recoveries of) losses on loans                      1              1             (1)
    Charge-offs of loans                                             (11)           (11)           (25)
                                                                     ---            ---           ---

    Balance at end of year                                          $713           $723           $733
                                                                     ===            ===            ===
</TABLE>

    As of June 30, 2001, 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.

    Nonperforming and nonaccrual loans totaled approximately $618,000, $281,000
    and $379,000 at June 30, 2001, 2000 and 1999, respectively.

    During the years ended June 30, 2001, 2000 and 1999, interest income of
    approximately $26,000, $11,000 and $16,000, respectively, would have been
    recognized had such nonperforming and nonaccrual loans been performing in
    accordance with contractual terms.







                                       34
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE E - OFFICE PREMISES AND EQUIPMENT

    Office premises and equipment at June 30 are comprised of the following:

                                                       2001                2000
                                                             (In thousands)

    Land and improvements                            $  389              $  389
    Office buildings and improvements                 1,622               1,581
    Furniture, fixtures and equipment                   756                 648
                                                      -----               -----
                                                      2,767               2,618
      Less accumulated depreciation and
        amortization                                  1,373               1,252
                                                      -----               -----

                                                     $1,394              $1,366
                                                      =====               =====





























                                       35
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE F - DEPOSITS

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

Deposit type and weighted-
average interest rate                                2001                  2000
                                                            (In thousands)
<S>                                                 <C>                    <C>
NOW accounts
  2001 - 1.82%                                   $  8,429
  2000 - 2.06%                                                         $  7,237
Passbook
  2001 - 2.94%                                      8,004
  2000 - 2.94%                                                            7,735
Money market deposit accounts
  2001 - 3.33%                                     18,292
  2000 - 3.31%                                                           15,790
                                                  -------               -------
Total demand, transaction and
  passbook deposits                                34,725                30,762

Certificates of deposit
  Original maturities of:
    Less than 12 months
      2001 - 5.05%                                  7,739
      2000 - 5.74%                                                        6,935
    12 months to 24 months
      2001 - 6.15%                                 47,621
      2000 - 5.80%                                                       44,778
    30 months to 36 months
      2001 - 5.51%                                  5,621
      2000 - 5.56%                                                        6,612
    More than 36 months
      2001 - 5.92%                                    526
      2000 - 5.85%                                                          612
  Individual retirement accounts
    2001 - 6.22%                                   16,030
    2000 - 5.90%                                                         14,991
  Jumbo accounts
    2001 - 5.16%                                    8,463
    2000 - 5.28%                                                          5,317
                                                  -------               -------
Total certificates of deposit                      86,000                79,245
                                                  -------               -------

Total deposit accounts                           $120,725              $110,007
                                                  =======               =======
</TABLE>

At June 30, 2001 and 2000, the Corporation had certificate of deposit accounts
with balances greater than $100,000 totaling $14.1 million and $10.3 million,
respectively.



                                       36
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE F - DEPOSITS (continued)

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

                                                         2001           2000           1999
                                                                  (In thousands)
<S>                                                      <C>            <C>            <C>
    Passbook                                           $  226         $  230         $  224
    NOW and money market deposit
      accounts                                            800            611            489
    Certificates of deposit                             5,007          4,192          4,084
                                                        -----          -----          -----

                                                       $6,033         $5,033         $4,797
                                                        =====          =====          =====
</TABLE>

    Maturities of outstanding certificates of deposit at June 30 are summarized
as follows:

                                                          2001           2000
                                                             (In thousands)

    Less than one year                                 $59,377        $52,822
    One to three years                                  26,221         26,199
    Over three years                                       402            224
                                                      --------       --------

                                                       $86,000        $79,245
                                                        ======         ======

NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

    Advances from the Federal Home Loan Bank, collateralized at June 30, 2001 by
    pledges of certain residential mortgage loans totaling $5.3 million and the
    Savings Bank's investment in Federal Home Loan Bank stock, are summarized as
    follows:

                               Maturing
                              year ending                         June 30,
    Interest rate              June 30,                      2001         2000
                                                          (Dollars in thousands)

    6.10%                       2001                       $   -        $2,500
    3.93%                       2003                        1,000           -
    4.40% - 6.12%               2004                           -         1,000
    3.16% - 3.74%               2008                        2,257        3,290
    3.93%                       2009                        1,000        1,000
                                                            -----        -----

                                                           $4,257       $7,790
                                                            =====        =====

           Weighted-average interest rate                    3.78%        5.85%
                                                             ====         ====





                                       37
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


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>

                                                                  2001           2000           1999
                                                                           (In thousands)
<S>                                                              <C>              <C>            <C>
    Federal income taxes computed at
      statutory rate                                              $542           $513           $514
    Increase (decrease) in taxes resulting from:
      Low income housing investment tax credits                    (78)           (79)           (79)
      Nontaxable interest income                                    (3)            (3)            (2)
      Other                                                         (1)            (5)            -
                                                                   ---            ---            ---
    Federal income tax provision per consolidated
      financial statements                                        $460           $426           $433
                                                                   ===            ===            ===
</TABLE>


    The composition of the Corporation's net deferred tax asset (liability) at
June 30 is as follows:
<TABLE>
<CAPTION>

                                                                          2001           2000
                                                                              (In thousands)
<S>                                                                       <C>            <C>
     Taxes (payable) refundable on temporary
     differences at estimated corporate tax rate:
       Deferred tax assets:
         General loan loss allowance                                      $242         $  246
         Deferred compensation                                             525            516
         Stock benefit plans                                                20             36
         Book/tax depreciation                                              25             15
         Unrealized loss on securities designated as
           available for sale                                               -             305
                                                                           ---          -----
           Total deferred tax assets                                       812          1,118

       Deferred tax liabilities:
         Percentage of earnings bad debt deduction                        (113)          (151)
         Deferred loan origination costs                                  (116)          (125)
         Federal Home Loan Bank stock dividends                           (183)          (171)
         Unrealized gain on securities designated as
           available for sale                                             (401)            -
                                                                           ---          -----
           Total deferred tax liabilities                                 (813)          (447)
                                                                           ---          -----

           Net deferred tax asset (liability)                             $ (1)        $  671
                                                                           ===          =====
</TABLE>

    Prior to fiscal 1997, 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




                                       38
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE H - FEDERAL INCOME TAXES (continued)

    income taxes at the then current corporate income tax rate. Retained
    earnings at June 30, 2001 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, 2001. 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, 2001, the Savings Bank had outstanding commitments to originate
    loans totaling approximately $1.6 million. In addition, the Savings Bank was
    obligated under unused lines of credit and letters of credit totaling $3.4
    million. In the opinion of management, all loan commitments equaled or
    exceeded prevalent market interest rates as of June 30, 2001, 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, 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.




                                       39
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE J - REGULATORY CAPITAL (continued)

    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-weighting factor of 50%.

    During the 2001 fiscal year, the Savings Bank was notified by the OTS 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, 2001 and 2000, management believes that the Savings Bank met
    all capital adequacy requirements to which it was subject.
<TABLE>
<CAPTION>

                                                                As of June 30, 2001
                                                                                                 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                    $11,728      8.4%        =>$2,098    =>1.5%          =>$6,994     => 5.0%

    Core capital                        $11,728      8.4%        =>$5,595    =>4.0%          =>$8,393     => 6.0%

    Risk-based capital                  $12,441     15.9%        =>$6,248    =>8.0%          =>$7,810     =>10.0%

                                                                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)

    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, 2001, 2000 and 1999


NOTE J - REGULATORY CAPITAL (continued)

    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 225,423 shares, as adjusted, of authorized but unissued shares of common
    stock at fair value at the date of grant. In fiscal 1996, the Corporation
    granted 197,521 options at an adjusted exercise price of $7.64. The number
    of options granted and the exercise price have been adjusted to give effect
    to the return of capital and special dividend distributions paid by the
    Corporation. 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.

    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. Had compensation cost for the Corporation's stock
    option plan been determined based on the fair value at the grant dates for
    awards under the Plan consistent with the accounting method utilized in SFAS
    No. 123, the Corporation's net earnings and earnings per share would have
    been reported as the pro forma amounts indicated below:













                                       41
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE K - STOCK OPTION PLAN (continued)
<TABLE>
<CAPTION>

                                                                     2001              2000           1999
                                                                     (In thousands, except per share data)
<S>                                      <C>                          <C>              <C>             <C>
    Net earnings                      As reported                  $1,134            $1,084         $1,080
                                                                    =====             =====          =====

                                        Pro-forma                  $1,103            $1,024         $1,020
                                                                    =====             =====          =====

    Earnings per share
      Basic                           As reported                    $.75              $.70           $.68
                                                                      ===               ===            ===

                                        Pro-forma                    $.73              $.66           $.64
                                                                      ===               ===            ===

      Diluted                         As reported                    $.73              $.70           $.67
                                                                      ===               ===            ===

                                        Pro-forma                    $.71              $.66           $.63
                                                                      ===               ===            ===
</TABLE>


    The fair value of each option grant is estimated on the date of grant using
    the modified Black-Scholes options-pricing model with the following
    assumptions used for grants during fiscal 2001: dividend yield of 4.9%;
    expected volatility of 20.0%; a risk-free interest rate of 5.0% and an
    expected life of ten years.

    A summary of the status of the Corporation's Plan as of June 30, 2001, 2000
    and 1999, and changes during the periods ending on those dates is presented
    below:
<TABLE>
<CAPTION>
                                                   2001                      2000                         1999
                                                         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        164,557       $10.08      170,627       $10.08         170,627      $10.08
    Adjustment for special dividend
      distributions                              -         (2.44)          -           -                -          -
    Granted                                  10,000         8.75           -           -                -          -
    Exercised                                    -           -         (6,070)       10.08              -          -
    Forfeited                                    -           -             -           -                -          -
                                            -------        -----      -------        -----         -------       -----

    Outstanding at end of year              174,557       $ 7.70      164,557       $10.08         170,627      $10.08
                                            =======        =====      =======        =====         =======       =====

    Options exercisable at year-end         164,557       $ 7.64      125,052       $10.08          91,618      $10.08
                                            =======        =====      =======        =====         =======       =====

    Weighted-average fair value of
      options granted during the year                     $ 1.34                    $  -                        $  -
                                                           =====                     =====                       =====
</TABLE>

    The following information applies to options outstanding at June 30, 2001:

    Number outstanding                                                  174,557
    Range of exercise prices                                      $7.64 - $8.75
    Weighted-average exercise price                                       $7.70
    Weighted-average remaining contractual life                       4.7 years



                                       42
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


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, 2001 and 2000, and the results of
    its operations and its cash flows for the fiscal years ended June 30, 2001,
    2000 and 1999.

                               ASB Financial Corp.
<TABLE>
<CAPTION>
                        STATEMENTS OF FINANCIAL CONDITION
                                    June 30,
                                 (In thousands)
     ASSETS                                                                              2001             2000
<S>                                                                                      <C>              <C>
    Interest-bearing deposits in American Savings Bank, fsb                           $   568          $   497
    Interest-bearing deposits in other financial institutions                             500              724
    Investment securities                                                               1,211            1,106
    Loans receivable                                                                      489               -
    Loan receivable from ESOP                                                             399              539
    Investment in American Savings Bank, fsb                                           12,477            9,716
    Prepaid expenses and other                                                            145              172
                                                                                       ------           ------

          Total assets                                                                $15,789          $12,754
                                                                                       ======           ======

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Checks issued in excess of bank balance                                           $ 1,033          $    -
    Dividends payable                                                                     185              173
    Other liabilities                                                                      53               -
    Deferred federal income taxes                                                          15               -
                                                                                       ------           ------
          Total liabilities                                                             1,286              173

    Shareholders' equity
      Common stock and additional paid-in capital                                       8,482            8,454
      Retained earnings                                                                 8,393            7,870
      Shares acquired by stock benefit plans                                             (781)          (1,059)
      Treasury shares                                                                  (2,370)          (2,092)
      Unrealized gains (losses) on securities designated as available for sale, net       779             (592)
                                                                                       ------           ------
          Total shareholders' equity                                                   14,503           12,581
                                                                                       ------           ------

          Total liabilities and shareholders' equity                                  $15,789          $12,754
                                                                                       ======           ======
</TABLE>

                               ASB Financial Corp.
<TABLE>
<CAPTION>
                             STATEMENTS OF EARNINGS
                               Year ended June 30,
                                 (In thousands)
                                                                              2001           2000         1999
<S>                                                                            <C>            <C>          <C>
    Revenue
      Interest income                                                       $  170         $   82       $   90
      Equity in earnings of American Savings Bank, fsb                       1,157          1,171        1,199
                                                                             -----          -----        -----
          Total revenue                                                      1,327          1,253        1,289

    General and administrative expenses                                        188            225          272
                                                                             -----          -----        -----

    Earnings before income taxes (credits)                                   1,139          1,028        1,017

    Federal income taxes (credits)                                               5            (56)         (63)
                                                                             -----          -----        -----

          NET EARNINGS                                                      $1,134         $1,084       $1,080
                                                                             =====          =====        =====
</TABLE>



                                       43
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


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)
                                                                              2001           2000         1999
<S>                                                                           <C>             <C>         <C>
    Cash provided by (used in) operating activities:
      Net earnings for the year                                             $1,134         $1,084       $1,080
      Adjustments to reconcile net earnings to net
      cash provided by (used in) operating activities
        Amortization of premiums on loans and
          investment securities - net                                            3             -            -
        (Undistributed earnings of) excess of distributions
          from consolidated subsidiary                                      (1,157)         1,828        2,303
        Increase (decrease) in cash due to changes in:
          Prepaid expenses and other assets                                     27            104         (122)
          Deferred federal income taxes                                        (20)            -            -
          Other liabilities                                                     65              8           -
                                                                             -----          -----        -----
          Net cash provided by operating activities                             52          3,024        3,261

    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)
      Loan principal repayments                                                 11             -            -
      Loan disbursements                                                      (500)            -            -
                                                                             -----          -----        -----
          Net cash provided by (used in) investing activities                 (349)           140          110

    Cash flows provided by (used in) financing activities:
      Checks issued in excess of bank balance                                1,033             -            -
      Proceeds from exercise of stock options                                   -              61           -
      Repayment of borrowed money                                               -              -        (2,500)
      Payment of dividends on common stock                                    (611)        (2,123)        (463)
      Purchase of treasury shares                                             (278)          (949)          -
                                                                             -----          -----        -----
          Net cash provided by (used in) financing activities                  144         (3,011)      (2,963)
                                                                             -----          -----        -----

    Net increase (decrease) in cash and cash equivalents                      (153)           153          408

    Cash and cash equivalents at beginning of year                           1,221          1,068          660
                                                                             -----          -----        -----

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


    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, 2001, 2000 and 1999


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

    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 earnings 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 exceeded the above described limitation. As a result,
    the Savings Bank will be required to request OTS approval for any dividends
    payable through December 31, 2001.


NOTE M - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

    The following table summarizes the Corporation's quarterly results for the
    fiscal years ended June 30, 2001 and 2000. Certain amounts, as previously
    reported, have been reclassified to conform to the 2001 presentation.
<TABLE>
<CAPTION>

                                                                        Three Months Ended
                                                   September 30,      December 31,      March 31,     June 30,
    2001:                                                   (In thousands, except per share data)
<S>                                                      <C>               <C>             <C>           <C>
    Total interest income                                 $2,548            $2,577         $2,590       $2,551
    Total interest expense                                 1,569             1,653          1,605        1,552
                                                           -----             -----          -----        -----

    Net interest income                                      979               924            985          995
    Provision for losses on loans                             -                 -               1           -
    Other income                                             107               125            129          134
    General, administrative and other expense                701               690            722          670
                                                           -----             -----          -----        -----

    Earnings before income taxes                             385               359            391          459
    Federal income taxes                                     107                98            107          148
                                                           -----             -----          -----        -----

    Net earnings                                          $  278            $  261         $  284       $  311
                                                           =====             =====          =====        =====

    Earnings per share
      Basic                                                 $.18              $.18           $.19         $.20
                                                             ===               ===            ===          ===

      Diluted                                               $.18              $.17           $.18         $.20
                                                             ===               ===            ===          ===
</TABLE>










                                       45
<PAGE>


                               ASB FINANCIAL CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


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
























                                       46
<PAGE>


                               ASB FINANCIAL CORP.
                             DIRECTORS AND OFFICERS

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

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

Gerald R. Jenkins                                       Director
Retired 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

Michael L. Gampp                                        Chief Financial Officer
Chief Financial Officer and Vice President
American Savings Bank, fsb

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

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

Robert M. Smith                     Director, President and CEO

Gerald R. Jenkins                   Director

William J. Burke                    Director

Lee O. Fitch                        Director

Louis M. Schoettle, M.D.            Director

Jack A. Stephenson                  Vice President

Michael L. Gampp                    Chief Financial Officer and Vice President

Carlisa R. Baker                    Treasurer

M. Kathryn Fish                     Secretary




                                       47
<PAGE>


                              SHAREHOLDER SERVICES

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

Illinois  Stock   Transfer   Company  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:

                         Illinois Stock Transfer Company
                           209 West Jackson Boulevard
                                    Suite 903
                          Chicago, Illinois 60606-6905
                                  (312)427-2953


                                 ANNUAL MEETING

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

The Annual  Meeting  of  Shareholders  of ASB  Financial  Corp.  will be held on
October 24, 2001,  at 11:00 a.m.,  Eastern  Time,  in the Micklethwaite Room at
Shawnee State University,  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

























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