REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Glenway Financial Corporation

We have audited the accompanying  consolidated statements of financial condition
of Glenway  Financial  Corporation as of June 30, 1998 and 1997, and the related
consolidated  statements  of earnings,  stockholders'  equity and cash flows for
each of the three years ended June 30, 1998, 1997 and 1996.  These  consolidated
financial statements are the responsibility of the Corporation's management. Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of Glenway Financial
Corporation  as of June 30, 1998 and 1997, and the  consolidated  results of its
operations  and its cash flows for each of the three years ended June 30,  1998,
1997 and 1996, in conformity with generally accepted accounting principles.



/s/GRANT THORNTON LLP


Cincinnati, Ohio
August 31, 1998


<PAGE>

<TABLE>
<CAPTION>

                          Glenway Financial Corporation
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                    June 30,
                        (In thousands, except share data)

          ASSETS                                                                                    1998           1997
<S>                                                                                               <C>               <C>
Cash and due from banks                                                                         $  1,436       $  3,890
Federal funds sold                                                                                 1,764             - 
                                                                                                 -------        -------
          Cash and cash equivalents                                                                3,200          3,890

Investment securities - at amortized cost, approximate market
  value of $8,120 and $7,035 at June 30, 1998 and 1997                                             8,069          7,042
Mortgage-backed securities - at amortized cost, approximate market
  value of $11,158 and $12,946 at June 30, 1998 and 1997                                          11,304         13,281
Mortgage-backed securities available for sale - at market                                          5,570          9,920
Loans receivable - net                                                                           262,327        239,648
Office premises and equipment - at depreciated cost                                                5,805          7,043
Real estate acquired through foreclosure                                                              -              44
Federal Home Loan Bank stock - at cost                                                             2,617          2,382
Accrued interest receivable on loans                                                               1,548          1,214
Accrued interest receivable on mortgage-backed securities, investments
  and interest-bearing deposits                                                                      230            267
Cash surrender value of life insurance                                                             1,652          1,585
Prepaid expenses and other assets                                                                    412            404
Prepaid federal income taxes                                                                         372             - 
Goodwill - net of amortization                                                                       226            368
                                                                                                 -------        -------

          Total assets                                                                          $303,332       $287,088
                                                                                                 =======        =======

         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                                        $220,639       $226,853
Advances from the Federal Home Loan Bank                                                          50,435         28,114
Loan to Employee Stock Ownership Plan                                                                 -              65
Checks issued in excess of bank balance                                                               -           2,422
Advances by borrowers for taxes and insurance                                                        186            235
Accounts payable on mortgage loans serviced for others                                               600            229
Accrued interest payable                                                                             108             61
Other liabilities                                                                                  1,486          1,189
Accrued federal income taxes                                                                          -             102
Deferred federal income taxes                                                                        657            580
                                                                                                 -------        -------
         Total liabilities                                                                       274,111        259,850

Commitments                                                                                           -              - 

Stockholders' equity
  Serial preferred stock - authorized 500,000 shares of $.01 par value; no shares issued              -              - 
  Common stock - authorized 3,000,000 shares of $.01 par value;
    2,374,738 and 1,187,369 shares issued at June 30, 1998 and 1997                                   24             12
  Additional paid-in capital                                                                      13,359         13,267
  Retained earnings - substantially restricted                                                    16,806         15,038
  Less required contributions for shares acquired by employee benefit plans                         (107)          (216)
  Less 91,244 and 47,372 shares of treasury stock at June 30, 1998 and 1997 - at cost               (929)          (965)
  Unrealized gains on securities designated as available for sale,
    net of related tax effects                                                                        68            102
                                                                                                 -------        -------
         Total stockholders' equity                                                               29,221         27,238
                                                                                                 -------        -------

         Total liabilities and stockholders' equity                                             $303,332       $287,088
                                                                                                 =======        =======
</TABLE>


The accompanying notes are an integral part of these statements.

                                        4


<PAGE>

<TABLE>

                          Glenway Financial Corporation
<CAPTION>

                       CONSOLIDATED STATEMENTS OF EARNINGS

                               Year ended June 30,
                        (In thousands, except share data)

                                                                             1998         1997         1996
<S>                                                                         <C>           <C>           <C>
Interest income
  Loans                                                                   $20,477      $18,290      $16,934
  Mortgage-backed securities                                                1,343        1,764        2,029
  Investment securities                                                       476          465          646
  Interest-bearing deposits and other                                         229          216          188
                                                                           ------       ------       ------
         Total interest income                                             22,525       20,735       19,797

Interest expense
  Deposits                                                                 10,910       10,938       10,593
  Borrowings                                                                2,283        1,257        1,340
                                                                           ------       ------       ------
         Total interest expense                                            13,193       12,195       11,933
                                                                           ------       ------       ------

         Net interest income                                                9,332        8,540        7,864

Provision for losses on loans                                                 363          244           60
                                                                           ------       ------       ------
         Net interest income after provision for losses on loans            8,969        8,296        7,804

Other income
  Gain (loss) on sale of loans                                                 21           39          (14)
  Gain (loss) on securities transactions                                       42           63           (9)
  Gain (loss) on sale of office premises and equipment                        (57)          -           144
  Gain (loss) on sale of real estate acquired through foreclosure             (19)          15          (13)
  Loan servicing fees                                                         143          168          187
  Other operating                                                             753          669          626
                                                                           ------       ------       ------
         Total other income                                                   883          954          813

General, administrative and other expense
  Employee compensation and benefits                                        3,235        3,168        3,308
  Occupancy and equipment                                                     689          591          475
  Federal deposit insurance premiums                                          146        1,549          484
  Franchise taxes                                                             239          358          377
  Data processing                                                             323          330          245
  Amortization of goodwill                                                    142          208          220
  Other operating                                                             941        1,144        1,165
                                                                           ------       ------       ------
         Total general, administrative and other expense                    5,715        7,348        6,274
                                                                           ------       ------       ------

         Earnings before income taxes                                       4,137        1,902        2,451

Federal income taxes
  Current                                                                   1,339          657          774
  Deferred                                                                     94           39          132
                                                                           ------       ------       ------
         Total federal income taxes                                         1,433          696          906
                                                                           ------       ------       ------

         NET EARNINGS                                                     $ 2,704      $ 1,206      $ 1,545
                                                                           ======       ======       ====== 
         EARNINGS PER SHARE
           Basic                                                            $1.19         $.53         $.68
                                                                             ====          ===          ===

           Diluted                                                          $1.16         $.52         $.67
                                                                             ====          ===          ===

</TABLE>

The accompanying notes are an integral part of these statements.

                                        5


<PAGE>

<TABLE>

                          Glenway Financial Corporation
<CAPTION>
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                For the years ended June 30, 1998, 1997 and 1996
                        (In thousands, except share data)
                                                                                                                   Shares       
                                                                                                              acquired by       
                                                                                Additional                       employee       
                                                                      Common       paid-in        Retained        benefit       
                                                                       stock       capital        earnings          plans       
<S>                                                                     <C>          <C>             <C>              <C>       
Balance at July 1, 1995                                                 $ 10       $11,026         $15,906          $(618)      

Principal repayments on loan to ESOP/amortization of
  expense related to employee benefit plans                               -             31              -             149       
Net earnings for the year ended June 30, 1996                             -             -            1,545             -        
Cash dividends of $.323 per share                                         -             -             (732)            -        
Stock dividend (5%), including cash in lieu of fractional shares           1           965            (970)            -        
Issuance of shares under employee benefit and stock option plans          -             80              -             153       
Unrealized gains on securities designated as available for sale,
  net of related tax effects                                              -             -               -              -        
                                                                         ---        ------          ------            ---       

Balance at June 30, 1996                                                  11        12,102          15,749           (316)      

Principal repayments on loan to ESOP/amortization of
  expense related to employee benefit plans                               -             44              -             149       
Net earnings for the year ended June 30, 1997                             -             -            1,206             -        
Cash dividends of $.34 per share                                          -             -             (772)            -        
Purchase of treasury shares                                               -             -               -              -        
Stock dividend (5%), including cash in lieu of fractional shares           1         1,139          (1,145)            -        
Issuance of shares under employee benefit and stock option plans          -            (18)             -             (49)      
Unrealized gains on securities designated as available for sale,
  net of related tax effects                                              -             -               -              -        
                                                                         ---        ------          ------            ---       

Balance at June 30, 1997                                                  12        13,267          15,038           (216)      

Principal repayments on loan to ESOP/amortization of
  expense related to employee benefit plans                               -             78              -              65       
Net earnings for the year ended June 30, 1998                             -             -            2,704             -        
Cash dividends of $.41 per share                                          -             -             (936)            -        
2-for-1 stock split                                                       12           (12)             -              -        
Issuance of shares under employee benefit and stock option plans          -             26              -              44       
Unrealized losses on securities designated as available for sale,
  net of related tax effects                                              -             -               -              -        
                                                                         ---        ------          ------            ---       

Balance at June 30, 1998                                                $ 24       $13,359         $16,806          $(107)      
                                                                         ===        ======          ======           ====       

</TABLE>


<TABLE>
<CAPTION>

                                                                                          Unrealized
                                                                                      gains (losses)
                                                                                       on securities
                                                                      Treasury         designated as
                                                                         stock    available for sale        Total
<S>                                                                       <C>                 <C>           <C>
Balance at July 1, 1995                                                  $(908)           $ (29)           $25,387

Principal repayments on loan to ESOP/amortization of
  expense related to employee benefit plans                                 -                -                 180
Net earnings for the year ended June 30, 1996                               -                -               1,545
Cash dividends of $.323 per share                                           -                -                (732)
Stock dividend (5%), including cash in lieu of fractional shares            -                -                  (4)
Issuance of shares under employee benefit and stock option plans           152               -                 385
Unrealized gains on securities designated as available for sale,
  net of related tax effects                                                -                20                 20
                                                                           ---              ---             ------

Balance at June 30, 1996                                                  (756)              (9)            26,781

Principal repayments on loan to ESOP/amortization of
  expense related to employee benefit plans                                 -                -                 193
Net earnings for the year ended June 30, 1997                               -                -               1,206
Cash dividends of $.34 per share                                            -                -                (772)
Purchase of treasury shares                                               (411)              -                (411)
Stock dividend (5%), including cash in lieu of fractional shares            -                -                  (5)
Issuance of shares under employee benefit and stock option plans           202               -                 135
Unrealized gains on securities designated as available for sale,
  net of related tax effects                                                -               111                111
                                                                           ---              ---             ------

Balance at June 30, 1997                                                  (965)             102             27,238

Principal repayments on loan to ESOP/amortization of
  expense related to employee benefit plans                                 -                -                 143
Net earnings for the year ended June 30, 1998                               -                -               2,704
Cash dividends of $.41 per share                                            -                -                (936)
2-for-1 stock split                                                         -                -                   - 
Issuance of shares under employee benefit and stock option plans            36               -                 106
Unrealized losses on securities designated as available for sale,
  net of related tax effects                                                -               (34)               (34)
                                                                           ---              ---             ------

Balance at June 30, 1998                                                 $(929)            $ 68            $29,221
                                                                          ====              ===             ======

</TABLE>







The accompanying notes are an integral part of these statements.
                                        6


<PAGE>

<TABLE>

                          Glenway Financial Corporation

<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                               Year ended June 30,
                                 (In thousands)

                                                                                         1998         1997         1996
<S>                                                                                      <C>           <C>          <C>
Cash flows from operating activities:
  Net earnings for the year                                                          $  2,704      $ 1,206      $ 1,545
  Adjustments to reconcile net earnings to net
  cash provided by (used in) operating activities:
    Amortization of premiums and discounts on loans,
      investments and mortgage-backed securities - net                                    (10)          53           67
    Depreciation and amortization                                                         370          335          197
    Provision for losses on loans                                                         363          244           60
    (Gain) loss on sale of loans                                                          (12)         (39)          14
    (Gain) loss on securities transactions                                                (42)         (63)           9
    (Gain) loss on sale of real estate acquired through foreclosure                        19          (15)          13
    (Gain) loss  on sale of office premises and equipment                                  57           -          (144)
    Amortization of deferred loan origination fees                                       (198)         (90)        (102)
    Amortization of goodwill                                                              142          208          220
    Amortization of expense related to employee benefit plans                             143          193          180
    Loans disbursed for sale in the secondary market                                   (1,123)        (440)      (3,442)
    Proceeds from loans sold in the secondary market                                    1,135          444        2,873
    Federal Home Loan Bank stock dividends                                               (177)        (160)        (148)
    Increases (decreases) in cash due to changes in:
      Accrued interest receivable on loans                                               (334)        (111)        (113)
      Accrued interest receivable on mortgage-backed securities,
        investments and interest-bearing deposits                                          37           91            5
      Prepaid expenses and other assets                                                    (8)         141          337
      Accounts payable on mortgage loans serviced for others                              371         (370)         (82)
      Accrued interest payable and other liabilities                                      344          196          (40)
      Checks issued in excess of bank balance                                          (2,422)       1,388         (832)
      Federal income taxes
        Current                                                                          (474)         132          180
        Deferred                                                                           94           39          132
                                                                                      -------       ------       ------
         Net cash provided by operating activities                                        979        3,382          929

Cash flows provided by (used in) investing activities:
  Proceeds from maturities/calls of investment securities                               3,000        1,500        3,026
  Proceeds from sale of investment securities designated as available for sale             -         4,090          993
  Purchase of investment securities designated as held-to-maturity                     (4,000)      (3,000)      (2,075)
  Principal repayments on mortgage-backed securities                                    4,715        4,795        5,474
  Purchase of mortgage-backed securities designated as held-to-maturity                    -            -        (4,267)
  Proceeds from sale of mortgage-backed securities designated
    as available for sale                                                               1,578        2,672        1,060
  Loan principal repayments                                                            82,289       53,283       56,987
  Loan disbursements                                                                 (105,125)     (72,344)     (72,354)
  Purchase and construction of office premises and equipment                             (785)      (1,449)      (1,898)
  Proceeds from sale of office premises and equipment                                   1,596           -           370
  Proceeds from sale/disposal of real estate acquired through foreclosure                  25          590          736
  Purchase of Federal Home Loan Bank stock                                                (58)          -           (16)
  Purchase of single premium life insurance policy                                         -           (60)          - 
  Increase in cash surrender value of life insurance policies                             (67)         (68)         (31)
                                                                                      -------       ------       ------
              Net cash used in investing activities                                   (16,832)      (9,991)     (11,995)
                                                                                      -------       ------       ------

              Net cash used in operating and investing
                activities (subtotal carried forward)                                 (15,853)      (6,609)     (11,066)
                                                                                      -------       ------       ------

</TABLE>

                                        7


<PAGE>

<TABLE>

                          Glenway Financial Corporation
<CAPTION>

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                               Year ended June 30,
                                 (In thousands)

                                                                                    1998            1997           1996
<S>                                                                                 <C>             <C>             <C>
         Net cash used in operating and investing
           activities (subtotal brought forward)                                $(15,853)        $(6,609)      $(11,066)

Cash flows provided by (used in) financing activities:
  Net increase (decrease) in deposit accounts                                     (6,214)          4,085         14,391
  Proceeds from borrowings                                                        95,191          58,250         50,200
  Repayment of borrowings                                                        (72,870)        (55,770)       (51,724)
  Repayment of loan to employee stock ownership plan                                 (65)           (148)          (149)
  Advances by borrowers for taxes and insurance                                      (49)             (7)          (231)
  Issuance of shares under stock option and benefit plans                            106             135            385
  Dividends paid on common stock                                                    (936)           (777)          (736)
  Purchase of treasury stock                                                          -             (411)            - 
                                                                                 -------          ------        -------
         Net cash provided by financing activities                                15,163           5,357         12,136
                                                                                 -------          ------        -------

Net increase (decrease) in cash and cash equivalents                                (690)         (1,252)         1,070

Cash and cash equivalents at beginning of year                                     3,890           5,142          4,072
                                                                                 -------          ------        -------

Cash and cash equivalents at end of year                                        $  3,200         $ 3,890       $  5,142
                                                                                 =======          ======        =======


Supplemental disclosure of cash flow information:
   Cash paid during the year for:
    Federal income taxes                                                        $  1,591         $   387       $    583
                                                                                 =======          ======        =======

    Interest on deposits and borrowings                                         $ 13,146         $12,190       $ 11,921
                                                                                 =======          ======        =======

Supplemental disclosure of noncash investing activities:
  Transfer from loans to real estate acquired
    through foreclosure                                                         $     -          $   378       $    276
                                                                                 =======          ======        =======

  Transfer of investment securities to an available for sale
    classification                                                              $     -          $    -        $  1,000
                                                                                 =======          ======        =======

  Transfer of mortgage-backed securities to an available
    for sale classification                                                     $     -          $    -        $ 12,100
                                                                                 =======          ======        =======

  Unrealized gains (losses) on securities designated as available
    for sale, net of related tax effects                                        $    (34)        $   111       $     20
                                                                                 =======          ======        =======

  Recognition of mortgage servicing rights in accordance with
    SFAS No. 125                                                                $      9         $    -        $     - 
                                                                                 =======          ======        =======


Supplemental disclosure of noncash financing activities:
  Issuance of treasury shares in exchange for outstanding
    shares related to exercise of stock options                                 $     36         $   202       $    152
                                                                                 =======          ======        =======

</TABLE>



The accompanying notes are an integral part of these statements.

                                        8


<PAGE>


                          Glenway Financial Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES

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

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

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

    1.  Principles of Consolidation

    The  consolidated   financial   statements   include  the  accounts  of  the
    Corporation  and its  subsidiary,  the Savings  Bank,  and its  wholly-owned
    subsidiary  Centennial  Savings  and Loan  Service  Corporation.  Centennial
    Savings and Loan Service Corporation is currently inactive.  All significant
    intercompany balances and transactions have been eliminated.

    2.  Investment Securities and Mortgage-Backed Securities

    The Corporation  accounts for investment and  mortgage-backed  securities in
    accordance with Statement of Financial Accounting Standards ("SFAS") No. 115
    "Accounting for Certain Investments in Debt and Equity Securities." SFAS No.
    115 requires that investments 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
    available-for-sale are carried at fair value with resulting unrealized gains
    or losses recorded to operations or stockholders' equity, respectively.

                                        9


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

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

    During September 1995, the Financial Accounting Standards Board (the "FASB")
    granted  financial  institutions  the  opportunity to reclassify  investment
    portfolios  without  calling into question  prior intent under SFAS No. 115.
    The  Corporation  took  advantage  of this  opportunity  in  fiscal  1996 by
    reclassifying  approximately $1.0 million of investment securities and $12.1
    million  of  mortgage-backed   securities  from   held-to-maturity   to  the
    available-for-sale  classification.  All  reclassifications  were  made on a
    single day in conformity with the requirement.  It was  management's  belief
    that such changes  would allow more  flexibility  in managing  interest rate
    risk within the investment and  mortgage-backed  securities  portfolios.  At
    June 30, 1998 and 1997, the  Corporation's  stockholders'  equity  reflected
    unrealized  gains on securities  designated  as available  for sale,  net of
    applicable tax effects, totaling $68,000 and $102,000, respectively.

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

    3.  Loans Receivable

    Loans held in  portfolio  are stated at the  principal  amount  outstanding,
    adjusted for deferred loan  origination  fees, the allowance for loan losses
    and  premiums  and  discounts  on loans  purchased  and sold.  Premiums  and
    discounts  on loans  purchased  and  sold  are  amortized  and  accreted  to
    operations using the interest method over the average life of the underlying
    loans.

    Interest is accrued as earned  unless the  collectibility  of the loan is in
    doubt.  Uncollectible  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.

    Loans held for sale are  carried at the lower of cost or market,  determined
    in the aggregate.  In computing  cost,  deferred loan  origination  fees are
    deducted from the principal  balances of the related loans.  The Corporation
    had no loans held for sale at June 30, 1998 and 1997.

    The Savings Bank retains the  servicing on loans sold and agrees to remit to
    the investor loan principal and interest at agreed-upon  rates.  These rates
    can differ from the loan's contractual  interest rate, resulting in a "yield
    differential." Prior to the adoption of SFAS No. 125, gains on sale of loans
    could  include the present  value of the future  yield  differential  less a
    normal servicing fee, capitalized over the estimated life of the loans sold.
    Normal servicing fees were


                                       10


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    3.  Loans Receivable (continued)

     determined  by reference to the  stipulated  servicing fee set forth by the
     government  agency loan sale agreement.  Such fees approximated the Savings
     Bank's normal servicing costs. The resulting  capitalized  excess servicing
     fee is being  amortized to operations  over the estimated life of the loans
     using the interest  method.  If prepayments  are higher than  expected,  an
     immediate  charge to  operations is made. If  prepayments  are lower,  then
     adjustments are made prospectively.  At June 30, 1997, unamortized deferred
     excess servicing fees totaled  approximately  $18,000.  Amortization of the
     deferred excess servicing fee asset totaled approximately $18,000,  $13,000
     and $17,000 for the years ended June 30, 1998, 1997 and 1996, respectively.

     The Savings Bank  recognizes  rights to service  mortgage  loans for others
     pursuant  to SFAS No. 125,  "Accounting  for  Transfers  and  Servicing  of
     Financial  Assets and  Extinguishments  of Liabilities." In accordance with
     SFAS No.  125, an  institution  that  acquires  mortgage  servicing  rights
     through  either the  purchase or  origination  of mortgage  loans and sells
     those loans with servicing  rights retained would allocate some of the cost
     of the loans to the mortgage servicing rights.

     SFAS No. 125 requires that  securitization  of mortgage  loans be accounted
     for  as  sales  of  mortgage  loans  and  acquisitions  of  mortgage-backed
     securities.  Additionally,  SFAS No. 125 requires that capitalized mortgage
     servicing rights and capitalized  excess servicing  receivables be assessed
     for impairment. Impairment is measured based on fair value.

     The  Savings  Bank  recognized  $9,000 of  pre-tax  gains on sales of loans
     related to  capitalized  mortgage  servicing  rights during the fiscal year
     ended June 30, 1998.

     The mortgage  servicing rights recorded by the Savings Bank,  calculated in
     accordance  with the provisions of SFAS No. 125, were segregated into pools
     for valuation purposes,  using as pooling criteria the loan term and coupon
     rate.  Once pooled,  each  grouping of loans was  evaluated on a discounted
     earnings  basis to determine  the present  value of future  earnings that a
     purchaser  could  expect to  realize  from each  portfolio.  Earnings  were
     projected from a variety of sources including loan servicing fees, interest
     earned on float, net interest earned on escrows,  miscellaneous income, and
     costs to service  the loans.  The present  value of future  earnings is the
     "economic" value for the pool, i.e., the net realizable present value to an
     acquirer of the acquired servicing.

    4.  Loan Origination Fees

     The Savings Bank accounts for loan origination fees in accordance with SFAS
     No.  91,  "Accounting  for  Nonrefundable  Fees and Costs  Associated  with
     Originating  or  Acquiring  Loans  and  Initial  Direct  Costs 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


                                       11


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    4.  Loan Origination Fees (continued)

    prepayments.  Additionally,  SFAS No. 91 generally  limits the definition of
    loan  origination  costs to the direct costs  attributable  to 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.

    5.  Allowance for Losses on Loans

    It is  the  Savings  Bank's  policy  to  provide  valuation  allowances  for
    estimated losses on loans based on past loss  experience,  current trends in
    the level of delinquent and specific 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 its
    primary lending areas.  When the collection of a loan becomes  doubtful,  or
    otherwise  troubled,  the Savings  Bank  records a  charge-off  equal to the
    difference  between the fair value of the property securing the loan and the
    loan's  carrying  value.  Major loans and major  lending  areas are reviewed
    periodically to determine potential problems at an early date. The allowance
    for losses on loans 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,  1998 and 1997,  the  Savings  Bank had no loans  that would be
     defined as impaired under SFAS No. 114.

                                       12


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    6.  Depreciation and Amortization

    Depreciation  and  amortization  are provided for in amounts  sufficient  to
    relate  the cost of  depreciable  assets to  operations  over the  estimated
    service  lives,  principally  on the  straight-line  method.  An accelerated
    method is used for tax reporting purposes.

    7.  Real Estate Acquired through Foreclosure

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

    8.  Federal Income Taxes

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

    The Corporation's  principal temporary  differences between pretax financial
    income and taxable  income result  primarily  from the different  methods of
    accounting for deferred loan origination fees,  Federal Home Loan Bank stock
    dividends,  certain components of retirement expense, gains on sale of loans
    utilizing the net yield  method,  book and tax bad debt  deductions  and the
    loss on mortgage  loans sold in a reciprocal  sale  transaction.  Additional
    temporary  differences  result from depreciation  expense computed utilizing
    accelerated methods for federal income tax purposes.



                                       13



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    9.  Amortization of Goodwill 

    Goodwill arising from acquisitions is being amortized to expense in the same
    manner and over the same time  period as the  related  original  discount on
    long-term  interest-bearing  assets  acquired,  to the  extent the value was
    attributable  to that  discount.  The  amount of  goodwill  in excess of the
    original  unearned  discount  is being  amortized  to  operations  using the
    straight-line method over a twenty-year period.

    The approximate scheduled  amortization with respect to intangible assets is
    as follows:

                                                                   Future
    Fiscal year ending June 30,                                amortization
                                                               (In thousands)

        1999                                                       $103
        2000                                                         82
        2001                                                         41
                                                                    ---

                                                                   $226

    10.  Benefit Plans

    The Corporation has an Employee Stock Ownership Plan ("ESOP") which provides
    retirement  benefits for  substantially all employees who have completed one
    year of service.  Contributions  of  approximately  $149,000,  $228,000  and
    $270,000  were made to the ESOP for the years ended June 30, 1998,  1997 and
    1996, respectively.

    The  Savings  Bank   sponsors  a  401(k)  profit   sharing  plan.   Employer
    contributions  are made solely at the  discretion of the Board of Directors,
    not to exceed amounts allowable under Internal Revenue Service  regulations.
    Profit sharing plan  contributions  for the years ended June 30, 1998,  1997
    and 1996 totaled approximately $88,000, $65,000 and $99,000, respectively.

    The Savings Bank has a directors retirement plan which provides for payments
    to  directors  upon  retirement,  subject  to a ten year  vesting  schedule.
    Expense  recorded  for  the  directors  retirement  plan  totaled  $173,000,
    $279,000  and $87,000 for the fiscal  years  ended June 30,  1998,  1997 and
    1996, respectively.







                                       14


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    11.  Stock Incentive Plan

    The Corporation had a Stock Incentive Plan that provided for the issuance of
    61,740 shares to directors,  officers,  and employees.  Compensation expense
    for  restricted  shares was measured by the fair value at the date of grant.
    The Corporation  issued 16,338 and 23,034 shares of restricted  stock during
    fiscal 1997 and 1996,  respectively.  The term of the Incentive Plan expired
    during fiscal 1997. The Corporation  recognized expense totaling $19,000 and
    $178,000 for the years ended June 30, 1997 and 1996, respectively, under the
    Incentive  Plan. The number of shares subject to the Incentive Plan, as well
    as future  references  to share  totals,  have been adjusted for the 2-for-1
    stock  split in fiscal  1998 and for 5% stock  dividends  in fiscal 1997 and
    1996.

    12.  Management Recognition and Retention Plan and Trust

    The  Corporation  has a Management  Recognition and Retention Plan and Trust
    ("MRP") which  provided for the award of 60,568 shares of the  Corporation's
    common stock to members of  management  and the Board of  Directors.  Shares
    issued by the MRP are generally  deemed earned and allocated to participants
    over a five year period.  The  Corporation  issued  4,484,  3,086 and 13,892
    shares of common  stock  under the MRP during  fiscal  1998,  1997 and 1996,
    respectively,  leaving 11,760 shares subject to future  issuance at June 30,
    1998. Expense under the MRP plan totaled approximately $88,000,  $55,000 and
    $141,000 for the years ended June 30, 1998, 1997 and 1996, respectively.

    13.  Earnings Per Share

    Basic earnings per share is computed based upon the weighted-average  shares
    outstanding  during the period,  less shares in the Corporation's  ESOP that
    are  unallocated and not committed to be released.  Weighted-average  common
    shares outstanding totaled 2,273,025, 2,275,628 and 2,258,132 for the fiscal
    years ended June 30, 1998, 1997 and 1996, 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
    2,326,671,  2,310,076,  and  2,289,838  for the fiscal  years ended June 30,
    1998, 1997 and 1996, respectively.








                                       15



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    13.  Earnings Per Share (continued)

    During fiscal 1998,  the  Corporation  began  presenting  earnings per share
    pursuant  to  the  provisions  of  SFAS  No.  128,   "Earnings  Per  Share."
    Accordingly,  the fiscal 1997 and 1996 earnings per share  presentation  has
    been revised to conform to the requirements of SFAS No. 128.

    14.  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,
    1998 and 1997:

                  Cash and cash  equivalents:  The carrying amounts presented in
                  the  consolidated  statements of financial  condition 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.



                                       16



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    14.  Fair Value of Financial Instruments (continued)

                  Deposits:  The fair values of NOW accounts,  passbook and club
                  accounts, money market deposits, and advances by borrowers are
                  deemed to  approximate  the  amounts  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
                  advances is estimated  using the rates  currently  offered for
                  similar  advances  of similar  remaining  maturities  or, when
                  available, quoted market prices.

                  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.  The  difference  between the fair
                  value and notional amount of outstanding  loan  commitments at
                  June 30, 1998 and 1997, 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>

                                                                        1998                               1997
                                                             Carrying           Fair            Carrying           Fair
                                                                value          value               value          value
                                                                                    (In thousands)
<S>                                                             <C>             <C>               <C>               <C>
    Financial assets
      Cash and cash equivalents                              $  3,200       $  3,200            $  3,890       $  3,890
      Investment securities                                     8,069          8,120               7,042          7,035
      Mortgage-backed securities                               16,874         16,728              23,201         22,866
      Loans receivable                                        262,327        263,124             239,648        238,978
      Stock in Federal Home Loan Bank                           2,617          2,617               2,382          2,382
                                                              -------        -------             -------        -------

                                                             $293,087       $293,798            $276,163       $275,151
                                                              =======        =======             =======        =======

    Financial liabilities
      Deposits                                               $220,639       $221,611            $226,853       $226,671
      Advances from the Federal Home Loan Bank                 50,435         50,669              28,114         27,997
      Advances by borrowers for taxes and insurance               186            186                 235            235
                                                              -------        -------             -------        -------

                                                             $271,260       $272,466            $255,202       $254,903
                                                              =======        =======             =======        =======
</TABLE>

    15.  Cash and Cash Equivalents

    For purposes of reporting  cash flows,  cash and cash  equivalents  includes
    cash and due from banks, federal funds sold and interest-bearing deposits in
    other  financial  institutions  with original terms to maturity of less than
    ninety days.


                                       17


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    16.  Reclassifications

    Certain  prior year  amounts have been  reclassified  to conform to the 1998
    consolidated financial statement presentation.


NOTE B - INVESTMENTS, SECURITIES AVAILABLE FOR SALE AND MORTGAGE-BACKED
SECURITIES

     Carrying  values  and  estimated  fair  values  of  investment   securities
     classified as held-to-maturity at June 30 are summarized as follows:

<TABLE>
<CAPTION>

                                                       1998                         1997
                                                          Estimated                      Estimated
                                            Carrying           fair        Carrying           fair
                                               value          value           value          value
                                                                (In thousands)
<S>                                             <C>          <C>               <C>             <C>
    U. S. Government obligations              $3,989         $4,026          $2,983         $2,981
    U. S. Government agency obligations        4,005          4,018           3,984          3,979
    Municipal obligations                         75             76              75             75
                                               -----          -----           -----          -----

                                              $8,069         $8,120          $7,042         $7,035
                                               =====          =====           =====          =====
</TABLE>

    At June 30, 1998,  the excess of the  estimated  fair value over the Savings
    Bank's cost carrying value of investment  securities,  totaling $51,000, was
    comprised of gross  unrealized  losses totaling $4,000 and gross  unrealized
    gains of $55,000.  At June 30, 1997,  the excess of the Savings  Bank's cost
    carrying  value  over the  estimated  fair value of  investment  securities,
    totaling $7,000,  was comprised of gross unrealized  losses totaling $26,000
    and gross unrealized gains of $19,000.

     The  amortized  cost and estimated  fair value of investment  securities at
     June 30, 1998, by term to maturity, are shown below.

<TABLE>
<CAPTION>

                                                                    Estimated
                                                Amortized                fair
                                                      cost              value
                                                           (In thousands)
<S>                                                  <C>                  <C>
    Due within one year                             $2,000             $2,001
    Due in one to five years                         5,994              6,043
    Due after five years                                75                 76
                                                     -----              -----

                                                    $8,069             $8,120
                                                     =====              =====
</TABLE>

     At June 30, 1998, the Savings Bank had pledged investment securities with a
     carrying value of approximately $6.5 million to secure public deposits.


                                       18



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE B - INVESTMENTS, SECURITIES AVAILABLE FOR SALE AND MORTGAGE-BACKED
SECURITIES (continued)

    During  fiscal 1997 and 1996,  the  Corporation  sold $4.1  million and $1.0
    million of investment securities designated as available for sale, realizing
    losses of $29,000 and $7,000 on such sales.

    The amortized cost, gross  unrealized  gains,  gross  unrealized  losses and
    estimated  fair values of  mortgage-backed  securities  at June 30, 1998 and
    1997 (including those designated as available for sale), are shown below.
<TABLE>
<CAPTION>

                                                                                         1998
                                                                               Gross            Gross         Estimated
                                                         Amortized        unrealized       unrealized              fair
                                                              cost             gains           losses             value
                                                                                    (In thousands)
<S>                                                          <C>               <C>               <C>                <C>
    Federal Home Loan
      Mortgage Corporation
      participation certificates                           $ 1,951              $  5             $ 25           $ 1,931
    Government National
      Mortgage Association
      participation certificates                                37                -                 1                36
    Federal National
      Mortgage Association
      participation certificates                             3,226                 7               21             3,212
    Collateralized mortgage obligations                      6,090                21              132             5,979
                                                            ------               ---              ---            ------
         Total mortgage-backed securities
           held to maturity                                 11,304                33              179            11,158

    Mortgage-backed securities designated
      as available for sale                                  5,469               104                3             5,570
                                                            ------               ---              ---            ------

         Total mortgage-backed securities                  $16,773              $137             $183           $16,728
                                                            ======               ===              ===            ======
</TABLE>













                                       19


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE B - INVESTMENTS, SECURITIES AVAILABLE FOR SALE AND MORTGAGE-BACKED
SECURITIES (continued)
<TABLE>
<CAPTION>
                                                                                         1997
                                                                               Gross            Gross         Estimated
                                                         Amortized        unrealized       unrealized              fair
                                                              cost             gains           losses             value
                                                                                    (In thousands)
<S>                                                          <C>               <C>               <C>               <C>
    Federal Home Loan
      Mortgage Corporation
      participation certificates                           $ 2,960              $ -              $ 54           $ 2,906
    Government National
      Mortgage Association
      participation certificates                                71                -                 2                69
    Federal National
      Mortgage Association
      participation certificates                             4,081                -                58             4,023
    Collateralized mortgage obligations                      6,169                19              240             5,948
                                                            ------               ---              ---            ------
         Total mortgage-backed securities
           held to maturity                                 13,281                19              354            12,946

    Mortgage-backed securities designated
      as available for sale                                  9,766               169               15             9,920
                                                            ------               ---              ---            ------

         Total mortgage-backed securities                  $23,047              $188             $369           $22,866
                                                            ======               ===              ===            ======
</TABLE>

    The amortized cost of mortgage-backed securities at June 30, 1998, including
    those designated as available-for-sale, are shown below by contractual terms
    to maturity.  Expected  maturities will differ from  contractual  maturities
    because  borrowers  may  generally  prepay  obligations  without  prepayment
    penalties.
         
<TABLE>
<CAPTION>
                                                                  Amortized
                                                                       cost
                                                             (In thousands)
<S>                                                                  <C>
    Due after one to five years                                     $   774
    Due after five years to ten years                                   890
    Due after ten years to twenty years                               1,312
    Due after twenty years                                           13,797
                                                                     ------

         Total mortgage-backed securities                           $16,773
                                                                     ======
</TABLE>

    During  fiscal 1998 and 1997,  the  Corporation  sold $1.6  million and $2.7
    million,   respectively,   of  mortgage-backed   securities   designated  as
    available-for-sale, realizing respective gains of $42,000 and $92,000.

    During fiscal 1996,  the  Corporation  sold $1.1 million of  mortgage-backed
    securities designated as available-for-sale, realizing a loss of $2,000 as a
    result of such sale.



                                       20


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE C - LOANS RECEIVABLE

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

                                                     1998                1997
                                                          (In thousands)
<S>                                                 <C>                  <C>
    Residential real estate
      One- to four-family residential            $186,723            $177,504
      Home equity lines of credit                  19,816              23,797
      Multi-family residential                     25,572              17,912
      Construction                                 17,048              14,947
    Nonresidential real estate                     18,848              13,548
    Commercial                                      4,779                 921
    Consumer and other                                696                 881
                                                  -------             -------
                                                  273,482             249,510
    Less:
      Undisbursed portion of loans in
        process                                     9,880               8,735
      Deferred loan origination fees                  101                 307
      Allowance for loan losses                     1,174                 820
                                                  -------             -------

                                                 $262,327            $239,648
                                                  =======             =======
</TABLE>

    As depicted  above,  the Savings  Bank's lending  efforts have  historically
    focused on one- to four-family residential and multi-family residential real
    estate loans, which comprise  approximately  $239.3 million,  or 91%, of the
    total loan  portfolio at June 30, 1998, and $225.4  million,  or 94%, of the
    total  loan  portfolio  at June 30,  1997.  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  residential  real  estate  values
    could deteriorate in its primary lending area of southwestern  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.

    As  discussed  previously,  the  Savings  Bank  has  sold  whole  loans  and
    participating  interests  in  loans  in  the  secondary  market,   retaining
    servicing  on the loans sold.  Loans sold and  serviced  for others  totaled
    approximately  $49.8  million,  $61.1  million and $68.8 million at June 30,
    1998, 1997 and 1996, respectively.









                                       21


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE C - LOANS RECEIVABLE (continued)

    The Savings Bank, in the ordinary  course of business,  has granted loans to
    its  directors,  officers and their  related  business  interests.  Loans to
    officers and directors  totaled  approximately  $1.3 million and $877,000 at
    June 30, 1998 and 1997, respectively.

    The Savings  Bank  retains a  director's  spouse to perform  title and other
    legal  services  principally  related  to  the  loan  origination  function.
    Management   believes  that  the  fees  paid  for  such  services  (totaling
    approximately  $215,000,  $153,000 and $137,000 for the years ended June 30,
    1998, 1997 and 1996,  respectively) are at, or below, the comparable cost of
    such services from unrelated parties.


NOTE D - ALLOWANCE FOR LOSSES ON LOANS

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

                                              1998         1997         1996
                                                       (In thousands)
<S>                                           <C>          <C>           <C>
    Beginning balance                       $  820         $618         $616
    Provision charged to operations            363          244           60
    Charge-offs                                (26)         (57)         (58)
    Recoveries                                  17           15           - 
                                             -----          ---          ---

    Ending balance                          $1,174         $820         $618
                                             =====          ===          ===
</TABLE>

    At June 30,  1998,  the  Savings  Bank's  allowance  for losses on loans was
    solely  general in nature,  and  includible  as a  component  of  regulatory
    risk-based capital.

    At June  30,  1998,  1997  and  1996,  the  Savings  Bank's  nonaccrual  and
    nonperforming loans totaled $982,000,  $851,000 and $883,000,  respectively.
    Interest income which would have been recognized if such loans had performed
    pursuant to contractual  terms totaled  approximately  $16,000,  $22,000 and
    $35,000 for the years ended June 30, 1998, 1997 and 1996, respectively.







                                       22


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE E - OFFICE PREMISES AND EQUIPMENT

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

                                                       1998           1997
                                                          (In thousands)
<S>                                                   <C>             <C>
    Land                                             $1,329         $1,630
    Office buildings and improvements                 3,283          4,692
    Furniture, fixtures and equipment                 3,618          2,915
                                                      -----          -----
                                                      8,230          9,237
      Less accumulated depreciation
        and amortization                              2,425          2,194
                                                      -----          -----

                                                     $5,805         $7,043
                                                      =====          ===== 
</TABLE>

    In January 1998, the Corporation sold a shopping center for a sales price of
    $1.6  million,  resulting  in a loss on sale of  $57,000.  A  branch  office
    located in the  shopping  center was leased back under a ten year  operating
    lease.  The lease cost is subject  to  adjustment  every  three  years,  and
    totaled  $46,000 for the fiscal year ended June 30, 1998. The lease provides
    for two  additional  five year  renewals.  During  fiscal  1996,  two of the
    Savings  Bank's  branch  locations  were sold  resulting  in gains  totaling
    $144,000.
























                                       23


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE F - DEPOSITS

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

    Deposit type and weighted-
    average interest rate                                        1998                1997
                                                                       (In thousands)
<S>                                                            <C>                   <C>
    Checking/NOW accounts
      1998 - 2.81%                                           $ 37,252
      1997 - 2.81%                                                               $ 26,716
    Savings accounts
      1998 - 2.53%                                             31,039
      1997 - 2.78%                                                                 36,602
    Money market deposit accounts
      1998 - 3.07%                                              5,001
      1997 - 3.15%                                                                  5,965
                                                              -------             -------
    Total demand, transaction and savings
      deposits                                                 73,292              69,283

    Certificates of deposit
      Original maturities of:
        Less than 12 months
          1998 - 5.25%                                         28,894
          1997 - 5.57%                                                             45,028
        12 months to 30 months
          1998 - 5.75%                                         95,686
          1997 - 5.86%                                                            102,112
        36 months or greater
          1998 - 6.10%                                         22,757
          1997 - 6.01%                                                             10,430
                                                              -------             -------

    Total certificates of deposit                             147,347             157,570
                                                              -------             -------

                                                             $220,639            $226,853
                                                              =======             =======
</TABLE>

    At June 30, 1998 and 1997,  the  Savings  Bank had  certificates  of deposit
    accounts  with  balances in excess of $100,000  totaling  $23.6  million and
    $19.1 million, respectively.









                                       24


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE F - DEPOSITS (continued)

    Interest  expense  on  deposit  accounts  for  the  years  ended  June 30 is
summarized as follows:
<TABLE>
<CAPTION>

                                              1998           1997           1996
                                                       (In thousands)
<S>                                          <C>             <C>            <C>
    Savings accounts                       $   896        $ 1,079        $ 1,162
    Checking/NOW accounts                      959            641            333
    Money market deposit accounts              171            219            283
    Certificates of deposit                  8,884          8,999          8,815
                                            ------         ------         ------

                                           $10,910        $10,938        $10,593
                                            ======         ======         ======
</TABLE>

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

                                                          1998           1997
                                                            (In thousands)
<S>                                                      <C>            <C>
    Less than one year                                $102,663       $109,770
    One year to three years                             41,131         41,484
    More than three years                                3,553          6,316
                                                       -------        -------

                                                      $147,347       $157,570
                                                       =======        =======
</TABLE>


NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

    Advances  from the Federal Home Loan Bank,  collateralized  at June 30, 1998
    and 1997, by pledges of certain  residential  mortgage  loans totaling $75.7
    million and $42.2 million, and the Savings Bank's investment in Federal Home
    Loan Bank stock are summarized as follows:
<TABLE>
<CAPTION>

    Interest                                                                June 30,
    rate                              Terms to maturity               1998           1997
                                                                         (In thousands)
<S>                                      <C>                        <C>              <C>
    5.10% - 6.50%                     Within one year              $16,000        $13,000
    5.42% - 6.50%                     One to three years            20,000          4,000
    5.65%                             Three to five years            2,000             - 
    5.50% - 8.20%                     Five to ten years              7,325          6,064
    5.25% - 6.25%                     Over ten years                 5,110          5,050
                                                                    ------         ------

                                                                   $50,435        $28,114
                                                                    ======         ======

    Weighted-average interest rate                                    5.76%          5.97%
                                                                      ====           ==== 

</TABLE>


                                       25


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE H - LOAN TO EMPLOYEE STOCK OWNERSHIP PLAN

    As discussed  previously in Note A-10, the Corporation  established an ESOP,
    which initially acquired 51,052 split-adjusted shares of common stock in the
    1990 conversion  offering.  In order to fund the  acquisition of stock,  the
    ESOP borrowed $147,000 from an independent  third-party lender, payable over
    a six year term. In connection with the  conversion-merger in 1993, the ESOP
    purchased an  additional  108,046  split-adjusted  shares of common stock by
    borrowing an  additional  $686,000,  payable over a six year term.  The ESOP
    loans were repaid in fiscal 1998.  At June 30,  1998,  the ESOP held 156,143
    shares of common  stock,  of which  approximately  147,749  shares  had been
    allocated to participants.


NOTE I - FEDERAL INCOME TAXES

    The  provision  for  federal  income  taxes on  earnings  differs  from that
    computed at the statutory  corporate tax rate for the years ended June 30 as
    follows:
<TABLE>
<CAPTION>

                                                                      1998         1997       1996
                                                                              (In thousands)
<S>                                                                   <C>           <C>        <C>
    Federal income taxes computed at the statutory rate             $1,407         $647       $833
    Increase (decrease) in taxes resulting from:
      Goodwill amortization                                             48           71         75
      Tax-exempt interest                                              (24)         (44)       (29)
      Other                                                              2           22         27
                                                                     -----          ---        ---
    Federal income tax provision per consolidated
      financial statements                                          $1,433         $696       $906
                                                                     =====          ===        ===
</TABLE>




















                                       26



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE I - FEDERAL INCOME TAXES (continued)

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

                                                                                           1998           1997
                                                                                               (In thousands)
<S>                                                                                       <C>              <C>
     Taxes (payable) refundable on temporary  differences 
     at estimated corporate tax rate:
       Deferred tax assets:
         General loan loss allowance                                                     $  399         $  279
         Retirement expense                                                                 229            208
         Purchase accounting adjustments other than goodwill                                 10             31
         Other                                                                               20             - 
                                                                                          -----          -----
           Total deferred tax assets                                                        658            518

       Deferred tax liabilities:
         Percentage of earnings bad debt deduction                                         (349)          (349)
         Book/tax depreciation                                                             (322)          (186)
         Federal Home Loan Bank stock dividends                                            (428)          (367)
         Deferred loan origination costs                                                   (183)          (141)
         Other                                                                               -              (2)
         Unrealized gains on securities designated as available for sale                    (33)           (53)
                                                                                          -----          -----
           Total deferred tax liabilities                                                (1,315)        (1,098)
                                                                                          -----          -----

           Net deferred tax liability                                                    $ (657)        $ (580)
                                                                                          =====          ===== 
</TABLE>

    The Savings Bank was allowed a special bad debt deduction, generally limited
    to 8% of otherwise taxable income,  subject to certain  limitations based on
    aggregate loans and deposit account  balances at the end of the year. If the
    amounts that qualify as deductions  for federal  income taxes are later used
    for  purposes  other  than  bad  debt  losses,  including  distributions  in
    liquidation,  such  distributions will be subject to federal income taxes at
    the then current  corporate income tax rate.  Retained  earnings at June 30,
    1998,  includes  approximately  $3.7 million for which federal  income taxes
    have not been provided.  The amount of  unrecognized  deferred tax liability
    relating  to the  cumulative  bad  debt  deduction  at  June  30,  1998,  is
    approximately $1.0 million. See Note N for additional  information regarding
    the Savings Bank's future percentage of earnings bad debt deductions.


NOTE J - 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 statements of financial condition. The contract
    or  notional  amounts of the  commitments  reflect the extent of the Savings
    Bank's involvement in such financial instruments.


                                       27


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE J - LOAN COMMITMENTS (continued)

    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 it does for on-balance-sheet instruments.

    At June 30, 1998,  the Savings  Bank had total  outstanding  commitments  of
    approximately $1.8 million to originate one- to four-family residential real
    estate loans.

    Additionally,  the  Savings  Bank had  $29.9  million  of  outstanding  loan
    commitments  under home equity  lines and $3.3 million of  outstanding  loan
    commitments  under commercial lines of credit. In the opinion of management,
    all loan commitments  equaled or exceeded prevalent market interest rates as
    of June 30, 1998, and such  commitments  have been  underwritten on the same
    basis as that of the existing loan portfolio.  Management  believes that all
    loan commitments are able to be funded through cash flow from operations and
    existing   excess   liquidity.   Fees  received  in  connection  with  these
    commitments have not been recognized in earnings.

    Commitments to extend credit are agreements to lend to a customer as long as
    there  is no  violation  of  any  condition  established  in  the  contract.
    Commitments  generally  have  fixed  expiration  dates or other  termination
    clauses and may require  payment of a fee. Since many of the commitments may
    expire  without  being  drawn  upon,  the total  commitment  amounts  do not
    necessarily  represent future cash requirements.  The Savings Bank evaluates
    each  customer's  creditworthiness  on a case-by-case  basis.  The amount of
    collateral  obtained,  if it is deemed  necessary  by the Savings  Bank upon
    extension  of credit,  is based on  management's  credit  evaluation  of the
    counterparty.  Collateral on loans may vary, but the  preponderance of loans
    granted generally include a mortgage interest in real estate as security.


NOTE K - REGULATORY CAPITAL

    The Savings Bank is subject to the regulatory  capital  requirements  of the
    Federal Deposit Insurance Corporation (the "FDIC").  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 Savings Bank's  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.




                                       28


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE K - REGULATORY CAPITAL (continued)

    During the  calendar  year,  the  Savings  Bank was  notified by its primary
    regulator that it was categorized as "well-capitalized" under the regulatory
    framework   for   prompt   corrective   action.   To   be   categorized   as
    "well-capitalized"  the Savings Bank must maintain minimum capital ratios as
    set forth in the table that follows.

    The FDIC has  adopted  risk-based  capital  ratio  guidelines  to which  the
    Savings Bank is subject.  The guidelines  establish a systematic  analytical
    framework  that makes  regulatory  capital  requirements  more  sensitive to
    differences in risk profiles among banking organizations. Risk-based capital
    ratios are determined by allocating  assets and specified  off-balance sheet
    commitments to four risk-weighting categories, with higher levels of capital
    being required for the categories perceived as representing greater risk.

    These  guidelines  divide the capital into two tiers.  The first tier ("Tier
    1") includes common equity, certain non-cumulative perpetual preferred stock
    (excluding auction rate issues) and minority interests in equity accounts of
    consolidated subsidiaries, less goodwill and certain other intangible assets
    (except mortgage  servicing rights and purchased credit card  relationships,
    subject to certain limitations).  Supplementary ("Tier 2") capital includes,
    among other items, cumulative perpetual and long-term limited-life preferred
    stock, mandatory convertible securities, certain hybrid capital instruments,
    term subordinated debt and the allowance for loan losses, subject to certain
    limitations,  less  required  deductions.  Savings  banks  are  required  to
    maintain a total  risk-based  capital (the sum of Tier 1 and Tier 2 capital)
    ratio of 8%, of which 4% must be Tier 1 capital.  The FDIC may, however, set
    higher capital requirements when particular  circumstances warrant.  Savings
    banks  experiencing  or  anticipating  significant  growth are  expected  to
    maintain capital ratios,  including tangible capital  positions,  well above
    the minimum levels.

    In addition,  the FDIC established  guidelines  prescribing a minimum Tier 1
    leverage  ratio (Tier 1 capital to adjusted total assets as specified in the
    guidelines). These guidelines provide for a minimum Tier 1 leverage ratio of
    3% for savings banks that meet certain  specified  criteria,  including that
    they  have  the  highest  regulatory  rating  and  are not  experiencing  or
    anticipating  significant  growth.  All other  savings banks are required to
    maintain  a Tier 1  leverage  ratio of 3% plus an  additional  cushion of at
    least 100 to 200 basis points.












                                       29


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE K - REGULATORY CAPITAL (continued)

     As of June 30, 1998 and 1997, management believes that the Savings Bank met
     all capital adequacy requirements to which it is subject.

<TABLE>
<CAPTION>
                                                                   1998
                                                                                                 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>
    Total capital
      (to risk-weighted assets)         $27,688    14.2%        =>$15,650    =>8.0%         =>$19,563     =>10.0%

    Tier I capital
      (to risk-weighted assets)         $26,514    13.6%       =>$  7,825    =>4.0%         =>$11,738     => 6.0%

    Tier I leverage                     $26,514     8.8%        =>$12,021    =>4.0%         =>$15,027     => 5.0%

</TABLE>


<TABLE>
<CAPTION>
                                                                   1997
                                                                                                 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>
    Total capital
      (to risk-weighted assets)         $24,795    13.4%        =>$14,752    =>8.0%         =>$18,440     =>10.0%

    Tier I capital
      (to risk-weighted assets)         $23,985    13.0%       =>$  7,376    =>4.0%         =>$11,064     => 6.0%

    Tier I leverage                     $23,985     8.5%        =>$11,333    =>4.0%         =>$14,167     => 5.0%

</TABLE>

    The  Corporation'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 Corporation,  such as increased  interest rates or a downturn
    in the economy in the Savings Bank's market areas,  could  adversely  affect
    future  earnings  and,  consequently,  the  ability to meet  future  minimum
    regulatory capital requirements.




                                       30



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE L - CONDENSED FINANCIAL STATEMENTS OF GLENWAY FINANCIAL
  CORPORATION

    The  following  condensed  financial   statements  summarize  the  financial
    position of the Corporation as of June 30, 1998 and 1997, and the results of
    its operations and its cash flows for each of the years ended June 30, 1998,
    1997 and 1996.
<TABLE>
<CAPTION>

                          Glenway Financial Corporation
                        STATEMENTS OF FINANCIAL CONDITION
                                    June 30,
                                 (In thousands)

                  ASSETS                                         1998         1997
<S>                                                            <C>            <C>                
    Cash                                                      $    32      $   164
    Investment in Centennial Savings Bank                      26,808       24,455
    Loans receivable, net                                       1,273           - 
    Real estate held for investment                                -         1,668
    Cash surrender value of life insurance                      1,652        1,585
    Prepaid expenses and other assets                              79            2
                                                               ------       ------

                  Total assets                                $29,844      $27,874
                                                               ======       ======

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Other liabilities                                         $   623      $   571
    Loan to Employee Stock Ownership Plan                          -            65
                                                               ------       ------
                                                                  623          636

    Stockholders' equity
      Common stock24                                               12
      Additional paid-in capital                               13,359       13,267
      Retained earnings                                        16,806       15,038
      Shares acquired by employee benefit plans                  (107)        (216)
      Treasury stock - at cost                                   (929)        (965)
      Unrealized gains on securities designated as
        available for sale                                         68          102
                                                               ------       ------

         Total stockholders' equity                            29,221       27,238
                                                               ------       ------

         Total liabilities and stockholders' equity           $29,844      $27,874
                                                               ======       ======

</TABLE>




                                       31


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE L - CONDENSED FINANCIAL STATEMENTS OF GLENWAY FINANCIAL
  CORPORATION (continued)
<TABLE>
<CAPTION>

                          Glenway Financial Corporation
                             STATEMENTS OF EARNINGS
                               Year ended June 30,
                                 (In thousands)

                                                                      1998         1997         1996
<S>                                                                  <C>           <C>           <C>
    Revenue
      Interest income                                               $   47       $    4       $    6
      Dividends received from subsidiary                               724        1,075        1,160
      Equity in undistributed earnings of subsidiary                 2,242          660          735
      Other incom                                                      204          298          279
                                                                     -----        -----        -----
                  Total revenue                                      3,217        1,846        1,989

    Other operating
      Loss on sale of office premises and equipment                    (57)          -            - 

    Expenses
      Administrative and other                                         626          866          815
                                                                     -----        -----        -----
                  Net earnings before tax credits                    2,419        1,171        1,365

      Federal income tax credits                                      (170)         (35)        (180)
                                                                     -----        -----        -----

                  Net earnings                                      $2,704       $1,206       $1,545
                                                                     =====        =====        =====
</TABLE>

<TABLE>
<CAPTION>

                          Glenway Financial Corporation
                            STATEMENTS OF CASH FLOWS
                               Year ended June 30,
                                 (In thousands)

                                                                   1998         1997         1996
<S>                                                                 <C>         <C>           <C>
    Cash flows provided by (used in) operating activities:
      Net earnings for the year                                  $2,704       $1,206       $1,545
      Adjustments to reconcile net earnings to net cash
      provided by (used in) operating activities:
        Undistributed earnings of consolidated subsidiary        (2,242)        (660)        (735)
        Depreciation                                                 20           36           36
        Loss on sale of office premises and equipment                57           -            - 
        Increases (decreases) in cash due to
        changes in:
          Other liabilities                                          52          170          (98)
          Prepaid expenses and other                                (12)         485          (30)
                                                                  -----        -----        -----

                  Net cash provided by operating activities
                    (balance carried forward)                       579        1,237          718
                                                                  -----        -----        -----

</TABLE>



                                       32


<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE L - CONDENSED FINANCIAL STATEMENTS OF GLENWAY FINANCIAL
  CORPORATION (continued)
<TABLE>
<CAPTION>

                          Glenway Financial Corporation
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                               Year ended June 30,
                                 (In thousands)

                                                                                1998         1997         1996
<S>                                                                             <C>          <C>          <C>
                  Net cash provided by operating activities
                    (balance brought forward)                                 $  579       $1,237         $718

    Cash flows used in investing activities:
      Proceeds from sale of office premises and equipment                      1,596           -            - 
      Purchase of office premises and equipment                                   (5)         (15)          (5)
      Loan principal repayments                                                    7           -            - 
      Loan disbursements                                                      (1,280)          -            - 
      Purchase of single premium life insurance policy                            -           (60)          - 
      Increase in cash surrender value of life insurance
        policies                                                                 (67)         (68)         (31)
                                                                               -----        -----          ---
                  Net cash provided by (used in) investing activities            251         (143)         (36)

    Cash flows provided by (used in) financing activities:
      Repayment of loan to ESOP                                                  (65)        (148)        (149)
      Payment of dividends on common stock                                      (936)        (777)        (736)
      Issuance of shares under stock option plan                                  39          202          219
      Purchase of treasury stock                                                  -          (411)          - 
                                                                               -----        -----          ---
                  Net cash used in financing activities                         (962)      (1,134)        (666)
                                                                               -----        -----          ---

    Net increase (decrease) in cash and cash equivalents                        (132)         (40)          16

    Cash and cash equivalents at beginning of year                               164          204          188
                                                                               -----        -----          ---

    Cash and cash equivalents at end of year                                  $   32       $  164         $204
                                                                               =====        =====          ===
</TABLE>

    Under Federal Reserve Board supervisory  policy, a holding company generally
    should not  maintain its existing  rate of cash  dividends on common  shares
    unless (i) the corporation's net earnings  available to common  stockholders
    over the past year has been sufficient to fully fund the dividends, and (ii)
    the prospective rate of earnings  retention appears  consistent with capital
    needs,  asset  quality,  and  overall  financial  condition.  The  FDIC  has
    authority  to prohibit a company from paying  dividends  if, in its opinion,
    the payment of dividends would  constitute an unsafe or unsound  practice in
    light of the  financial  condition  of the  company.  Under  Ohio  law,  the
    Corporation and Centennial are prohibited from paying a dividend which would
    result in insolvency.  Ohio law requires the  Corporation  and Centennial to
    obtain approval from the Ohio Department of Commerce,  Division of Financial
    Institutions  before  payment of dividends in excess of net earnings for the
    current and two prior fiscal years, with certain adjustments.




                                       33



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE M - STOCK OPTION PLAN

    In fiscal  1996,  the  Corporation  adopted  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  Accounting  Principles  Board  Opinion No. 25 and
    related   Interpretations   in   accounting   for  the  stock  option  plan.
    Accordingly,  no compensation  cost has been recognized for the stock option
    plan. Had  compensation  cost for the  Corporation's  stock option plan been
    determined  based on the fair value at the grant dates,  consistent with the
    accounting  method utilized in SFAS No. 123, the  Corporation's net earnings
    and  earnings  per share  would have been  reduced to the pro forma  amounts
    indicated below:
<TABLE>
<CAPTION>

                                                                     1998             1997              1996
<S>                                    <C>                           <C>               <C>              <C>
    Net earnings (In thousands)     As reported                    $2,704           $1,206            $1,545
                                                                    =====            =====             =====

                                      Pro-forma                    $2,686           $1,149            $1,545
                                                                    =====            =====             =====

    Earnings per share
      Basic                         As reported                     $1.19             $.53              $.68
                                                                     ====              ===               ===

                                      Pro-forma                     $1.18             $.51              $.68
                                                                     ====              ===               ===

      Diluted                       As reported                     $1.16             $.52              $.67
                                                                     ====              ===               ===

                                      Pro-forma                     $1.15             $.50              $.67
                                                                     ====              ===               ===
</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
    weighted-average assumptions used for grants in 1998 and 1997, respectively;
    dividend  yield of 7.50% and  expected  volatility  of 25.0% for all  years;
    risk-free interest rate of 6.00% and expected lives of ten years.








                                       34



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE M - STOCK OPTION PLAN (continued)

     A summary of the status of the  Corporation's  stock option plan as of June
     30, 1998,  1997 and 1996,  and changes  during the periods  ending on those
     dates is presented below:

<TABLE>
<CAPTION>

                                                    1998                      1997                     1996
                                                       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         52,599       $14.34        42,075        $12.24        53,592       $ 8.51
    Effect of two-for-one stock split        51,849         7.17            -             -             -            - 
    Granted                                   7,000        17.75        20,500         20.88            -            - 
    Exercised                                 2,750        11.13       (9,976)         10.90       (11,517)        5.12
    Forfeited                                 5,093         6.33            -             -             -            - 
                                            -------        -----        ------         -----        ------        -----

    Outstanding at end of year              103,605       $ 8.55        52,599        $14.34        42,075       $12.24
                                            =======        =====        ======         =====        ======        =====

    Options exercisable at year-end         103,605       $ 8.55        52,599        $14.34        42,075       $12.24
                                            =======        =====        ======         =====        ======        =====
    Weighted-average fair value of
      options granted during the year
      (split-adjusted)                                     $2.14                       $2.12                        N/A
                                                            ====                        ====                        ===
</TABLE>

    The following information applies to options outstanding at June 30, 1998:

    Number outstanding                                              103,605
    Range of exercise prices                                 $6.33 - $17.75
    Weighted-average exercise price                                   $8.55
    Weighted-average remaining contractual life                  7.12 years


NOTE N - LEGISLATIVE MATTERS

    The deposit  accounts of the Savings Bank and of other savings  associations
    are  insured by the FDIC  through  the Savings  Association  Insurance  Fund
    ("SAIF").  Prior to September  1996, the reserves of the SAIF were below the
    level required by law because a significant  portion of the assessments paid
    into  the fund  were  used to pay the cost of  prior  thrift  failures.  The
    deposit  accounts of  commercial  banks are insured by the FDIC  through the
    Bank Insurance  Fund ("BIF"),  except to the extent such banks have acquired
    SAIF deposits.  The reserves of the BIF met the level required by law in May
    1995. As a result of the  respective  reserve  levels of the funds,  deposit
    insurance  assessments paid by healthy savings  associations  exceeded those
    paid by healthy  commercial banks by approximately $.19 per $100 in deposits
    in 1995.  In fiscal 1996 and 1997,  no BIF  assessments  were  required  for
    healthy commercial banks except for a $2,000 minimum fee.



                                       35



<PAGE>


                          Glenway Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1998, 1997 and 1996


NOTE N - LEGISLATIVE MATTERS (continued)

    Legislation was enacted to recapitalize the SAIF that provided for a special
    assessment  totaling $.657 per $100 of SAIF deposits held at March 31, 1995,
    in order to increase SAIF reserves to the level required by law. The Savings
    Bank held  $205.5  million in deposits at March 31,  1995,  resulting  in an
    assessment of approximately  $1.35 million, or $891,000 after tax, which was
    charged to operations in fiscal 1997.

    Under separate legislation related to the recapitalization plan, the Savings
    Bank is required to recapture as taxable income  approximately  $1.0 million
    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 be  permitted  to  amortize  the
    recapture of the bad debt reserve in taxable income over six years.
































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