<PAGE>   1

                                                                      Exhibit 13

PRESIDENT'S LETTER

Dear Shareholders,

         On behalf of the Officers, Directors and staff of Glenway Financial
Corporation and its wholly owned subsidiary, Centennial Savings Bank, it is with
great pleasure that I present your company's operating results for fiscal year
1997.

         As anticipated, the recapitalization of the Savings Association
Insurance Fund of the Federal Deposit Insurance Corporation (SAIF) occurred this
reporting period. Our one-time assessment amounted to $1.35 million which
negatively impacted after-tax net earnings by $891,000. Without the SAIF charge,
annual earnings of $2.1 million would have been realized, a substantial 36%
increase over prior year earnings of $1.5 million. The impact of the charge to
first quarter earnings is apparent when comparing the unaudited 1997 quarterly
earnings to the prior year results.

<TABLE>
<CAPTION>
         Net Earnings
         Quarter Ending           September 30,       December 31,           March 31,            June 30,
         --------------           -------------       ------------           ---------            --------

<S>                                   <C>                 <C>                 <C>                 <C>     
         Fiscal 1997                  $(439,000)          $507,000            $552,000            $586,000
         Fiscal 1996                  $ 404,000           $340,000            $364,000            $437,000
</TABLE>

         We moved into our new GlenCrossing headquarters in August 1996,
enabling us to achieve various economies of scale and to consolidate the bank
operations, including the successful relocation of the Ferguson Road branch
personnel and deposits to the new headquarters. Controlling operating expense is
one of our principal goals, and we are very pleased with the progress that we
have made in 1997. Excluding the SAIF special assessment, total general,
administrative and other expense declined approximately $276,000 in fiscal 1997,
compared to fiscal 1996. The 1998 fiscal year will be the first full year of
expenses associated with the new corporate headquarters. It will also be the
first full year of reduced deposit insurance premiums following the September
1996 SAIF recapitalization. We estimate that the headquarters expense will be
substantially offset by the reduced deposit insurance premiums. We anticipate,
however, that our continuing focus on cost reduction measures will produce other
savings that will allow us to further reduce total general, administrative and
other expense.

         Loans continued to increase a very respectable 8.4% in fiscal 1997
compared to fiscal 1996. At year-end, net loan receivables were $239.6 million
compared to prior year-end of $221.1 million, an increase of $18.5 million.
During the fiscal year, we initiated a commercial lending program and Centennial
now offers conventional business loans and programs sponsored by the Small
Business Administration (SBA) and state and local governments. To date we have
generated commercial loans and commitments for various business purpose loans
amounting to approximately $1.7 million. We anticipate substantial growth in
this area and look forward to serving the credit needs of small businesses in
the community.

         Year-end deposits of $226.9 million reflected an increase of $4.1
million for a 1.8% increase over 1996 year-end deposits of $222.8 million. This
modest increase, coupled with the wide array of borrowing programs available to
us through the Federal Home Loan Bank, was more than adequate to finance loan
demand.

         Given last year's fine performance and a continuing interest rate
friendly economy, we look forward to the future. We enter fiscal 1998 with a
capable staff that is excited about our company and the opportunities that
accompany success.

         In closing, we wish to formally recognize the retirement of Robert
(Bud) Holden from the Board of Directors effective October 23, 1996. Bud served
the Centennial organization and our present day company a total of 39 years as a
Director. Typical of Bud's dedication, he timed his retirement to coincide with
the completion of our new headquarters that he so expertly coordinated as
Chairman of the Building Committee.

Sincerely,

Robert R. Sudbrook
President


<PAGE>   2

BUSINESS OF THE CORPORATION

         Glenway Financial Corporation (the "Corporation" or "Glenway
Financial") was originally incorporated under the name Centennial Financial
Corp. in the State of Delaware in March 1990 for the purpose of owning all of
the outstanding stock of Centennial Savings Bank ("Centennial" or the "Savings
Bank") issued upon the conversion of the Savings Bank from the mutual to stock
form in November 1990.

         On August 24, 1993, the Corporation consummated a conversion-merger
transaction with The Glenway Loan and Deposit Company ("Glenway"), a
state-chartered mutual savings association, in which the Corporation issued $9.8
million in new common stock, representing the appraised value of Glenway. In
connection with the completion of the conversion-merger transaction, the
Corporation changed its name to Glenway Financial Corporation.

         The Savings Bank was organized in 1876 as an Ohio mutual savings and
loan company and converted to a federally-chartered stock savings bank in 1990.
In January 1994, Centennial converted its charter to an Ohio savings bank
charter. As an Ohio savings bank, Centennial is subject to regulation,
supervision and examination by the Ohio Department of Commerce, Division of
Financial Institutions and the Federal Deposit Insurance Corporation (the
"FDIC"). Centennial's deposits are insured up to applicable limits by the FDIC
in the Savings Association Insurance Fund (the "SAIF"). The Corporation is
subject to regulation by the Office of Thrift Supervision (the "OTS").

         Centennial considers its principal market area to be the western side
of Cincinnati, Ohio, with five offices in the neighborhoods of Western Hills,
Cheviot, Price Hill, Delhi and Colerain Township. With total assets of
approximately $287.1 million and stockholders' equity of approximately $27.2
million at June 30, 1997, Centennial is one of the largest thrifts headquartered
in Hamilton County, Ohio.

         As a community-oriented association, Centennial offers a wide range of
retail banking services. Centennial is principally engaged in the business of
attracting deposits from the general public and using such deposits, together
with borrowings and other funds, to originate residential mortgage loans.
Centennial also originates multi-family and construction loans, primarily on
properties located in its market area and has originated consumer loans and
nonresidential real estate loans. Additionally, Centennial has expanded its
lending activities to make commercial loans to businesses in its principal
market area, subject to applicable investment limits under Ohio law.

         Centennial's operating philosophy revolves around the fundamental goal
of providing affordable home ownership for the community and a safe, competitive
return for the depositors. Centennial's Board of Directors has long recognized
that improving the quality of life in Centennial's primary market area is a
prerequisite to continued success in the competitive financial services arena.
As a result, Centennial's management and employees have taken a prominent
position in civic promotion and development, thereby reciprocating the 121 years
of support that Centennial has received from its community.


                                       1
<PAGE>   3

COMMON STOCK AND RELATED INFORMATION

         The Corporation's common stock was listed on The NASDAQ Small Cap
Market from August 1993 through June 1995, when the Corporation received
approval for listing on The NASDAQ National Market. The Corporation's common
stock was designated a marginable security by the Federal Reserve Board in
August 1995.

         Presented below are the high and low bids for the Corporation's common
stock for each quarter of fiscal 1997, 1996 and 1995 and the amount of cash
dividends paid on the common stock in each quarter of fiscal 1997, 1996 and
1995. These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

<TABLE>
<CAPTION>
FISCAL YEAR ENDING JUNE 30,                         HIGH               LOW             CASH DIVIDENDS
---------------------------                         ----               ---             --------------

<S>                                                 <C>               <C>                   <C>  
1997
Quarter ending June 30, 1997                        $26.50            $23.00                $ .17
Quarter ending March 31, 1997                        23.50             21.50                  .17
Quarter ending December 31, 1996                     20.05             19.00                  .17
Quarter ending September 30, 1996                    20.00             18.25                  .17

1996

Quarter ending June 30, 1996                        $22.09            $19.24                $ .16
Quarter ending March 31, 1996                        23.28             19.95                  .16
Quarter ending December 31, 1995                     23.28             17.81                  .16
Quarter ending September 30, 1995                    20.43             15.91                  .16

1995

Quarter ending June 30, 1995                        $17.15            $14.44                $ .15
Quarter ending March 31, 1995                        17.60             15.34                  .15
Quarter ending December 31, 1994                     17.82             15.11                  .15
Quarter ending September 30, 1994                    17.82             16.25                  .13
</TABLE>

         As of September 12, 1997, the Corporation had outstanding 1,139,997
shares of common stock, held by approximately 523 stockholders of record. This
number of stockholders does not reflect the number of persons or entities who
may hold stock in nominee or "street" name through brokerage firms or others.

         In 1996, the Corporation announced the implementation of a dividend
reinvestment program (the "DRIP") pursuant to which stockholders may choose to
reinvest automatically all or a portion of the cash dividends received on shares
of the Corporation's common stock. Stockholders also may make quarterly cash
contributions to the DRIP for the purchase of additional shares of common stock
of the Corporation. The Corporation's transfer agent administers the DRIP.


                                       2
<PAGE>   4

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

         The following tables set forth certain information concerning the
Corporation's consolidated financial position and results of operations at the
dates and for the periods indicated.

<TABLE>
<CAPTION>
                                                                                    At June 30,
                                                    ------------------------------------------------------------------------
                                                      1997             1996            1995           1994            1993
                                                    --------         --------        --------       --------        --------
                                                                                  (In thousands)
<S>                                                 <C>              <C>             <C>            <C>             <C>     
STATEMENT OF FINANCIAL CONDITION DATA:(1) 
Total amount of:
  Assets                                            $287,088         $278,809        $265,740       $243,914        $225,540
  Interest-bearing deposits in other
    financial  institutions                                -              340             426          1,821           3,970
  Investment securities held for sale                      -                -               -              -           6,702
  Investment securities, at cost                       7,042            5,549           7,489         10,499           8,549
  Investment securities available for sale, at
     market                                                -            4,084           4,092          4,047               -
  Mortgage-backed securities available for
     sale, at market                                   9,920           14,761           4,769          6,824               -
  Mortgage-backed securities, at cost                 13,281           15,710          28,011         30,754          31,625
  Loans receivable, net(2)                           239,648          221,101         205,413        175,110         160,906
  Goodwill and other intangible assets                   368              576             796          1,037           1,357
  Deposit accounts                                   226,853          222,768         208,377        196,499         202,713
  FHLB advances                                       28,114           25,634          27,158         17,731           4,066
  Stockholders' equity - restricted(3)                27,238           26,781          25,387         25,045          15,986
</TABLE>

<TABLE>
<CAPTION>
                                                                                    At June 30,
                                                    ------------------------------------------------------------------------
                                                      1997             1996            1995           1994            1993
                                                    --------         --------        --------       --------        --------
                                                                       (In thousands, except per share data)
<S>                                                 <C>             <C>              <C>            <C>             <C>    

STATEMENT OF EARNINGS: (1)

Total interest income                               $20,903         $19,984          $17,862        $15,132         $16,849
Total interest expense                               12,195          11,933           10,300          8,160           9,813
                                                     ------          ------           ------        -------         -------
Net interest income                                   8,708           8,051            7,562          6,972           7,036
Provision for losses on loans                           244              60               84             96             240
                                                   --------       ---------        ---------      ---------        --------
Net interest income after provision
  for losses on loans                                 8,464           7,991            7,478          6,876           6,796
Other income                                            786             734              913            809           1,526
General, administrative and other expense             7,348           6,274            6,001          5,664           5,462
                                                    -------         -------          -------        -------         -------
Earnings before income taxes                          1,902           2,451            2,390          2,021           2,860
Federal income taxes                                    696             906              915            761           1,104
                                                   --------        --------         --------       --------         -------
Net earnings                                       $  1,206        $  1,545         $  1,475       $  1,260        $  1,756
                                                   ========        ========         ========       ========        ========
Earnings per share(4)                                 $1.06           $1.37           $1.30           $1.09           $1.53
                                                      =====           =====           =====           =====           =====

</TABLE>


Footnotes on next page



                                       3
<PAGE>   5

<TABLE>
<CAPTION>
                                                                                    At June 30,
                                                    ------------------------------------------------------------------------
                                                      1997             1996            1995           1994            1993
                                                    --------         --------        --------       --------        --------
<S>                                                 <C>             <C>            <C>              <C>             <C>   
OTHER DATA:
Interest rate spread                                  2.94%           2.77%          2.77%            2.96%           3.05%
Return on average assets (5)                           .43             .57            .57              .54             .77
Average equity-to-assets ratio                        9.53            9.58           9.72            10.23            6.62
Return on average equity (5)                          4.48            5.92           5.91             5.29           11.48
Number of:
  Real estate loans outstanding                      3,968           4,092          4,163            3,556           3,383
  Deposit accounts                                  31,760          31,221         30,429           28,372          28,248
  Full service office locations                          5               5              6                6               6

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

<FN>
(1)      The consolidated financial statements as of and for the year ended June 30, 1993, have been restated to give
         effect to the conversion-merger transaction, which was accounted for as a pooling-of-interests.

(2)      Includes loans held for sale.

(3)      See Notes I and K of the Notes to Consolidated Financial Statements regarding restrictions on equity.

(4)      Earnings per share for 1993 through 1996 has been adjusted to give effect to 5% stock dividends paid in fiscal
         1997, 1996 and 1993. Earnings per share is computed based on the following numbers of weighted average shares
         outstanding for the years indicated: 1,142,527 for fiscal 1993; 1,148,765 for fiscal 1994; 1,137,877 for fiscal
         1995; 1,129,066 for fiscal 1996; and 1,137,814 for fiscal 1997.

(5)      Before consideration of the SAIF recapitalization assessment the ratios set forth below would have been as
         follows:

                  Return on average assets            .74%
                  Return on average equity           7.79%
</TABLE>



                                        4
<PAGE>   6

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

GENERAL

         Glenway Financial's activities are limited primarily to holding the
Savings Bank's stock. The Corporation owns and operates a strip shopping center
in which one of the Savings Bank's branches is located; however, the impact of
this activity on the financial condition and results of operations of the
Corporation has not been material. Therefore, the discussion that follows
focuses on the comparison of Centennial's operations in the fiscal years ended
June 30, 1997 ("fiscal 1997"), June 30, 1996 ("fiscal 1996"), and June 30, 1995
("fiscal 1995").

OVERVIEW

         The principal asset of the Corporation is the capital stock of
Centennial. Accordingly, the Corporation's results of operations are primarily
dependent upon the results of operations of the Savings Bank. The Savings Bank
conducts a general banking business that consists primarily of attracting
deposits from the general public and using those funds to originate loans for
commercial, consumer and residential purposes.

         The Savings Bank's profitability depends primarily on its net interest
income, which is the difference between interest income generated from
interest-earning assets (i.e., loans and investments) and the interest expense
incurred on interest-bearing liabilities (i.e., deposits and borrowed funds).
Net interest income is affected by the relative amounts of interest-earning
assets and interest-bearing liabilities, and the interest rates earned and paid
on these balances.

         Additionally, and to a lesser extent, the Savings Bank's profitability
is affected by such factors as the level of non-interest income and expenses,
the provision for loan losses, and the effective tax rate. Non-interest income
consists primarily of service charges and other fees and income from the sale of
loans. Non-interest expenses consist of compensation and benefits,
occupancy-related expenses, FDIC deposit insurance premiums and other operating
expenses.

         Management's discussion and analysis of earnings and related financial
data are presented herein to assist investors in understanding the consolidated
financial condition and results of operations of the Corporation for the fiscal
years ended June 30, 1997 and 1996. This discussion should be read in
conjunction with the consolidated financial statements and related footnotes
presented elsewhere in this report.


                                       5
<PAGE>   7

DISCUSSION OF FINANCIAL CONDITION CHANGES FROM JUNE 30, 1996 TO JUNE 30, 1997

         The Corporation's total assets amounted to $287.1 million as of June
30, 1997, an increase of $8.3 million, or 3.0%, over the $278.8 million total at
June 30, 1996. The increase was funded primarily through growth in deposits of
$4.1 million and an increase in borrowings of $2.5 million.

         Cash and due from banks, federal funds sold and interest bearing
deposits in other financial institutions decreased by $1.3 million, or 24.3%, to
a total of $3.9 million at June 30, 1997, compared to $5.1 million at June 30,
1996. Investment securities and investment securities available for sale
decreased by $2.6 million, or 26.9%, while mortgage-backed securities and
mortgage-backed securities available for sale decreased by $7.3 million, or
23.9%. The combined decrease of $9.9 million in investment and mortgage-backed
securities resulted from the sale of $6.8 million of securities designated as
available for sale, scheduled maturities and calls of $1.5 million and principal
repayments and payoffs of $4.8 million on mortgage-backed securities. These
decreases were partially offset by the purchase of $3.0 million of U.S. Treasury
notes. The proceeds of sales and maturity of investment and mortgage-backed
securities were redeployed primarily to fund growth in the loan portfolio.

         Loans receivable totaled $239.6 million at June 30, 1997, an increase
of $18.5 million, or 8.4%, over the $221.1 million total at June 30, 1996. Loan
originations, which totaled $72.8 million during 1997, were partially offset by
loan sales of $440,000 and principal repayments of $53.3 million. Loan
origination volume during 1997 remained relatively consistent with that of 1996,
although sales volume decreased by $3.0 million. Growth in the loan portfolio in
fiscal 1997 was comprised of $17.0 million in one- to four-family and multi
family residential real estate loans and $2.1 million in nonresidential real
estate and commercial loans. The Corporation's allowance for loan losses
amounted to $820,000 at June 30, 1997, an increase of $202,000, or 32.7%, over
the total at June 30, 1996. The allowance for loan losses represented .33% of
the total loan portfolio at June 30, 1997, as compared to .27% at June 30, 1996.
The Corporation's allowances represented 96.4% and 70.0% of non-performing
loans, which totaled $851,000 and $883,000 at June 30, 1997 and 1996,
respectively.

         Deposits totaled $226.9 million at June 30, 1997, an increase of $4.1
million, or 1.8%, over the $222.8 million total at June 30, 1996. The increase
resulted from management's continuing marketing efforts, increased consumer
interest in the Savings Bank's "Optimum Choice Account" and growth at the new
main office location. Alternative sources of funds, such as Federal Home Loan
Bank ("FHLB") advances, are frequently used to manage the cost of funds. FHLB
advances totaled $28.1 million at June 30, 1997, an increase of $2.5 million, or
9.7%, over June 30, 1996, and were utilized primarily to fund loan growth.

         Stockholders' equity amounted to $27.2 million at June 30, 1997, an
increase of $457,000, or 1.7%, over the $26.8 million total at June 30, 1996.
The increase resulted primarily from period earnings of $1.2 million, a net
increase attributable to employee benefit and stock option plans totaling
$328,000, and an increase of $111,000 in net unrealized gains on securities
designated as available for sale, which were partially offset by dividends to
stockholders of $777,000 and the repurchase of $411,000 of outstanding stock
during fiscal 1997.

COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

         GENERAL. Net earnings for fiscal 1997, totaled $1.2 million, a decrease
of $339,000, or 21.9%, from the $1.5 million in net earnings recorded in fiscal
1996. The decrease in earnings was primarily attributable to the one-time $1.35
million, or $891,000 after tax, assessment imposed on the Savings Bank as part
of legislation to recapitalize the SAIF. Additionally, the decline in earnings
resulted from an increase in the provision for losses on loans of $184,000.
These increased expense items were partially offset by an increase of $657,000
in net interest income and a $52,000 increase in other income. As a result of
the decrease in net earnings before taxes, total federal income tax expense
decreased by $210,000.

         Absent the special SAIF assessment, net earnings for fiscal 1997, would
have been $2.1 million, which would represent an increase in net earnings of
$552,000, or 35.7%, over fiscal 1996.

                                       6
<PAGE>   8

         NET INTEREST INCOME. Total interest income for fiscal 1997 amounted to
$20.9 million, an increase of $919,000, or 4.6%, over the $20.0 million recorded
for fiscal 1996. Interest income on loans and mortgage-backed securities totaled
$20.2 million, an increase of $1.1 million, or 5.6%, over the 1996 fiscal
period. This increase resulted primarily from a $12.2 million, or 5.0%, increase
in the average balance outstanding year to year, coupled with a 5 basis point
increase in the average yield, from 7.83% in fiscal 1996 to 7.88% in fiscal
1997. Interest income on investment securities and other interest-earning assets
decreased by $153,000, or 18.3%, to a total of $681,000 in fiscal 1997, as
compared to $834,000 in fiscal 1996. This decrease resulted primarily from a
$3.4 million decrease in the average portfolio balance year to year, as a result
of the sale of $4.1 million in securities designated as available for sale,
which was partially offset by a 36 basis point increase in the average yield,
from 5.64% in fiscal 1996 to 6.00% in fiscal 1997.

         Total interest expense amounted to $12.2 million for fiscal 1997, an
increase of $262,000, or 2.2%, over fiscal 1996. Interest expense on deposits
increased by $345,000, or 3.3%, to a total of $10.9 million in fiscal 1997. The
increase resulted primarily from a $10.4 million, or 4.8%, increase in the
average deposit portfolio balance outstanding year to year, which was partially
offset by a 7 basis point decrease in the average cost of deposits, from 4.85%
in 1996 to 4.78% in 1997. Interest expense on borrowings decreased by $83,000,
or 6.2%, during fiscal 1997. This decrease was due to a $1.1 million decrease in
average borrowings outstanding and an 8 basis point decrease in the average cost
of borrowings, from 5.73% in fiscal 1996 to 5.65% in fiscal 1997.

         As a result of the foregoing changes in interest income and interest
expense, net interest income increased by $657,000, or 8.2%, for fiscal 1997, as
compared to fiscal 1996. The interest rate spread increased by 17 basis points
to 2.94% in 1997 from 2.77 % in 1996, while the net interest margin increased by
15 basis points, to 3.25% in 1997 from 3.10% in 1996.

         PROVISION FOR LOSSES ON LOANS. The provision for losses on loans
represents a charge to earnings to maintain the allowance for loan losses at a
level management believes is adequate to absorb losses in the loan portfolio.
The Corporation's provision for loan losses amount to $244,000 for fiscal 1997,
as compared to $60,000 for fiscal 1996, an increase of $184,000, or 306.7 %. The
provision for loan losses in 1997 was increased primarily as a result of the
$19.1 million, or 8.3%, of growth in the loan portfolio over the year and
introduction of small business commercial lending . Net loan charge-offs
amounted to $42,000 in fiscal 1997 as compared to $58,000 in fiscal 1996.

         Management uses the best information available in providing for
possible loan losses and believes that the allowance is adequate at June 30,
1997. However, future adjustments to the allowance could be necessary and net
earnings could be affected if circumstances and/or economic conditions differ
substantially from the assumptions used in making the initial determinations.

         OTHER INCOME. Other income totaled $786,000 for fiscal 1997, an
increase of $52,000, or 7.1 %, over the $734,000 recorded in fiscal 1996. The
increase resulted primarily from a $43,000, or 6.9%, increase in service fees,
charges and other operating income, coupled with a $53,000 increase in gain on
sale of loans, as well as a $72,000 increase in net gains on securities
transactions. The increase in service fees, charges and other operating income
resulted primarily from growth in the deposit portfolio, coupled with an
increase in service fee rates and management's continued focus on collecting
fees assessed on deposit accounts.

         GENERAL, ADMINISTRATIVE AND OTHER EXPENSE. General, administrative and
other expense increased by $1.1 million, or 17.1%, for fiscal 1997, compared to
fiscal 1996, due primarily to a $1.1 million increase in federal deposit
insurance premiums as a result of the one-time SAIF recapitalization assessment.
Excluding the SAIF recapitalization charge of $1.35 million, general,
administrative and other expense decreased by $276,000, or 4.4%. This net
decrease resulted primarily from a $140,000, or 4.2%, decrease in employee
compensation and benefits, a $19,000, or 5.0%, decrease in franchise taxes and a
$12,000 decrease in goodwill amortization. The decrease in employee compensation
and benefits resulted from a combination of benefits paid in connection with the
death of the Corporation's President in the prior year, coupled with employee
attrition resulting in a net decrease of two full-time equivalent employee
positions. Increases in general, administrative and other expense included a
$116,000, or 24.4%, increase in occupancy and equipment and an $85,000, or
34.7%, increase in data processing expense. In 


                                       7
<PAGE>   9

August 1996, the Corporation opened it's new main office headquarters and
upgraded the data communications systems of the Savings Bank, which resulted in
the increases in the aforementioned expenses.

         FEDERAL INCOME TAXES. The provision for federal income taxes amounted
to $696,000 for fiscal 1997, a decrease of $210,000, or 23.2 %, from the
$906,000 recorded in fiscal 1996. The decrease resulted primarily from a
$549,000, or 22.4%, decrease in earnings before taxes. The effective tax rates
were 36.6% and 37.0%, for fiscal 1997 and 1996, respectively.

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 1996 AND
1995

         GENERAL. Net earnings for fiscal 1996 totaled $1.5 million,
representing an increase of $70,000, or 4.7%, over net earnings reported for
fiscal 1995. The increase in earnings during fiscal 1996 is primarily
attributable to a $513,000, or 6.9%, increase in net interest income after
provision for losses on loans, which was partially offset by a $179,000, or
19.6%, decline in other income and an increase of $273,000 in general,
administrative and other expense.

         NET INTEREST INCOME. Interest income on loans and mortgage-backed
securities totaled $19.2 million in fiscal 1996, an increase of $2.2 million, or
12.9%, over the $17.0 million recorded in fiscal 1995. The increase resulted
primarily from an increase in the weighted average balance outstanding of $14.6
million, or 6.3%, coupled with an increase in the weighted average yield of 45
basis points, to 7.83% in fiscal 1996. Interest on investments and
interest-bearing deposits declined during fiscal 1996 by $67,000, or 7.4%, due
to a 24 basis point decline in weighted average yield and a $549,000 decline in
the weighted average balance outstanding.

         Interest expense on deposits totaled $10.6 million during fiscal 1996,
reflecting an increase of $1.8 million, or 20.6%, over fiscal 1995 levels. The
increase was due primarily to the increase in the weighted average balance
outstanding of $15.9 million, or 7.8%, and, to a lesser extent, an increase in
the weighted average rate from 4.34% in fiscal 1995 to 4.85% in fiscal 1996.
Interest on FHLB advances declined during fiscal 1996 by $176,000, or 11.6%, due
primarily to the decrease in outstanding advances year to year.

         As a result of the foregoing changes in interest income and interest
expense, net interest income increased by $489,000, or 6.5%, during fiscal 1996.
The Corporation's interest rate spread remained consistent at 2.77% for fiscal
1995 and fiscal 1996, while the net interest margin increased by two basis
points, from 3.08% in fiscal 1995 to 3.10% in fiscal 1996.

         PROVISION FOR LOSSES ON LOANS. The Corporation's provision for losses
on loans totaled $60,000 in fiscal 1996, compared to $84,000 in fiscal 1995. The
Corporation's provision during fiscal 1996 was based on management's overall
assessment of current and anticipated economic conditions, the level of asset
quality, delinquency totals, and portfolio growth from year to year.

         OTHER INCOME. Other income declined during fiscal 1996 by $179,000, or
19.6%. The decrease was primarily attributable to a $273,000 gain on sale of
real estate held for sale recorded in fiscal 1995, compared to a $144,000 gain
on sale of office premises realized in fiscal 1996. Additionally, gains on sale
of mortgage loans declined by $28,000 and gains on sale of real estate acquired
through foreclosure declined by $31,000.


                                       8
<PAGE>   10

         GENERAL, ADMINISTRATIVE AND OTHER EXPENSE. General, administrative and
other expense increased during fiscal 1996 by $273,000, or 4.5%, due primarily
to a $111,000, or 3.5%, increase in employee compensation and benefits, an
increase in franchise taxes of $120,000, or 46.7%, and increases in occupancy
and equipment and federal deposit insurance premiums of $35,000 and $27,000,
respectively. A $21,000 decline in amortization of goodwill and a $34,000
decrease in other operating expenses partially offset the overall increase in
general and administrative expenses.

         FEDERAL INCOME TAXES. The provision for federal income taxes totaled
$906,000 in fiscal 1996, a reduction of $9,000, or 1.0%, from the $915,000
recorded in fiscal 1995. The decline is partially attributable to a decline in
the amortization of certain non-deductible intangible expense items. The
Corporation's effective tax rate was 37.0% in fiscal 1996, as compared to 38.3%
in fiscal 1995.


                                       9
<PAGE>   11

The following table presents for the periods indicated the total dollar amount
of interest income from average interest-earning assets and the resultant
yields, as well as the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates, and the net interest margin. The table does
not reflect any effect of income taxes. All average balances are based on
month-end balances.

<TABLE>
<CAPTION>
                                                                                          Year ended June 30,
                                           ------------------------------------------------------------------------------
                                                      1997                                         1996                  
                                           ----------------------------------       -------------------------------------
                                           Average                                   Average                             
                                           balance     Interest    Yield/Rate       Balance      Interest      Yield/Rate
                                           -------     --------    ----------       -------      --------      ----------
<S>                                        <C>          <C>            <C>           <C>          <C>           <C>      
Interest-earning assets:
   Loans receivable and mortgage-
      backed securities (1)                $256,785     $20,222        7.88%         $244,558     $19,150       7.83%    
   Investment securities (2)                  7,419         465        6.27            11,886         646       5.43     
   Other interest-earning assets              3,927         216        5.50             2,897         188       6.49     
                                            -------     --------       ----           -------      ------       ----     
     Total interest-earning assets          268,131      20,903        7.80           259,341      19,984       7.71     
Non-interest earning assets                  14,399                                    13,104                            
                                            -------                                   -------                            
     Total assets                          $282,530                                  $272,445                            
                                            =======                                   =======                            
Interest-bearing liabilities:
   Passbook savings                       $  38,562       1,079        2.80         $  41,479       1,162       2.80     
   NOW accounts                              24,877         641        2.58            17,090         333       1.95     
   Money market accounts                      6,849         219        3.20             8,814         283       3.21     
   Certificates of deposit                  158,469       8,999        5.68           150,997       8,815       5.84     
                                            -------     -------        ----           -------      ------       ----     
     Total Deposits                         228,757      10,938        4.78           218,380      10,593       4.85     
   Borrowings                                22,241       1,257        5.65            23,375       1,340       5.73     
                                            -------     -------        ----           -------      ------       ----     
     Total interest-bearing liabilities     250,998      12,195        4.86           241,755      11,933       4.94     
                                                         ------        ----                        ------       ----     
Non-interest bearing liabilities              4,615                                     4,585                            
                                            -------                                   -------                            
   Total liabilities                        255,613                                   246,340                            

Stockholders' equity                         26,917                                    26,105                            
                                            -------                                   -------                            
   Total liabilities and stockholders' 
   equity                                  $282,530                                  $272,445                            
                                            =======                                   =======                            
Net interest income; interest
   rate spread                                         $  8,708        2.94%                     $  8,051       2.77%    
                                                        =======        ====                       =======       ====     
Net interest margin (3)                                                3.25%                                    3.10%    
                                                                       ====                                     ====     
Average interest-earning assets to
   interest-bearing liabilities                                      106.83%                                  107.27%    
                                                                     ======                                   ======     

                                                                                          Year ended June 30,
                                           -------------------------------------
                                                          1995
                                           -------------------------------------
                                           Average
                                           balance       Interest     Yield/Rate
                                           -------       --------     ----------
<S>                                         <C>          <C>           <C>  
Interest-earning assets:
   Loans receivable and mortgage-
      backed securities (1)                 $229,965     $16,961       7.38%
   Investment securities (2)                  12,778         752       5.89
   Other interest-earning assets               2,554         149       5.83
                                             -------      ------       ----
     Total interest-earning assets           245,297      17,862       7.28
Non-interest earning assets                   11,578
                                             -------
     Total assets                           $256,875
                                             =======
Interest-bearing liabilities:
   Passbook savings                       $$  46,455       1,302       2.80
   NOW accounts                               15,029         311       2.07
   Money market accounts                      11,277         356       3.16
   Certificates of deposit                   129,752       6,815       5.25
                                             -------      ------       ----
     Total Deposits                          202,513       8,784       4.34
   Borrowings                                 25,743       1,516       5.89
                                             -------      ------       ----
     Total interest-bearing liabilities      228,256      10,300       4.51
                                                          ------       ----
Non-interest bearing liabilities               3,653
                                             -------
   Total liabilities                         231,909

Stockholders' equity                          24,966
                                             -------
   Total liabilities and stockholders' 
   equity                                   $256,875
                                             =======
Net interest income; interest
   rate spread                                          $  7,562       2.77%
                                                         =======       ====
Net interest margin (3)                                                3.08%
                                                                       ====
Average interest-earning assets to
   interest-bearing liabilities                                      107.47%
                                                                     ======
-----------------------------

<FN>

(1)      Includes loans held for sale, nonaccrual loans and mortgage-backed securities designated as available for sale.

(2)      Includes investment securities designated as available for sale or held for sale.

(3)      Net interest margin is net interest income divided by average interest-earning assets.

</TABLE>


                                       10
<PAGE>   12


RATE/VOLUME ANALYSIS

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

<TABLE>
<CAPTION>
                                                                            Year ended June 30,
                                     ---------------------------------------------------------------------------------
                                                 1997 vs. 1996                              1996 vs. 1995
                                     -------------------------------------         -----------------------------------
                                           Increase                                    Increase
                                          (decrease)               Total              (decrease)               Total
                                            due to               increase               due to               increase
                                     ---------------------                         -------------------                
                                     Rate          Volume       (decrease)         Rate         Volume      (Decrease)
                                     ----          ------       ----------         ----         ------      ----------
                                                                       (In thousands)

<S>                                   <C>             <C>          <C>           <C>             <C>           <C>   
Interest-earning assets:
   Loans (1)                          $110            $962         $1,072        $1,079          $1,110        $2,189
   Investment securities (2)            88            (269)          (181)          (56)            (50)         (106)
   Other interest-earning assets       (32)             60             28            18              21            39
                                      ----            ----        -------       -------         -------       -------
     Total interest-earning
       assets                          166             753            919         1,041           1,081         2,122
                                       ---             ---         ------         -----           -----         -----

Interest-bearing liabilities
   Deposits                           (153)            498            345         1,088             720         1,808
   Borrowings                          (19)            (64)           (83)          (39)           (136)         (175)
                                      ----            ----        -------       -------          ------        ------
     Total interest-bearing
       liabilities                    (172)            434            262         1,049             584         1,633
                                       ---             ---         ------         -----          ------         -----

Increase (decrease) in net
   interest income                    $338            $319        $   657     $      (8)        $   497       $   489
                                       ===             ===         ======      ========          ======       =======
------------------------------

<FN>
(1)      Includes loans held for sale, nonaccrual loans and mortgage-backed securities designated as available for sale.

(2)      Includes investment securities designated as available for sale.
</TABLE>

ASSET/LIABILITY MANAGEMENT

         The Corporation's earnings depend primarily upon its net interest
income, which is the difference between its interest income on interest-earning
assets, such as mortgage loans, investment securities and mortgage-backed
securities, and its interest expense paid on interest-bearing liabilities,
consisting of deposits and borrowings. As market interest rates change, asset
yields and liability costs do not change simultaneously. Due to maturity,
repricing and timing differences of its interest-earning assets and its
interest-bearing liabilities, the Corporation's earnings will be affected
differently under various interest rate scenarios. The Corporation has sought to
limit these net income fluctuations and manage interest rate risk by originating
adjustable-rate loans and purchasing relatively short-term and variable-rate
investments and securities. The Corporation has a high percentage of
adjustable-rate, interest-earning assets, which reprice quickly with market
interest rate movements. At June 30, 1997, approximately $185.0 million, or
67.7%, of the Corporation's interest-earning assets had adjustable rates.

                                       11
<PAGE>   13

         The following table presents the Corporation's interest rate
sensitivity gap, or the difference between the repricing periods of
interest-earning assets and interest-bearing liabilities, at June 30, 1997:

<TABLE>
<CAPTION>
                                                    Over one   Over three                 Over ten
                                                    through      through     Over five     through       Over
                                        One year     three        five        through      twenty       twenty
                                        or less      years        years      ten years      years        years       Total
                                        --------    --------     -------     ---------     -------      -------      -----  
<S>                                    <C>          <C>         <C>           <C>         <C>          <C>         <C>      
  INTEREST-EARNING ASSETS:
    Fixed-rate mortgage loans (1) (2)   $ 12,787    $ 18,632     $13,857       $20,478     $13,516     $  1,834    $  81,104
    Balloon and adjustable-rate loans
    (1) (3) (5)                          157,791      23,255           -             -           -            -      181,046
    Consumer and other loans (1)           1,448         323          55             -           -            -        1,826
    Investment securities (4)              5,865       2,983           -            50         525            -        9,423
                                         -------      ------      ------        ------      ------        -----      -------
       Total                             177,891      45,193      13,912        20,528      14,041        1,834      273,399

  INTEREST-BEARING LIABILITIES:
    Passbook savings (5)                  12,079      13,515       6,067         4,275         655           11       36,602
    NOW accounts (6)                       6,509       8,543       4,806         4,712       1,384           83       26,037
    Money market accounts (5) (6)          2,984       2,238         560           181           5            -        5,968
    Certificates of deposit              109,770      41,482       6,316             -           -            -      157,568
    Advances and other borrowings         15,428       4,000           -         6,064       5,050            -       30,542
                                         -------      ------      ------        ------      ------        -----      -------
       Total                             146,770      69,778      17,749        15,232       7,094           94      256,717
                                         -------      ------      ------        ------      ------        -----      -------

  Interest rate sensitivity gap        $  31,121    $(24,585)   $ (3,837)     $  5,296    $  6,947     $  1,740    $  16,682
                                        ========     =======     =======       =======     =======      =======     ========
  Cumulative interest rate sensitivity
    gap                                $  31,121   $   6,536    $  2,699      $  7,995     $14,942      $16,682    $  16,682
                                        ========    ========     =======       =======      ======       ======     ========

  Cumulative interest rate
    sensitivity gap as a percent of
    rate sensitive assets                 11.38%       2.39%       0.99%         2.92%       5.47%       6.10%       6.10%
                                          =====        ====        ====          ====        ====        ====        ====

<FN>

(1)      The dollar amount of loans in any repricing period includes funds from the amortization and prepayment of loans
         estimated to occur in that period in accordance with the prepayment assumptions utilized by Performance Analysis by
         Sendero ("PAS") as of June 30, 1997, the latest date for which assumptions are available. PAS is a consulting firm
         which assists thrift institutions in monitoring and managing their interest-rate risk.

(2)      Includes all fixed-rate mortgage loans, net of the undisbursed portion of loans in process, unearned discounts and
         deferred loan origination fees, and mortgage-backed securities.

(3)      Includes all adjustable-rate mortgage loans, net of the undisbursed portion of loans-in-process, and mortgage-backed
         securities.

(4)      Includes interest-bearing deposits and all other investment securities, including those available for sale at
         amortized cost.

(5)      Based on an approximation of assumptions utilized by PAS in assessing the interest rate sensitivity of thrift
         institutions, passbook savings, money market accounts and NOW accounts are shown as decaying at annual rates of 33%,
         50% and 25%, respectively. It has been Centennial's experience that the actual decay rates are at least as favorable
         as the assumptions.

(6)      Excludes escrows, advances by borrowers for taxes and insurance and non-interest-bearing NOW accounts.
</TABLE>


                                       12
<PAGE>   14

         As depicted above, the Corporation has a positive cumulative interest
rate gap at each measurement period. A gap is considered positive when the
amount of interest-rate sensitive assets exceeds the amount of interest-rate
sensitive liabilities and is considered negative when the amount of
interest-rate sensitive liabilities exceeds the amount of interest-rate
sensitive assets. Generally, during a period of rising interest rates, a
positive gap within shorter maturities would increase net interest income, while
a negative gap within shorter maturities would result in a decrease in net
interest income. Conversely, during a period of falling interest rates, a
positive gap within shorter maturities would result in a decrease in net
interest income, while a negative gap within shorter maturities would have the
opposite effect.

         Certain shortcomings are inherent in the method of analysis presented
in the foregoing table. For example, although certain assets and liabilities may
have similar maturities or periods to repricing, they may react in different
degrees to changes in market interest rates. Also, the interest rates on certain
types of assets and liabilities may fluctuate in advance of changes in market
interest rates, while interest rates on other types may lag behind changes in
market rates. Additionally, certain assets, such as adjustable-rate mortgage
loans, have features which restrict changes in interest rates on a short-term
basis and over the life of the asset. Further, in the event of a change in
interest rates, prepayment and early withdrawal levels could deviate
significantly from those assumed in calculating the table. Finally, the ability
of some borrowers to service their adjustable-rate debt may become impaired in
the event of an increase in interest rates.

AVERAGE BALANCES, INTEREST RATES AND YIELDS

         The following table sets forth the average yields on the Corporation's
interest-earning assets, the average interest rates paid on interest-bearing
liabilities and the interest rate spread between the weighted average yields
earned and rates paid by the Corporation at the dates indicated:

<TABLE>
<CAPTION>
                                                                                     At June 30,
                                                                      -------------------------------------------
                                                                       1997               1996              1995
                                                                      ------             ------            ------ 
<S>                                                                    <C>                <C>               <C>  
Yield on assets:
  Weighted average yield on loan portfolio (1)                         7.90%              7.84%             7.61%
  Weighted average yield on investment portfolio (2)                   6.02               6.31              6.03
  Weighted average yield on other interest-earning assets              5.12               5.25              5.65
  Weighted average yield on all interest-earning assets                7.85               7.66              7.53
Cost of liabilities:
  Weighted average rate paid on deposits                               4.88               4.79              4.84
  Weighted average rate paid on borrowings                             5.97               5.78              6.11
  Weighted average rate paid on all interest-bearing liabilities       4.99               4.89              4.99
Interest rate spread (spread between weighted average rate on
   all interest-earning assets and all interest-bearing                2.86               2.77              2.54
   liabilities)
-----------------------------
<FN>
(1)      Includes loans held for sale and mortgage-backed securities designated
         as available for sale.

(2)      Includes investments designated as available for sale or held for sale.
</TABLE>



                                       13
<PAGE>   15

LIQUIDITY AND CAPITAL RESOURCES

         Like other financial institutions, Centennial must ensure that
sufficient funds are available to meet deposit withdrawals, loan commitments and
expenses. Control of Centennial's cash flow requires the anticipation of deposit
flows and loan payments. Centennial's primary sources of funds are deposits and
principal and interest repayments on loans.

         At June 30, 1997, Centennial had $109.8 million of certificates of
deposit maturing within one year. It has been Centennial's historic experience
that such certificates of deposit will be renewed at market rates of interest.
It is management's belief that maturing certificates of deposit over the next
year will similarly be renewed at market rates of interest without a material
adverse effect on results of operations.

         In the event that certificates of deposit cannot be renewed at
prevailing market rates, Centennial can obtain up to $47.6 million in advances
from the FHLB of Cincinnati. Centennial uses advances to help with
asset/liability management and liquidity. At June 30, 1997, Centennial had $28.1
million of outstanding FHLB advances.

         As of June 30, 1997, loan commitments and loans committed but not
closed totaled $8.7 million. Additionally, Centennial had unused lines of credit
totaling $27.5 million. Funding for these amounts is expected to be provided by
the sources described above. Management believes Centennial has adequate
resources to meet its normal funding requirements.

         The FDIC has a policy which requires institutions to maintain an
average balance of liquid assets (e.g. cash, time deposits, U.S. Government and
agency obligations) in an amount which it deems adequate to protect safety and
soundness. The FDIC does not set a specific required level. In the opinion of
management, Centennial's liquidity position was adequate to maintain safe and
sound operations at June 30, 1997.

         Centennial's liquidity, represented by cash and cash-equivalents, is a
function of its operating, investing and financing activities. These activities
are summarized below for the periods indicated.

<TABLE>
<CAPTION>
                                                                                 At June 30,
                                                            ---------------------------------------------------
                                                             1997                    1996                 1995
                                                            ------                  ------               ------ 
                                                                                (In thousands)
<S>                                                         <C>                   <C>                     <C>     
Net earnings                                                $1,206                 $ 1,545                 $ 1,475
Adjustments to reconcile net earnings to net
   cash provided by (used in) operating activities           2,176                    (616)                   (120)
                                                             -----                  ------                  ------
Net cash provided by operating activities                    3,382                     929                   1,355
Net cash used in investing activities                       (9,991)                (11,995)                (22,714)
Net cash provided by financing activities                    5,357                  12,136                  19,424
                                                             -----                  ------                  ------
Net increase (decrease) in cash and
   cash equivalents                                         (1,252)                  1,070                  (1,935)
Cash and cash equivalents at beginning of year               5,142                   4,072                   6,007
                                                             -----                  ------                  ------
Cash and cash equivalents at end of year                    $3,890                 $ 5,142                 $ 4,072
                                                             =====                  ======                  ======
</TABLE>

         The FDIC has adopted risk-based capital ratio guidelines to which
Centennial is subject. The guidelines establish a systematic analytical
framework that makes regulatory capital requirements more sensitive to
differences in risk profiles among financial institutions. 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. Such
guidelines also take into account other risks on an individualized basis,
including interest rate risk.

         The FDIC capital guidelines divide an institution's capital into two
tiers. The first tier ("Tier 1") capital includes common equity, certain
non-cumulative perpetual preferred stock (excluding auction rate issues) and
minority interests in equity accounts of consolidated subsidiaries, less
goodwill, unrealized gains and losses on securities designated as available for
sale, 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, long-term subordinated debt and
the allowance for loan and lease losses, subject to certain limitations, less
required deductions.

                                       14
<PAGE>   16

         In addition, FDIC guidelines prescribe 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 financial
institutions that meet certain specified criteria, including that they have the
highest regulatory rating and are not experiencing or anticipating significant
growth. All other institutions are required to maintain a Tier 1 leverage ratio
of 3% plus an additional cushion of at least 100 to 200 basis points. Financial
institutions are required to maintain a total risk-based capital ratio of 8%, of
which 4% must be met with Tier 1 capital. The FDIC may, however, set higher
capital requirements when particular circumstances warrant, including the
presence of excessive interest rate risk. Financial institutions experiencing or
anticipating significant growth are expected to maintain capital ratios well
above the minimum levels.

         The following is a summary of Centennial's regulatory capital at June
30, 1997:

<TABLE>
<CAPTION>

                                                                            Percent
                                                                            -------
<S>                                                                          <C> 
                 Tier 1 Leverage Ratio                                        8.5%
                 Tier 1 Capital to Risk-Weighted Assets                      13.0%
                 Total Capital to Risk-Weighted Assets                       13.4%
</TABLE>




EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS

         In October 1995, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation," establishing financial accounting and reporting
standards for stock-based compensation plans. SFAS No. 123 encourages all
entities to adopt a new method of accounting to measure compensation of all
stock compensation plans based on the estimated fair value of the award at the
date it is granted. Companies are, however, allowed to continue to measure
compensation cost for those plans using the intrinsic value based method of
accounting, which generally does not result in compensation expense recognition
for most plans. Companies that elect to remain with the existing accounting are
required to disclose in a footnote to the financial statements pro forma net
earnings and, if presented, earnings per share, as if SFAS No. 123 had been
adopted. The accounting requirements of SFAS No. 123 are effective for
transactions entered into during fiscal years that begin after December 15,
1995; however, companies are required to disclose information for awards granted
in their first fiscal year beginning after December 15, 1994. Management has
determined that the Corporation will continue to account for stock-based
compensation pursuant to Accounting Principles Board Opinion No. 25 and,
therefore, the disclosure provisions of SFAS No. 123 will have no effect on its
consolidated financial condition or results of operations.

         In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers
of Financial Assets, Servicing Rights, and Extinguishment of Liabilities," that
provides accounting guidance on transfers of financial assets, servicing of
financial assets, and extinguishment of liabilities. SFAS No. 125 introduces an
approach to accounting for transfers of financial assets that provides a means
of dealing with more complex transactions in which the seller disposes of only a
partial interest in the assets, retains rights or obligations, makes use of
special purpose entities in the transaction, or otherwise has continuing
involvement with the transferred assets. The new accounting method, the
financial components approach, provides that the carrying amount of the
financial assets transferred be allocated to components of the transaction based
on their relative fair values. SFAS No. 125 provides criteria for determining
whether control of assets has been relinquished and whether a sale has occurred.
If the transfer does not qualify as a sale, it is accounted for as a secured
borrowing. Transactions subject to the provisions of SFAS No. 125 include, among
others, transfers involving repurchase agreements, securitizations of financial
assets, loan participations, factoring arrangements, and transfers of
receivables with recourse.

         An entity that undertakes an obligation to service financial assets
recognizes either a servicing asset or liability for the servicing contract
(unless related to a securitization of assets, and all the securitized assets
are retained and classified as held-to-maturity). A servicing asset or liability
that is purchased or assumed is initially recognized at its fair value.
Servicing assets and liabilities are amortized in proportion to and over the
period of estimated net servicing income or net servicing loss and are subject
to subsequent assessments for impairment based on fair value.

                                       15
<PAGE>   17

         SFAS No. 125 provides that a liability is removed from the balance
sheet only if the debtor either pays the creditor and is relieved of its
obligation for the liability or is legally released from being the primary
obligor.

         SFAS No. 125 is effective for transfers and servicing of financial
assets and extinguishment of liabilities occurring after December 31, 1997, and
is to be applied prospectively. Earlier or retroactive application is not
permitted. Management does not believe that adoption of SFAS No. 125 will have a
material adverse effect on the Corporation's consolidated financial position or
results of operations.

         In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share,"
which requires companies to present basic earnings per share and, if applicable,
diluted earnings per share, instead of primary and fully diluted earnings per
share, respectively. Basic earnings per share is computed without including
potentially dilutive common shares. Diluted earnings per share is computed
taking into consideration common shares outstanding and potentially dilutive
common shares, including options, warrants, convertible securities and
contingent stock agreements. SFAS No. 128 is effective for periods ending after
December 14, 1997. Early application is not permitted. Based upon the provisions
of SFAS No. 128, the Corporation's basic and diluted earnings per share for the
fiscal year ended June 30, 1997, would have been $1.06 and $1.04, respectively.
Basic and diluted earnings per share for the fiscal year ended June 30, 1996,
would have been $1.37 and $1.36, respectively.

         In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which requires entities presenting a complete set of financial
statements to include details of comprehensive income that arise in the
reporting period. Comprehensive income consists of net earnings or loss for the
current period and other comprehensive income, expense, gains and losses that
bypass the income statement and are reported in a separate component of equity,
i.e., unrealized gains and losses on certain investment securities. SFAS No. 130
is effective for fiscal years beginning after December 15, 1997. Management does
not believe that adoption of SFAS No. 130 will have a material adverse effect on
the Corporation's consolidated financial position or results of operations.

         The foregoing discussion of the effects of recent accounting
pronouncements contains forward-looking statements that involve risks and
uncertainties. Changes in economic circumstances, interest rates or the balance
of loan servicing rights sold and retained by Centennial could cause the effects
of the accounting pronouncements to differ from management's foregoing
assessment.



                                       16
<PAGE>   18

               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, 1997 and 1996, and the related
consolidated statements of earnings, stockholders' equity and cash flows for
each of the three years ended June 30, 1997, 1996 and 1995. 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, 1997 and 1996, and the consolidated results of its
operations and its cash flows for each of the three years ended June 30, 1997,
1996 and 1995, in conformity with generally accepted accounting principles.

GRANT THORNTON LLP

Cincinnati, Ohio
August 14, 1997


                                       17
<PAGE>   19

<TABLE>
<CAPTION>
                          GLENWAY FINANCIAL CORPORATION

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                    June 30,
                        (In thousands, except share data)

          ASSETS                                                                  1997           1996

<S>                                                                           <C>            <C>     
Cash and due from banks                                                       $  3,890       $  4,802
Federal funds sold                                                                --              204
Interest-bearing deposits in other financial institutions                         --              136
                                                                              --------       --------
          Cash and cash equivalents                                              3,890          5,142




Investment securities - at amortized cost, approximate market
  value of $7,035 and $5,499 at June 30, 1997 and 1996                           7,042          5,549
Investment securities available for sale - at market                              --            4,084
Mortgage-backed securities - at amortized cost, approximate market
  value of $12,946 and $15,354 at June 30, 1997 and 1996                        13,281         15,710
Mortgage-backed securities available for sale - at market                        9,920         14,761
Loans receivable - net                                                         239,648        220,007
Loans held for sale - at lower of cost or market                                  --            1,094
Office premises and equipment - at depreciated cost                              7,043          5,929
Real estate acquired through foreclosure                                            44            242
Federal Home Loan Bank stock - at cost                                           2,382          2,222
Accrued interest receivable on loans                                             1,214          1,103
Accrued interest receivable on mortgage-backed securities                          156            181
Accrued interest receivable on investments and interest-bearing deposits           111            177
Cash surrender value of life insurance                                           1,585          1,457
Prepaid expenses and other assets                                                  404            545
Prepaid federal income taxes                                                      --               30
Goodwill and other intangible assets - net of amortization                         368            576
                                                                              --------       --------

          Total assets                                                        $287,088       $278,809
                                                                              ========       ========
</TABLE>



                                       18
<PAGE>   20

<TABLE>
<CAPTION>

         LIABILITIES AND STOCKHOLDERS' EQUITY                                               1997               1996

<S>                                                                                      <C>                 <C>      
Deposits                                                                                 $ 226,853           $ 222,768
Advances from the Federal Home Loan Bank                                                    28,114              25,634
Loan to Employee Stock Ownership Plan                                                           65                 213
Checks issued in excess of bank balance                                                      2,422               1,034
Advances by borrowers for taxes and insurance                                                  235                 242
Accounts payable on mortgage loans serviced for others                                         229                 599
Accrued interest payable                                                                        61                  56
Other liabilities                                                                            1,189                 999
Accrued federal income taxes                                                                   102                --
Deferred federal income taxes                                                                  580                 483
                                                                                         ---------           ---------
         Total liabilities                                                                 259,850             252,028

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;
    1,187,369 and 1,131,109 shares issued at June 30, 1997 and 1996                             12                  11
  Additional paid-in capital                                                                13,267              12,102
  Retained earnings - substantially restricted                                              15,038              15,749
  Less required contributions for shares acquired by employee benefit plans                   (216)               (316)
  Less 47,372 and 37,292 shares of treasury stock at June 30, 1997 and 1996 - at cost         (965)               (756)
  Unrealized gains (losses) on securities designated as available for sale,
    net of related tax effects                                                                 102                  (9)
                                                                                         ---------           ---------
         Total stockholders' equity                                                         27,238              26,781
                                                                                         ---------           ---------

         Total liabilities and stockholders' equity                                      $ 287,088           $ 278,809
                                                                                         =========           =========
</TABLE>










The accompanying notes are an integral part of these statements.



                                       19
<PAGE>   21

                          GLENWAY FINANCIAL CORPORATION

                       CONSOLIDATED STATEMENTS OF EARNINGS

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

<TABLE>
<CAPTION>
                                                                         1997        1996        1995

<S>                                                                    <C>         <C>         <C>    
Interest income
  Loans                                                                $18,458     $17,121     $14,911
  Mortgage-backed securities                                             1,764       2,029       2,050
  Investment securities                                                    465         646         752
  Interest-bearing deposits and other                                      216         188         149
                                                                       -------     -------     -------
         Total interest income                                          20,903      19,984      17,862

Interest expense
  Deposits                                                              10,938      10,593       8,784
  Borrowings                                                             1,257       1,340       1,516
                                                                       -------     -------     -------
         Total interest expense                                         12,195      11,933      10,300
                                                                       -------     -------     -------
         Net interest income                                             8,708       8,051       7,562

Provision for losses on loans                                              244          60          84
                                                                       -------     -------     -------
         Net interest income after provision for losses on loans         8,464       7,991       7,478

Other income
  Gain (loss) on sale of loans                                              39         (14)         14
  Gain (loss) on investment securities transactions                         63          (9)          1
  Gain on sale of real estate held for sale                               --          --           273
  Gain on sale of office premises and equipment                           --           144        --
  Gain (loss) on sale of real estate acquired through foreclosure           15         (13)         18
  Other operating                                                          669         626         607
                                                                       -------     -------     -------
         Total other income                                                786         734         913

General, administrative and other expense
  Employee compensation and benefits                                     3,168       3,308       3,197
  Occupancy and equipment                                                  591         475         440
  Federal deposit insurance premiums                                     1,549         484         457
  Franchise taxes                                                          358         377         257
  Data processing                                                          330         245         210
  Amortization of goodwill and other
    intangible assets                                                      208         220         241
  Other operating                                                        1,144       1,165       1,199
                                                                       -------     -------     -------
         Total general, administrative and other expense                 7,348       6,274       6,001
                                                                       -------     -------     -------
         Earnings before income taxes                                    1,902       2,451       2,390

Federal income taxes
  Current                                                                  657         774         708
  Deferred                                                                  39         132         207
                                                                       -------     -------     -------
         Total federal income taxes                                        696         906         915
                                                                       -------     -------     -------
         NET EARNINGS                                                  $ 1,206     $ 1,545     $ 1,475
                                                                       =======     =======     =======
         EARNINGS PER SHARE                                            $  1.06     $  1.37     $  1.30
                                                                       =======     =======     =======
</TABLE>


The accompanying notes are an integral part of these statements.



                                       20
<PAGE>   22

                          GLENWAY FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                For the years ended June 30, 1997, 1996 and 1995
                        (In thousands, except share data)

<TABLE>
<CAPTION>

                                                                                                  SHARES 
                                                                                             ACQUIRED BY 
                                                                     ADDITIONAL                 EMPLOYEE 
                                                              COMMON    PAID-IN    RETAINED      BENEFIT 
                                                               STOCK    CAPITAL    EARNINGS        PLANS 
                                                                                                         
<S>                                                              <C>    <C>         <C>           <C>    
Balance at July 1, 1994                                          $10    $10,915     $15,136       $(914) 
                                                                                                         
Principal repayments on loan to ESOP/amortization of                                                     
  expense related to employee benefit plans                       --       --          --           296  
Net earnings for the year ended June 30, 1995                     --       --         1,475          --  
Cash dividends of $.63 per share                                  --       --          (705)         --  
Purchase of treasury shares                                       --       --          --            --  
Issuance of shares under employee benefit and stock option plans  --        111        --            --  
Unrealized gains on securities designated as available for sale,                                         
  net of related tax effects                                      --       --          --            --  
                                                                 ---    -------     -------         ---  
                                                                                                         
Balance at June 30, 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 $.65 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 $.68 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)
                                                                 ===    =======     =======        =====

                                                                                  UNREALIZED                       
                                                                               GAINS (LOSSES)                   
                                                                               ON SECURITIES                    
                                                                TREASURY       DESIGNATED AS                    
                                                                   STOCK  AVAILABLE FOR SALE        TOTAL      
                                                                                                                 
<S>                                                                <C>                 <C>       <C>             
Balance at July 1, 1994                                            $  --               $(102)     $25,045        
                                                                                                                 
Principal repayments on loan to ESOP/amortization of                                                             
  expense related to employee benefit plans                           --                 --           296        
Net earnings for the year ended June 30, 1995                         --                 --         1,475        
Cash dividends of $.63 per share                                      --                 --          (705)       
Purchase of treasury shares                                         (1,048)              --        (1,048)       
Issuance of shares under employee benefit and stock option plans       140               --           251        
Unrealized gains on securities designated as available for sale,                                                 
  net of related tax effects                                          --                  73           73        
                                                                   -------              ----      -------        
                                                                                                                 
Balance at June 30, 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 $.65 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 $.68 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        
                                                                   =======              ====      =======
</TABLE>

The accompanying notes are an integral part of these statements.  


                                       21
<PAGE>   23

                          GLENWAY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               Year ended June 30,
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                     1997         1996         1995
<S>                                                                              <C>          <C>          <C>   
Cash flows from operating activities:
  Net earnings for the year                                                      $1,206       $1,545       $1,475
  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                               53           67           51
    Depreciation and amortization                                                   335          197          198
    Provision for losses on loans                                                   244           60           84
    (Gain) loss on sale of loans                                                    (39)          14          (14)
    (Gain) loss on investment securities transactions                               (63)           9           (1)
    (Gain) loss on sale of real estate acquired through foreclosure                 (15)          13          (18)
    Gain on sale of real estate held for sale                                      --           --           (273)
    Gain on sale of office premises and equipment                                  --           (144)        --
    Amortization of deferred loan origination fees                                  (90)        (102)        (100)
    Amortization of goodwill and other intangible assets                            208          220          241
    Amortization of expense related to employee benefit plans                       193          180          296
    Loans disbursed for sale in the secondary market                               (440)      (3,442)      (2,300)
    Proceeds from loans sold in the secondary market                                444        2,873        1,977
    Federal Home Loan Bank stock dividends                                         (160)        (148)        (113)
    Increases (decreases) in cash due to changes in:
      Accrued interest receivable on loans                                         (111)        (113)        (183)
      Accrued interest receivable on mortgage-backed securities                      25           35           (4)
      Accrued interest receivable on investments and
        interest-bearing deposits                                                    66          (30)          37
      Prepaid expenses and other assets                                             141          337         (331)
      Accounts payable on mortgage loans serviced for others                       (370)         (82)        (240)
      Accrued interest payable and other liabilities                                196          (40)         406
      Checks issued in excess of bank balance                                     1,388         (832)         361
      Federal income taxes
        Current                                                                     132          180         (401)
        Deferred                                                                     39          132          207
                                                                                 ------       ------       ------
              Net cash provided by operating activities                           3,382          929        1,355

Cash flows provided by (used in) investing activities:
  Proceeds from maturities of investment securities                               1,500        3,026        2,010
  Proceeds from sale of investment securities designated as available for sale    4,090          993        1,001
  Purchase of investment securities designated as held-to-maturity               (3,000)      (2,075)        --
  Principal repayments on mortgage-backed securities                              4,795        5,474        3,290
  Purchase of mortgage-backed securities designated as held-to-maturity            --         (4,267)        --
  Proceeds from sale of mortgage-backed securities designated
    as available for sale                                                         2,672        1,060        1,500
  Loan principal repayments                                                      53,283       56,987       26,248
  Loan disbursements                                                             (72,344)     (72,354)     (56,730)
  Decrease in certificates of deposit in other financial institutions              --           --            100
  Purchase and construction of office premises and equipment                     (1,449)      (1,898)        (297)
  Proceeds from sale of office premises and equipment                              --            370         --
  Proceeds from sale of real estate acquired through foreclosure                    590          736          243
  Proceeds from sale of real estate held for sale                                  --           --          1,387
  Purchase of Federal Home Loan Bank stock                                         --            (16)        (320)
  Redemption of Federal Home Loan Bank stock                                       --           --            280
  Purchase of single premium life insurance policy                                  (60)        --         (1,370)
  Increase in cash surrender value of life insurance policy                         (68)         (31)         (56)
                                                                                 ------       ------       ------
              Net cash used in investing activities                              (9,991)      (11,995)     (22,714)
                                                                                 ------       ------       ------
              Net cash used in operating and investing
                activities (subtotal carried forward)                            (6,609)      (11,066)     (21,359)
                                                                                 ------       ------       ------
</TABLE>



                                       22
<PAGE>   24

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

<TABLE>
<CAPTION>
                                                                                 1997        1996        1995

<S>                                                                           <C>         <C>         <C>    
         Net cash used in operating and investing
           activities (subtotal brought forward)                               $(6,609)  $(11,066)   $(21,359)

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts                                              4,085      14,391      11,878
  Proceeds from Federal Home Loan Bank advances                                58,250      50,200      54,150
  Repayment of Federal Home Loan Bank advances                                (55,770)    (51,724)    (44,723)
  Repayment of loan to employee stock ownership plan                             (148)       (149)       (238)
  Advances by borrowers for taxes and insurance                                    (7)       (231)       (141)
  Issuance of shares under stock option and benefit plans                         135         385         251
  Dividends paid on common stock                                                 (777)       (736)       (705)
  Purchase of treasury stock                                                     (411)       --        (1,048)
                                                                               ------      ------      ------
         Net cash provided by financing activities                              5,357      12,136      19,424
                                                                               ------      ------      ------

Net increase (decrease) in cash and cash equivalents                           (1,252)      1,070      (1,935)

Cash and cash equivalents at beginning of year                                  5,142       4,072       6,007
                                                                               ------      ------      ------

Cash and cash equivalents at end of year                                      $ 3,890     $ 5,142     $ 4,072
                                                                               ======      ======      ======


Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Federal income taxes                                                      $   387     $   583     $   797
                                                                               ======      ======      ======

    Interest on deposits and borrowings                                       $12,190     $11,921     $10,276
                                                                               ======      ======      ======

Supplemental disclosure of noncash investing activities:
  Transfer from loans to real estate acquired
    through foreclosure                                                       $   378      $  276      $  575
                                                                               ======      ======      ======

  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 on securities designated as available
    for sale, net of related tax effects                                      $   111     $    20     $    73
                                                                               ======      ======      ======

</TABLE>



The accompanying notes are an integral part of these statements.


                                       23
<PAGE>   25

                          GLENWAY FINANCIAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 1997, 1996 and 1995

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 charged to operations or stockholders' equity, respectively.


                                       24
<PAGE>   26

                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995

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 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, 1997,
    the Corporation's stockholders' equity reflected an unrealized gain on
    securities designated as available for sale, net of applicable tax effects,
    totaling $102,000. At June 30, 1996, the Corporation's stockholders' equity
    reflected an unrealized loss on securities designated as available-for-sale,
    net of applicable tax effects, of $9,000.

    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 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.


                                       25
<PAGE>   27

                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    3.  Loans Receivable (continued)
        ----------------

    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." In addition to previously deferred loan origination fees and
    cash gains, gains on sale of loans can represent 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 are determined by
    reference to the stipulated servicing fee set forth by the government agency
    loan sale agreement. Such fees approximate the Savings Bank's normal
    servicing costs. The resulting capitalized excess servicing fee is 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 and 1996, unamortized deferred excess
    servicing fees totaled approximately $18,000 and $31,000, respectively.
    Amortization of the deferred excess servicing fee asset totaled
    approximately $13,000, $17,000 and $13,000 for the years ended June 30,
    1997, 1996 and 1995, respectively.

    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, 1997. At June 30, 1996, loans held
    for sale were carried at market, which resulted in a charge to operations
    for the unrealized loss totaling $50,000.

    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 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.


                                       26
<PAGE>   28

                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    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).

    In June 1993, the FASB issued SFAS No. 114, "Accounting by Creditors for
    Impairment of a Loan." This promulgation, which became effective for the
    Savings Bank's fiscal year which began July 1, 1995, 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. As a result, the
    Corporation adopted SFAS No. 114 as of July 1, 1995, without material
    financial statement effect.

    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
    valuation 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, 1997 and 1996, the Savings Bank had no loans that would be
    defined as impaired under SFAS No. 114.

    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.


                                       27
<PAGE>   29

                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    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.  Real Estate Held for Sale
        -------------------------

    Real estate held for sale is carried at the lower of cost or fair value. The
    investment in real estate held for sale was comprised of a developed tract
    of land contiguous to the Corporation's new main office site. The parcel of
    land was sold during fiscal 1995, resulting in a realized gain of $273,000
    on such sale.

    9.  Federal Income Taxes
        --------------------

    The Corporation accounts for federal income taxes in accordance with the
    provisions of SFAS No. 109, "Accounting for Income Taxes." SFAS No. 109
    established financial accounting and reporting standards for the effects of
    income taxes that result from the Corporation's activities within the
    current and previous years. 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.


                                       28
<PAGE>   30

                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    10.  Amortization of Goodwill and Other Intangible Assets
         ----------------------------------------------------

    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.

    Specifically identifiable intangible assets arising from branch acquisitions
    were amortized over the ten year estimated useful life of the deposits
    acquired.

    At June 30, 1997, intangible assets consisted of the following:

<TABLE>
<CAPTION>
                                                     ORIGINAL           UNAMORTIZED
                                                      BALANCE               BALANCE
                                                            (In thousands)

<S>                                                    <C>                     <C> 
    Goodwill                                           $3,850                  $368
                                                        =====                   ===
</TABLE>

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

<TABLE>
<CAPTION>
                                                                       FUTURE
    FISCAL YEAR ENDING JUNE 30,                                  AMORTIZATION
                                                               (In thousands)

<S>               <C>                                                    <C> 
                  1998                                                   $142
                  1999                                                    103
                  2000                                                     82
                  2001 and years thereafter                                41
                                                                          ---

                                                                         $368
                                                                          ===
</TABLE>

    11.  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 $228,000, $270,000 and
    $238,000 were made to the ESOP for the years ended June 30, 1997, 1996 and
    1995, 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, 1997, 1996
    and 1995 totaled approximately $65,000, $99,000 and $92,000, respectively.


                                       29
<PAGE>   31

                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    12.  Stock Incentive Plan
         --------------------
  
    The Corporation had a Stock Incentive Plan that provided for the issuance of
    30,870 shares to directors, officers, and employees. Compensation expense
    for restricted shares is measured by the fair value at the date of grant.
    The Corporation issued 8,169, 11,517 and 13,040 shares of restricted stock
    during fiscal 1997, 1996 and 1995, respectively. The term of the Incentive
    Plan expired during fiscal 1997. The Corporation recognized expense totaling
    $19,000, $178,000 and $221,000 for the years ended June 30, 1997, 1996 and
    1995, 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 5% stock dividends paid during fiscal 1997 and 1996.

    13.  Management Recognition and Retention Plan and Trust
         ---------------------------------------------------

    The Corporation has established a Management Recognition and Retention Plan
    and Trust ("MRP") for which Centennial initially funded the purchase of
    10,990 authorized and issued shares of common stock. In conjunction with the
    conversion-merger transaction, the Corporation funded the purchase of an
    additional 19,294 shares by the MRP. During fiscal 1997, an additional 5,807
    shares were awarded under the Incentive Plan. Shares issued by the MRP are
    generally deemed earned and allocated to employees over a five year period.
    The Corporation issued 1,543, 6,946 and 3,859 shares of common stock under
    the MRP during fiscal 1997, 1996 and 1995, respectively, leaving 8,121
    shares subject to future issuance at June 30, 1997. Expense under the MRP
    plan totaled approximately $55,000, $141,000 and $88,000 for the years ended
    June 30, 1997, 1996 and 1995, respectively.

    14.  Earnings Per Share
         ------------------

    Earnings per share for the years ended June 30, 1997, 1996 and 1995, is
    based upon the weighted-average shares outstanding during the year plus
    those stock options that are dilutive, less shares in the ESOP that are
    unallocated and not committed to be released. Weighted-average shares deemed
    outstanding totaled 1,137,814, 1,129,066 and 1,137,877 during the respective
    years. Weighted-average shares outstanding have been adjusted for the 5%
    stock dividends paid in fiscal 1997 and 1996. Fully-diluted earnings per
    share is not presented, as there is no material dilutive effect associated
    with the Corporation's Stock Option Plan.


                                       30
<PAGE>   32
                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    15.  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,
    1997 and 1996:

                  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.

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




                                       31


<PAGE>   33


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    15.  Fair Value of Financial Instruments (Continued)
         -----------------------------------------------

                  ADVANCES FROM FEDERAL HOME LOAN BANK: The fair value of these
                  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, 1997 and 1996, 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>

                                                                        1997                               1996
                                                             CARRYING           FAIR            CARRYING           FAIR
                                                                VALUE          VALUE               VALUE          VALUE
                                                                                    (In thousands)
<S>                                                        <C>              <C>               <C>            <C>       
    Financial assets
      Cash and cash equivalents                            $    3,890       $  3,890          $    5,142     $    5,142
      Investment securities                                     7,042          7,035               9,633          9,583
      Mortgage-backed securities                               23,201         22,866              30,471         30,115
      Loans receivable                                        239,648        238,978             221,101        219,910
      Stock in Federal Home Loan Bank                           2,382          2,382               2,222          2,222
                                                             --------       --------            --------       --------

                                                             $276,163       $275,151            $268,569       $266,972
                                                             ========       ========            ========       ========

    Financial liabilities
      Deposits                                               $226,853       $226,671            $222,768       $224,585
      Advances from the Federal Home Loan Bank                 28,114         27,997              25,634         25,511
      Advances by borrowers for taxes and insurance               235            235                 242            242
                                                             --------       --------            --------       --------

                                                             $255,202       $254,903            $248,644       $250,338
                                                             ========       ========            ========       ========
</TABLE>

    16.  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.  Reclassifications
         -----------------

    Certain prior year amounts have been reclassified to conform to the 1997
    consolidated financial statement presentation.



                                       32

<PAGE>   34


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


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

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

<TABLE>
<CAPTION>

                                                             1997                         1996
                                                  CARRYING         MARKET        CARRYING         MARKET
                                                     VALUE          VALUE           VALUE          VALUE
                                                                      (In thousands)

<S>                                                 <C>            <C>             <C>            <C>  
    U. S. Government obligations                    $2,983         $2,981          $   -          $   -
    U. S. Government agency obligations              3,984          3,979           5,474          5,426
    Municipal obligations                               75             75              75             73
                                                    ------         ------          ------         ------

                                                    $7,042         $7,035          $5,549         $5,499
                                                    ======         ======          ======         ======
</TABLE>

    At June 30, 1997, the excess of the Savings Bank's cost carrying value over
    the market value of investment securities, totaling $7,000, was comprised of
    gross unrealized losses totaling $26,000 and gross unrealized gains of
    $19,000. At June 30, 1996, the excess of the Savings Bank's cost carrying
    value over the market value of investment securities, totaling $50,000, was
    comprised of gross unrealized losses totaling $55,000 and gross unrealized
    gains of $5,000.

    The amortized cost and market value of investment securities at June 30,
    1997, by term to maturity, are shown below.

<TABLE>
<CAPTION>

                                                                 AMORTIZED              MARKET
                                                                       COST              VALUE
                                                                            (In thousands)
                                                                 
<S>                                                                  <C>                <C>   
    Due within two years                                             $4,484             $4,478
    Due in two to five years                                          1,983              1,986
    Due after five years                                                575                571
                                                                     ------             ------
                                                                 
                                                                     $7,042             $7,035
                                                                     ======             ======
</TABLE>                                                       

    Investment securities designated as available for sale at June 30 consist of
    the following:

<TABLE>
<CAPTION>

                                                                       1997               1996
                                                                             (In thousands)

<S>                                                                    <C>              <C>   
    Asset management funds (cost of $4,118 at June 30, 1996)           $ -              $4,084
                                                                        ===              =====
</TABLE>



                                       33



<PAGE>   35


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


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
    a loss of $29,000 and $7,000, respectively, as a result of such sales.
    During fiscal 1995, the Corporation sold $1.0 million of investment
    securities, realizing a gain of $1,000 as a result of such sale.

    The amortized cost, gross unrealized gains, gross unrealized losses and
    estimated fair values of mortgage-backed securities at June 30, 1997 and
    1996 (including those designated as available for sale), are shown below.

<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>











                                       34

<PAGE>   36


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


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

<TABLE>
<CAPTION>

                                                                                        1996
                                                                               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                          $  4,687               $-             $  70          $  4,617
    Government National
      Mortgage Association
      participation certificates                                93                -                 3                90
    Federal National
      Mortgage Association
      participation certificates                             8,930                -               225             8,705
    Collateralized mortgage obligations                      2,000                -                58             1,942
                                                           -------                --             ----           -------
         Total mortgage-backed securities
           held to maturity                                 15,710                -               356            15,354

    Mortgage-backed securities designated
      as available for sale                                 14,740                69               48            14,761
                                                            ------              ----             ----            ------

         Total mortgage-backed securities                  $30,450             $  69             $404           $30,115
                                                           =======             =====             ====           =======
</TABLE>

    The amortized cost of mortgage-backed securities at June 30, 1997, 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 within one year                                                                                        $     -
    Due after one to five years                                                                                      71
    Due after five years to ten years                                                                             2,026
    Due after ten years to twenty years                                                                             725
    Due after twenty years                                                                                       20,225
                                                                                                                 ------

         Total mortgage-backed securities                                                                       $23,047
                                                                                                                =======
</TABLE>

    During fiscal 1997, the Corporation sold $2.7 million of mortgage-backed
    securities designated as available-for-sale, realizing a gain of $92,000 as
    a result of such sale.

    During fiscal 1996, the Corporation sold $1.0 million of mortgage-backed
    securities designated as available-for-sale, realizing a loss of $2,000 as a
    result of such sale.

    During fiscal 1995, the Corporation sold $1.5 million of mortgage-backed
    securities designated as available-for-sale, realizing no gain or loss as a
    result of such sale.





                                       35
<PAGE>   37


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE C - LOANS RECEIVABLE

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

                                                        1997                1996
                                                             (In thousands)
<S>                                                 <C>                 <C>     
    Residential real estate
      One- to four-family residential               $177,504            $161,761
      Home equity lines of credit                     23,797              20,051
      Multi family residential                        17,912              16,368
      Construction                                    14,947              18,969
    Nonresidential real estate                        14,469              12,337
    Consumer and other                                   881                 884
                                                  ----------          ----------
                                                     249,510             230,370
    Less:
      Undisbursed portion of loans in
        process                                        8,735               9,318
      Deferred loan origination fees                     307                 427
      Allowance for loan losses                          820                 618
                                                  ----------          ----------

                                                    $239,648            $220,007
                                                     =======             =======
</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 $224.3 million, or 94%, of the
    total loan portfolio at June 30, 1997, and $206.8 million, or 94%, of the
    total loan portfolio at June 30, 1996. 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 $61.1 million, $68.8 million and $74.9 million at June 30,
    1997, 1996 and 1995, respectively.












                                       36
<PAGE>   38


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


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 $877,000 and $1.1 million at
    June 30, 1997 and 1996, respectively. During the year ended June 30, 1997,
    there were $160,000 in loans disbursed to officers and directors, while
    principal repayments of $383,000 were received from officers and directors.

    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 $153,000, $137,000 and $126,000 for the years ended June 30,
    1997, 1996 and 1995, 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>

                                                 1997         1996         1995
                                                          (In thousands)

<S>                                              <C>          <C>          <C> 
    Beginning balance                            $618         $616         $724
    Provision charged to operations               244           60           84
    Charge-off of loans                           (57)         (58)        (192)
    Recoveries of loan losses                      15           -            -
                                                 ----           --           -

    Ending balance                               $820         $618         $616
                                                  ===          ===          ===
</TABLE>

    At June 30, 1997, 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, 1997, 1996 and 1995, the Savings Bank's nonaccrual and
    nonperforming loans totaled $851,000, $883,000 and $927,000, respectively.
    Interest income which would have been recognized if such loans had performed
    pursuant to contractual terms totaled approximately $22,000, $35,000 and
    $34,000 for the years ended June 30, 1997, 1996 and 1995, respectively.










                                       37
<PAGE>   39


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE E - OFFICE PREMISES AND EQUIPMENT

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

<TABLE>
<CAPTION>

                                                       1997           1996
                                                          (In thousands)

<S>                                                  <C>            <C>   
    Land                                             $1,630         $1,559
    Office buildings and improvements                 4,692          4,528
    Furniture, fixtures and equipment                 2,915          1,701
                                                      -----          -----
                                                      9,237          7,788
      Less accumulated depreciation
        and amortization                              2,194          1,859
                                                      -----          -----

                                                     $7,043         $5,929
                                                     ======         ======

</TABLE>

    During fiscal 1991, the Corporation purchased a developed tract of land as a
    future office site for $2.1 million. After evaluating various alternatives,
    the Corporation entered into an option during fiscal 1993 to sell a parcel
    of land adjacent to the office site at a sales price of $1.5 million, less
    selling costs of approximately $80,000. Accordingly, the land was
    transferred to real estate held for sale at the lower of cost or fair value.
    The land was sold in July 1994, resulting in a $273,000 pre-tax gain. The
    construction of the new branch facility and corporate headquarters was
    completed in August 1996, at a total cost of $2.5 million. Additionally,
    during fiscal 1996, two of the Savings Bank's branch locations were sold
    resulting in gains totaling $144,000.
























                                       38
<PAGE>   40


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE F - DEPOSITS

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

    Deposit type and weighted-
    average interest rate                                             1997                1996
                                                                            (In thousands)
<S>                                                               <C>                 <C>
    NOW accounts
      1997 - 2.81%                                                $ 26,716
      1996 - 2.47%                                                                    $ 20,511
    Passbook and club accounts
      1997 - 2.78%                                                  36,602
      1996 - 2.79%                                                                      40,482
    Money market deposit accounts
      1997 - 3.15%                                                   5,965
      1996 - 3.17%                                                                       7,634
                                                                  --------            --------
    Total demand, transaction and passbook
      deposits                                                      69,283              68,627

    Certificates of deposit
      Original maturities of:
        Less than 12 months
          1997 - 5.57%                                              45,028
          1996 - 5.28%                                                                  46,861
        12 months to 30 months
          1997 - 5.86%                                             102,112
          1996 - 5.87%                                                                  83,752
        36 months or greater
          1997 - 6.01%                                              10,430
          1996 - 6.03%                                                                  23,528
                                                                  --------            --------

    Total certificates of deposit                                  157,570             154,141
                                                                  --------            --------

                                                                  $226,853            $222,768
                                                                   =======             =======
</TABLE>

    At June 30, 1997 and 1996, the Savings Bank had certificates of deposit with
    balances in excess of $100,000 totaling $14.8 million and $13.2 million,
    respectively.












                                       39
<PAGE>   41


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE F - DEPOSITS (continued)

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

<TABLE>
<CAPTION>

                                                              1997           1996           1995
                                                                       (In thousands)

<S>                                                        <C>            <C>             <C>   
    Passbook                                               $ 1,079        $ 1,162         $1,311
    NOW accounts                                               641            333            303
    Money market deposit accounts                              219            283            356
    Certificates of deposit                                  8,999          8,815          6,814
                                                           -------        -------          -----

                                                           $10,938        $10,593         $8,784
                                                            ======         ======          =====
</TABLE>

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

<TABLE>
<CAPTION>

                                                                             1997           1996
                                                                               (In thousands)

<S>                                                                      <C>            <C>     
    Less than one year                                                   $109,770       $106,938
    One year to three years                                                41,484         37,827
    More than three years                                                   6,316          9,376
                                                                        ---------      ---------

                                                                         $157,570       $154,141
                                                                         ========       ========
</TABLE>


NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

    Advances from the Federal Home Loan Bank, collateralized at June 30, 1997
    and 1996, by pledges of certain residential mortgage loans totaling $42.2
    million and $38.5 million, and the Savings Bank's investment in Federal Home
    Loan Bank stock are summarized as follows:

<TABLE>
<CAPTION>

    INTEREST                          MATURING IN FISCAL                           JUNE 30,
    RATE                              YEAR ENDING                            1997           1996

<S>                                   <C>                                 <C>            <C>                       
    5.40 - 5.80%                      1997                                $    -         $11,600
    5.52 - 6.15%                      1998                                 13,000          2,000
    6.30 - 6.50%                      1999                                  3,000             -
    6.45%                             2000                                  1,000             -
    5.68%                             2004                                  6,064          6,766
    5.95%                             2009                                  2,148          2,270
    5.99%                             2013                                    143            152
    6.25%                             2014                                  2,759          2,846
                                                                          -------        -------

                                                                          $28,114        $25,634
                                                                          =======        =======

    Weighted-average interest rate                                           5.97%          5.78%
                                                                             ====           ==== 
</TABLE>


                                       40

<PAGE>   42


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE H - LOAN TO EMPLOYEE STOCK OWNERSHIP PLAN

    As discussed previously in Note A-11, the Corporation established the ESOP,
    which initially acquired 25,526 shares of common stock in the 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, the ESOP purchased an
    additional 54,023 shares of common stock by borrowing an additional
    $686,000, payable over a six year term. The sole security for the loans is
    the acquired stock and, while neither Centennial nor the Corporation has
    guaranteed the loans, future contributions to retire the loans will be paid
    out of current or retained earnings. Accordingly, the remaining unpaid
    amount of the loans to the ESOP has been deducted from stockholders' equity,
    with the corresponding future payments reflected as a liability. At June 30,
    1997, the ESOP held 82,742 shares of common stock, of which approximately
    78,058 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>

                                                                    1997         1996       1995
                                                                            (In thousands)

<S>                                                                 <C>          <C>        <C> 
    Federal income taxes computed at the statutory rate             $647         $833       $813
    Increase (decrease) in taxes resulting from:
      Purchase method accounting adjustments
        (comprised solely of goodwill)                                71           75         76
      Tax-exempt interest                                            (44)         (29)       (25)
      Other                                                           22           27         51
                                                                    ----         ----       ----
    Federal income tax provision per consolidated
      financial statements                                          $696         $906       $915
                                                                     ===          ===        ===
</TABLE>




















                                       41
<PAGE>   43


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE I - FEDERAL INCOME TAXES (continued)

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

<TABLE>
<CAPTION>

                                                                                           1997           1996
                                                                                               (In thousands)
<S>                                                                                     <C>              <C>   
     Taxes (payable) refundable on temporary differences at estimated corporate
     tax rate:
       Deferred tax assets:
         General loan loss allowance                                                    $   279          $ 210
         Retirement expense                                                                 208            118
         Purchase accounting adjustments other than goodwill                                 31             52
         Unrealized losses on securities designated as available
           for sale                                                                          -               5
                                                                                        -------          ----- 
           Total deferred tax assets                                                        518            385

       Deferred tax liabilities:
         Percentage of earnings bad debt deduction                                         (349)          (338)
         Book/tax depreciation                                                             (186)          (171)
         Federal Home Loan Bank stock dividends                                            (367)          (313)
         Deferred loan origination costs                                                   (141)           (25)
         Other                                                                               (2)           (21)
         Unrealized gains on securities designated as available for sale                    (53)            -
                                                                                        -------          ----- 
           Total deferred tax liabilities                                                (1,098)          (868)
                                                                                        -------          ----- 

           Net deferred tax liability                                                   $  (580)         $(483)
                                                                                         ======           ==== 
</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,
    1997, 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, 1997, 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.

    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.


                                       42
<PAGE>   44




                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE J - LOAN COMMITMENTS (continued)

    At June 30, 1997, the Savings Bank had total outstanding commitments of
    approximately $8.7 million to originate one- to four-family residential real
    estate loans.

    Additionally, the Savings Bank had $26.6 million of outstanding loan
    commitments under home equity lines and $783,000 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, 1997, 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.

    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.








                                       43
<PAGE>   45


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE K - REGULATORY CAPITAL (continued)

    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.

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

<TABLE>
<CAPTION>

                                                                                                 TO BE "WELL-
                                                                                              CAPITALIZED" UNDER
                                                                    FOR CAPITAL               PROMPT CORRECTIVE
                                             ACTUAL               ADEQUACY PURPOSES           ACTION PROVISIONS
                                        ----------------          ----------------            ------------------
                                         AMOUNT    RATIO           AMOUNT    RATIO             AMOUNT     RATIO
                                                                    (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 1 Capital
      (to risk-weighed assets)          $23,985    13.0%          $ 7,376      4.0%           $11,064     6.0%

    Tier 1 Leverage                     $23,985     8.5%          $11,333      4.0%           $14,167     5.0%
</TABLE>





                                       44
<PAGE>   46


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE K - REGULATORY CAPITAL (continued)

    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.


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, 1997 and 1996, and the results of
    its operations and its cash flows for each of the years ended June 30, 1997,
    1996 and 1995.

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

<TABLE>
<CAPTION>

                  ASSETS                                          1997            1996

<S>                                                            <C>              <C>     
Cash                                                           $    164         $    204
Investment in Centennial Savings Bank                            24,455           23,707
Real estate held for investment                                   1,668            1,689
Cash surrender value of life insurance                            1,585            1,457
Prepaid expenses and other assets                                     2              338
                                                               --------         --------

              Total assets                                     $ 27,874         $ 27,395
                                                               ========         ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Other liabilities                                              $    571         $    401
Loan to Employee Stock Ownership Plan                                65              213
                                                               --------         --------
                                                                    636              614

Stockholders' equity
  Common stock12                                                     11
  Additional paid-in capital                                     13,267           12,102
  Retained earnings                                              15,038           15,749
  Shares acquired by employee benefit plans                        (216)            (316)
  Treasury stock - at cost                                         (965)            (756)
  Unrealized gains (losses) on securities designated as
    available for sale                                              102               (9)
                                                               --------         --------

     Total stockholders' equity                                  27,238           26,781
                                                               --------         --------

     Total liabilities and stockholders' equity                $ 27,874         $ 27,395
                                                               ========         ========
</TABLE>






                                       45
<PAGE>   47


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE L - CONDENSED FINANCIAL STATEMENTS OF GLENWAY FINANCIAL
  CORPORATION (continued)

                          Glenway Financial Corporation
                             STATEMENTS OF EARNINGS
                               Year ended June 30,
                                 (In thousands)
<TABLE>
<CAPTION>

                                                          1997            1996            1995
<S>                                                     <C>             <C>             <C>    
Revenue
  Interest income                                       $     4         $     6         $    19
  Dividends received from subsidiary                      1,075           1,160           4,353
  Equity in undistributed earnings of (excess       
    distributions from) subsidiary                          660             735          (2,222)
  Other income                                              107              88              74
                                                        -------         -------         -------
              Total revenue                               1,846           1,989           2,224
                                                    
Expenses                                            
  Administrative and other                                  675             624             972
                                                        -------         -------         -------
              Net earnings before tax credits             1,171           1,365           1,252
  Federal income tax credits                                (35)           (180)           (223)
                                                        -------         -------         -------
                                                    
              Net earnings                              $ 1,206         $ 1,545         $ 1,475
                                                        =======         =======         =======

                                                 
</TABLE>
                          Glenway Financial Corporation
                            STATEMENTS OF CASH FLOWS
                               Year ended June 30,
                                 (In thousands)
<TABLE>
<CAPTION>

                                                          1997            1996            1995
<S>                                                     <C>             <C>             <C>    
Cash flows provided by (used in) operating
activities:
Net earnings for the year                               $ 1,206         $ 1,545         $ 1,475
Adjustments to reconcile net earnings to net cash       
provided by (used in) operating activities:             
  (Undistributed earnings of) excess of distributions   
    from consolidated subsidiary                           (660)           (735)            462
  Amortization of expense related to employee           
    benefit plans                                           193             180             296
  Depreciation                                               36              36               8
  Increases (decreases) in cash due to                  
  changes in:                                           
    Other liabilities                                       170             (98)            424
    Prepaid expenses and other assets                       336            (179)           (107)
                                                        -------         -------         -------
                                                        
            Cash provided by operating activities       
              (balance carried forward)                   1,281             749           2,558
                                                        -------         -------         -------
                                                     
</TABLE>




                                       46
<PAGE>   48


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE L - CONDENSED FINANCIAL STATEMENTS OF GLENWAY FINANCIAL
  CORPORATION (continued)

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

                                                             1997            1996            1995
<S>                                                       <C>             <C>             <C>    
              Cash provided by operating activities
                (balance brought forward)                 $ 1,281         $   749         $ 2,558
                                                          
Cash flows used in investing activities:                  
  Purchase of office premises and equipment                   (15)             (5)            (25)
  Purchase of single premium life insurance policy            (60)           --            (1,370)
  Increase in cash surrender value of life insurance      
    policy                                                    (68)            (31)            (56)
                                                          -------         -------         -------
              Net cash used in investing activities          (143)            (36)         (1,451)
                                                          
Cash flows provided by (used in) financing activities:
  Repayment of loan to ESOP                                  (148)           (149)           (238)
  Payment of dividends on common stock                       (777)           (736)           (705)
  Issuance of shares under stock option plan                  158             188             251
  Purchase of treasury stock                                 (411)           --            (1,048)
                                                          -------         -------         -------
              Net cash used in financing activities        (1,178)           (697)         (1,740)
                                                          -------         -------         -------
                                                          
Net increase (decrease) in cash and cash equivalents          (40)             16            (633)
                                                          
Cash and cash equivalents at beginning of year                204             188             821
                                                          -------         -------         -------
                                                          
Cash and cash equivalents at end of year                  $   164         $   204         $   188
                                                          =======         =======         =======
</TABLE>
                                                     
    Under Federal Reserve Board supervisory policy, a bank 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 the company's capital needs, asset quality, and overall
    financial condition. The FDIC has authority under the Financial Institutions
    Supervisory Act 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.






                                       47
<PAGE>   49


                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE M - STOCK OPTION PLAN

    The Corporation adopted a stock option plan during fiscal 1991 that
    initially provided for the issuance of 25,660 options to purchase shares to
    officers and directors. In connection with the conversion-merger
    transaction, the Corporation granted an additional 46,228 options during
    fiscal 1994.

    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>
                                                         1997             1996              1995

<S>                            <C>                     <C>              <C>               <C>   
    Net earnings               As reported             $1,206           $1,545            $1,475
                                                        =====            =====             =====

                                 Pro-forma             $1,149           $1,545            $1,475
                                                        =====            =====             =====

    Earnings per share         As reported              $1.06            $1.37             $1.30
                                                         ====             ====              ====

                                 Pro-forma              $1.01            $1.37             $1.30
                                                         ====             ====              ====
</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 1997 and 1996, respectively;
    dividend yield of 7.50% and expected volatility of 25.0% for all years;
    risk-free interest rates of 6.00% and 5.95% and expected lives of ten years.

    A summary of the status of the Corporation's Stock Option Plans as of June
    30, 1997 and 1996, and changes during the periods ending on those dates is
    presented below:

<TABLE>
<CAPTION>

                                                    1997                      1996                     1995
                                                       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         42,074       $12.25        53,591         $8.51        61,740        $8.97
    Granted                                  20,500       $20.88            -          $  -             -         $  -
    Exercised                               (9,976)       $10.90      (11,517)         $5.12       (8,149)        $5.93
    Forfeited                                    -        $   -             -          $  -             -         $  -
                                             ------                     ------                      ------

    Outstanding at end of year               52,598       $14.34        42,074        $12.24        53,591        $8.51
                                             ======        =====        ======         =====        ======         ====

    Options exercisable at year-end          52,598                     42,074
                                             ======                     ======
    Weighted-average fair value of
      options granted during the year                      $4.24                         N/A                        N/A
                                                            ====
</TABLE>


                                       48
<PAGE>   50






                          GLENWAY FINANCIAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 1997, 1996 and 1995


NOTE M - STOCK OPTION PLAN (continued)

    The following information applies to options outstanding at June 30, 1997:

<TABLE>

<S>                                                            <C>   
    Number outstanding                                                  52,598
    Range of exercise prices                                   $13.33 - $23.00
    Weighted-average exercise price                                     $14.34
    Weighted-average remaining contractual life                      7.4 years
</TABLE>


NOTE N - LEGISLATIVE DEVELOPMENTS

    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.

    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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<PAGE>   51


CORPORATE INFORMATION - GLENWAY FINANCIAL CORPORATION




         CORPORATE HEADQUARTERS:
         5535 Glenway Avenue
         Cincinnati, Ohio  45238
         Telephone:  (513) 922-5959


         TRANSFER AGENT AND REGISTRAR:
         The Fifth Third Bank
         Stock Transfer Department
         ML #1090D2
         38 Fountain Square
         Cincinnati, Ohio  45263


         INDEPENDENT AUDITORS:
         Grant Thornton LLP
         625 Eden Park Drive, Suite 900
         Cincinnati, Ohio  45202-4181


         MARKET MAKERS:
         Herzog, Heine, Geduld Inc.
         McDonald & Company Securities, Inc.
         Trident Securities, Inc.
         National Securities Corporation

         ANNUAL MEETING:
         October 22, 1997, 2:00 P.M.
         Corporate Headquarters
         Glenway Financial Corporation
         5535 Glenway Avenue
         Cincinnati, Ohio  45238




A COPY OF FORM 10-KSB, INCLUDING THE CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD
DATE UPON WRITTEN REQUEST TO ROBERT R. SUDBROOK, PRESIDENT, GLENWAY FINANCIAL
CORPORATION, 5535 GLENWAY AVENUE, CINCINNATI, OHIO 45238.




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<PAGE>   52




DIRECTORS AND OFFICERS -
GLENWAY FINANCIAL CORPORATION


DIRECTORS:

EDGAR A. RUST
Chairman of the Board
Housing Director of Bethany House Services, Inc.

MILTON L. VAN SCHOIK
Vice Chairman of the Board
Retired Vice President of the
Cincinnati Gas and Electric Company

DANIEL W. GEEDING
Secretary
Professor of Management
Director of The Center for International Business
Xavier University

ROBERT R. SUDBROOK
President and Chief Executive Officer of Glenway
Financial Corporation and Centennial Savings Bank

RONALD L. GOODFELLOW
Retired executive of Cincinnati Milacron, Inc.

KENNETH LICHTENDAHL
President of Hudepohl-Schoenling  Brewery

JOHN P. TORBECK
Vice President of Torbeck Homes, Inc.

ALBERT W. MOELLER
Retired executive of The Procter & Gamble Company





OFFICERS:

ROBERT R. SUDBROOK
President and Chief Executive Officer

GREGORY P. NIESEN
Treasurer and Chief Financial Officer

JOSEPH V. BUNKE
Vice President/Audit




                                       51
<PAGE>   53


DIRECTORS AND OFFICERS -
CENTENNIAL SAVINGS BANK


DIRECTORS:

RONALD L. GOODFELLOW
Chairman of the Board
Retired executive of Cincinnati Milacron, Inc.

JOHN L. TORBECK
Vice Chairman of the Board
President of Torbeck Homes, Inc.

DONALD E. WILLIG
Secretary
Retired President of Parkway Products

ROBERT R. SUDBROOK
President and Chief Executive Officer of Glenway
Financial Corporation and Centennial Savings Bank

JAMES M. HATER
Chief Executive Officer of Hater Dry Goods

FRANK S. HODGES
Chief Executive Officer of Pioneer Guns

EDGAR A. RUST
Housing Director of Bethany House Services, Inc.

JAMES W. SCHACKMANN
Retired Chief Executive Officer of
The Glenway Loan and Deposit Company

MILTON L. VAN SCHOIK
Retired Vice President of the
Cincinnati Gas and Electric Company



OFFICERS:

ROBERT R. SUDBROOK           MICHAEL P. DOHERTY
President and Chief          Senior Vice President/
Executive Officer            Lending

ELAINE M. SCHMIDT            LINDA M. CLARK
Senior Vice President/       Vice President/
Chief Operations Officer     Branch Operations

GREGORY P. NIESEN
Vice President/
Chief Financial Officer

JOSEPH V. BUNKE
Vice President/
Audit




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