FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

[X]  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 For the fiscal year ended December 31, 2003

                                       or

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange  Act of 1934

For the transition period from _____________ to _______________

Commission File Number 0-25910



                           LOGANSPORT FINANCIAL CORP.
             (Exact name of registrant as specified in its charter)



                 INDIANA                                 35-1945736
    ---------------------------------          -------------------------------
      (State or other Jurisdiction             (I.R.S. Employer Identification
    of Incorporation or Organization)                      Number)



 723 East Broadway, Logansport, Indiana                     46947
----------------------------------------          -------------------------
(Address of Principal Executive Offices)                 (Zip Code)


Registrant's telephone number including area code:
                                 (574) 722-3855


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


Securities Registered Pursuant to Section 12(g) of the Act:
                         Common Stock, without par value
                               (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. YES _X_    NO___

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be  contained,  to the best of  Registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). YES ___   NO _X_

The aggregate market value of the issuer's voting stock held by  non-affiliates,
computed by reference to the the price at which the common  equity was last sold
on June 30, 2003, was $13,430,968.

The  number of shares of the  Registrant's  Common  Stock,  without  par  value,
outstanding as of March 1, 2004, was 876,193 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to  Shareholders  for the year ended  December 31,
2003, are  incorporated  into Part II.  Portions of the Proxy  Statement for the
2004 Annual Meeting of Shareholders are incorporated in Part I and Part III.

                            Exhibit Index on Page E-1
                               Page 1 of 30 Pages
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<CAPTION>

                           LOGANSPORT FINANCIAL CORP.
                                    Form 10-K
                                      INDEX
                                                                                      Page
                                                                                      ----
<S>                                                                                     <C>
Forward Looking Statements .......................................................      1

PART I
Item  1.   Business ..............................................................      1
Item  2.   Properties ............................................................     24
Item  3.   Legal Proceedings .....................................................     25
Item  4.   Submission of Matters to a Vote of Security Holders ...................     25
Item  4.5. Executive Officers of Registrant.......................................     25

PART II
Item  5.   Market for Registrant's Common Equity and Related Stockholder Matters..     25
Item  6.   Selected Financial Data ...............................................     26
Item  7.   Management's Discussion and Analysis of Financial Condition and
             Results of Operations ...............................................     26
Item  7A.  Quantitative and Qualitative Disclosures About Market Risk ............     26
Item  8.   Financial Statements and Supplementary Data ...........................     26
Item  9.   Changes in and Disagreements with Accountants on Accounting and
             Financial Disclosure ................................................     27
Item  9A.  Controls and Procedures ...............................................     27

PART III
Item  10.  Directors and Executive Officers of Registrant ........................     27
Item  11.  Executive Compensation ................................................     27
Item  12.  Security Ownership of Certain Beneficial Owners and Management and
             Related Stockholder Matters .........................................     27
Item  13.  Certain Relationships and Related Transactions ........................     28
Item  14.  Principal Accountant Fees and Services ................................     28

PART IV
Item  15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K ......     29

Signatures .......................................................................     30


</TABLE>
<PAGE>

                           FORWARD LOOKING STATEMENTS


     This Annual Report on Form 10-K ("Form  10-K")  contains  statements  which
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-K and include  statements  regarding the intent,  belief,
outlook,  estimate  or  expectations  of the Company  (as  defined  below),  its
directors or its officers primarily with respect to future events and the future
financial  performance  of the Company.  Readers of this Form 10-K are cautioned
that any such forward looking  statements are not guarantees of future events or
performance  and involve risks and  uncertainties,  and that actual  results may
differ  materially from those in the forward  looking  statements as a result of
various  factors.  The  accompanying  information  contained  in this  Form 10-K
identifies  important factors that could cause such  differences.  These factors
include but are not limited to changes in interest  rates;  loss of deposits and
loan demand to other savings and financial institutions;  substantial changes in
financial  markets;  changes in real estate  values and the real estate  market;
regulatory changes; or unanticipated results in pending legal proceedings.


                                     PART I
Item 1. Business.

General

     Logansport  Financial Corp. (the "Holding  Company" and,  together with the
Bank (as defined below), the "Company") is an Indiana  corporation  organized in
February 1995, to become a unitary savings and loan holding company. The Holding
Company became a unitary savings and loan holding company upon the conversion of
Logansport  Savings Bank, FSB (the "Bank") from a federal mutual savings bank to
a federal  stock  savings  bank on June 13,  1995.  The  principal  asset of the
Holding Company consists of 100% of the issued and outstanding  shares of common
stock,  $.01 par value per  share,  of the Bank.  The Bank began  operations  in
Logansport,  Indiana, under the name Logansport Building and Loan Association in
1925.  In  1962,  the  Bank  changed  its name to  Logansport  Savings  and Loan
Association,  and in 1992, the Bank converted to a federally  chartered  savings
bank  known as  Logansport  Savings  Bank,  FSB.  The Bank  serves  the needs of
primarily residents of Cass County, Indiana.

     The Bank is the oldest financial  institution  headquartered in Logansport,
Indiana. Management believes the Bank has developed a solid reputation among its
loyal customer base because of its commitment to personal service and its strong
support  of the  local  community.  The Bank  offers a number  of  consumer  and
commercial  financial  services.  These services  include:  (i) residential real
estate  loans;  (ii) home  equity  loans;  (iii) home  improvement  loans;  (iv)
construction loans; (v) commercial real estate loans and other commercial loans,
including  operating  lines of credit secured by  receivables  and inventory and
term financing for equipment purchases,  and agricultural loans; (vi) commercial
leases,  including  equipment leases;  (vii) multi-family loans; (viii) consumer
loans; (ix) NOW accounts;  (x) passbook savings  accounts;  (xi) certificates of
deposit;  (xii) consumer and  commercial  demand  deposit  accounts;  and (xiii)
individual  retirement  accounts.  The  Holding  Company  and the  Bank  conduct
business out of their main office  located in Logansport,  Indiana.  The Bank is
and  historically  has been a significant  real estate  mortgage  lender in Cass
County, Indiana.

     The Bank  historically  has  concentrated  its  lending  activities  on the
origination  of  loans  secured  by  first  mortgage  liens  for  the  purchase,
construction  or refinancing of one- to four-family  residential  real property.
One- to four-family residential mortgage loans continue to be the major focus of
the Bank's loan  origination  activities,  representing  49.1% of the  Company's
gross loans at December 31,  2003.  The Bank also offers  multi-family  mortgage
loans,  commercial real estate loans,  construction loans,  commercial loans and
leases and consumer loans. Mortgage loans secured by multi-family properties and
commercial real estate totaled  approximately 1.1% and 22.0%,  respectively,  of
the Company's  gross loans at December 31, 2003.  Commercial  loans  constituted
12.4% and  commercial  leases  3.8% of the gross  loans at  December  31,  2003.
Residential real estate construction loans constituted  approximately .8% of the
Company's gross loans at December 31, 2003.  Installment,  home equity, and home
improvement loans constituted  approximately 4.6%, 1.6%, and 4.6%, respectively,
of the Company's total loan portfolio at December 31, 2003.
<PAGE>
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<CAPTION>

Lending Activities

     Loan Portfolio  Data. The following table sets forth the composition of the
Company's  loan  portfolio  by loan  type  and  security  type  as of the  dates
indicated,   including  a   reconciliation   of  gross  loans  receivable  after
consideration of the allowance for loan losses and loans in process.

                                                                               At December 31,
                                           -----------------------------------------------------------------------------------------
                                                  2003                   2002                   2001                   2000
                                           ------------------      -----------------     ------------------     ------------------
                                                     Percent                Percent                Percent                Percent
                                           Amount    of Total      Amount   of Total     Amount    of Total     Amount    of Total
                                          --------   --------    ---------  --------    --------   --------    --------   --------
                                                                           (Dollars in thousands)
TYPE OF LOAN
Mortgage loans:
<S>                                       <C>          <C>       <C>          <C>       <C>          <C>       <C>          <C>
  Residential ..........................  $ 51,208     49.10%    $ 61,717     55.02%    $ 63,863     56.25%    $ 62,277     59.73%
  Commercial real estate ...............    22,910     21.97       20,557     18.33       18,435     16.24       13,230     12.69
  Multi-family .........................     1,094      1.05        1,606      1.43        1,816      1.60        2,050      1.96
Construction:
  Residential ..........................       870       .83        1,317      1.17        2,278      2.01        2,814      2.70
  Commercial real estate ...............        --        --           --        --           --        --           --        --
  Multi-family .........................        --        --           --        --           --        --           --        --
Commercial loans .......................    12,931     12.40       10,924      9.74        9,586      8.44        7,088      6.80
Commercial leases ......................     4,000      3.83        4,352      3.88        3,914      3.45        2,228      2.14
Consumer loans:
  Installment (1) ......................     4,784      4.59        5,156      4.60        6,473      5.70        7,045      6.75
  Share ................................        11       .01           62       .06          144       .13          290       .28
  Home equity ..........................     1,683      1.61        1,358      1.21        1,199      1.06        1,164      1.12
  Home improvement .....................     4,813      4.61        5,118      4.56        5,819      5.12        6,076      5.83
                                          --------    ------     --------    ------     --------    ------     --------    ------
    Gross loans receivable .............  $104,304    100.00%    $112,167    100.00%    $113,527    100.00%    $104,262    100.00%
                                          ========    ======     ========    ======     ========    ======     ========    ======
TYPE OF SECURITY
  Residential (2) ......................  $ 58,574     56.16%    $ 71,320     63.58%    $ 74,097     65.27%    $ 73,056     70.07%
  Commercial real estate ...............    22,910     21.96       20,557     18.33       18,725     16.49       13,606     13.05
  Multi-family .........................     1,094      1.05        1,606      1.43        1,816      1.60        2,050      1.96
  Deposits .............................        11     01              62       .06          144       .13          290       .28
  Auto .................................     2,197      2.11        2,382      2.12        2,857      2.52        3,223      3.09
  Consumer (1) .........................     2,587      2.48        1,646      1.47        2,388      2.10        2,722      2.61
  Other security .......................    16,931     16.23       14,594     13.01       13,500     11.89        9,315      8.94
                                          --------    ------     --------    ------     --------    ------     --------    ------
    Gross loans receivable .............   104,304    100.00%     112,167    100.00%     113,527    100.00%     104,262    100.00%
Deduct:
Allowance for loan losses ..............     1,751      1.68        1,458      1.30        1,132      1.00          760       .73
Loans in process .......................       200       .19          323       .29          699       .61        1,084      1.04
                                          --------    ------     --------    ------     --------    ------     --------    ------
  Net loans receivable .................  $102,353     98.13%    $110,386     98.41%    $111,696     98.39     $102,418      8.23%
                                          ========    ======     ========    ======     ========    ======     ========    ======

Mortgage Loans (including construction):
  Adjustable-rate ......................  $ 47,800     62.83%    $ 48,068     56.42%    $ 52,365     60.61%    $ 51,664     64.28%
  Fixed-rate ...........................    28,282     37.17       37,129     43.58       34,027     39.39       28,707     35.72
                                          --------    ------     --------    ------     --------    ------     --------    ------
    Total ..............................  $ 76,082    100.00%    $ 85,197    100.00%    $ 86,392    100.00%    $ 80,371    100.00%
                                          ========    ======     ========    ======     ========    ======     ========    ======


(Table is continued on following page.)

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

(Table is continued from previous page.)



                                              At December 31,
                                             ------------------
                                                    1999
                                             ------------------
                                                       Percent
                                             Amount    of Total
                                             ------    --------
                                           (Dollars in thousands)
TYPE OF LOAN
Mortgage loans:
<S>                                          <C>          <C>
  Residential ..........................     $ 57,889     62.23%
  Commercial real estate ...............       11,825     12.71
  Multi-family .........................        2,111      2.27
Construction:
  Residential ..........................        2,575      2.77
  Commercial real estate ...............           --        --
  Multi-family .........................           --        --
Commercial loans .......................        4,102      4.41
Commercial leases ......................        1,609      1.73
Consumer loans:
  Installment (1) ......................        6,107      6.56
  Share ................................          289       .31
  Home equity ..........................          974      1.05
  Home improvement .....................        5,544      5.96
                                             --------    ------
    Gross loans receivable .............     $ 93,025    100.00%
                                             ========    ======
TYPE OF SECURITY
  Residential (2) ......................     $ 66,150     71.11%
  Commercial real estate ...............       12,334     13.26
  Multi-family .........................        2,088      2.25
  Deposits .............................          289       .31
  Auto .................................        2,477      2.66
  Consumer (1) .........................        1,599      1.72
  Other security .......................        8,088      8.69
                                             --------    ------
    Gross loans receivable .............       93,025    100.00%
Deduct:
Allowance for loan losses ..............          440       .47
Loans in process .......................        1,685      1.81
                                             --------    ------
  Net loans receivable .................     $ 90,900     97.72%
                                             ========    ======

Mortgage Loans (including construction):
  Adjustable-rate ......................     $ 48,119     64.68%
  Fixed-rate ...........................       26,281     35.32
                                             --------    ------
    Total ..............................     $ 74,400    100.00%
                                             ========    ======
-------------------------
(1)  Includes "one-pay" notes due in less than one year.
(2)  Includes home equity, residential construction and home improvement loans.

</TABLE>

     The following  table sets forth certain  information  at December 31, 2003,
regarding the dollar amount of loans  maturing in the Company's  loan  portfolio
based on the date that final payment is due under the terms of the loan.  Demand
loans  having no stated  schedule  of  repayments  and no  stated  maturity  and
overdrafts  are  reported  as due in one year or less.  This  schedule  does not
reflect  the effects of  possible  prepayments  or  enforcement  of  due-on-sale
clauses.  Management  expects  prepayments  will cause actual  maturities  to be
shorter.
<PAGE>
<TABLE>
<CAPTION>

                                                                         Balance due during years ending December 31,
                                                        ---------------------------------------------------------------------------
                                          Outstanding                                      2007        2009       2014      2019
                                        at December 31,                                     to          to         to        and
                                              2003        2004       2005       2006       2008        2013       2018    following
                                        --------------- --------   --------   --------   --------   ---------   --------  ---------
                                                                                      (In thousands)
<S>                                          <C>        <C>        <C>        <C>        <C>        <C>         <C>        <C>
Mortgage loans (including construction):
   Residential .........................     $ 52,078   $    746   $     86   $    339   $  1,348   $   6,029   $ 14,208   $ 29,322
   Multi-family ........................        1,094        178         --         --         --         916         --         --
   Commercial real estate ..............       22,910      2,117        120        408        897       3,273      4,227     11,868
Commercial loans .......................       12,931      7,853        303      1,239      1,912       1,624         --         --
Commercial leases ......................        4,000      1,228        987        926        743         116         --         --
Consumer loans:
   Home improvement ....................        4,813         66         73        200        879       1,852      1,730         13
   Home equity .........................        1,683         --         --         --         --          --      1,683         --
   Installment .........................        4,784      1,762        493        809      1,069         423        228         --
   Share ...............................           11         11         --         --         --          --         --         --
                                             --------   --------   --------   --------   --------    --------   --------   --------
      Total ............................     $104,304   $ 13,961   $  2,062   $  3,921   $  6,848    $ 14,233   $ 22,076   $ 41,203
                                             ========   ========   ========   ========   ========    ========   ========   ========

</TABLE>


     The following  table sets forth, as of December 31, 2003, the dollar amount
of all loans due after one year which have fixed  interest rates and floating or
adjustable rates.

                                       Due After December 31, 2004
                                ------------------------------------------
                                Fixed Rates   Variable Rates       Total
                                -----------   --------------   ------------
                                               (In thousands)
Mortgage loans:
   Residential ..........         $22,127         $29,205         $51,332
   Multi-family .........             498             418             916
   Commercial real estate           5,343          15,450          20,793
Commercial loans ........           3,902           1,176           5,078
Commercial leases .......           2,772              --           2,772

Consumer loans:
   Home improvement .....           4,747              --           4,747
   Home equity ..........              --           1,683           1,683
   Installment ..........           3,022              --           3,022
                                  -------         -------         -------
      Total .............         $42,411         $47,932         $90,343
                                  =======         =======         =======

     Residential   Loans.   Residential  loans  consist  primarily  of  one-  to
four-family  loans.  Approximately  $51.2  million,  or 49.1%  of the  Company's
portfolio  of loans at  December  31,  2003,  consisted  of one- to  four-family
residential mortgage loans.

     The Bank currently offers  adjustable-rate one- to four-family  residential
mortgage loans  ("ARMs")  which adjust  annually and are indexed to the one-year
U.S. Treasury securities yield adjusted to a constant maturity.  These ARMs have
a current margin above such index of 2.75%, or 3.00% for loans in which interest
is amortized and payments are due monthly or bi-weekly.  Many of the residential
ARMs in the  Company's  portfolio at December  31, 2003,  provided for a maximum
rate adjustment per year of 1%, although the Bank began originating  residential
ARMs which  provide for a maximum rate  adjustment  of 2% per year in 1995.  The
Bank's  residential  ARMs provide for a maximum rate  adjustment  of 5% over the
life of the loan. These ARMs generally bear terms of between 15 and 30 years.

     The Bank also  currently  offers  fixed-rate  loans  which  provide for the
payment of principal and interest over a period that  generally  does not exceed
15  years.  At  December  31,  2003,  37.2%  of  the  Company's  total  mortgage
portfolios,  which includes  residential,  commercial real estate,  multi-family
loans  and  construction  loans,  had  fixed  rates of  interest  and  62.8% had
adjustable rates.

     During 2003,  the Bank  initiated a program to originate  certain  mortgage
loans for sale in the secondary  market,  retaining the servicing on loans sold.
These sales  transactions  were  conducted  with the  Federal  Home Loan Bank of
Indianapolis. Sales of loans during 2003 totaled $6.2 million.
<PAGE>

     The Bank  generally  does not originate  residential  mortgage loans if the
ratio of the loan amount to the lesser of current cost or appraised value of the
property  (i.e.,  the  "loan-to-value  ratio")  exceeds  90% on  ARMs  or 80% on
fixed-rate loans. However, in certain circumstances the Bank may originate loans
exceeding the above loan-to-value ratios. In 2003, if the loan-to-value ratio on
a  residential  single-family  mortgage  loan  exceeded  90%, the Bank  required
private mortgage insurance.

     Substantially  all  of  the  residential   mortgage  loans  that  the  Bank
originates  include  "due-on-sale"  clauses,  which  give the Bank the  right to
declare a loan  immediately  due and  payable  in the event  that,  among  other
things, the borrower sells or otherwise disposes of the real property subject to
the mortgage and the loan is not repaid.

     Historically,   the  Bank's  residential   mortgage  loans  have  not  been
originated on terms and conditions and using  documentation  that conform to the
standard  underwriting  criteria  required  to sell such loans on the  secondary
market.  However, during 2003 the Bank conformed its origination process to meet
FHLB of Indianapolis  requirements.  See "--  Origination,  Purchase and Sale of
Loans."

     At December 31, 2003,  residential loans amounting to $269,000,  or .26% of
total loans, were included in non-performing  assets.  See  "Non-Performing  and
Problem Assets."

     Commercial Real Estate Loans. At December 31, 2003, $22.9 million, or 22.0%
of the  Company's  total loan  portfolio,  consisted of  commercial  real estate
loans. Of these loans, $1.7 million constituted  participations in loans secured
by commercial real estate which were purchased from other financial institutions
in 2003.  The commercial  real estate loans included in the Company's  portfolio
are  primarily  secured by  non-residential  real  estate  such as small  office
buildings,  nursing homes, churches, light manufacturing facilities,  retail and
service outlets,  warehouses,  professional  buildings and farm real estate. The
Bank currently originates  commercial real estate loans as adjustable-rate loans
indexed to the one-,  three- or five-year  U.S.  Treasury or the prime  interest
rate with various margins,  or as fixed rate loans.  The Bank underwrites  these
loans on a  case-by-case  basis and,  in  addition  to its  normal  underwriting
criteria, the Bank evaluates the borrower's ability to service the debt from the
net operating income of the property.  No single  commercial real estate loan at
December 31, 2003,  exceeded  $2,000,000.  One  commercial  real estate loan was
included in non-performing assets at December 31, 2003, amounting to $543,000.

     Loans secured by commercial  real estate  generally are larger than one- to
four-family  residential loans and involve a greater degree of risk.  Commercial
real estate  loans often  involve  large loan  balances to single  borrowers  or
groups of related borrowers. Payments on these loans depend to a large degree on
results of operations  and management of the properties and may be affected to a
greater extent by adverse conditions in the real estate market or the economy in
general.  Accordingly,  the nature of the loans  makes them more  difficult  for
management to monitor and evaluate.

     Multi-Family  Loans.  Approximately $1.1 million,  or 1.1% of the Company's
portfolio of loans at December 31, 2003,  consisted of multi-family loans. These
loans are generally purchased  participations and secured by apartment complexes
and  other  multi-family  residential  properties.  At  December  31,  2003,  no
multi-family loan was included in non-performing assets.

     Construction  Loans.  The Bank offers  construction  loans with  respect to
owner-occupied  residential  real estate and, in limited  cases,  to builders or
developers constructing such properties on a speculative investment basis (i.e.,
before the  builder/developer  obtains a commitment from a buyer).  The Bank may
also purchase participations.

     At  December  31,  2003,  $870,000,  or .8%,  of the  Company's  total loan
portfolio  consisted of construction  loans. All construction  loans at December
31, 2003, were one- to four-family  residential loans. The largest  construction
loan at December 31, 2003, was  approximately  $225,000.  No construction  loans
were included in non-performing assets on that date.

     Construction  loans  originated  by the Bank are written such that interest
only is payable during the  construction  phase,  which is typically  limited to
nine months,  and following the  construction  phase,  a permanent loan is made.
Inspections are made prior to any disbursement under a construction loan.

     Commercial  Loans.  At December 31, 2003,  $12.9  million,  or 12.4% of the
Company's total loan portfolio consisted of commercial loans provided to finance
receivables, inventory or equipment. These loans were originated by the Bank and
provided  to  existing  businesses  located  primarily  in Cass  County  and its
contiguous  counties.  Loans  are  underwritten  on a  case-by-case  basis  with
emphasis placed on cash flow analysis and the borrower's debt service  capacity.
The majority of the loans are written on a variable  rate basis using the Bank's
prime rate as the  primary  index  rate.  The  weighted-average  maturity of the
variable rate portion of the  portfolio  was 11 months and the  weighted-average
maturity of the fixed rate  portion of the  portfolio  was 53 months at December
31, 2003. One commercial loan was included in non-performing  assets at December
31, 2003, amounting to $658,000.
<PAGE>

     Commercial  Leases.  At December 31,  2003,  $4.0  million,  or 3.8% of the
Company's  total loan  portfolio  consisted  of  commercial  leases  provided to
finance  equipment.  The Bank's lease  portfolio  consists of a joint  marketing
effort  between  the Bank and SCI  Leasing  Group,  a  Sheridan,  Indiana  based
concern,  with all credit  decisions  made solely by the Bank and  following the
same  underwriting  standards  as are  applied to  traditional  commercial  loan
requests.   Commercial   leases  are  a  fixed  rate  financing  tool  with  the
weighted-average  maturity  of the  Bank's  lease  portfolio  at 44 months as of
December 31, 2003.

     Consumer Loans.  Federal laws and regulations  permit  federally  chartered
savings  associations  to  make  secured  and  unsecured  consumer  loans  in an
aggregate amount up to 35% of the  association's  total assets.  In addition,  a
federally  chartered  savings  association  has lending  authority above the 35%
limit for certain consumer loans, such as property improvement loans and deposit
account  secured  loans.  However,  the  Qualified  Thrift  Lender  test  places
additional  limitations  on a savings  association's  ability  to make  consumer
loans. See "Regulation -- Qualified Thrift Lender."

     The Company's consumer loans,  consisting primarily of installment,  share,
home improvement, and home equity loans, aggregated $11.3 million as of December
31, 2003, or 10.8% of the Company's total loan portfolio.  The Bank consistently
originates  consumer  loans to meet the needs of its  customers and to assist in
meeting  its  asset/liability  management  goals.  All  of  the  consumer  loans
originated by the Bank,  except home equity loans,  are  fixed-rate  loans,  and
substantially all are secured loans.

     Installment  loans,  totaling  $4.8  million,  or 4.6% of  total  loans  at
December  31,  2003,  are  fixed-rate  loans  generally  secured by  collateral,
including  automobiles,  and are  made  for  maximum  terms  of up to ten  years
(depending  on the  collateral).  The  Bank's  installment  loans  also  include
"one-pay"  notes,  some of which are secured by residential real estate and have
maximum terms of six months to one year.

     Share loans, totaling $11,000, or .01% of total loans at December 31, 2003,
are made up to 80% of the original  account balance and accrue at a rate of 2-3%
over the underlying certificate of deposit rate. Interest on share loans is paid
quarterly. Home improvement loans totaled $4.8 million, or 4.6% of the Company's
total loan portfolio at December 31, 2003, and are close-ended  fixed-rate loans
made for maximum  terms up to 15 years.  The Bank's home  improvement  loans are
generally  made only to those  borrowers  for whom the Bank  holds  the  primary
mortgage on the property, if any.

     The Bank also offers  open-ended  lines of credit  secured by a lien on the
equity in the borrower's home in amounts up to 90% of the appraised value of the
real estate  (taking into  account any other  mortgages  on the  property).  The
Bank's home equity loans are adjustable-rate  loans with interest rates equal to
the national prime rate plus 0.5% and payments equal to the greater of 2% of the
outstanding loan balance or $50. The Bank's home equity loans are generally made
only to those  borrowers  for whom the Bank holds the  primary  mortgage  on the
property, if any, and generally have a maximum term of 15 years. At December 31,
2003,  the Bank had approved  $2.9 million of home equity  loans,  of which $1.7
million were outstanding.

     As a general rule,  consumer loans involve a higher level of risk than one-
to four-family  residential  mortgage loans because consumer loans are generally
made based upon the  borrower's  ability to repay the loan,  which is subject to
change, rather than the value of the underlying collateral, if any. However, the
relatively  higher  yields and shorter  terms to maturity of consumer  loans are
believed to be helpful in reducing interest-rate risk, and compensating the Bank
for assuming  this  additional  credit risk.  As of December 31, 2003,  consumer
loans totaling $45,000 were included in non-performing  assets,  which indicates
the Bank's success in managing consumer loan risk.

     Letters of Credit Securing  Tax-Exempt Bonds. The Bank currently  maintains
four  letters of  credit,  each in the amount of  $253,000,  to secure  payments
required under  tax-exempt  bonds issued to raise funds for  low-income  housing
projects in Franklin,  Kokomo and Michigan City, Indiana and Hamilton, Ohio. The
issuer of the  tax-exempt  bonds is permitted to draw against  these  letters of
credit  only in the event it  defaults  in making  payments  required  under the
bonds, and any such draws made against the letters of credit would be secured by
a mortgage  on the  subject  housing  project.  The Bank also has two letters of
credit totaling $1.5 million  associated with the equity investment owned by the
Bank; these also secure payments required for tax-exempt bonds. No draws against
any letters of credit had been made as of December 31, 2003.  In addition to the
above,  the Bank held $210,000 in standby  letters of credit for one  commercial
loan customer.

     Origination,  Purchase  and Sale of Loans.  In an effort to  control  costs
incurred by its mortgage customers,  the Bank currently originates some mortgage
loans  pursuant to its own  underwriting  standards  which are not in conformity
with the  standard  criteria  of the  Federal  Home  Loan  Mortgage  Corporation
("FHLMC") or Federal National Mortgage  Association  ("FNMA").  If it desired to
sell these mortgage loans,  the Bank might therefore  experience some difficulty
selling such loans quickly in the secondary  market.  The Bank did sell selected
loans  originated in 2003 through the MPP program of the FHLB of Indianapolis in
the amount of $6.2 million.
<PAGE>

     The Bank confines its loan origination activities primarily to Cass County,
Indiana.  The Bank's loan  originations  are generated  from referrals from real
estate dealers and existing customers, and newspaper and periodical advertising.
Business  loan  originations  also  arise  from an active  business  development
calling  program.  All loan  applications  are processed and underwritten at the
Bank's main office.

     Under the Financial  Institutions Reform,  Recovery, and Enforcement Act of
1989  ("FIRREA"),  a savings  association  generally  may not make any loan to a
borrower or its  related  entities if the total of all such loans by the savings
association  exceeds 15% of its capital (plus up to an additional 10% of capital
in the case of loans fully  collateralized  by readily  marketable  collateral);
provided,  however,  that  loans up to  $500,000  regardless  of the  percentage
limitations  may be made  and  certain  housing  development  loans of up to $30
million or 30% of capital,  whichever is less, are permitted. The maximum amount
which the Bank could have  loaned to one  borrower  and the  borrower's  related
entities  under the 15% of capital  limitation  was $2.7 million at December 31,
2003. The Company's  portfolio of loans currently  contains no loans that exceed
the 15% of capital limitation.

     The Bank's  loan  approval  process is  intended  to assess the  borrower's
ability to repay the loan,  the  viability  of the loan and the  adequacy of the
value of the  property  that will  secure  the loan.  To assess  the  borrower's
ability  to repay,  the Bank  studies  the  employment  and credit  history  and
information  on  the  historical  and  projected  income  and  expenses  of  its
mortgagors.

     The Bank generally requires  appraisals or loan officer  evaluations on all
property securing its loans and requires title insurance and a valid lien on its
mortgaged real estate. Appraisals for residential real property are performed by
a  state-licensed   residential  appraiser  or  an  independent   state-licensed
residential appraiser.  The Bank also uses the services of certified residential
appraisers for performance of appraisals related to loans in excess of $250,000.
The Bank requires fire and extended coverage insurance in amounts at least equal
to the principal amount of the loan. It also requires flood insurance to protect
the property securing its interest if the property is in a flood plain.

     The Bank's  underwriting  standards  for  consumer  loans are  intended  to
protect against some of the risks inherent in making  consumer  loans.  Borrower
character, paying habits and financial strengths are important considerations.

     The Bank  historically  had not  participated in the secondary  market as a
seller  of its  mortgage  loans  until  2003,  but  does  occasionally  purchase
participations  in  commercial  real  estate and  multi-family  loans from other
financial institutions.

     The following table shows loan origination, purchase and repayment activity
for the Bank during the periods indicated.

<TABLE>
<CAPTION>


                                                                   Year Ended December 31,
                                                           --------------------------------------
                                                             2003           2002           2001
                                                           --------       --------       --------
                                                                      (In thousands)
<S>                                                        <C>            <C>            <C>
Gross loans receivable at beginning of period ......       $112,167       $113,527       $104,262
Originations:
   Mortgage loans:
      Residential ..................................         13,438         14,737         18,243
      Commercial real estate and lines of credit and
         multi-family ..............................         37,653         25,554         36,011
                                                           --------       --------       --------
      Total mortgage loans and commercial loans ....         51,091         40,291         54,254
   Consumer loans:
      Installment ..................................          3,196          3,176          4,342
      Share ........................................             --             --             --
      Home improvement .............................          1,812          1,669          2,260
      Home equity ..................................            648            418            226
                                                           --------       --------       --------
         Total consumer loans ......................          5,656          5,263          6,828
                                                           --------       --------       --------
            Total originations .....................         56,747         45,554         61,082
Purchases:
   Commercial real estate and multi-family .........          1,771            171            499
                                                           --------       --------       --------
      Total purchases ..............................          1,771            171            499
                                                           --------       --------       --------
         Total originations and purchases ..........         58,518         45,725         61,581
Sales ..............................................          8,192             --            416
Repayments and deductions ..........................         58,189         47,085         51,900
                                                           --------       --------       --------
Gross loans receivable at end of period ............       $104,304       $112,167       $113,527
                                                           ========       ========       ========

</TABLE>
<PAGE>


     Origination and Other Fees. The Company  realizes  income from  origination
fees, late charges, checking account service charges, credit card fees, and fees
for other miscellaneous  services.  The Bank currently charges $300 plus closing
costs on its adjustable-rate mortgage loans. Points may be charged on fixed-rate
loans.  Late charges are generally  assessed if payment is not received within a
specified  number of days  after it is due.  The  grace  period  depends  on the
individual loan documents.


Non-Performing and Problem Assets

     Mortgage  loans are reviewed by the Bank on a regular  basis and are placed
on a non-accrual status when the loans become  contractually past due 90 days or
more. At the end of each month, delinquency notices are sent with respect to all
mortgage loans for which payments have not been received. Contact by phone or in
person is made,  if  feasible,  with  respect to all such loans.  When loans are
sixty days in default,  an  additional  delinquency  notice is sent and personal
contact is made with the borrower to establish an acceptable repayment schedule.
When loans are ninety days in default,  contact is made with the borrower by the
Senior Loan Officer who attempts to establish an acceptable  repayment schedule.
Management is authorized to commence  foreclosure  proceedings for any loan upon
making  a  determination  that it is  prudent  to do so.  All  loans  for  which
foreclosure  proceedings  have been commenced are placed on non-accrual  status.
Late  notices are sent to  commercial  loan  borrowers  at five and fifteen days
after which personal contact by the Account Officer is made.

     Consumer loans are reviewed by the Bank on a daily basis.  Notices are sent
to  borrowers  when  any  consumer  loan is 5, 10 and 15 days  past  due.  After
consumer  loans are 15 days  delinquent,  a late fee in the amount of 10% of the
payment is imposed until the loan is brought current.

     Non-Performing  Assets. At December 31, 2003, $1.5 million,  or .97% of the
Company's total assets, were  non-performing  assets (loans delinquent more than
90  days,   non-accruing  loans,  real  estate  owned  ("REO"),   troubled  debt
restructurings and non-accruing investments), compared to $1.5 million, or .99%,
of the  Company's  total  assets at December  31,  2002.  At December  31, 2003,
residential loans accounted for 17.76% and consumer loans accounted for 2.97% of
non-performing  assets.  Commercial  real estate loans  accounted for 35.84% and
commercial operating loans accounted for 43.43% of non-performing  assets. There
were no non-accruing investments at December 31, 2003.

     The table  below sets forth the  amounts and  categories  of the  Company's
non-performing  assets (non-accruing loans and real estate owned) as of the date
indicated.  It is the policy of the  Company  that all  earned  but  uncollected
interest on all loans be reviewed  monthly to determine  if any portion  thereof
should  be  classified  as  uncollectible  for any loan past due in excess of 90
days.

<TABLE>
<CAPTION>


                                                                                   At December 31,
                                                     ----------------------------------------------------------------------
                                                        2003             2002           2001           2000           1999
                                                     ---------        ---------        ------        -------        -------
                                                                                (Dollars in thousands)
<S>                <C>                               <C>              <C>              <C>           <C>            <C>

Non-accruing loans (1) .....................         $   1,515        $   1,484        $1,948        $   336        $   666
Real estate owned, net .....................                --               --            65             --             --
                                                     ---------        ---------        ------        -------        -------
   Total non-performing assets .............         $   1,515        $   1,484        $2,013        $   336        $   666
                                                     =========        =========        ======        =======        =======
Non-performing loans to total loans, net (2)              1.45%            1.34%         1.73%           .32%           .72%
Non-performing assets to total assets ......               .97              .99          1.46            .25            .57
------------------------------
(1)  The Company generally places loans on a non-accruing  status when the loans
     become  contractually  past  due 90 days or more.  At  December  31,  2003,
     $269,000  of  non-accruing  loans  were  residential  loans,  $45,000  were
     consumer  loans,  $543,000 were  commercial  real estate loans and $658,000
     were commercial  operating loans. For the year ended December 31, 2003, the
     income that would have been recorded had the non-accruing loans not been in
     a non-performing status totaled $115,000.
(2)  Total loans less loans in process.

</TABLE>
<PAGE>

     Classified Assets.  Federal regulations and the Bank's Internal Loan Review
policy provide for the classification of loans and other assets such as debt and
equity   securities   considered  by  the  OTS  to  be  of  lesser   quality  as
"substandard," "doubtful" or "loss" assets. An asset is considered "substandard"
if it is inadequately  protected by the current net worth and paying capacity of
the obligor or of the collateral pledged, if any.  "Substandard"  assets include
those  characterized  by the "distinct  possibility"  that the association  will
sustain "some loss" if the deficiencies are not corrected.  Assets classified as
"doubtful"   have  all  of  the   weaknesses   inherent   in  those   classified
"substandard,"  with the added  characteristic  that the weaknesses present make
"collection or liquidation in full," on the basis of currently  existing  facts,
conditions,  and values, "highly questionable and improbable." Assets classified
as "loss" are those  considered  "uncollectible"  and of such little  value that
their continuance as assets without the establishment of a specific loss reserve
is not warranted.  Assets which do not currently expose the insured  institution
to  sufficient  risk  to  warrant  classification  in one of the  aforementioned
categories  but  possess  weaknesses  are  required  to be  designated  "special
mention"  by  management.

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

     At December 31, 2003,  the  aggregate  amount of the  Company's  classified
assets and the Company's general and specific loss allowances were as follows:

                             At December 31, 2003
                             --------------------
                               (In thousands)

Substandard assets .......         $2,254
Doubtful assets ..........            200
Loss assets ..............             --
                                   ------
   Total classified assets         $2,454
                                   ======

General loss allowances ..         $1,551
Specific loss allowances .            200
                                   ------
   Total allowances ......         $1,751
                                   ======

     The Company  regularly  reviews its loan portfolio to determine whether any
loans require  classification  in accordance  with applicable  regulations.  The
substandard  and  doubtful  loans  consist  of  all  nonaccrual  loans  totaling
$1,515,000,  a purchased  participation loan secured by multi-family real estate
of $177,000,  which is current on payments but considered substandard because of
cash flow and  $762,000 of  commercial  loans which are current on payments  but
substandard because of cash flow.


Allowance for Loan Losses

     The  allowance  for loan losses is  maintained  through the  provision  for
losses on loans, which is charged to earnings. The provision for losses on loans
is determined in conjunction with management's  review and evaluation of current
economic conditions (including those of the Bank's lending area), changes in the
character and size of the loan portfolio,  loan delinquencies (current status as
well as past and  anticipated  trends) and adequacy of collateral  securing loan
delinquencies,  historical and estimated net  charge-offs,  and other  pertinent
information  derived  from a  review  of the  loan  portfolio.  In  management's
opinion,  the  Company's  allowance  for  loan  losses  is  adequate  to  absorb
anticipated future losses from loans at December 31, 2003. However, there can be
no assurance that regulators, when reviewing the Company's loan portfolio in the
future,  will not require  increases  in its  allowance  for loan losses or that
changes in economic  conditions  will not adversely  affect the  Company's  loan
portfolio.

<PAGE>
<TABLE>
<CAPTION>

     Summary of Loan Loss  Experience.  The following table analyzes  changes in
the  allowance  for loan  losses  during the past five  one-year  periods  ended
December 31, 2003.


                                                                 Year Ended December 31,
                                                 ---------------------------------------------------------
                                                  2003         2002         2001         2000        1999
                                                 ------       ------       ------       ------      ------
                                                                   (Dollars in thousands)

<S>                                                   <C>          <C>                       <C>
Balance of allowance at beginning of period      $1,458       $1,132       $  760       $  440      $  285
   Recoveries .............................           6            4           --            1          --
Less charge-offs:
   Residential real estate loans ..........          60           --           --           --          --
   Consumer loans .........................          13           38           20           13           7
                                                 ------       ------       ------       ------      ------
Net charge-offs ...........................          67           34           20           12           7
Provisions for losses on loans ............         360          360          392          332         162
                                                 ------       ------       ------       ------      ------
Balance of allowance at end of period .....      $1,751       $1,458       $1,132       $  760      $  440
                                                 ======       ======       ======       ======      ======
   Net charge-offs to total average
      loans receivable for period .........         .06%         .03%         .02%         (*)         (*)
   Allowance at end of period to
      net loans receivable at end
      of period (1) .......................        1.68         1.30         1.00          .73         .47
   Allowance to total non-performing
      loans at end of period ..............      115.58        98.25        58.11       226.19       66.07

--------------------------
(1) Total loans less loans in process.
(*) Less than .01%.

</TABLE>
<TABLE>
<CAPTION>

     Allocation of Allowance for Loan Losses.  The following  table  presents an
analysis of the  allocation  of the  Company's  allowance for loan losses at the
dates indicated.


                                                                     At December 31,
                              --------------------------------------------------------------------------------------------
                                    2003               2002               2001              2000                1999
                              ----------------   -----------------  -----------------  -----------------  ----------------
                                      Percent            Percent            Percent            Percent            Percent
                                      of loans           of loans           of loans           of loans           of loans
                                      in each            in each            in each            in each            in each
                                      category           category           category           category           category
                                      of total           of total           of total           of total           of total
                              Amount    loans    Amount    loans    Amount    loans    Amount    loans    Amount    loans
                              ------  --------   ------  --------   ------  --------   ------  --------   ------  --------
                                                                  (Dollars in thousands)
<S>                           <C>       <C>      <C>       <C>      <C>       <C>        <C>     <C>      <C>       <C>
Balance at end of period
  applicable to:
Residential ............      $   37    49.10%   $   11    55.02%   $   16    56.25%     $ 12    59.73%   $  270    62.23%
Commercial real estate .         318    21.97       242    18.33       132    16.24       126    12.69         8    12.71
Multi-family ...........          36     1.05        62     1.43       100     1.60       100     1.96       117     2.27
Construction loans .....          --      .83        --     1.17        --     2.01        --     2.70        --     2.77
Commercial loans .......         546    12.40       352     9.74       316     8.44       180     6.80        --     4.41
Commercial leases ......          --     3.83        --     3.88        --     3.45        --     2.14        --     1.73
Consumer loans .........          67    10.82        47    10.43        27    12.01        15    13.98        45    13.88
Unallocated ............         747       --       744      --        541       --       327       --        --       --
                              ------   ------    ------   ------    ------   ------      ----   ------    ------   ------
  Total ................      $1,751   100.00%   $1,458   100.00%   $1,132   100.00%     $760   100.00%   $  440   100.00%
                              ======   ======    ======   ======    ======   ======      ====   ======    ======   ======

</TABLE>
<PAGE>


Investments and Mortgage- and Other Asset-Backed Securities

     Federally  chartered  savings  associations have the authority to invest in
various types of liquid assets, including U.S. Treasury obligations,  securities
of various federal  agencies,  certain  certificates of deposit of insured banks
and savings institutions,  repurchase agreements and federal funds sold. Subject
to various  restrictions,  federally  chartered  savings  associations  may also
invest a portion of their assets in corporate debt  securities and  asset-backed
securities.  The  investment  policy  of the  Bank,  which  is  established  and
implemented  by the  Bank's  Investment  Committee,  is  designed  primarily  to
maximize  the yield on the  investment  portfolio  subject to minimal  liquidity
risk,  default  risk  and  interest  rate  risk,  and  prudent   asset/liability
management.

     The  Company's  investments  consist of U.S.  government  and other  agency
securities  which are primarily  callable fixed rate notes,  mortgage- and other
asset-backed securities,  state and municipal bonds, corporate debt obligations,
marketable   equity   securities,   and  FHLB  stock.   At  December  31,  2003,
approximately $34.6 million, or 22.08% of the Company's total assets,  consisted
of such investments.

     At December 31, 2003,  the Company had $20.3 million of mortgage- and other
asset-backed securities  outstanding,  all of which were classified as available
for sale. These fixed-rate and adjustable-rate  mortgage- and other asset-backed
securities may be used as collateral for borrowings and through repayments, as a
source of liquidity.  Mortgage- and other  asset-backed  securities offer yields
above those available for investments of comparable credit quality and duration.
Mortgage-backed securities are qualifying thrift investments under the Qualified
Thrift Lender test. See "Regulation--Qualified Thrift Lender."

     The following  table sets forth the amortized  cost and market value of the
Company's  investments  and mortgage- and other  asset-backed  securities at the
dates indicated.

<TABLE>
<CAPTION>


                                                                    At December 31,
                                       ---------------------------------------------------------------------------
                                                  2003                      2002                      2001
                                       ------------------------ -------------------------- -----------------------
                                         Amortized      Market    Amortized       Market     Amortized      Market
                                            Cost        Value        Cost         Value         Cost        Value
                                       ------------    -------   -----------     --------   -----------    -------
                                                                       (In thousands)
Securities available for sale:
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
   Federal agencies ................      $ 8,867      $ 8,812      $ 3,051      $ 3,120      $ 1,900      $ 1,908
   State and municipal .............        3,074        3,212        3,028        3,232        2,789        2,901
   Mortgage- and other asset-backed
            securities .............       20,437       20,307       10,779       11,009        4,418        4,419
   Corporate debt obligations ......           --           --          907          983          710          731
   Marketable equity securities ....            4          218          504          725            4          248
                                          -------      -------      -------      -------      -------      -------
      Total securities available for
         sale ......................       32,382       32,549       18,269       19,069        9,821       10,207
FHLB stock (1) .....................        2,080        2,080        2,003        2,003        1,973        1,973
                                          -------      -------      -------      -------      -------      -------
      Total investments ............      $34,462      $34,629      $20,272      $21,072      $11,794      $12,180
                                          =======      =======      =======      =======      =======      =======

--------------------------------
(1) Market value approximates carrying values.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

The  following  table  sets forth  investment  securities,  mortgage-  and other
asset-backed  securities  and FHLB stock which mature during each of the periods
indicated  and the  weighted-average  yields  for each  range of  maturities  at
December 31, 2003.

                                                                   Amount at December 31, 2003, which matures in
                                              ------------------------------------------------------------------------------------
                                                      One                 One to               Five to                Over
                                                 Year or Less          Five Years             Ten Years           Ten Years (4)
                                              ------------------    ------------------    ------------------    ------------------
                                                        Weighted              Weighted              Weighted              Weighted
                                              Amortized  Average    Amortized  Average    Amortized  Average    Amortized  Average
                                                 Cost     Yield        Cost     Yield        Cost     Yield        Cost     Yield
                                              --------- --------    --------- --------    --------- --------    --------- --------
                                                                             (Dollars in thousands)
<S>                                             <C>        <C>       <C>        <C>        <C>         <C>       <C>         <C>
Securities available for sale (1)(3):
   Federal agencies ......................      $ 2,274    3.15%     $ 2,500    3.76       $ 3,343     4.70%     $   750     6.05%
   State and municipal (2) ...............          783    7.91          641    6.58         1,195     6.61          455     8.46
   Mortgage- and other asset-backed
     securities ..........................        3,857    3.20        7,796    3.47         4,070     3.59        4,714     3.58
   Corporate obligations .................           --      --           --      --            --       --           --       --
   Marketable equity securities ..........           --      --           --      --            --       --            4   102.17
                                                -------    ----      -------    ----       -------     ----      -------   ------
       Total securities available for sale        6,914               10,937                 8,608                 5,923     4.33
FHLB stock ...............................           --                                         --       --        2,080     4.86
                                                -------    ----      -------    ----       -------     ----      -------   ------
        Total investments ................      $ 6,914    3.72%     $10,937    3.72%      $ 8,608     4.44%     $ 8,003     4.47%
                                                =======    ====      =======    ====       =======     ====      =======   ======
-----------------------
(1)  Securities  available for sale are set forth at amortized cost for purposes
     of this table.
(2)  Fully taxable equivalent basis.
(3)  No  effect  is given  for  possible  prepayments  or  securities  which are
     callable.
(4)  Includes perpetual marketable equity securities.

</TABLE>


Sources of Funds

     General.  Deposits have  traditionally  been the Bank's  primary  source of
funds for use in lending and investment activities. In addition to deposits, the
Company derives funds from scheduled loan payments, loan prepayments, and income
on earning  assets.  While  scheduled loan payments and income on earning assets
are relatively  stable sources of funds,  deposit  inflows and outflows can vary
widely and are influenced by prevailing  interest rates,  market  conditions and
levels of competition. Borrowings from the FHLB of Indianapolis are also used to
compensate for reductions in deposits or deposit  inflows at less than projected
levels.

     Deposits.  Deposits  are  attracted,  principally  from within Cass County,
through the offering of a broad selection of deposit  instruments  including NOW
and other transaction accounts,  fixed-rate certificates of deposit,  individual
retirement accounts, and savings accounts. The Bank does not actively solicit or
advertise for deposits outside of Cass County.  Substantially  all of the Bank's
depositors are residents of that county.  Deposit  account terms vary,  with the
principal differences being the minimum balance required, the amount of time the
funds remain on deposit and the interest  rate.  The Bank does not pay a fee for
any deposits it receives.

     Deposits totaled $103.8 million at December 31, 2003.

     Interest rates paid, maturity terms,  service fees and withdrawal penalties
are  established  by the Bank on a periodic  basis.  Determination  of rates and
terms are predicated on funds acquisition and liquidity requirements, rates paid
by competitors, growth goals, and federal regulations. The Bank relies, in part,
on customer service and  long-standing  relationships  with customers to attract
and retain its  deposits,  but also  closely  prices its deposits in relation to
rates offered by its competitors.
<PAGE>

     The flow of  deposits  is  influenced  significantly  by  general  economic
conditions,   changes  in  money  market  and  prevailing  interest  rates,  and
competition.  The variety of deposit accounts offered by the Bank has allowed it
to be competitive in obtaining funds and to respond with  flexibility to changes
in  consumer  demand.  The  Bank  has  become  more  susceptible  to  short-term
fluctuations  in deposit  flows as  customers  have  become more  interest  rate
conscious.  The Bank  manages  the pricing of its  deposits in keeping  with its
asset/liability   management  and   profitability   objectives.   Based  on  its
experience,  the Bank believes that its passbook,  NOW and  non-interest-bearing
checking  accounts  are  relatively  stable  sources of deposits.  However,  the
ability of the Bank to attract and  maintain  certificates  of deposit,  and the
rates paid on these  deposits,  has been and will  continue to be  significantly
affected by market conditions.

     An analysis of the Bank's deposit accounts by type,  maturity,  and rate at
December 31, 2003, is as follows:


<TABLE>
<CAPTION>

                                          Minimum     Balance at                   Weighted
                                          Opening    December 31,      % of         Average
Type of Account                           Balance        2003        Deposits        Rate
---------------                         -----------  ------------    --------      --------
                           (Dollars in thousands)
<S>                                        <C>          <C>             <C>          <C>
Withdrawable:
   Passbook savings accounts ........      $    25      $ 4,635         4.47%        1.02%
   Regular money market accounts ....        2,500          651          .63          .59
   Hi yield money market accounts ...       10,000       19,536        18.83         1.12
   Super NOW accounts ...............        2,500       10,717        10.33          .97
   NOW and other transaction accounts          200        6,304         6.07          .43
   Non-interest bearing accounts ....          100        4,038         3.89           --
                                                       --------       ------         ----
Total withdrawable ..................                    45,881        44.22          .88%
Certificates (original terms):
   91 days ..........................        1,000        2,725         2.62         1.13
   6 months .........................        1,000        3,141         3.03         1.10
   12 months ........................        1,000        5,793         5.58         1.57
   18 months ........................          500        2,869         2.76         2.19
   24 months ........................          500        2,985         2.88         2.37
   30 months ........................          500       16,777        16.17         4.68
   36-60 months .....................        1,000       15,555        15.00         4.48
IRAs
   18 months ........................          100        8,031         7.74         3.51
                                                       --------       ------         ----
Total certificates ..................                    57,876        55.78         3.52
                                                       --------       ------         ----
Total deposits ......................                  $103,757       100.00%        2.35%
                                                       ========       ======         ====

</TABLE>


     The  following  table sets forth by various  interest rate  categories  the
composition of time deposits of the Bank at the dates indicated:


                               At December 31,
                       2003        2002         2001
                     -------      -------      -------
                              (In thousands)

4.00% and under      $28,616      $22,082      $ 8,157
4.01 - 6.00 % .       29,000       34,253       42,598
6.01 - 8.00% ..          260          269          888
                     -------      -------      -------
   Total ......      $57,876      $56,604      $51,643
                     =======      =======      =======

<PAGE>

     The following table  represents,  by various interest rate categories,  the
amounts of time  deposits  maturing  during  each of the three  years  following
December  31,  2003,  and  the  total  amount   maturing   thereafter.   Matured
certificates  which have not been  renewed as of December  31,  2003,  have been
allocated based upon certain rollover assumptions:

                                         Amounts At
                              December 31, 2003 Maturing in
                     --------------------------------------------------
                     One Year       Two         Three      Greater Than
                     or Less       Years        Years      Three Years
                     --------     -------      -------     ------------
                                     (In thousands)

4.00% and under      $19,934      $ 6,086      $   957      $ 1,639
4.01 - 6.00 % .        9,097        6,246        4,435        9,222
6.01 - 8.00% ..          230           30           --           --
                     -------      -------      -------      -------
         Total       $29,261      $12,362      $ 5,392      $10,861
                     =======      =======      =======      =======


     The  following  table  indicates the amount of the Bank's  certificates  of
deposit of greater than $100,000 by time remaining until maturity as of December
31, 2003.

        Maturity                                       (In thousands)
        --------                                       --------------

        Three months or less ........................      $2,794
        Greater than three months through six months        1,077
        Greater than six months through twelve months       2,025
        Over twelve months ..........................       3,959
                                                           ------
           Total ....................................      $9,855
                                                           ======

<PAGE>
<TABLE>
<CAPTION>


     The following  table sets forth the dollar amount of savings in the various
types of deposits  programs offered by the Bank at the dates indicated,  and the
amount of  increase or  decrease  in such  deposits as compared to the  previous
period.


                                                                   Deposit Activity
                                    --------------------------------------------------------------------------------
                                                                Increase                                  Increase
                                                               (Decrease)                                (Decrease)
                                     Balance at                   from        Balance at                    from
                                    December 31,      % of     December 31,  December 31,     % of      December 31,
                                        2003         Deposits     2002          2002        Deposits        2001
                                    ------------     --------  ------------  ------------   --------    ------------
                                                                  (Dollars in thousands)
<S>                                    <C>             <C>     <C>            <C>             <C>         <C>
Withdrawable:
   Passbook savings accounts ....      $  4,635        4.47%   $    354       $  4,281        4.35%       $    145
   Regular money market accounts            651         .63        (222)           873         .89             (69)
   Hi yield money market accounts        19,536       18.83       1,643         17,893       18.20           1,076
   Super NOW accounts ...........        10,717       10.33       1,418          9,299        9.46           8,337
   NOW accounts .................         6,304        6.07         (22)         6,326        6.43             269
   Non-interest bearing accounts          4,038        3.89         989          3,049        3.10            (294)
                                       --------      ------    --------       --------      ------        --------
Total withdrawable ..............        45,881       44.22       4,160         41,721       42.43           9,464
Certificates (original terms):
   91 days ......................         2,725        2.62         154          2,571        2.62           1,677
   6 months .....................         3,141        3.03        (854)         3,995        4.06             256
   12 months ....................         5,793        5.58      (3,263)         9,056        9.21          (4,335)
   18 months ....................         2,869        2.76      (2,680)         5,549        5.64          (2,015)
   24 months ....................         2,985        2.88        (484)         3,469        3.53          (1,506)
   30 months ....................        16,777       16.17        (428)        17,205       17.50           5,526
   More than 30 months ..........        15,555       15.00       7,745          7,810        7.94           4,440
IRAs
   18 months ....................         8,031        7.74       1,082          6,949        7.07             918
                                       --------      ------    --------       --------      ------        --------
Total certificates ..............        57,876       55.78       1,272         56,604       57.57           4,961
                                       --------      ------    --------       --------      ------        --------
Total deposits ..................      $103,757      100.00%   $  5,432       $ 98,325      100.00%       $ 14,425
                                       ========      ======    ========       ========      ======        ========


                                               Deposit Activity
                                    ---------------------------------------
                                                                Increase
                                                               (Decrease)
                                     Balance at                   from
                                    December 31,      % of     December 31,
                                        2001         Deposits     2000
                                    ------------     --------  ------------
                                            (Dollars in thousands)
Withdrawable:
   Passbook savings accounts ....      $ 4,136          4.93%    $  658
   Regular money market accounts           942          1.12        (99)
   Hi yield money market accounts       16,817         20.04      2,035
   Super NOW accounts ...........          962          1.15        348
   NOW accounts .................        6,057          7.22        591
   Non-interest bearing accounts         3,343          3.99         66
                                       -------         -----     ------
Total withdrawable ..............       32,257         38.45      3,599
Certificates (original terms):
   91 days ......................          894          1.06        226
   6 months .....................        3,739          4.46     (4,200)
   12 months ....................       13,391         15.96     (6,439)
   18 months ....................        7,564          9.01      6,301
   24 months ....................        4,975          5.93     (2,280)
   30 months ....................       11,679         13.92      6,254
   More than 30 months ..........        3,370          4.02        144
IRAs
   18 months ....................        6,031          7.19        841
                                       -------         -----     ------
Total certificates ..............       51,643         61.55        847
                                       -------         -----     ------
Total deposits ..................      $83,900        100.00%    $4,446
                                       =======         =====     ======

</TABLE>
<PAGE>

     Borrowings.  The Bank focuses on  generating  high  quality  loans and then
seeks the best source of funding from deposits, investments or borrowings. There
are  regulatory  restrictions  on advances from the FHLBs.  See  "Regulation  --
Federal Home Loan Bank System" and "-- Qualified Thrift Lender." At December 31,
2003, the Company had $3.0 million in borrowings  from the FHLB of  Indianapolis
which mature  within one year and $31.0 million which mature in greater than one
year. The  weighted-average  interest rate related to these borrowings was 5.47%
at December  31,  2003.  The  Company  does not  anticipate  any  difficulty  in
obtaining  advances  appropriate  to meet its  requirements  in the  future.  At
December 31, 2003, notes payable  consisted of borrowings  secured by the Bank's
investment in a real estate  partnership which will mature in 2009. The interest
rate on the variable rate  borrowing was 1.66% at December 31, 2003.  During the
year ended December 31, 2003, the Corporation borrowed an additional $200,000 on
a line of credit  with  another  financial  institution  to finance  corporation
dividends.  The Corporation can borrow up to $1.5 million on the line of credit,
which is payable at October 3, 2004.  Interest is payable quarterly at a rate of
3.50%,  which  represents  national prime less .50%. The balance at December 31,
2003, was $900,000.


Employees

     As of  December  31,  2003,  the  Bank  employed  twenty-two  persons  on a
full-time  basis  and one  person  on a  part-time  basis.  None  of the  Bank's
employees are represented by a collective bargaining group. Management considers
its employee relations to be excellent.

     The Bank's employee benefits for full-time  employees include,  among other
things,  a defined  benefit  pension  plan, a 401(k) plan and major  medical and
long-term disability insurance.

     Employee benefits are considered by management to be competitive with those
offered by other financial institutions and major employers in the Bank's market
area. See "Executive Compensation and Related Transactions."


Competition

     The Bank  operates in North  Central  Indiana  and makes  almost all of its
loans to and  accepts  most of its  deposits  from  residents  of Cass County in
Indiana.

     The Bank is subject to  competition  from various  financial  institutions,
including  state and national  banks,  state and federal  savings  institutions,
credit unions,  certain  non-banking  consumer  lenders,  and other companies or
firms,  including  brokerage houses and mortgage  brokers,  that provide similar
services in Cass County.  The Bank must also compete with money market funds and
with insurance companies with respect to its individual retirement accounts. See
"Regulation--Acquisitions or Dispositions and Branching."

     The primary  factors in  competing  for  deposits  are  interest  rates and
convenience  of  office  locations.  The Bank  competes  for  loan  originations
primarily  through the efficiency and quality of services it provides  borrowers
and through interest rates and loan fees it charges. Competition is affected by,
among other things,  the general  availability  of lendable  funds,  general and
local economic conditions, current interest rate levels, and other factors which
are not readily predictable.


                                   REGULATION
General

     The Bank, as a federally chartered savings bank, is a member of the Federal
Home Loan Bank System ("FHLB  System").  Its deposits are insured by the Federal
Deposit  Insurance  Corporation  ("FDIC")  and it is a  member  of  the  Savings
Association Insurance Fund (the "SAIF"),  which is administered by the FDIC. The
Bank is subject to extensive regulation by the OTS. Federal associations may not
enter into certain  transactions unless certain regulatory tests are met or they
obtain prior  governmental  approval and the associations must file reports with
the  OTS  about  their  activities  and  their  financial  condition.   Periodic
compliance  examinations  of the Bank are  conducted  by the OTS which  has,  in
conjunction  with the FDIC in certain  situations,  examination  and enforcement
powers.   This  supervision  and  regulation  are  intended  primarily  for  the
protection of depositors  and the federal  deposit  insurance  fund. The Bank is
also subject to certain reserve  requirements  under regulations of the Board of
Governors of the Federal Reserve System ("FRB").

     An OTS  regulation  establishes a schedule for the  assessment of fees upon
all savings  associations to fund the operations of the OTS. The regulation also
establishes a schedule of fees for the various types of applications and filings
made by savings associations with the OTS. The general assessment, to be paid on
a  semiannual  basis,  is based upon the  savings  association's  total  assets,
including  consolidated  subsidiaries,  as reported in a recent quarterly thrift
financial report. The Bank's semiannual assessment under this assessment scheme,
based upon its total assets at December 31, 2003, was approximately $22,000.
<PAGE>

     The Bank is also subject to federal and state regulation as to such matters
as loans to officers,  directors, or principal shareholders,  required reserves,
limitations as to the nature and amount of its loans and investments, regulatory
approval of any merger or  consolidation,  issuances or  retirements  of its own
securities,  and  limitations  upon  other  aspects of  banking  operations.  In
addition,  the  activities and operations of the Bank are subject to a number of
additional  detailed,  complex and sometimes  overlapping federal and state laws
and regulations.  These include state usury and consumer credit laws, state laws
relating to fiduciaries,  the Federal Truth-In-Lending Act and Regulation Z, the
Federal Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting
Act, the Community  Reinvestment Act,  anti-redlining  legislation and antitrust
laws.


Holding Company Regulation

     The Holding Company is regulated as a "non-diversified  unitary savings and
loan  holding  company"  within the  meaning of the Home  Owners'  Loan Act,  as
amended  ("HOLA"),  and subject to  regulatory  oversight of the Director of the
OTS. As such, the Holding Company is registered with the OTS and thereby subject
to OTS regulations,  examinations,  supervision and reporting requirements. As a
subsidiary of a savings and loan holding company, the Bank is subject to certain
restrictions  in its dealings with the Holding  Company and with other companies
affiliated with the Holding Company.

     The  Holding  Company  currently  operates  as a unitary  savings  and loan
holding company.  Prior to the enactment of the Gramm-Leach-Bliley Act (the "GLB
Act") on  November  12,  1999,  there were no  restrictions  on the  permissible
business  activities of a unitary savings and loan holding company.  The GLB Act
included a provision  that  prohibits  any new unitary  savings and loan holding
company,  defined as a company that  acquires a thrift  after May 4, 1999,  from
engaging in commercial  activities.  This  provision also includes a grandfather
clause,  however,  that  permits a company  that was a savings and loan  holding
company as of May 4, 1999,  or had an  application  to become a savings and loan
holding company on file with the OTS as of that date, to acquire and continue to
control a thrift and to continue to engage in commercial activities. Because the
Holding Company qualifies under this grandfather provision,  the GLB Act did not
affect  the  Holding  Company's  authority  to  engage in  diversified  business
activities.

     Notwithstanding  the above rules as to permissible  business  activities of
unitary  savings  and  loan  holding  companies,   if  the  savings  association
subsidiary of such a holding  company fails to meet the Qualified  Thrift Lender
("QTL")  test,  then such unitary  holding  company would be deemed to be a bank
holding company subject to all of the provisions of the Bank Holding Company Act
of 1956 and other  statutes  applicable to bank holding  companies,  to the same
extent as if the Holding Company were a bank holding company and the Bank were a
bank.  See  "-Qualified  Thrift  Lender." At December 31, 2003, the Bank's asset
composition  was in excess of that  required  to qualify as a  Qualified  Thrift
Lender.

     If  the  Holding  Company  were  to  acquire  control  of  another  savings
institution  other than through a merger or other business  combination with the
Bank, the Holding  Company would  thereupon  become a multiple  savings and loan
holding  company.  Except where such acquisition is pursuant to the authority to
approve  emergency  thrift   acquisitions  and  where  each  subsidiary  savings
association meets the QTL test, the activities of the Holding Company and any of
its subsidiaries (other than the Bank or other subsidiary savings  associations)
would  thereafter be subject to further  restrictions.  The HOLA provides  that,
among other things,  no multiple  savings and loan holding company or subsidiary
thereof  which is not a savings  association  shall  commence or continue  for a
limited  period of time  after  becoming  a multiple  savings  and loan  holding
company or subsidiary  thereof,  any business activity other than (i) furnishing
or performing  management  services for a subsidiary savings  association,  (ii)
conducting an insurance agency or escrow business,  (iii) holding,  managing, or
liquidating assets owned by or acquired from a subsidiary  savings  institution,
(iv) holding or managing  properties  used or occupied by a  subsidiary  savings
institution,  (v) acting as trustee under deeds of trust,  (vi) those activities
in which  multiple  savings  and loan  holding  companies  were  authorized  (by
regulation)  to directly  engage on March 5, 1987,  to be engaged in by multiple
holding companies or (vii) those activities authorized by the FRB as permissible
for  bank  holding  companies,  unless  the  Director  of the OTS by  regulation
prohibits  or limits such  activities  for savings and loan  holding  companies.
Those activities  described in (vii) above must also be approved by the Director
of the OTS prior to being  engaged in by a  multiple  savings  and loan  holding
company.
<PAGE>

Federal Home Loan Bank System

     The Bank is a member of the FHLB  system,  which  consists  of 12  regional
banks.  The Federal  Housing  Finance Board  ("FHFB"),  an  independent  agency,
controls the FHLB System,  including the FHLB of  Indianapolis.  The FHLB System
provides a central credit facility primarily for member financial  institutions.
At December 31, 2003, the Bank's investment in stock of the FHLB of Indianapolis
was  $2,080,000.  For the  fiscal  year ended  December  31,  2003,  the FHLB of
Indianapolis paid approximately $100,000 in dividends to the Bank.

     All 12 FHLB's are required to provide funds to establish affordable housing
programs through direct loans or interest subsidies on advances to members to be
used for  lending at  subsidized  interest  rates for  low-and  moderate-income,
owner-occupied  housing projects,  affordable rental housing,  and certain other
community  projects.  These contributions and obligations could adversely affect
the value of FHLB stock in the future.  A  reduction  in the value of such stock
may result in a corresponding reduction in the Bank's capital.

     The FHLB of Indianapolis serves as a reserve or central bank for its member
institutions.  It is funded  primarily  from  proceeds  derived from the sale of
consolidated  obligations  of the FHLB System.  It makes  advances to members in
accordance with policies and procedures established by the FHLB and the Board of
Directors of the FHLB of Indianapolis.

     All FHLB  advances  must be  fully  secured  by  sufficient  collateral  as
determined by the FHLB.  Eligible  collateral  includes first mortgage loans not
more  than  90 days  delinquent  or  securities  evidencing  interests  therein,
securities (including mortgage-backed  securities) issued, insured or guaranteed
by the federal government or any agency thereof, cash or FHLB deposits,  certain
small business and  agricultural  loans of smaller  institutions and real estate
with readily  ascertainable  value in which a perfected security interest may be
obtained.  Other forms of collateral may be accepted as additional  security or,
under  certain  circumstances,  to renew  outstanding  advances.  All  long-term
advances are required to provide funds for  residential  home  financing and the
FHLB has  established  standards of community  service that members must meet to
maintain access to long-term advances.

     Interest rates charged for advances vary depending upon maturity,  the cost
of funds to the FHLB of Indianapolis and the purpose of the borrowing.


Federal Reserve System

     Under FRB  regulations,  the Bank is required to maintain  reserves against
its transaction  accounts (primarily checking and NOW accounts) and non-personal
money market deposit  accounts.  The effect of these reserve  requirements is to
increase the Bank's cost of funds.  The Bank is in  compliance  with its reserve
requirements.

     A federal  savings bank,  like other  depository  institutions  maintaining
reservable accounts, may borrow from the Federal Reserve Bank "discount window,"
but the FRB's  regulations  require the savings bank to exhaust other reasonable
alternative  sources,   including  borrowing  from  its  regional  FHLB,  before
borrowing from the Federal Reserve Bank. Certain  limitations are imposed on the
ability of  undercapitalized  depository  institutions  to borrow  from  Federal
Reserve Banks.


Insurance of Deposits

     The  FDIC  administers  two  separate   insurance  funds,   which  are  not
commingled:  one primarily for federally insured banks ("BIF") and one primarily
for federally insured savings associations  ("SAIF").  As the federal insurer of
deposits of savings institutions, the FDIC determines whether to grant insurance
to  newly-chartered  savings  institutions,  has authority to prohibit unsafe or
unsound activities and has enforcement powers over savings institutions (usually
in  conjunction  with  the  OTS or on its  own if the  OTS  does  not  undertake
enforcement action).

     Deposit  accounts  in the Bank are  insured by the SAIF  within  prescribed
statutory limits which generally provide a maximum of $100,000 coverage for each
insured  account.  As a condition to such  insurance,  the FDIC is authorized to
issue  regulations and, in conjunction  with the OTS,  conduct  examinations and
generally supervise the operations of its insured members.
<PAGE>

     The FDIC's  deposit  insurance  premiums are assessed  through a risk-based
system under which all insured  depository  institutions  are placed into one of
nine  categories  and  assessed  insurance  premiums  based upon their  level of
capital and supervisory evaluation. Under the system, institutions classified as
well-capitalized (i.e. a core capital ratio of at least 5%, a ratio of Tier 1 or
core capital to risk-weighted  assets ("Tier 1 risk-based  capital") of at least
6% and a total risk-based  capital ratio of at least 10%) pay the lowest premium
while institutions that are less than adequately  capitalized (i.e. core or Tier
1 risk-based  capital ratio of less than 4% or a total risk-based  capital ratio
of less than 8%) and  considered  of  substantial  supervisory  concern  pay the
highest premium.  Risk classification of all insured institutions is made by the
FDIC semi-annually.

     In addition to the assessment for deposit insurance,  savings  institutions
are  required  to  pay on  bonds  issued  in the  late  1980s  by the  Financing
Corporation to  recapitalize  the  predecessor to the SAIF. By law,  payments on
Financing  Corporation  obligations have been shared equally between the members
of both  insurance  funds  since  January 1, 2000.  The  Bank's  annual  deposit
insurance premium for the year ended December 31, 2003,  including the Financing
Corporation  payments,  was  approximately  $15,600  based upon its current risk
classification  and the new assessment  schedule for SAIF insured  institutions.
These premiums are subject to change in future periods.

     The FDIC is authorized to increase assessment rates, on a semiannual basis,
if it  determines  that the  reserve  ratio of the  SAIF  will be less  than the
designated  reserve  ratio of 1.25% of SAIF insured  deposits.  In setting these
increased  assessments,  the FDIC must seek to restore the reserve ratio to that
designed reserve level, or such higher reserve ratio as established by the FDIC.
The FDIC may also impose  special  assessments  on SAIF members to repay amounts
borrowed  from  the  United  States  Treasury  or for any  other  reason  deemed
necessary by the FDIC.


Regulatory Capital

     Currently,  savings  associations  are  subject to three  separate  minimum
capital-to-assets  requirements:  (i) a leverage limit,  (ii) a tangible capital
requirement,  and  (iii) a  risk-based  capital  requirement.  The OTS  requires
savings  associations that receive the highest supervisory rating for safety and
soundness to maintain "core  capital" of at least 3% of total assets.  All other
savings  associations must maintain core capital of at least 4% of total assets.
Core  capital is generally  defined as common  shareholders'  equity  (including
retained income),  noncumulative  perpetual preferred stock and related surplus,
certain  minority  equity  interests  in  subsidiaries,  qualifying  supervisory
goodwill,   purchased  mortgage  servicing  rights  and  purchased  credit  card
relationships (subject to certain limits) less nonqualifying intangibles.  Under
the tangible capital  requirement,  a savings association must maintain tangible
capital  (core capital less all  intangible  assets  except  purchased  mortgage
servicing  rights which may be included after making the above-noted  adjustment
in an amount up to 100% of tangible  capital) of at least 1.5% of total  assets.
Under the risk-based capital  requirements,  a minimum amount of capital must be
maintained by a savings  association  to account for the relative risks inherent
in the type and amount of assets held by the savings association. The risk-based
capital requirement  requires a savings association to maintain capital (defined
generally for these purposes as core capital plus general  valuation  allowances
and  permanent  or maturing  capital  instruments  such as  preferred  stock and
subordinated  debt  less  assets  required  to be  deducted)  equal  to  8.0% of
risk-weighted  assets.  Assets are  ranked as to risk in one of four  categories
(0-100%).  A credit  risk-free  asset,  such as  cash,  requires  no  risk-based
capital,  while an asset with a significant  credit risk,  such as a non-accrual
loan,  requires a risk  factor of 100%.  Moreover,  a savings  association  must
deduct from capital, for purposes of meeting the core capital,  tangible capital
and risk-based  capital  requirements,  its entire  investment in and loans to a
subsidiary engaged in activities not permissible for a national bank (other than
exclusively   agency   activities   for  its   customers  or  mortgage   banking
subsidiaries). At December 31, 2003, the Bank was in compliance with all capital
requirements imposed by law.

     If an association is not in compliance with its capital  requirements,  the
OTS is required to prohibit asset growth and to impose a capital  directive that
may  restrict,  among other  things,  the  payment of  dividends  and  officers'
compensation. In addition, the OTS and the FDIC generally are authorized to take
enforcement actions against a savings association that fails to meet its capital
requirements.  These actions may include restricting the operating activities of
the association,  imposing a capital directive, cease and desist order, or civil
money  penalties,  or imposing harsher measures such as appointing a receiver or
conservator or forcing the association to merge into another institution.
<PAGE>

Prompt Corrective Action

     The Federal  Deposit  Insurance  Corporation  Improvement  Act of 1991,  as
amended ("FedICIA")  requires,  among other things, that federal bank regulatory
authorities take "prompt corrective action" with respect to institutions that do
not meet minimum capital requirements.  For these purposes,  FedICIA establishes
five capital tiers: well capitalized, adequately capitalized,  undercapitalized,
significantly undercapitalized, and critically undercapitalized. At December 31,
2003,  the Bank was  categorized as "well  capitalized,"  meaning that its total
risk-based  capital  ratio  exceeded  10%, its Tier I risk-based  capital  ratio
exceeded  6%,  its  leverage  ratio  exceeded  5%,  and it was not  subject to a
regulatory order, agreement or directive to meet and maintain a specific capital
level for any capital measure.

     The FDIC may order savings  associations which have insufficient capital to
take corrective actions. For example, a savings association which is categorized
as  "undercapitalized"  would be  subject  to  growth  limitations  and would be
required  to submit a capital  restoration  plan,  and a  holding  company  that
controls  such a savings  association  would be required to  guarantee  that the
savings   association   complies  with  the  restoration  plan.   "Significantly
undercapitalized"   savings   associations   would  be  subject  to   additional
restrictions.  Savings  associations  deemed  by  the  FDIC  to  be  "critically
undercapitalized"  would  be  subject  to  the  appointment  of  a  receiver  or
conservator.
<PAGE>


Capital Distributions Regulation

     An OTS regulation imposes  limitations upon all "capital  distributions" by
savings  institutions,  including cash dividends,  payments by an institution to
repurchase or otherwise acquire its shares,  payments to shareholders of another
institution  in a  cash-out  merger  and  other  distributions  charged  against
capital.  The OTS  regulations  permit a savings  institution  to make a capital
distribution  to its  shareholders  in a maximum amount that does not exceed the
institution's  undistributed  net income for the prior two years plus the amount
of its  undistributed  income for the current year.  The rule requires a savings
institution,  such as the  Bank,  that is a  subsidiary  of a  savings  and loan
holding  company  to file a notice  with the OTS  thirty  days  before  making a
capital distribution up to the maximum amount described above. The proposed rule
would also require all savings  institutions,  whether a holding company or not,
to file an  application  with the OTS prior to making any  capital  distribution
where the association is not eligible for "expedited  processing"  under the OTS
"Expedited  Processing  Regulation," where the proposed  distribution,  together
with any other  distributions  made in the same year,  would exceed the "maximum
amount"  described  above,  where  the  institution  would be under  capitalized
following the distribution or where the distribution would otherwise be contrary
to a statute, regulation or agreement with the OTS.

     In addition to these regulatory restrictions, the Bank's Plan of Conversion
imposed  additional  limitations on the amount of capital  distributions  it may
make to the Holding Company.  The Plan of Conversion by which the Bank converted
from the  mutual to the  stock  form of  ownership  (the  "Plan of  Conversion")
required  the Bank to  establish  and  maintain a  liquidation  account  for the
benefit of Eligible  Account Holders and  Supplemental  Eligible Account Holders
(as those terms are defined in the Plan of  Conversion)  and  prohibits the Bank
from making capital  distributions to the Holding Company if its net worth would
be reduced below the amount required for the liquidation account.


Limitations on Rates Paid for Deposits

     Regulations  promulgated  by the FDIC place  limitations  on the ability of
insured  depository  institutions  to  accept,  renew or roll over  deposits  by
offering  rates of interest which are  significantly  higher than the prevailing
rates of interest on deposits offered by other insured  depository  institutions
having the same type of charter in the  institution's  normal market area. Under
these regulations,  "well-capitalized" depository institutions may accept, renew
or  roll  such  deposits  over  without  restriction,  "adequately  capitalized"
depository  institutions  may accept,  renew or roll such  deposits  over with a
waiver from the FDIC (subject to certain  restrictions on payments of rates) and
"undercapitalized"  depository  institutions may not accept,  renew or roll such
deposits  over.  The  regulations  contemplate  that  the  definitions  of "well
capitalized,"  "adequately  capitalized" and "undercapitalized" will be the same
as the  definition  adopted by the agencies to implement the  corrective  action
provisions  of FedICIA.  The Bank does not believe that these  regulations  will
have a materially adverse effect on its current operations.


Loans to One Borrower

     Under OTS  regulations,  the Bank may not make a loan or extend credit to a
single or related group of borrowers in excess of 15% of its unimpaired  capital
and surplus.  Additional amounts may be lent, not in excess of 10% of unimpaired
capital and surplus,  if such loans or extensions of credit are fully secured by
readily marketable collateral,  including certain debt and equity securities but
not including real estate.  In some cases, a savings  association may lend up to
30 percent of  unimpaired  capital and surplus to one  borrower  for purposes of
developing domestic residential housing, provided that the association meets its
regulatory  capital  requirements  and the OTS authorizes the association to use
this expanded lending authority. At December 31, 2003, the Bank did not have any
loans or  extensions  of credit to a single or  related  group of  borrowers  in
excess  of  its   lending   limits.   The  Bank  does  not   believe   that  the
loans-to-one-borrower  limits  will have a  significant  impact on its  business
operations or earnings.


Qualified Thrift Lender

     Savings  associations must meet a QTL test that requires the association to
maintain  an  appropriate  level  of  qualified  thrift   investments   ("QTIs")
(primarily  residential  mortgages and related  investments,  including  certain
mortgage-related  securities)  and  otherwise  to qualify as a QTL. The required
percentage  of QTIs is 65% of  portfolio  assets  (defined  as all assets  minus
intangible  assets,  property used by the association in conducting its business
and liquid assets equal to 10% of total assets). Certain assets are subject to a
percentage  limitation  of  20%  of  portfolio  assets.  In  addition,   savings
associations may include shares of stock of the FHLBs,  FNMA, and FHLMC as QTIs.
Compliance  with the QTL test is  determined  on a monthly  basis in nine out of
every twelve months.
<PAGE>

     A savings  association which fails to meet the QTL test must either convert
to a bank (but its deposit  insurance  assessments and payments will be those of
and paid to SAIF) or be subject to the following penalties: (i) it may not enter
into any new activity except for those permissible for a national bank and for a
savings association;  (ii) its branching activities shall be limited to those of
a  national  bank;  and  (iii) it shall be bound by  regulations  applicable  to
national banks  respecting  payment of dividends.  Three years after failing the
QTL  test the  association  must  dispose  of any  investment  or  activity  not
permissible  for a national  bank and a savings  association.  If such a savings
association  is  controlled  by a savings and loan  holding  company,  then such
holding company must,  within a prescribed time period,  become  registered as a
bank holding company and become subject to all rules and regulations  applicable
to bank holding companies (including restrictions as to the scope of permissible
business activities).

     A savings  association  failing to meet the QTL test may requalify as a QTL
if it  thereafter  meets the QTL test. In the event of such  requalification  it
shall not be subject to the penalties  described  above.  A savings  association
which  subsequently  again  fails to  qualify  under the QTL test  shall  become
subject to all of the described  penalties  without  application  of any waiting
period.

     At December 31, 2003,  81.03% of the Bank's portfolio assets (as defined on
that date) were  invested in qualified  thrift  investments  (as defined on that
date), and therefore the Bank's asset composition was in excess of that required
to qualify the Bank as a QTL.  Also,  the Bank does not expect to  significantly
change its lending or investment activities in the near future. The Bank expects
to continue to qualify as a QTL, although there can be no such assurance.


Acquisitions or Dispositions and Branching

     The  Bank  Holding  Company  Act  specifically  authorizes  a bank  holding
company, upon receipt of appropriate regulatory approvals, to acquire control of
any savings association or holding company thereof wherever located.  Similarly,
a savings and loan  holding  company may  acquire  control of a bank.  Moreover,
federal  savings  associations  may  acquire  or  be  acquired  by  any  insured
depository  institution.   Regulations  promulgated  by  the  FRB  restrict  the
branching authority of savings associations  acquired by bank holding companies.
Savings  associations  acquired by bank  holding  companies  may be converted to
banks if they continue to pay SAIF premiums,  but as such they become subject to
branching and activity restrictions applicable to banks.

     Subject  to  certain  exceptions,  commonly  controlled  banks and  savings
associations  must reimburse the FDIC for any losses suffered in connection with
a failed  bank or  savings  association  affiliate.  Institutions  are  commonly
controlled  if one is owned by another or if both are owned by the same  holding
company.  Such claims by the FDIC under this provision are subordinate to claims
of depositors,  secured creditors,  and holders of subordinated debt, other than
affiliates.

     The OTS has adopted  regulations which permit  nationwide  branching to the
extent  permitted by federal  statute.  Federal  statutes permit federal savings
associations to branch outside of their home state if the association  meets the
domestic building and loan test in  Section7701(a)(19)  of the Code or the asset
composition test of Section7701(c)  of the Code.  Branching that would result in
the formation of a multiple savings and loan holding company controlling savings
associations  in more  than one  state is  permitted  if the law of the state in
which the savings association to be acquired is located specifically  authorizes
acquisitions   of  its   state-chartered   associations   by  state-   chartered
associations  or their  holding  companies  in the  state  where  the  acquiring
association or holding company is located.  Moreover,  Indiana banks and savings
associations   are   permitted  to  acquire  other  Indiana  banks  and  savings
associations and to establish branches throughout Indiana.

     The  Director of the OTS may also  approve  acquisitions  resulting  in the
formation of a multiple  savings and loan holding company which controls savings
associations  in more than one state,  if the multiple  savings and loan holding
company involved controls a savings  association which operated a home or branch
office in the state of the  association  to be acquired as of March 1987,  or if
the  laws of the  state in which  the  institution  to be  acquired  is  located
specifically permit institutions to be acquired by state-chartered  institutions
or savings and loan holding  companies  located in the state where the acquiring
entity is located (or by a holding  company that controls  such  state-chartered
savings institutions).  Also, the Director of the OTS may approve an acquisition
resulting in a multiple  savings and loan holding  company  controlling  savings
associations  in more than one  state in the case of  certain  emergency  thrift
acquisitions.

     Indiana law permits federal and state savings association holding companies
with  their  home  offices   located  outside  of  Indiana  to  acquire  savings
associations  whose home offices are located in Indiana and savings  association
holding  companies with their principal  place of business in Indiana  ("Indiana
Savings  Association Holding Companies") upon receipt of approval by the Indiana
Department of Financial  Institutions.  Moreover,  Indiana  Savings  Association
Holding  Companies  may acquire  savings  associations  with their home  offices
located outside of Indiana and savings associations holding companies with their
principal place of business  located outside of Indiana upon receipt of approval
by the Indiana Department of Financial Institutions.
<PAGE>

     Finally, The Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Riegle-Neal  Act") permits bank holding companies to acquire banks in
other states and, with state consent and subject to certain limitations,  allows
banks  to  acquire  out-of-state  branches  either  through  merger  or de  novo
expansion.  The State of Indiana  enacted  legislation  establishing  interstate
branching  provisions for Indiana  state-chartered  banks  consistent with those
established by the Riegle-Neal Act (the "Indiana  Branching  Law").  The Indiana
Branching  Law,  which became  effective in 1996,  authorizes  Indiana  banks to
branch   interstate  by  merger  or  de  novo  expansion,   provided  that  such
transactions  are not permitted to  out-of-state  banks unless the laws of their
home  states  permit  Indiana  banks to merge or  establish  de novo  banks on a
reciprocal basis.


Transactions with Affiliates

     The Bank and Holding Company are subject to Sections 22(h),  23A and 23B of
the Federal Reserve Act, which restrict financial transactions between banks and
affiliated companies.  The statute limits credit transactions between a bank and
its executive  officers and its affiliates,  prescribes terms and conditions for
bank affiliate  transactions deemed to be consistent with safe and sound banking
practices,   and  restricts  the  types  of  collateral  security  permitted  in
connection with a bank's extension of credit to an affiliate.


Federal Securities Law

     The shares of Common Stock of the Holding  Company are registered  with the
Securities and Exchange  Commission (the "Commission")  under the Securities and
Exchange  Act of 1934,  as amended  (the "1934  Act").  The  Holding  Company is
subject to the information, proxy solicitation, insider trading restrictions and
other  requirements of the 1934 Act and the rules of the SEC thereunder.  If the
Holding Company has fewer than 300 shareholders of record, it may deregister the
shares under the 1934 Act and cease to be subject to the foregoing requirements.

     Shares of Common  Stock held by persons who are  affiliates  of the Holding
Company may not be resold without  registration  unless sold in accordance  with
the resale  restrictions of Rule 144 under the Securities Act of 1933 (the "1933
Act"). If the Holding Company meets the current public information  requirements
under Rule 144,  each  affiliate of the Holding  Company who  complies  with the
other conditions of Rule 144 (including  conditions that require the affiliate's
sale to be aggregated with those of certain other persons) would be able to sell
in the public market, without registration, a number of shares not to exceed, in
any three-month  period,  the greater of (i) 1% of the outstanding shares of the
Holding  Company or (ii) the  average  weekly  volume of trading in such  shares
during the preceding four calendar weeks.


Community Reinvestment Act Matters

     Federal law requires  that  ratings of  depository  institutions  under the
Community Reinvestment Act of 1977 ("CRA") be disclosed. The disclosure includes
both a four-unit descriptive rating -- outstanding, satisfactory, unsatisfactory
and  needs  improvement  --  and a  written  evaluation  of  each  institution's
performance.   Each  FHLB  is  required  to  establish  standards  of  community
investment  or service that its members must  maintain for  continued  access to
long-term  advances from the FHLBs.  The standards  take into account a member's
performance  under the CRA and its record of lending to first-time  home buyers.
The OTS examiners have  determined  that the Bank has a  satisfactory  record of
meeting community credit needs.


Recent Legislative Developments

     On   November   12,   1999,   President   Clinton   signed   into  law  the
Gramm-Leach-Bliley  Financial  Services  Modernization  Act of  1999  -  federal
legislation which modernizes the laws governing the financial services industry.
The new law establishes a comprehensive  framework to permit  affiliations among
commercial  banks,  insurance  companies,  securities  firms and other financial
service providers. As a result of this legislation,  bank holding companies will
be permitted to engage in a wider variety of financial activities than permitted
under  prior  law,   particularly  with  respect  to  insurance  and  securities
activities.  To the extent the law permits banks, securities firms and insurance
companies to affiliate,  the financial  services industry may experience further
consolidation.  This  could  result  in a growing  number  of  larger  financial
institutions that offer wider varieties of financial services than are currently
offered by the  Company  and that  could  aggressively  compete  in the  markets
currently served by the Company. The statute  grandfathered the Company's status
as a unitary  savings and loan  holding  company and its  authority to engage in
commercial  activities.  The  legislation  also provides,  however,  that only a
company engaged in those  activities that are permissible for a multiple savings
and loan  holding  company or for a  financial  holding  company  may  acquire a
unitary  savings and loan  holding  company  through a merger or other  business
combination.  This  provision  likely  could  reduce  the  number  of  potential
acquirors of the Company.  The law also  increases  commercial  banks' access to
loan funding by the Federal Home Loan Bank System,  and includes new  provisions
in the privacy area,  restricting the ability of financial institutions to share
nonpublic personal customer information with third parties.
<PAGE>

     On October 26, 2001, President Bush signed the USA Patriot Act of 2001 (the
"Patriot  Act").  The Patriot Act is intended to strengthen  the ability of U.S.
Law Enforcement to combat terrorism on a variety of fronts. The potential impact
of the Patriot Act on financial  institutions is significant  and  wide-ranging.
The  Patriot  Act  contains   sweeping   anti-money   laundering  and  financial
transparency laws and requires  financial  institutions to implement  additional
policies and  procedures  with respect to, or  additional  measures  designed to
address,  any or all the  following  matters,  among others:  money  laundering,
suspicious activities and currency transaction  reporting,  and currency crimes.
In addition,  financial  institutions  are required  under this statute to adopt
reasonable  procedures  to verify the identity of any person  seeking to open an
account and maintain records to verify such person's identity.

     On July 30, 2002,  President Bush signed into law the Sarbanes-Oxley Act of
2002  (the   "Sarbanes-Oxley   Act").  The   Sarbanes-Oxley   Act  represents  a
comprehensive  revision  of  laws  affecting  corporate  governance,  accounting
obligations and corporate  reportings.  The  Sarbanes-Oxley Act is applicable to
all companies  with equity or debt  securities  registered  under the Securities
Exchange Act of 1934. In particular, the Sarbanes-Oxley Act establishes: (i) new
requirements  for  audit  committees,  including  independence,  expertise,  and
responsibilities;   (ii)   additional   responsibilities   regarding   financial
statements for the Chief Executive  Officer and Chief  Financial  Officer of the
reporting  company;  (iii) new standards for auditors and  regulation of audits;
(iv) increased  disclosure and reporting  obligations for the reporting  company
and their directors and executive officers;  and (v) new and increased civil and
criminal  penalties for violation of the securities laws. Many of the provisions
became  effective  immediately  while other  provisions  become effective over a
period of 30 to 270 days and are subject to  rulemaking  by the  Securities  and
Exchange  Commission.  Although  we  anticipate  that we will  incur  additional
expense in  complying  with the  provisions  of the  Sarbanes-Oxley  Act and the
resulting regulations, management does not expect that such compliance will have
a material impact on our results of operations or financial condition.


                                    TAXATION
Federal Taxation

     Historically,  savings associations,  such as the Bank, have been permitted
to compute bad debt deductions  using either the bank  experience  method or the
percentage of taxable income method. However, for years beginning after December
31, 1995,  the Bank is no longer able to use the  percentage  of taxable  income
method of computing its allocable tax bad debt  deduction.  The Bank is required
to compute its allocable  deduction using the experience  method. As a result of
the repeal of the percentage of taxable income method, reserves taken after 1987
using the  percentage  of taxable  income method  generally  must be included in
future  taxable  income over a six-year  period,  although a two-year  delay was
permitted for institutions meeting a residential mortgage loan origination test.
In  addition,  the  pre-1988  reserve,  for which no  deferred  taxes  have been
recorded,  will not have to be  recaptured  into  income  unless (i) the Bank no
longer qualifies as a bank under the Code, or (ii) excess dividends are paid out
by the Bank.

     Depending on the composition of its items of income and expense,  a savings
institution may be subject to the alternative minimum tax. A savings institution
must pay an alternative minimum tax equal to the amount (if any) by which 20% of
alternative minimum taxable income ("AMTI"),  as reduced by an exemption varying
with AMTI,  exceeds the regular tax due.  AMTI  equals  regular  taxable  income
increased or decreased by certain tax  preferences  and  adjustments,  including
depreciation  deductions in excess of that allowable for alternative minimum tax
purposes, tax-exempt interest on most private activity bonds issued after August
7, 1986  (reduced by any related  interest  expense  disallowed  for regular tax
purposes), the amount of the bad debt reserve deduction claimed in excess of the
deduction  based on the  experience  method  and 75% of the  excess of  adjusted
current  earnings over AMTI (before this  adjustment and before any  alternative
tax net  operating  loss).  AMTI may be reduced only up to 90% by net  operating
loss carryovers,  but alternative  minimum tax paid that is attributable to most
preferences  (although not to post-August 7, 1986,  tax-exempt  interest) can be
credited against regular tax due in later years.


State Taxation

     The Bank is subject to Indiana's Financial  Institutions Tax ("FIT"), which
is imposed at a flat rate of 8.5% on "adjusted  gross income."  "Adjusted  gross
income," for purposes of FIT,  begins with taxable  income as defined by Section
63 of the Code and,  thus,  incorporates  federal  tax law to the extent that it
affects  the  computation  of taxable  income.  Federal  taxable  income is then
adjusted  by several  Indiana  modifications,  the most  notable of which is the
required  addback of interest that is tax-free for federal  income tax purposes.
Other  applicable state taxes include  generally  applicable sales and use taxes
plus real and personal property taxes.
<PAGE>

Item 2. Properties.

     At December 31, 2003, the Bank and the Holding Company  conducted  business
from a single office at 723 East Broadway,  Logansport,  Indiana.  The following
table provides  certain  information  with respect to the Company's office as of
December 31, 2003:

<TABLE>
<CAPTION>


                                                    Total Deposits     Net Book Value
                                                          at            of Property,
                            Owned or       Year      December 31,        Furniture        Approximate
Description and Address      Leased       Opened         2003           and Fixtures     Square Footage
-----------------------    ----------     ------    ---------------    ---------------   --------------
                                                          (Dollars in thousands)
<C>                                        <C>        <C>                  <C>               <C>
723 East Broadway             Owned        1962       $103,757             $1,694            11,000
Logansport, Indiana  46947

</TABLE>


     The Company owns computer and data  processing  equipment which is used for
transaction  processing and  accounting.  The net book value of electronic  data
processing equipment owned by the Company was $62,000 at December 31, 2003.

     The Bank also has contracted for the data processing and reporting services
of the  Intrieve  Data  Center  in  Cincinnati,  Ohio.  The cost of  these  data
processing services is approximately $16,000 per month.


Item 3. Legal Proceedings.

     Neither  the Holding  Company nor the Bank is a party to any pending  legal
proceedings, other than routine litigation incidental to its business.


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

     No matter was  submitted  to a vote of the Holding  Company's  shareholders
during the quarter ended December 31, 2003.


Item 4.5. Executive Officers of the Registrant.

     Presented below is certain information  regarding the executive officers of
the Holding Company:

         Name                   Position
         ----                   --------
         David G. Wihebrink     President and Chief Executive Officer
         Charles J. Evans       Senior Vice President
         Dottye Robeson         Secretary/Treasurer

     David G.  Wihebrink  (age 56) has served as President  and Chief  Executive
Officer of the Bank and the Holding Company since April 2000.  Prior to that, he
had  served  as  Vice  President  and  Chief  Financial  Officer  of  TM  Morris
Manufacturing Co., Inc.  ("Morris") since 1988. Morris is located in Logansport,
Indiana,  and  manufactures  lead  wire  assemblies  and  wiring  harnesses  and
stampings.  Prior to his employment with Morris,  Mr.  Wihebrink was a member of
the accounting firm Smith,  Thompson & Wihebrink  (Logansport) for 15 years. Mr.
Wihebrink  also  currently  serves as a member of the Board of  Directors of the
Neal Home  retirement home in Logansport,  Indiana;  as a member of the Board of
Directors  of the North  Central  Indiana  Workforce  Investment  Board and as a
member  of the Board of  Directors  of the  Logansport/Cass  County  Chamber  of
Commerce.

     Charles J. Evans (age 57) has served as Senior Vice  President  of the Bank
since  January  2000 and as Vice  President  of the  Holding  Company  since its
organization.  Prior to becoming Senior Vice President,  Mr. Evans had served as
Vice President and Senior Loan Officer of the Bank since 1980.

     Dottye Robeson (age 53) has served as Chief  Financial  Officer of the Bank
since  1994  and  as  Secretary/Treasurer  of  the  Holding  Company  since  its
organization. She has been a certified public accountant since 1987.

     Allen  Schieber  (age 55) has served as Senior Vice  President  of the Bank
since  January 2000.  Theretofore  he was Vice  President of Commercial  Lending
since 1998.
<PAGE>

                                    PART II

Item 5. Market for Registrant's  Common Equity,  Related Stockholder Matters and
        Issuer Purchases of Equity Securities.

     Page 52 of the 2003 Shareholder Annual Report (the "Shareholder Report") is
herein incorporated by reference.

     The Holding  Company has  established a policy of paying  regular  periodic
cash  dividends,  and the Board of  Directors  intends to continue  this policy,
subject  to  the  Holding  Company's  operating  results,  financial  condition,
capital, income tax considerations,  regulatory restrictions, and other relevant
factors.

     Since  the  Holding  Company  has  no  independent  operations  other  than
investment-related  activities or other  subsidiaries  to generate  income,  its
ability  to  accumulate  earnings  for  the  payment  of cash  dividends  to its
shareholders  will be  directly  dependent  upon the  ability of the Bank to pay
dividends to the Holding Company.

     Under OTS regulations,  a converted savings  institution may not declare or
pay a cash  dividend  if the effect  would be to reduce its net worth  below the
amount required for the liquidation account created at the time it converted. In
addition,  under OTS regulations,  the extent to which a savings institution may
make  a  "capital   distribution,"  is  subject  to  certain  limitations.   See
"Regulation -- Capital  Distributions  Regulation." Prior notice of any dividend
to be paid by the Bank to the Holding Company will have to be given to the OTS.

     Income of the Bank  appropriated  to bad debt  reserves  and  deducted  for
federal  income tax purposes is not available  for payment of cash  dividends or
other distributions to the Holding Company without the payment of federal income
taxes by the Bank on the amount of such income deemed  removed from the reserves
at the then-current  income tax rate. At December 31, 2003,  approximately  $1.7
million of the Bank's retained income  represented bad debt deductions for which
no federal income tax provision had been made. See "Taxation--Federal Taxation."

     Unlike  the  Bank,  generally  there is no  regulatory  restriction  on the
payment of  dividends  by the  Holding  Company.  Indiana  law,  however,  would
prohibit the Holding  Company from paying a dividend if, after giving  effect to
the payment of that dividend,  the Holding  Company would not be able to pay its
debts  as they  become  due in the  usual  course  of  business  or the  Holding
Company's total assets would be less than the sum of its total  liabilities plus
preferential rights of holders of preferred stock, if any.

     The Company  sold no equity  securities  during the period  covered by this
report that were not  registered  under the  Securities Act of 1933. The Company
repurchased no shares during the fiscal quarter ended December 31, 2003.

     The  disclosures  regarding  equity  compensation  plans  required  by Reg.
Section 229.201(d) is set forth in Item 12 hereof.


Item 6. Selected Financial Data.

     The  information  required by this item is incorporated by reference to the
material under the heading "Selected  Consolidated  Financial and Other Data" on
pages 4 and 5 of the  Holding  Company's  2003  Shareholder  Annual  Report (the
"Shareholder Annual Report").


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operation.

     The information required by this item is incorporated by reference to pages
6 through 19 of the Shareholder Annual Report.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

     The information required by this item is incorporated by reference to pages
16 through 17 of the Shareholder Annual Report.


Item 8. Financial Statements and Supplementary Data.

     The Holding Company's  Consolidated  Financial Statements and Notes thereto
contained  on  pages  20  through  51  in  the  Shareholder  Annual  Report  are
incorporated  herein by reference.  The Company's unaudited quarterly results of
operations   contained  on  page  51  in  the  Shareholder   Annual  Report  are
incorporated herein by reference.
<PAGE>

Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

     Not applicable.


Item 9A. Controls and Procedures.

     As  of  December  31,  2003,  an  evaluation  was  carried  out  under  the
supervision and with the  participation of the Company's  management,  including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
our  disclosure  controls  and  procedures  (as  defined in  Exchange  Act Rules
13a-15(e) and 15d-15(e)  under the  Securities  Exchange Act of 1934).  Based on
their  evaluation our Chief Executive  Officer and Chief Financial  Officer have
concluded that the Company's disclosure controls and procedures are, to the best
of  their  knowledge,  effective  to  ensure  that  information  required  to be
disclosed by the Company in reports that it files or submits  under the Exchange
Act is recorded,  processed,  summarized  and  reported  within the time periods
specified in Securities and Exchange Commission rules and forms.

     Our Chief  Executive  Officer and Chief  Financial  Officer have  concluded
that,  during the Company's  fiscal quarter ended December 31, 2003,  there have
been no  significant  changes in the  Company's  internal  controls  or in other
factors that could  significantly  affect its internal  controls,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.



                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

     The  information  required  by this  item with  respect  to  directors  and
compliance with Section 16(a) of the Securities Exchange Act of 1934, members of
the Company's  Audit  Committee,  and the Company's  Audit  Committee  Financial
Expert,  is  incorporated  by  reference  to pages  4, 10 and 12 of the  Holding
Company's  Proxy  Statement for its 2004 Annual  Shareholder  Meeting (the "2004
Proxy  Statement").  Information  concerning  the  Holding  Company's  executive
officers is included in Item 4.5 in Part I of this report.

     The  Company has adopted an Ethics  Policy  that  applies to all  officers,
employees  and  directors  of the  Company and its  subsidiaries.  A copy of the
Ethics Policy is attached as Exhibit 14 to this Annual Report.


Item 11. Executive Compensation.

     The   information   required  by  this  item  with   respect  to  executive
compensation  is  incorporated  by reference to pages 6 through 9 of the Holding
Company's 2004 Proxy Statement.


Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters.

     The information required by this item is incorporated by reference to pages
1 through 3 of the 2004 Proxy Statement.

     The following table provides the information about the Corporation's common
stock  that may be issued  upon the  exercise  of options  and rights  under all
existing equity compensation plans as of December 31, 2003.
<PAGE>
<TABLE>
<CAPTION>

                                            Equity Compensation Plan Information


                                                                                   Number of securities
                                   Number of                                     remaining available for
                               securities to be                                   future issuance under
                             issued upon exercise        Weighted-average       equity compensation plans
                            of outstanding options,      exercise price of        as of December 31, 2003
                              warrants and rights       outstanding options,       (excluding securities
                            as of December 31, 2003     warrants and rights       reflected in column (a))
                                      (a)                       (b)                         (c)
                            -----------------------     -------------------     --------------------------
<S>                                    <C>               <C>                    <C>
Equity compensation
   plans approved by
   security holders ...               50,650                  $10.63                       115,000
Equity compensation
   plans not approved
   by security holders                    --                      --                            --
                                      ------                  ------                       -------
           Total                      50,650                  $10.63                       115,000
                                      ======                  ======                       =======
---------------------
(1)  Includes the  following  plans:  the  Company's  stock option plan and 1999
     stock option plan.

</TABLE>


Item 13. Certain Relationships and Related Transactions.

     The information required by this item is incorporated by reference to pages
9 and 10 of the 2004 Proxy Statement.


Item 14. Principal Accountant Fees and Services.

     The information  required by this item is incorporated by reference to page
11 of the 2004 Proxy Statement.
<PAGE>
<TABLE>
<CAPTION>

                                    PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

     (a)  List the following documents filed as part of the report:

          Financial Statements
          --------------------

<S>       <C>                                                           <C>
          Independent  Auditor's  Report (Grant  Thornton  LLP)         See Shareholder Annual Report
                                                                            Page 20

          Consolidated  Statements  of Financial  Condition
                at December 31, 2003 and 2002                           See Shareholder Annual Report
                                                                            Page 21

          Consolidated  Statements of Earnings for the Years
                Ended  December 31, 2003, 2002 and 2001                 See Shareholder Annual Report
                                                                            Page 22

          Consolidated  Statements of  Comprehensive  Income for
                the Years Ended December 31, 2003,  2002 and 2001       See  Shareholder  Annual Report
                                                                            Page 23

          Consolidated  Statements of  Shareholders'  Equity for
                the Years Ended December 31, 2003,  2002 and 2001       See  Shareholder  Annual Report
                                                                            Page 24

          Consolidated Statements of Cash Flows for the Years
                Ended December 31, 2003, 2002 and 2001                  See Shareholder Annual Report
                                                                            Page 25

          Notes to Consolidated  Financial  Statements                  See  Shareholder  Annual Report
                                                                            Page 27


     (b)  Reports on Form 8-K.

          The Company  filed a Form 8-K dated October 20, 2003,  concerning  the
          Company's earnings release for the quarter ended September 30, 2003.

     (c)  The exhibits filed herewith or  incorporated  by reference  herein are
          set forth on the Exhibit Index on page E-1. Included in those exhibits
          are Executive Compensation Plans and Arrangements which are identified
          as Exhibits 10(1) through 10(16).

     (d)  All  schedules are omitted as the required  information  either is not
          applicable or is included in the Consolidated  Financial Statements or
          related notes.
</TABLE>
<PAGE>


                                   SIGNATURES


     Pursuant  to the  requirement  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on behalf of the undersigned, thereto duly authorized.


                                        LOGANSPORT FINANCIAL CORP.



Date: March 29, 2004                    By: /s/ David G. Wihebrink
                                            --------------------------
                                            David G. Wihebrink, President and
                                            Chief Executive Officer


     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 29th day of March, 2004.




/s/ David G. Wihebrink
-----------------------------------------------
David G. Wihebrink, President, Chief Executive
Officer and Director
(Principal Executive Officer)


/s/ Dottye Robeson
-----------------------------------------------
Dottye Robeson, Secretary/Treasurer
(Principal Financial and Accounting Officer)


/s/ Charles J. Evans
-----------------------------------------------
Charles J. Evans, Vice President and Director


/s/ Susanne S. Ridlen
-----------------------------------------------
Susanne S. Ridlen, Director


/s/ William Tincher, Jr.
-----------------------------------------------
William Tincher, Jr., Director


/s/ Brian J. Morrill
-----------------------------------------------
Brian J. Morrill, Director


/s/ Thomas G. Williams
-----------------------------------------------
Thomas G. Williams, Director


/s/ Todd S. Weinstein
-----------------------------------------------
Todd S. Weinstein, Director


/s/ James P. Bauer
-----------------------------------------------
James P. Bauer, Director

<PAGE>

                                  EXHIBIT INDEX

  Exhibit                                                                Page
  -------                                                                ----
    3(1)    The Articles of  Incorporation  of the Registrant are
            incorporated  by  reference  to  Exhibit  3(1) to the
            Registration  Statement on Form S-1 (Registration No.
            33-89788).

    3(2)    The   Code  of   By-Laws   of  the   Registrant   are
            incorporated  by reference to Exhibit 3.1 to the Form
            10-Q for the fiscal quarter ended June 30, 2002.

   10(1)    The Registrant's Stock Option Plan is incorporated by
            reference  to  Exhibit  A to the  Registrant's  Proxy
            Statement for its Annual Shareholder  Meeting held on
            April 9, 1996 and  resolutions  dated July 14,  1998,
            amending  the  Registrant's  Stock  Option  Plan  are
            incorporated by reference to Exhibit 10.1 to the Form
            10-Q for the period ended  September 30, 1998,  filed
            with the Commission on November 12, 1998.

   10(2)    Logansport   Savings  Bank,   FSB   Recognition   and
            Retention Plan and Trust is incorporated by reference
            to Exhibit B to the Registrant's  Proxy Statement for
            its Annual Shareholder Meeting held on April 9, 1996,
            and  resolutions  dated July 14,  1998,  amending the
            Logansport   Savings  Bank,   FSB   Recognition   and
            Retention   Plan  and  Trust  are   incorporated   by
            reference  to  Exhibit  10.2 to the Form 10-Q for the
            period  ended  September  30,  1998,  filed  with the
            Commission on November 12, 1998.

   10(3)    Logansport Savings Bank, FSB Employee Stock Ownership
            Plan and Trust Agreement is incorporated by reference
            to Exhibit  10(4) to the  Registration  Statement  on
            Form S-1 (Registration No. 33-89788).

   10(4)    Deferred  Compensation  Agreement between  Logansport
            Savings Bank, FSB and David G.  Wihebrink,  dated and
            effective as of April 12, 2000,  is  incorporated  by
            reference to Exhibit 10.4 of  Registrant's  Form 10-K
            for its fiscal year ended December 31, 2000.

   10(5)    Employment Agreement between Logansport Savings Bank,
            FSB and Charles J. Evans is incorporated by reference
            to  Exhibit  10(6) to the  Registration  Statement on
            Form S-1 (Registration No. 33-89788).

   10(6)    Director  Deferred  Compensation   Agreement  between
            Logansport  Savings Bank, FSB and Thomas G. Williams,
            effective  April 1, 1992 is incorporated by reference
            to Exhibit  10(7) to the  Registration  Statement  on
            Form S-1 (Registration No. 33-89788).

   10(7)    Director  Deferred  Compensation   Agreement  between
            Logansport   Savings  Bank,   FSB  and  Don  Pollitt,
            effective  April 1, 1992 is incorporated by reference
            to Exhibit  10(8) to the  Registration  Statement  on
            Form S-1 (Registration No. 33-89788).

   10(8)    Director  Deferred  Compensation   Agreement  between
            Logansport  Savings  Bank,  FSB and  Norbert  Adrian,
            effective  April 1, 1992 is incorporated by reference
            to Exhibit  10(9) to the  Registration  Statement  on
            Form S-1 (Registration No. 33-89788).

   10(9)    Director  Deferred  Compensation   Agreement  between
            Logansport  Savings  Bank,  FSB and  Susanne  Ridlen,
            effective  April 1, 1992 is incorporated by reference
            to Exhibit  10(10) to the  Registration  Statement on
            Form S-1 (Registration No. 33-89788).

   10(10)   Director  Deferred  Compensation   Agreement  between
            Logansport  Savings  Bank,  FSB and David  Wihebrink,
            effective  April 1, 1992 is incorporated by reference
            to Exhibit  10(11) to the  Registration  Statement on
            Form S-1 (Registration No. 33-89788).

   10(11)   Executive  Supplemental  Retirement  Income Agreement
            between  Logansport  Savings Bank,  FSB and Thomas G.
            Williams,  executed  May 7, 1992 is  incorporated  by
            reference  to  Exhibit  10(12)  to  the  Registration
            Statement on Form S-1 (Registration No. 33-89788).

   10(12)   Executive  Supplemental  Retirement  Income Agreement
            between  Logansport  Savings Bank, FSB and Charles J.
            Evans,  executed  May  7,  1992  is  incorporated  by
            reference  to  Exhibit  10(13)  to  the  Registration
            Statement on Form S-1 (Registration No. 33-89788).

   10(13)   Employment  Agreement  dated as of February 11, 2002,
            between the Bank and Dottye  Robeson is  incorporated
            by reference to Exhibit 10(13) of  Registrant's  Form
            10-K for the fiscal year ended December 31, 2001.

   10(14)   Employment  Agreement  dated as of February 11, 2002,
            between   the  Bank  and   Allen   D.   Schieber   is
            incorporated   by  reference  to  Exhibit  10(14)  of
            Registrant's  Form  10-K for the  fiscal  year  ended
            December 31, 2001.

   10(15)   Employment  Agreement  dated  as of April  10,  2001,
            between   the  Bank  and   David  G.   Wihebrink   is
            incorporated   by  reference  to  Exhibit   10(1)  of
            Registrant's  Form 10-Q for the fiscal  quarter ended
            March 31, 2001.

   10(16)   The   Registrant's   1999   Stock   Option   Plan  is
            incorporated by reference to Exhibit A to Registrant'
            Proxy  Statement for its Annual  Shareholder  Meeting
            held on April 13, 1999.

   13       2003 Shareholder Annual Report

   14       Code of Ethics

   21       Subsidiaries of  the  Registrant  are incorporated by
            reference to Exhibit 21 to the Registration Statement
            on Form S-1 (Registration No. 33-89788).

   23       Independent Auditor's Consent (Grant Thornton LLP)

   31(1)    Certification  of David G. Wihebrink  required  by 12
            CFR Section 240.13a-14(a)

   31(2)    Certification  of Dottye  Robeson  required by 12 CFR
            Section 240.13a-14(a)

   32       Certification  pursuant to 18 U.S.C. Section 1350, as
            adopted pursuant to Section 906 of the Sarbanes-Oxley
            Act of 2002.