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, 2001

                                       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,
Regulation S-K (ss. 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]

The aggregate market value of the issuer's voting stock held by  non-affiliates,
as of March 1, 2002, was $15,311,197.20.

The  number of shares of the  Registrant's  Common  Stock,  without  par  value,
outstanding as of March 1, 2002, was 999,845 shares.


                       DOCUMENTS INCORPORATED BY REFERENCE


Portions of the Annual Report to  Shareholders  for the year ended  December 31,
2001, are  incorporated  into Part II.  Portions of the Proxy  Statement for the
2002 Annual Meeting of Shareholders are incorporated in Part I and Part III.

                            Exhibit Index on Page E-1
                               Page 1 of 30 Pages


<PAGE>

                           LOGANSPORT FINANCIAL CORP.
                                    Form 10-K
                                      INDEX

                                                                           Page
Forward Looking Statements..........................................         1


PART I

Item  1.   Business ................................................         1
Item  2.   Properties ..............................................        25
Item  3.   Legal Proceedings. ......................................        26
Item  4.   Submission of Matters to a Vote of Security Holders .....        26
Item  4.5.        Executive Officers of Registrant .................        26


PART II

Item  5.   Market for Registrant's Common Equity and Related
                  Stockholder Matters ..............................        26
Item  6.   Selected Financial Data .................................        28
Item  7.   Management's Discussion and Analysis of Financial Condition
                  and Results of Operations ........................        28
Item 7A.   Quantitative and Qualitative Disclosures About
                  Market Risk.......................................        28
Item  8.   Financial Statements and Supplementary Data .............        28
Item  9.   Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure .........................        28


PART III

Item 10.   Directors and Executive Officers of Registrant ..........        28
Item 11.   Executive Compensation ..................................        28
Item 12.   Security Ownership of Certain Beneficial Owners and
                  Management .......................................        28
Item 13.   Certain Relationships and Related Transactions ..........        28


PART IV
Item 14.   Exhibits, Financial Statement Schedules, and Reports on
                  Form 8-K .........................................        29

Signatures .........................................................        30
<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  56.3% of the  Company's
total loan  portfolio at December 31,  2001.  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  1.6% and 16.2%,
respectively,  of the  Company's  total loan  portfolio  at December  31,  2001.
Commercial loans  constituted 8.4% and commercial  leases 3.5% of the total loan
portfolio at December  31,  2001.  Residential  real estate  construction  loans
constituted approximately 2.0% of the Company's total loan portfolio at December
31,  2001.   Installment,   share,  home  equity,  and  home  improvement  loans
constituted  approximately  5.7%,  .1%,  1.1%,  and 5.1%,  respectively,  of the
Company's total loan portfolio at December 31, 2001.




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.

<TABLE>
<CAPTION>
                                                                            At December 31,
                                   -----------------------------------------------------------------------------------------------
                                        2001                2000                  1999              1998                1997
                                   ----------------  ------------------     ----------------    ---------------    ---------------
                                           Percent             Percent              Percent            Percent             Percent
                                   Amount  of Total  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>     <C>        <C>
  Residential .................   $ 63,863    56.25%  $ 62,277    59.73%   $57,889    62.23%   $52,205    69.35%  $46,419    72.48%
  Commercial real estate ......     18,435    16.24     13,230    12.69     11,825    12.71      3,492     4.64     3,072     4.80
  Multi-family ................      1,816     1.60      2,050     1.96      2,111     2.27      1,584     2.10     1,844     2.88
Construction:
  Residential .................      2,278     2.01      2,814     2.70      2,575     2.77      1,742     2.31     1,333     2.08
  Commercial real estate ......         --       --         --       --         --       --      1,400     1.86        --       --
  Multi-family ................         --       --         --       --         --       --        350      .47        --       --
Commercial loans ..............      9,586     8.44      7,088     6.80      4,102      4.41     1,486     1.97        --       --
Commercial leases .............      3,914     3.45      2,228     2.14      1,609      1.73        --       --        --       --
Consumer loans:
  Installment(2) ..............      6,473     5.70      7,045     6.75      6,107      6.56     6,021     8.00     5,409     8.44
  Share .......................        144      .13        290      .28        289       .31       314      .42       313      .49
  Home equity .................      1,199     1.06      1,164     1.12        974      1.05     1,090     1.45       685     1.07
  Home improvement ............      5,819     5.12      6,076     5.83      5,544      5.96     5,589     7.43     4,972     7.76
                                  --------  -------   --------   ------    -------    ------   -------   ------   -------   ------
   Gross loans receivable .....   $113,527   100.00%  $104,262   100.00%   $93,025    100.00%  $75,273   100.00%  $64,047   100.00%
                                  ========  =======   ========  =======    =======    ======   =======   ======   =======   ======


TYPE OF SECURITY
  Residential (1) ................$ 74,097    65.27%  $ 73,056    70.07%   $66,150     71.11% $ 61,291    81.42%  $53,409    83.39%
  Commercial real estate .........  18,725    16.49     13,606    13.05     12,334     13.26     4,108     5.46     3,212     5.02
  Multi-family ...................   1,816     1.60      2,050     1.96      2,088      2.25     1,934     2.57     1,844     2.88
  Deposits .......................     144      .13        290      .28        289       .31       314      .42       313      .49
  Auto ...........................   2,857     2.52      3,223     3.09      2,477      2.66     2,210     2.94     2,148     3.35
  Consumer residential (2) .......   2,388     2.10      2,722     2.61      1,599      1.72     1,918     2.55     1,617     2.52
  Other security .................  13,500    11.89      9,315     8.94      8,088      8.69     3,498     4.64     1,504     2.35
                                  --------  -------   --------   ------    -------    ------   -------   ------   -------   ------
   Gross loans receivable ........ 113,527   100.00%   104,262   100.00%    93,025    100.00%   75,273   100.00%   64,047   100.00%
Deduct:
Allowance for loan losses  .......   1,132     1.00        760      .73        440       .47       285      .38       245      .38
Loans in process .................     699      .61      1,084     1.04      1,685      1.81     1,915     2.54       167      .26
                                  --------  -------   --------   ------    -------    ------   -------   ------   -------   ------
   Net loans receivable ........  $111,696    98.39%  $102,418    98.23%   $90,900     97.72%  $73,073    97.08%  $63,635    99.36%
                                  ========  =======   ========  =======    =======    ======   =======   ======   =======   ======
Mortgage Loans:
  Adjustable-rate ................  52,365    60.61%  $ 51,664    64.28%   $48,119     64.68% $ 45,552    74.95% $ 42,984    81.61%
  Fixed-rate .....................  34,027    39.39     28,707    35.72     26,281     35.32    15,221    25.05     9,684    18.39
                                  --------   ------   --------   ------    -------    ------  --------   ------  --------   ------
    Total ........................$ 86,392   100.00%  $ 80,371   100.00%   $74,400    100.00% $ 60,773   100.00% $ 52,668   100.00%
                                  ========   ======   ========   ======    =======    ======  ========   ======  ========   ======
</TABLE>

------------------------
(1)  Includes home equity, residential construction and home improvement loans.
(2)  Includes "one-pay" notes due in less than one year.

     The following  table sets forth certain  information  at December 31, 2001,
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                            2005     2007    2012    2017
                              at December 31,                          to       to       to     and
                                   2001       2002    2003    2004    2006     2011    2016  following
                              --------------  ----    ----    ----    ----     ----    ----  ---------
                                                                  (In thousands)
<S>                             <C>         <C>      <C>     <C>     <C>     <C>      <C>      <C>
Mortgage loans:
  Residential...................$  66,141   $   929  $   98  $  258  $  820  $ 6,899  $14,313  $42,824
  Multi-family..................    1,816        --     181     435      --    1,200       --       --
  Commercial real estate........   18,435       326      --     167     690    4,702    6,519    6,031
Commercial loans................    9,586     6,596     145     163   1,339      648      695       --
Commercial leases...............    3,914     1,196   1,123   1,074     427       94       --       --
Consumer loans:
  Home improvement..............    5,819        34     162     237   1,003    2,033    2,008      342
  Home equity...................    1,199        --      --      --      --       --    1,199       --
  Installment...................    6,473     2,393     532     842   1,891      624      191       --
  Share.........................      144       144      --      --      --       --       --       --
                                ---------   -------  ------  ------  ------  -------  -------  -------
    Total.......................$ 113,527   $11,618  $2,241  $3,176  $6,170  $16,200  $24,925  $49,197
                                =========   =======  ======  ======  ======  =======  =======  =======
</TABLE>

     The following  table sets forth, as of December 31, 2001, the dollar amount
of all loans due after one year which have fixed  interest rates and floating or
adjustable rates.

                                        Due After December 31, 2002
                               -------------------------------------------
                               Fixed Rates    Variable Rates       Total
                               -----------    --------------     ---------
                                              (In thousands)
Mortgage loans:
  Residential ...............    $ 24,675        $ 40,537        $ 65,212
  Multi-family ..............         181           1,635           1,816
  Commercial real estate ....       6,425          11,684          18,109
Commercial loans ............       2,328             662           2,990
Commercial leases ...........       2,718              --           2,718

Consumer loans:
  Home improvement ..........       5,785              --           5,785
  Home equity ...............        --             1,199           1,199
  Installment ...............       4,080              --           4,080
                                 --------        --------        --------
    Total ...................    $ 46,192        $ 55,717        $101,909
                                 ========        ========        ========

     Residential   Loans.   Residential  loans  consist  primarily  of  one-  to
four-family  loans.  Approximately  $63.9  million,  or 56.3%  of the  Company's
portfolio  of loans at  December  31,  2001,  consisted  of one- to  four-family
residential mortgage loans, of which approximately 60.6% had adjustable rates.

     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 yields 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 bi-weekly.  Interest rates cannot adjust lower
than the rate at the time of origination.  Many of the  residential  ARMs in the
Company's portfolio at December 31, 2001, 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, 2001,  39.4% of the  Company's  residential  mortgage
loans had fixed rates of interest.

     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.   Beginning  in  2002,  if  the
loan-to-value  ratio on a residential  single-family  mortgage loan exceeds 95%,
the Bank will require 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,  the Bank is in the  process  of  conforming  its  origination
process to meet Freddie Mac  requirements.  The Bank generally retains its loans
in its portfolio  and does not  anticipate  the need to sell its  non-conforming
loans. See "-- Origination, Purchase and Sale of Loans."

     At December 31, 2001,  residential loans amounting to $391,000,  or .34% of
total loans, were included in non-performing  assets.  See  "Non-Performing  and
Problem Assets."

     Commercial Real Estate Loans. At December 31, 2001, $18.4 million, or 16.2%
of the  Company's  total loan  portfolio,  consisted of  commercial  real estate
loans. Of these loans,  $500,000 constituted  participations in loans secured by
commercial real estate which were purchased from other financial institutions in
2001. 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-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,
2001,  exceeded  $2,000,000.  One  commercial  real estate loan was  included in
non-performing assets at December 31, 2001, amounting to $623,000.

     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 $1.8 million,  or 1.6% of the Company's
portfolio of loans at December 31, 2001,  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,  2001,  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, 2001,  $2.3 million,  or 2.0%, of the Company's  total loan
portfolio  consisted of construction  loans. All construction  loans at December
31, 2001, were one- to four-family  residential loans. The largest  construction
loan at December 31, 2001, was  approximately  $192,000.  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,  2001,  $9.6  million,  or 8.4% 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 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 using the Bank's prime rate as the primary
index rate.  The weighted  average  maturity of the variable rate portion of the
portfolio  was 20 months and the  weighted  average  maturity  of the fixed rate
portion of the portfolio was 55 months at December 31, 2001. One commercial loan
was  included  in  non-performing  assets at December  31,  2001,  amounting  to
$979,000.

     Commercial  Leases.  At December 31,  2001,  $3.9  million,  or 3.5% 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 Carmel,  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 52 months as of December 31, 2001.

     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 $13.6 million as of December
31, 2001, or 12.0% 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 Bank's consumer loans
originated by the Bank,  except home equity loans,  are  fixed-rate  loans,  and
substantially all are secured loans.

     Installment  loans,  totaling  $6.5  million,  or 5.7% of  total  loans  at
December  31,  2001,  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 all of
which  amortize at rates  similar to those for home  improvement  loans and have
maximum terms of 6 months to one year.

     Share loans, totaling $144,000, or .1% of total loans at December 31, 2001,
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 $5.8 million, or 5.1% of the Company's
total loan portfolio at December 31, 2001, 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,
2001,  the Bank had approved  $2.2 million of home equity  loans,  of which $1.2
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  and  credit  risks.  As of
December  31,  2001,   consumer   loans   totaling   $20,000  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, 2001.  In addition to the
above,  the Bank held $185,000 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 its 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 its mortgage  loans,  the Bank might  therefore  experience some difficulty
selling such loans quickly in the secondary  market.  The Bank has no intention,
however, of attempting to sell such loans.

     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  loans  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 $2.6 million at December 31,
2001. 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 or an abstract and a
valid  lien on its  mortgaged  real  estate.  Appraisals  for  residential  real
property are performed  either by an in-house  appraiser who is a state-licensed
residential appraiser or an independent  state-licensed  residential  appraiser.
The Bank also uses the services of certified residential appraisers, who are not
in-house,  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  has not  participated in the secondary  market as a
seller of its mortgage loans, 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,
                                                     --------------------------------
                                                       2001        2000       1999
                                                     ---------- ---------- ----------
                                                              (In thousands)
<S>                                                  <C>        <C>        <C>
Gross loans receivable at beginning of period ....   $104,262   $ 93,025   $ 75,273
Originations:
  Mortgage loans:
    Residential ..................................     18,243     17,598     17,229
    Commercial real estate and lines of credit and
      multi-family ...............................     36,011     25,586     19,368
                                                     --------   --------   --------
    Total mortgage loans and commercial loans ....     54,254     43,184     36,597
  Consumer loans:
    Installment ..................................      4,342      5,692      5,597
    Share ........................................         --        146        169
    Home improvement .............................      2,260      2,447      1,944
    Home equity ..................................        226        224        103
                                                     --------   --------   --------
      Total consumer loans .......................      6,828      8,509      7,813
                                                     --------   --------   --------
        Total originations .......................     61,082     51,693     44,410
  Purchases:
  Commercial real estate and multi-family ........        499         --        981
                                                     --------   --------   --------
        Total purchases ..........................        499         --        981
                                                     --------   --------   --------
          Total originations and purchases .......     61,581     51,693     45,391
  Sales ..........................................        416         --         --
Repayments and deductions ........................     51,900     40,456     27,639
                                                     --------   --------   --------
Gross loans receivable at end of period ..........   $113,527   $104,262   $ 93,025
                                                     ========   ========   ========
</TABLE>

     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, 2001, $2.0 million,  or 1.4% 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 $336,000, or .25%, of
the  Company's  total  assets at  December  31,  2000.  At  December  31,  2001,
residential  loans  accounted for 19.4% and consumer loans accounted for 1.0% of
non-performing  assets.  There were no non-accruing  investments at December 31,
2001.  Commercial real estate loans accounted for 31.0% and commercial operating
loans accounted for 48.6% of non-performing assets.

     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,
                                                        -------------------------------------------
                                                          2001     2000     1999     1998    1997
                                                        -------- -------- -------- -------- -------
                                                                         (Dollars in thousands)
<S>                                                     <C>        <C>      <C>      <C>      <C>
Non-accruing loans (1).......................           $1,948     $336     $666     $315     $431
Real estate owned, net.......................               65       --       --       --      106
                                                        ------     ----     ----     ----     ----
   Total non-performing assets...............           $2,013     $336     $666     $315     $537
                                                        ======     ====     ====     ====     ====
Non-performing loans to total loans, net (2).             1.72%     .32%     .72%     .42%     .67%
Non-performing assets to total assets........             1.46      .25      .57      .33      .62
</TABLE>

------------------------
(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,  2001,
     $326,000  of  non-accruing  loans  were  residential  loans,  $20,000  were
     consumer  loans,  $623,000 were  commercial  real estate loans and $979,000
     were commercial  operating loans. For the year ended December 31, 2001, the
     income that would have been recorded had the non-accruing loans not been in
     a non-performing status totaled $41,000.
(2)  Total loans less loans in process.

     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, 2001,  the  aggregate  amount of the  Company's  classified
assets and the Company's general and specific loss allowances were as follows:

                                                    At December 31, 2001
                                                    --------------------
                                                       (In thousands)
Substandard assets ...............................         $3,617
Doubtful assets ..................................             --
Loss assets ......................................             --
                                                           ------
         Total classified assets .................         $3,617
                                                           ======
General loss allowances ..........................         $1,132
Specific loss allowances .........................             --
                                                           ------
         Total allowances ........................         $1,132
                                                           ======

     The Company  regularly  reviews its loan portfolio to determine whether any
loans require  classification  in accordance  with applicable  regulations.  The
substandard  loans consist of all nonaccrual loans,  three additional  purchased
participation  loans secured by multi-family real estate of $747,000,  which are
current on payments but considered  substandard because of cash flow, one letter
of  credit  for   $253,000   related  to  one  of  the   substandard   purchased
participations,  and one commercial  relationship  for $604,000 which is current
but classified 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, 2001. 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.

     Summary of Loan Loss  Experience.  The following table analyzes  changes in
the allowance  for loan losses  during the past five (5) one-year  periods ended
December 31, 2001.
<TABLE>
<CAPTION>

                                                                 Year Ended December 31,
                                                     -------------------------------------------
                                                       2001     2000     1999  .  1998    1997
                                                     -------- -------- -------- ------- --------
                                                                 (Dollars in thousands)
<S>                                                  <C>        <C>       <C>      <C>     <C>
Balance of allowance at beginning of period.         $   760    $440      $285     $245    $236
  Recoveries................................              --       1        --       --       1
Less charge-offs:
  Residential real estate loans.............              --      --        --       13      10
  Consumer loans............................              20      13         7       10       8
                                                      ------    ----      ----     ----    ----
Net charge-offs.............................              20      12         7       23      17
Provisions for losses on loans..............             392     332       162       63      26
                                                      ------    ----      ----     ----    ----
Balance of allowance at end of period.......          $1,132    $760      $440     $285    $245
                                                      ======    ====      ====     ====    ====
  Net charge-offs to total average
    loans receivable for period.............             (*)     (*)       (*)      .03%    .03%
  Allowance at end of period to
    net loans receivable at end
    of period (1)...........................            1.00     .73       .47      .38     .38
  Allowance to total non-performing
    loans at end of period..................           58.11  226.19     66.07    90.48   56.84
</TABLE>

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

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

     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.
<TABLE>
<CAPTION>
                                                                       At December 31,
                          -------------------------------------------------------------------------------------------------------
                                 2001               2000                   1999                1998                  1997
                          ------------------   ------------------   -------------------  ------------------   -------------------
                                   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............. $   16      56.25%     $  12      59.73%     $270      62.23%     $232      69.35%     $193      72.48%
Commercial real estate..    132      16.24        126      12.69         8      12.71         6       4.64         6       4.80
Multi-family............    100       1.60        100       1.96       117       2.27         1       2.10         1       2.88
Construction loans......     --       2.01         --       2.70        --       2.77        --       4.64        --       2.08
Commercial loans........    316       8.44        180       6.80        --       4.41        --       1.97        --         --
Commercial leases.......     --       3.45         --       2.14        --       1.73        --         --        --         --
Consumer loans..........     27      12.01         15      13.98        45      13.88        46      17.30        45      17.76
Unallocated.............    541         --        327         --        --         --        --         --        --         --
                         ------     ------       ----     ------      ----     ------      ----     ------      ----     ------
  Total................. $1,132     100.00%      $760     100.00%     $440     100.00%     $285     100.00%     $245     100.00%
                         ======     ======       ====     ======      ====     ======      ====     ======      ====     ======

</TABLE>

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  obligations,
marketable   equity   securities,   and  FHLB  stock.   At  December  31,  2001,
approximately $12.2 million, or 8.8% of the Company's total assets, consisted of
such investments.

     At December 31, 2001,  the Company had $4.4 million of mortgage-  and other
asset-backed securities  outstanding,  all of which were classified as available
for sale. These fixed-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,
                                      ---------------------------------------------------------------------------
                                                  2001                       2000                     1999
                                      ------------------------------- -------------------------------------------
                                         Amortized     Market      Amortized     Market      Amortized     Market
                                            Cost        Value         Cost        Value         Cost        Value
                                         ---------     ------      ---------     ------      ---------     ------
                                                                (In thousands)
<S>                                      <C>          <C>          <C>          <C>          <C>          <C>
Securities available for sale:
  Federal agencies.................      $  1,900     $  1,908     $  4,746     $  4,625     $  6,295     $  5,901
  State and municipal..............         2,789        2,901        2,800        2,899        1,931        1,939
  Mortgage- and other asset-backed
           securities..............         4,418        4,419        5,264        5,165        6,145        5,898
  Corporate debt obligations.......           710          731          560          539          560          523
  Marketable equity securities.....             4          248            4          259            4          176
                                          -------      -------      -------      -------      -------      -------
    Total securities available for
      sale.........................         9,821       10,207       13,374       13,487       14,935       14,437
FHLB stock (1).....................         1,973        1,973        1,973        1,973        1,273        1,273
                                          -------      -------      -------      -------      -------      -------
    Total investments..............       $11,794      $12,180      $15,347      $15,460      $16,208      $15,710
                                          =======      =======      =======      =======      =======      =======
</TABLE>

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

     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, 2001.

<TABLE>
<CAPTION>
                                                             Amount at December 31, 2001, 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)
Securities available for sale (1)(3):
<S>                                       <C>                  <C>         <C>     <C>         <C>     <C>          <C>
  Federal agencies ...............        $ --         --%     $  700      4.39%   $  700      6.35%   $  500       6.50%
  State and municipal (2) ........          25       6.83       1,241      8.16       968      7.91       554       8.48
  Mortgage- and other asset-backed
    securities ...................         805       4.46       1,520      5.90       786      6.59     1,307       6.47
  Corporate obligations ..........          --         --          --        --       711      6.53        --         --
  Marketable equity securities ...          --         --          --        --        --        --         4      78.67
                                          ----      ------       ----    ------      ----    ------     -----      -----
    Total securities available for
      sale .......................         830        4.53      3,461      6.41     3,165      6.93     2,365       7.06
FHLB stock .......................          --          --         --        --        --        --     1,973       7.45
                                          ----        ----     ------      ----    ------      ----    ------      -----
    Total investments ............        $830        4.53%    $3,461      6.41%   $3,165      6.93%   $4,338       7.24%
                                          ====        ====     ======      ====    ======      ====    ======      =====
</TABLE>

------------------------------
(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.


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 $83.9 million at December 31, 2001.

     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.

     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, 2001, is as follows:

                                       Minimum   Balance at             Weighted
                                       Opening   December 31,   % of     Average
Type of Account                        Balance     2001       Deposits    Rate
---------------                       ---------  ------------ --------  --------
                                                       (Dollars in thousands)
Withdrawable:
  Passbook savings accounts ........   $    25   $ 4,136         4.93%   2.47%
  Regular money market accounts ....     2,500       942         1.12    1.98
  Hi yield money market accounts ...    10,000    16,817        20.04    2.48
  Super NOW accounts ...............     2,500       962         1.15    1.97
  NOW and other transaction accounts       200     6,057         7.22    1.29
  Non-interest bearing accounts ....       100     3,343         3.99      --
                                                 -------       ------    ----
Total withdrawable .................              32,257        38.45    1.96
Certificates (original terms):
  91 days ..........................     1,000       894         1.06    2.71
  6 months .........................     1,000     3,739         4.46    3.17
  12 months ........................     1,000    13,391        15.96    4.67
  18 months ........................       500     7,564         9.01    5.02
  24 months ........................       500     4,975         5.93    5.12
  30 months ........................       500    11,679        13.92    5.41
  60 months ........................     1,000     3,370         4.02    5.63
IRAs
  18 months ........................       100     6,031         7.19    5.16
                                                 -------       ------    ----
Total certificates .................              51,643        61.55    4.91
                                                 -------       ------    ----
Total deposits .....................             $83,900       100.00%   3.78%
                                                 =======       ======    ====


     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,
                               ------------------------------------
                                  2001         2000         1999
                               ----------   ----------   ----------
                                            (In thousands)

4.00% and under ..........      $ 8,157      $   746      $   175
4.01 - 6.00 % ............       42,598       25,112       44,496
6.01 - 8.00% .............          888       24,938          826
                                -------      -------      -------
         Total ...........      $51,643      $50,796      $45,497
                                =======      =======      =======

     The following table  represents,  by various interest rate categories,  the
amounts of time  deposits  maturing  during  each of the three  years  following
December  31,  2001,  and  the  total  amount   maturing   thereafter.   Matured
certificates  which have not been  renewed as of December  31,  2001,  have been
allocated based upon certain rollover assumptions:

                                              Amounts At
                                    December 31, 2001, Maturing in
                    -----------------------------------------------------------
                     One Year           Two            Three       Greater Than
                      or Less          Years           Years        Three Years
                    -----------    -------------    ------------  -------------
                                         (In thousands)
4.00% and under.....  $ 7,160         $   884          $   113        $  --
4.01 - 6.00 % ......   23,763           9,419            8,376        1,040
6.01 - 8.00% .......      628              20              214           26
                      -------         -------          -------      -------
         Total .....  $31,551         $10,323          $ 8,703      $ 1,066
                      =======         =======          =======      =======

     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, 2001.

     Maturity                                                 (In thousands)
     --------                                                 --------------
     Three months or less..................................       $1,182
     Greater than three months through six months..........        1,134
     Greater than six months through twelve months.........        2,479
     Over twelve months....................................        1,745
                                                                  ------
              Total                                               $6,540
                                                                  ======

     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.

<TABLE>
<CAPTION>
                                                               Deposit Activity
                                 -------------------------------------------------------------------------
                                                         Increase                            Increase
                                                        (Decrease)                          (Decrease)
                                  Balance at               from       Balance at                from
                                 December 31,    % of   December 31,  December 31,  % of     December 31,
                                      2001     Deposits    2000          2000      Deposits     1999
                                 ------------  -------- ------------ ------------- -------- --------------
         (Dollars in thousands)
Withdrawable:
<S>                                <C>            <C>       <C>       <C>            <C>       <C>
  Passbook savings accounts ....   $ 4,136        4.93%     $  658    $ 3,478        4.38%     $  609
  Regular money market accounts        942        1.12         (99)     1,041        1.31        (125)
  Hi yield money market accounts    16,817       20.04       2,035     14,782       18.61      (3,339)
  Super NOW accounts ...........       962        1.15         348        614         .77         287
  NOW accounts .................     6,057        7.22         591      5,466        6.88         116
  Non-interest bearing accounts      3,343        3.99          66      3,277        4.12         596
                                    ------      ------      ------     ------      ------      ------
Total withdrawable .............    32,257       38.45       3,599     28,658       36.07      (1,856)
Certificates (original terms):
  91 days ......................       894        1.06         226        668         .84         146
  6 months .....................     3,739        4.46      (4,200)     7,939        9.99       4,701
  12 months ....................    13,391       15.96      (6,439)    19,830       24.96       7,661
  18 months ....................     7,564        9.01       6,301      1,263        1.59         131
  24 months ....................     4,975        5.93      (2,280)     7,255        9.13      (4,514)
  30 months ....................    11,679       13.92       6,254      5,425        6.83      (2,718)
  More than 30 months ..........     3,370        4.02         144      3,226        4.06        (169)
IRAs
  18 months ....................     6,031        7.19         841      5,190        6.53          61
                                    ------      ------      ------     ------      ------      ------
Total certificates .............    51,643       61.55         847     50,796       63.93       5,299
                                    ------      ------      ------     ------      ------      ------
Total deposits .................   $83,900      100.00%     $4,446    $79,454      100.00%     $3,443
                                   =======      ======      ======    =======      ======      ======
</TABLE>


                                             Deposit Activity
                                   --------------------------------------
                                                              Increase
                                                             (Decrease)
                                   Balance at                   from
                                   December 31,    % of      December 31,
                                      1999       Deposits        1998
                                   ------------  --------    ------------
                                          (Dollars in thousands)
Withdrawable:
  Passbook savings accounts ....   $ 2,869        3.77%        $  (302)
  Regular money market accounts      1,166        1.53              13
  Hi yield money market accounts    18,121       23.84          (1,241)
  Super NOW accounts ...........       327         .43             (39)
  NOW accounts .................     5,350        7.04             560
  Non-interest bearing accounts      2,681        3.53           1,189
                                   -------      ------         -------
Total withdrawable .............    30,514       40.14             180
Certificates (original terms):
  91 days ......................       522         .69            (705)
  6 months .....................     3,238        4.26            (353)
  12 months ....................    12,169       16.01           6,198
  18 months ....................     1,132        1.49            (700)
  24 months ....................    11,769       15.48             636
  30 months ....................     8,143       10.71             574
  60 months ....................     3,395        4.47            (224)
IRAs
  18 months ....................     5,129        6.75             394
                                   -------      ------         -------
Total certificates .............    45,497       59.86           5,820
                                   -------      ------         -------
Total deposits .................   $76,011      100.00%        $ 6,000
                                   =======      ======         =======

     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,
2001, the Company had $6.0 million in borrowings  from the FHLB of  Indianapolis
which mature  within one year and $28.7 million which mature in greater than one
year. The weighted  average  interest rate related to these borrowings was 5.39%
at December  31,  2001.  The  Company  does not  anticipate  any  difficulty  in
obtaining  advances  appropriate  to meet its  requirements  in the  future.  At
December 31, 2001, 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 1.92% at December 31, 2001.

Employees

     As of December 31, 2001, the Bank employed 22 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")  and 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 federal deposit  insurance  funds. 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.  Currently,  the quarterly assessment rates range from .01164%
of assets for  associations  with  assets of $67  million or less to .00308% for
associations  with  assets in  excess  of $35  billion.  The  Bank's  semiannual
assessment under this assessment scheme, based upon its total assets at December
31, 2001, was approximately $20,500.

     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 their 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 HOLA generally  prohibits a savings and loan holding  company,  without
obtaining  the prior  approval of the  Director of the OTS,  from (i)  acquiring
control of any other savings  association or savings and loan holding company or
controlling  the  assets  thereof or (ii)  acquiring  or  retaining  more than 5
percent of the voting shares of a savings association or holding company thereof
which is not a subsidiary. Except with the prior approval of the Director of the
OTS,  no director  or officer of a savings  and loan  holding  company or person
owning or  controlling  by proxy or  otherwise  more than 25% of such  company's
stock  may  also  acquire  control  of any  savings  institution,  other  than a
subsidiary institution, or any other savings and loan holding company.

     The Holding  Company's Board of Directors  presently intends to continue to
operate the Holding Company as a unitary savings and loan holding company. Under
current OTS regulations,  there are generally no restrictions on the permissible
business activities of a unitary savings and loan 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, 2001, 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.

     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.

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, 2001, the Bank's investment in stock of the FHLB of Indianapolis
was  $1,973,100.  For the  fiscal  year ended  December  31,  2001,  the FHLB of
Indianapolis paid approximately $147,000 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.

Insurance of Deposits

     The FDIC is an independent federal agency that insures the deposits,  up to
prescribed  statutory limits, of banks and thrifts and safeguards the safety and
soundness  of the  banking  and  thrift  industries.  The FDIC  administers  two
separate  insurance  funds,  the Bank  Insurance Fund (the "BIF") for commercial
banks and state savings banks and the SAIF for savings  associations such as the
Bank and banks that have acquired deposits from savings  associations.  The FDIC
is required to maintain designated levels of reserves in each fund. During 1996,
the reserves of the SAIF were below the level required by law, primarily because
a significant  portion of the  assessments  paid into the SAIF have been used to
pay the cost of prior  thrift  failures,  while the  reserves of the BIF met the
level required by law. In 1996, however, legislation was enacted to recapitalize
the SAIF and  eliminate  the  premium  disparity  between  the BIF and SAIF,  as
further described below.

     The FDIC is authorized to establish  separate annual  assessment  rates for
deposit  insurance for members of the BIF and members of the SAIF.  The FDIC may
increase  assessment  rates for either fund if  necessary  to restore the fund's
ratio of reserves to insured  deposits to the target  level  within a reasonable
time and may decrease these rates if the target level has been met. The FDIC has
established a risk-based assessment system for both SAIF and BIF members.  Under
this system, assessments vary depending on the risk the institution poses to its
deposit  insurance fund. An institution's  risk level is determined based on its
capital level and the FDIC's level of supervisory concern about the institution.

     In 1996,  legislation  was enacted  that  included  provisions  designed to
recapitalize the SAIF and eliminate the significant  premium  disparity  between
the BIF and the SAIF,  and beginning  January 1, 1997, the Bank's annual deposit
insurance premium was reduced from .23% to .06% of total assessable deposits. 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
("FICO"),  which is a  federally-chartered  corporation  that was  organized  to
provide some of the financing to resolve the thrift crisis in the 1980s.  During
1998, FICO payments for SAIF members  approximated 6.10 basis points,  while BIF
members paid 1.22 basis points.  By law,  payments on FICO obligations have been
shared  equally  between  BIF members and SAIF  members  since  January 1, 2000.
Legislation is pending before Congress that would increase the deposit insurance
assessments paid by all financial institutions, including the Bank.

     Although Congress has considered  merging the SAIF and the BIF, until then,
savings  associations  with SAIF deposits may not transfer deposits into the BIF
system without  paying  various exit and entrance  fees.  Such exit and entrance
fees need not be paid if a SAIF institution converts to a bank charter or merges
with a bank, as long as the resulting bank continues to pay applicable insurance
assessments to the SAIF, and as long as certain other conditions are met.

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, 2001, the Bank was in compliance with all capital
requirements imposed by law.

     The OTS has  promulgated  a rule  which  sets  forth  the  methodology  for
calculating an interest rate risk  component to be used by savings  associations
in calculating  regulatory  capital.  The OTS has delayed the  implementation of
this rule, however.  The rule requires savings  associations with "above normal"
interest rate risk  (institutions  whose portfolio equity would decline in value
by more than 2% of assets in the event of a hypothetical 200-basis-point move in
interest rates) to maintain  additional capital for interest rate risk under the
risk-based capital framework. If the OTS were to implement this regulation,  the
Bank would not be required to maintain  additional  capital at December 31, 2001
under the terms of the OTS proposed  interest  rate risk rule.  The OTS recently
proposed  an  amendment  to the  interest  rate risk rule that would  delete the
requirement  that a savings  association  with excess  exposure to interest rate
risk maintain additional capital.

     The OTS has also revised its standards regarding the management of interest
rate risk to  include  summary  guidelines  to assist  savings  associations  in
determining  their  exposures to interest rate risk. If an association is not in
compliance with the 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.

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,
2001,  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.

Capital Distributions Regulation

     The OTS also  restricts the amount of "capital  distributions"  that may be
made by savings associations. The regulation defines a capital distribution as a
distribution of cash or other property to a savings  association's  owners, made
on account of their ownership.  This definition includes a savings association's
payment  of  cash  dividends  to  shareholders,  or  any  payment  by a  savings
association  to  repurchase,  redeem,  retire,  or otherwise  acquire any of its
shares or debt instruments that are included in total capital, and any extension
of credit to finance an  affiliate's  acquisition  of those shares or interests.
The amended regulation does not apply to dividends  consisting only of a savings
association's shares or rights to purchase such shares.

     The regulation  exempts certain savings  associations  from filing either a
notice or an application with the OTS before making any capital distribution and
requires a savings association to file an application for approval of a proposed
capital  distribution  with  the  OTS if the  association  is not  eligible  for
expedited  treatment  under OTS's  application  processing  rules,  or the total
amount  of  all  capital   distributions,   including   the   proposed   capital
distribution,  for the applicable  calendar year would exceed an amount equal to
the  savings  association's  net income  for that year to date plus the  savings
association's retained net income for the preceding two years (the "retained net
income  standard").  Based on the Bank's retained net income standard,  the Bank
would be required to file a notice or application with the OTS before making any
capital  distribution.  A savings  association must also file an application for
approval  of  a  proposed  capital   distribution  if,  following  the  proposed
distribution, the association would not be at least adequately capitalized under
the OTS prompt corrective action  regulations,  or if the proposed  distribution
would violate a prohibition contained in any applicable statute,  regulation, or
agreement between the association and the OTS or the FDIC.

     The  regulation  requires  a  savings  association  to file a  notice  of a
proposed  capital  distribution  in lieu of an application if the association or
the proposed  capital  distribution do not meet the conditions  described above,
and:  (1) the  savings  association  will not be at least well  capitalized  (as
defined  under the OTS  prompt  corrective  action  regulations)  following  the
capital  distribution;  (2) the capital distribution would reduce the amount of,
or retire any part of the savings  association's  common or preferred  stock, or
retire any part of debt instruments such as notes or debentures  included in the
association's  capital  under the OTS  capital  regulation;  or (3) the  savings
association is a subsidiary of a savings and loan holding  company.  Because the
Bank is a  subsidiary  of a  savings  and  loan  holding  company,  this  latter
provision requires that, at a minimum,  the Bank must file a notice with the OTS
30 days before making any capital distributions to the Holding Company.

     In addition to these regulatory restrictions, the Bank's Plan of Conversion
imposes  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")
requires  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 pursuant to FedICIA 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.

Liquidity

     The Financial  Regulatory Relief and Economic Efficiency Act of 2000, which
was  signed  into law on  December  27,  2000,  repealed  the  former  statutory
requirement that all savings  associations  maintain an average daily balance of
liquid assets in a minimum  amount of not less than 4% or more than 10% of their
withdrawable  accounts plus  short-term  borrowings.  The OTS adopted an interim
final rule in March 2001 that  implemented this revised  statutory  requirement,
although savings associations remain subject to the OTS regulation that requires
them to maintain sufficient liquidity to ensure their safe and sound operation.

Safety and Soundness Standards

     In 1995, the federal  banking  agencies  adopted final safety and soundness
standards for all insured  depository  institutions.  The standards,  which were
issued in the form of  guidelines  rather than  regulations,  relate to internal
controls,  information  systems,  internal audit systems,  loan underwriting and
documentation,   compensation  and  interest  rate  exposure.  In  general,  the
standards are designed to assist the federal banking agencies in identifying and
addressing  problems at insured depository  institutions  before capital becomes
impaired.  If an  institution  fails to meet these  standards,  the  appropriate
federal banking agency may require the institution to submit a compliance  plan.
Failure  to submit a  compliance  plan may  result in  enforcement  proceedings.
During  1996,  the federal  banking  agencies  added  asset  quality and earning
standards to the safety and soundness guidelines.

Real Estate Lending Standards

     OTS  regulations  require  savings  associations  to establish and maintain
written  internal  real estate  lending  policies.  Each  association's  lending
policies  must  be  consistent  with  safe  and  sound  banking   practices  and
appropriate  to the size of the  association  and the  nature  and  scope of its
operations.   The  policies  must  establish   loan  portfolio   diversification
standards;  establish prudent underwriting  standards,  including  loan-to-value
limits, that are clear and measurable;  establish loan administration procedures
for the  association's  real  estate  portfolio;  and  establish  documentation,
approval,   and  reporting   requirements   to  monitor   compliance   with  the
association's  real estate  lending  policies.  The  association's  written real
estate lending policies must be reviewed and approved by the association's board
of directors at least annually. Further, each association is expected to monitor
conditions  in its real  estate  market  to  ensure  that its  lending  policies
continue to be appropriate for current market conditions.

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, 2001, 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.

     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, 2001,  81.3% 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  ss.7701(a)(19)  of the Code or the  asset
composition  test of ss.7701(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.

     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,  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 or unless sold in accordance with
the resale  restrictions  of Rule 144 under the  Securities  and Exchange 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.

                                    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.

Item 2.      Properties.

     At December 31, 2001, 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, 2001:

<TABLE>
<CAPTION>
                                                          Total Deposits         Net Book Value
                                                              at                  of Property,
                            Owned or         Year         December 31,             Furniture      Approximate
Description and Address      Leased         Opened            2001                and Fixtures   Square Footage
-----------------------    ----------       ------   ----------------------     ---------------- --------------
                                                               (Dollars in thousands)
<S>                          <C>             <C>            <C>                      <C>             <C>
723 East Broadway            Owned           1962           $83,900                  $1,803          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 $97,000 at December 31, 2001.

     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 $15,000 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, 2001.

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 54) 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 55) 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 52) 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.

                                     PART II

Item 5.      Market  for  Registrant's  Common  Equity and  Related  Shareholder
             Matters.

     Logansport  Savings  Bank,  FSB converted  from a mutual  savings bank to a
stock form federal savings bank effective June 13, 1995 (the  "Conversion")  and
simultaneously  formed a savings and loan holding company,  Logansport Financial
Corp. The Holding Company's common stock, without par value ("Common Stock"), is
quoted on the National  Association of Securities  Dealers  Automated  Quotation
System  ("Nasdaq"),  Small Cap Market,  under the symbol  "LOGN." The  following
table sets forth the high and low trade prices and  dividends  paid per share of
Common Stock for the quarters  indicated.  Such price  information  was obtained
from Nasdaq.

Quarter Ended                  High             Low           Dividends Declared
------------------------   ------------     -----------       ------------------
March 31, 2001               $12.25           $11.25                 $.12
June  30, 2001                13.34            11.44                  .12
September 30, 2001            14.05            12.77                  .12
December 31, 2001             15.25            13.00                  .12

March 31, 2000               $10.31          $  9.06                 $.11
June  30, 2000                 9.88             7.63                  .11
September 30, 2000            11.88             9.81                  .11
December 31, 2000             11.81            10.88                  .11

March 31, 1999               $14.00           $12.00                 $.11
June  30, 1999                12.50            11.13                  .11
September 30, 1999            11.56             9.63                  .11
December 31, 1999             10.50             9.03                  .11

     As of  February  8,  2002,  there were 775  record  holders of the  Holding
Company's  Common Stock.  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,"  which  includes,  among  other  things,  cash
dividends, will depend upon in which one of three categories,  based upon levels
of capital, that savings institution is classified.  The Bank is now and expects
to continue to be a "tier one  institution"  and therefore  would be able to pay
cash dividends to the Holding Company during any calendar year up to 100% of its
net income  during that  calendar  year plus the amount that would reduce by one
half its "surplus  capital ratio" (the excess over its fully  phased-in  capital
requirements)  at the beginning of the calendar year. 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, 2001,  approximately  $1.6
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.

Item 6.      Selected Financial Data.

     The  information  required by this item is incorporated by reference to the
material under the heading "Selected  Consolidated  Financial Data of Logansport
Financial Corp. and  Subsidiary" on pages 4 and 5 of the Holding  Company's 2001
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 18 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
15 through 16 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  19  through  47  in  the  Shareholder  Annual  Report  are
incorporated  herein by reference.  The Company's unaudited quarterly results of
operations   contained  on  page  47  in  the  Shareholder   Annual  Report  are
incorporated herein by reference.

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

     Not applicable.

                                    PART III



Item 10.     Directors and Executive Officers of the Registrant.

     The  information  required  by this  item  with  respect  to  directors  is
incorporated  by  reference  to  pages 1  through  5 and  page 9 of the  Holding
Company's  Proxy  Statement for its 2002 Annual  Shareholder  Meeting (the "2002
Proxy  Statement").  Information  concerning  the  Holding  Company's  executive
officers is included in Item 4.5 in Part I of this report.

Item 11.     Executive Compensation.

     The   information   required  by  this  item  with   respect  to  executive
compensation  is  incorporated by reference to pages 6 through 10 of the Holding
Company's 2002 Proxy Statement.

Item 12.     Security Ownership of Certain Beneficial Owners and Management.

     The information required by this item is incorporated by reference to pages
1 through 3 of the 2002 Proxy Statement.

Item 13.     Certain Relationships and Related Transactions.

     The information  required by this item is incorporated by reference to page
10 of the 2002 Proxy Statement. PART IV


Item 14.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

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

          Financial Statements

          Independent  Auditor's  Report
             (Grant  Thornton  LLP).............   See Shareholder Annual Report
                                                                Page 19

          Consolidated  Statements  of Financial
             Condition at December 31, 2001
             and 2000...........................   See Shareholder Annual Report
                                                                Page 20

          Consolidated  Statements of Earnings
             for the Years Ended  December 31,
             2001, 2000 and 1999................   See Shareholder Annual Report
                                                                Page 21

          Consolidated Statements of Comprehensive
             Income for the Years Ended
             December 31, 2001, 2000 and 1999...   See Shareholder Annual Report
                                                                Page 22

          Consolidated Statements of Changes in
             Shareholders' Equity for the Years
             Ended December 31, 2001, 2000 and
             1999...............................   See Shareholder Annual Report
                                                                Page 23

          Consolidated Statements of Cash Flows
             for the Years Ended December 31,
             2001, 2000 and 1999................   See Shareholder Annual Report
                                                                Page 24

          Notes to  Consolidated  Financial
             Statements.........................   See Shareholder Annual Report
                                                                Page 26

     (b)  Reports on Form 8-K.

          The  Holding  Company  did not file any reports on Form 8-K during the
          fourth quarter of its 2001 fiscal year.

     (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(12).

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


<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 27, 2002                        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 27th day of March, 2002.




/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
----------------------------------------------------
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 3.2 to
                    the Form 10-Q for the  period  ended June 30,
                    1997, filed with the Commission on August 13,
                    1997 and resolutions  dated October 13, 1998,
                    are incorporated  by reference to Exhibit 3.2
                    to the Form 10-K for the period ended December
                    31, 1998, filed with the Commission on  March
                    29, 1999.

      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)  to the Form  10-K405  for the
                    period ended  December  31, 2000,  filed with
                    the Commission on March 30, 2001.

      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.

      10(14)        Employment  Agreement  dated  as of  February
                    11,  2002,  between  the  Bank  and  Allen D.
                    Schieber.

      13            2001 Shareholder Annual Report.

      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).