TABLE OF CONTENTS

                                                                          Page

Directors and Officers                                                       2

President's Message to Shareholders                                          3

Selected Consolidated Financial Data                                         4

Management's Discussion and Analysis                                         6

Report of Independent Certified Public Accountants                          21

Consolidated Statements of Financial Condition                              22

Consolidated Statements of Earnings                                         23

Consolidated Statements of Comprehensive Income                             24

Consolidated Statements of Changes in Shareholders' Equity                  25

Consolidated Statements of Cash Flows                                       26

Notes to Consolidated Financial Statements                                  28






                     BUSINESS OF LOGANSPORT FINANCIAL CORP.

Logansport Financial Corp. ("Logansport Financial" or the "Company"), an Indiana
corporation,  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 in June,  1995. The Company and the
Bank conduct business from a single office in Logansport,  Cass County, Indiana.
The Bank is and historically has been among the top real estate mortgage lenders
in Cass County and is the oldest  financial  institution  headquartered  in Cass
County.  The Bank offers a variety of retail deposit and lending  services.  The
Company has no business  activity  other than being the holding  company for the
Bank. The Company is the sole shareholder of the Bank.

                                MISSION STATEMENT

"The Board of Directors,  management  and staff of  Logansport  Savings Bank are
dedicated to serving the needs of our  customers,  providing  them with the best
possible service in an efficient,  friendly,  caring atmosphere. As a vital part
of this  community,  Logansport  Savings Bank seeks to continue  partnering with
local business and individuals.  The customers,  employees, and shareholders are
an  integral  part of  Logansport  Savings  Bank and are best served if the Bank
remains an independent,  locally controlled and operated,  profitable  financial
institution."

                                        1


<PAGE>



                           Logansport Financial Corp.

                             DIRECTORS AND OFFICERS

     DIRECTORS

     Charles  J. Evans (age 54) has  served as Vice  President  and Senior  Loan
Officer of Logansport  Savings Bank,  FSB since 1980.  Mr. Evans was promoted to
Senior Vice President in January 2000.

     Brian J. Morrill (age 42) is the founder and President of Cass County Title
Company,  Inc.  The firm  provides  title  insurance  policies  and real  estate
searches for lenders,  realtors,  attorneys,  and the general  public.  Prior to
founding  Cass  County  Title  Company,  Morrill  served  for ten  years  as the
Executive  Director  of the Cass  County  Family  YMCA in  Logansport,  Indiana.
Morrill has served on several community boards and is currently  Chairman of the
Logansport/Cass County Chamber of Commerce.

     Susanne  S.  Ridlen  (age 60) has served as an  adjunct  faculty  member of
Indiana  University  Kokomo ("IUK") since 1969. Ms. Ridlen also currently serves
as a member of the Board of Directors of the Logansport Art  Association and the
Cass County Children's Home in Logansport, Indiana.

     William  Tincher,  Jr. (age 60) has served as Plant  Manager for the Modine
Manufacturing  Company  ("Modine") since 1977.  Modine is located in Logansport,
Indiana, and manufactures automotive cooling systems.

     David  G.  Wihebrink  (age  52) has  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 House retirement home in Logansport, Indiana.

     Thomas G. Williams  (age 67) has served as President of Logansport  Savings
Bank, FSB since 1971.

LOGANSPORT FINANCIAL CORP.             LOGANSPORT SAVINGS BANK, FSB

Officers                               Officers

THOMAS G. WILLIAMS                     THOMAS G. WILLIAMS - President
President and Chief
Executive Officer                      CHARLES J. EVANS - Senior Vice President

CHARLES J. EVANS                       DOTTYE ROBESON - Chief Financial Officer/
Vice President                                             Secretary/Treasurer

DOTTYE ROBESON                         ALLEN SCHIEBER - Senior Vice President
Secretary/Treasurer
                                       JEFFREY JONES - Vice President

                                       SHEILA WILDERMUTH - Vice President

                                       MARK DEBARGE - Assistant Vice President

                                       KAY GAPSKI - Assistant Vice President

                                        2


<PAGE>



Dear Shareholder:

The year 2000 will mark the 75th  anniversary of Logansport  Savings Bank,  FSB,
the subsidiary of Logansport Financial Corp. We look forward to celebrating this
anniversary and reviewing the  accomplishments  of the last seventy-five  years,
while  never  taking our eyes off plans for the  future.  When I joined the Bank
nearly 41 years ago there were only two employees and assets  totaled  $750,000.
At year-end 1999, total assets of the consolidated  Company were $117.5 million.
The year 1999 was a year of excitement and transition for us. Our  profitability
mirrored  our  1998  results  but in  many  respects  we  were a very  different
institution.  We moved into our new  banking  facility  in March of 1999 and the
remodeling of the old building was  completed by May. We are extremely  proud of
the completed  project.  It is a beautiful  building and ideal for our needs now
and in the future.  We hosted a community open house in May and we have received
nothing but compliments on our facility. If you have not visited us, please stop
by and look  around  and meet our very  capable  staff who is ready to meet your
every banking need.

In 1998 we added a  commercial  lender and 1999  reflected  the  results of that
decision.  Total loans  increased by $17.8 million,  a 24.4% increase over 1998.
This growth was  instrumental  in maintaining  our income while expanding into a
new  facility  and  doubling  our  staff  to meet the  needs  of our  customers.
Additionally,  in  September  of 1999 we hired Jeff Jones,  a  well-known  local
agricultural  lender. We expect this division to further enhance the earnings of
the Company and provide a much-needed  service to the  agricultural  sector.  We
welcome Jeff to the Bank.

Our  return on average  assets was 1.14% and return on equity was 7.33%.  During
the year a 10% stock repurchase program was authorized.  Since our conversion in
1995 we have  authorized  a total of 20% of our  stock to be  repurchased.  Each
repurchase enhances shareholder value and this was reflected in our earnings per
share numbers.  In 1999, basic earnings per share was $1.03 compared to $1.00 in
1998.  These  repurchases  evidence  our  commitment  to  create  value  for our
shareholders  over the long term. We have  continued to pay quarterly  dividends
since  our  conversion  to a stock  institution  and  remain  committed  to this
practice. We are pleased with our performance but disappointed by the failure of
the market to recognize the value of the Company.  We remain optimistic that the
market will soon have a renewed recognition of our potential.

Logansport  Financial Corp. and Logansport Savings Bank look confidently forward
to a new century. The changing of the calendar brings new challenges and we must
be ready to meet  them.  We remain  committed  to  providing  excellent  banking
services for the people of this area and we continually  look for better ways to
serve our customers.  I am proud to have served this Bank and this community for
so many years and though my role will shift from  President  to Director in this
next year, my commitment  to work for the good of this  institution  will remain
the same.  We look to the future and we will be ever  working to be "Your Bank".
Please join us for our annual  meeting on April 11th,  2000 to help us celebrate
the successes of the past and the potential for the future.

Sincerely,


/s/Thomas G. Williams
Thomas G. Williams, President

                                        3


<PAGE>



                           Logansport Financial Corp.

                 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The  following  tables  set  forth  certain  information  concerning  Logansport
Financial's  consolidated  financial  position,  results of operations and other
data at the dates and for the periods indicated.
<TABLE>
<CAPTION>


                                                                      At December 31,
Statement of Financial Condition Data:            1999         1998        1997          1996        1995
                                                                      (In thousands)
<S>                                            <C>          <C>          <C>          <C>          <C>
Total assets                                   $117,468     $ 96,085     $ 86,115     $ 77,668     $ 74,647
Loans receivable, net                            90,900       73,073       63,635       56,802       49,707
Mortgage-backed securities                        5,898        8,129        9,932        6,674        7,468
Cash and cash equivalents                         5,146        4,328        2,269        3,759        3,243
Investment securities                             8,539        5,033        5,750        7,629       11,285
Certificates of deposit in other financial
  institutions                                       --           --          100          100          100
Deposits                                         76,011       70,011       60,595       57,396       52,461
Borrowings                                       24,307        8,375        8,025        3,400        1,000
Shareholders' equity - net                       16,146       16,488       16,542       15,427       20,454
</TABLE>

<TABLE>
<CAPTION>
                                                              Year ended December 31,
Summary of Operating Results:                   1999      1998        1997      1996       1995
                                                         (In thousands, except share data)

<S>                                           <C>        <C>        <C>        <C>        <C>
Interest income                               $7,599     $6,579     $6,101     $5,653     $4,775
Interest expense                               4,043      3,476      3,115      2,719      2,468
                                              ------     ------     ------     ------     ------
Net interest income                            3,556      3,103      2,986      2,934      2,307
Provision for losses on loans                    162         63         26         12         20
                                              ------     ------     ------     ------     ------
Net interest income after provision for
  losses on loans                              3,394      3,040      2,960      2,922      2,287
Other income                                     175        285        170         82        179
General, administrative and other expense      1,667      1,322      1,170      1,584      1,032
                                              ------     ------     ------     ------     ------
Earnings before income taxes                   1,902      2,003      1,960      1,420      1,434
Income taxes                                     678        756        728        507        526
                                              ------     ------     ------     ------     ------
Net earnings                                  $1,224     $1,247     $1,232     $  913     $  908
                                              ======     ======     ======     ======     ======

Basic earnings per share                      $ 1.03     $ 1.00     $  .98     $  .69     N/A (1)
                                              ======     ======     ======     ======     ======

Diluted earnings per share                    $ 1.02     $  .97     $  .95     $  .69     N/A (1)
                                              ======     ======     ======     ======     ======

Cash dividends per share
  Regular                                     $  .44     $  .43     $  .40     $  .40     $  .20
                                              ======     ======     ======     ======     ======
  Special                                        N/A        N/A        N/A     $ 3.00 (2)    N/A
                                              ======     ======     ======     ======     ======
</TABLE>



Footnotes on following page.


                                        4


<PAGE>



                           Logansport Financial Corp.

           SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA (CONTINUED)
<TABLE>
<CAPTION>


                                                                            Year ended December 31,
Supplemental Data:                                    1999           1998           1997            1996           1995
<S>              <C>                                 <C>             <C>            <C>            <C>             <C>
Return on assets (3)                                 1.14%           1.37%          1.50%          1.18%           1.34%
Return on equity (4)                                 7.33            7.44           7.69           4.76            6.33
Interest rate spread (5)                             2.86            2.70           2.94           2.80            2.77
Net yield on interest earning assets (6)             3.54            3.61           3.86           3.99            3.64
General, administrative and other
  expense to average assets                          1.55            1.45           1.42           2.04            1.53
Net interest income to general,
  administrative and other expense                 213.32          234.72         255.21         185.23          223.55
Equity-to-assets (7)                                13.75           17.16          19.21          19.86           27.40
Average interest-earning assets to
  average interest-bearing liabilities             117.20          122.72         123.36         132.80          122.90
Non-performing assets to total assets                 .57             .33            .62            .52             .42
Non-performing loans to total loans                   .72             .42            .67            .71             .63
Loan loss allowance to total loans                    .47             .38            .38            .41             .45
Loan loss allowance to non-performing
  loans                                             66.07           90.48          56.84          58.12           71.61
Dividend payout ratio                               42.72           43.00          40.82          57.97(8)          --- (1)
Net charge-offs to average loans                     *                .03            .03           *               *

*  Less than .01%
-------------

(1)  Information prior to 1996 is not meaningful.
(2)  Special one-time cash distribution  which qualified as a non-taxable return
     of capital pursuant to an IRS Private Letter Ruling.
(3)  Net earnings divided by average total assets.
(4)  Net earnings divided by average total equity.
(5)  Interest rate spread is calculated by subtracting combined weighted average
     interest rate cost from combined  weighted average interest rate earned for
     the period indicated.
(6)  Net interest income divided by average interest-earning assets.
(7)  Total equity divided by total assets.
(8)  Excludes special one-time $3.00 per share cash distribution.

</TABLE>



                                        5


<PAGE>



                           Logansport Financial Corp.

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

General

The  Company  was  formed as part of the  conversion  of the Bank from a federal
mutual  savings bank to a federal stock savings bank,  which was completed  June
13, 1995. The Company has no activity  other than being the holding  company for
the Bank.

The  principal  business  of  savings  associations,  including  the  Bank,  has
historically consisted of attracting deposits from the general public and making
loans  secured  by  residential  and other real  estate.  The Bank and all other
savings   associations  are  significantly   affected  by  prevailing   economic
conditions,  as well as government  policies and regulations  concerning,  among
other things,  monetary and fiscal affairs,  housing and financial institutions.
Deposit flows are  influenced by a number of factors,  including  interest rates
paid on competing investments,  account maturities and levels of personal income
and savings.  In addition,  deposit growth is affected by how customers perceive
the stability of the financial  services  industry amid various  current  events
such as  regulatory  changes,  failures  of  other  financial  institutions  and
financing of the deposit  insurance fund.  Lending  activities are influenced by
the demand for and supply of housing lenders, the availability and cost of funds
and various  other items.  Sources of funds for lending  activities  of the Bank
include  deposits,  borrowings,  payments  on loans  and  income  provided  from
operations.

The Bank's earnings are primarily dependent upon its net interest income,  which
is the  difference  between  interest  income  on  interest-earning  assets  and
interest expense on interest-bearing liabilities.  Interest income is a function
of the balances of loans and investments  outstanding  during a given period and
the yield earned on such loans and  investments.  Interest expense is a function
of the amount of deposits and borrowings  outstanding during the same period and
interest  rates paid on such deposits and  borrowings.  The Bank's  earnings are
also affected by provisions for loan losses, service charges, operating expenses
and income taxes.

Forward-Looking Statements

In the  following  pages,  management  presents  an  analysis  of the  Company's
financial  condition as of December 31, 1999,  and the results of operations for
the year ended December 31, 1999, as compared to prior  periods.  In addition to
this historical information,  the following discussion contains  forward-looking
statements that involve risks and  uncertainties.  Economic  circumstances,  the
Company's operations and the Company's actual results could differ significantly
from those discussed in the forward-looking statements. Some of the factors that
could cause or contribute  to such  differences  are  discussed  herein but also
include  changes  in the  economy  and  interest  rates in the nation and in the
Company's general market area.

Without limiting the foregoing,  some of the forward-looking  statements include
the following:

1.   Management's  establishment  of  an  allowance  for  loan  losses  and  its
     statements regarding the adequacy of such allowance for loan losses.

2.   Management's  opinion  as  to  the  financial  statement  effec  of  recent
     accounting pronouncements.

3.   Management's  opinion as to the effect of changes in interest  rates on the
     Company's results of operations.


                                        6


<PAGE>



                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Changes in Financial Condition from December 31, 1998 to December 31, 1999

General

The Company's total assets were $117.5 million at December 31, 1999, an increase
of $21.4 million,  or 22.3%,  over the $96.1 million total at December 31, 1998.
The increase in assets was funded through growth in deposits of $6.0 million and
increases in borrowings of $16.0  million.  The  percentage of  interest-earning
assets  to total  assets  was 94.0% and  94.5% at  December  31,  1999 and 1998,
respectively.

At December 31, 1999, the total of investment and mortgage-backed securities was
$14.4  million,  compared to $13.2  million at December 31, 1998, an increase of
$1.2 million,  or 9.7%. The primary investments added to the portfolio were FHLB
callable  fixed rate notes.  At December 31, 1999,  the Company held $523,000 of
corporate  obligations,  all of which was debt of domestic corporations rated AA
or better by Moody's  Investors  Service,  Inc.  The  Company  had  $300,000  of
structured  FHLB notes in its investment  portfolio at December 31, 1999,  which
will mature in July, 2000.

Total loans  increased by $17.8  million from  December 31, 1998 to December 31,
1999,  an  increase  of  24.4%.  Most of the  increase  occurred  in the one- to
four-family  mortgages and commercial loans. One- to four-family  mortgage loans
increased by $5.7 million,  or 10.9%, and loans secured by  nonresidential  real
estate and commercial loans increased by $10.9 million,  or 219.9%. The increase
in loans was funded primarily by the increase in deposits and advances.

During 1997 the Company  invested $1.5 million in a limited  partnership,  which
will  construct  and  manage  residential  real  estate  apartments  for low and
moderate income residents. This investment reflects a 49.5% participation in the
partnership.  The affordable housing project is expected to generate tax credits
for the Bank in future years.  This investment  resulted in an increase to total
assets of $1.5  million  with a  corresponding  increase  in notes  payable.  At
December 31, 1998, the project was just beginning to rent apartments; therefore,
there was no material income or loss to allocate to the Company. During 1999 the
housing  project  passed  through  pretax  losses of $121,000  due to lower than
anticipated  occupancy.  The  project  is  anticipated  to  meet  its  projected
occupancy targets during 2000.

Deposits  increased by $6.0 million to $76.0 million at December 31, 1999,  from
$70.0 million at December 31, 1998. Non-interest bearing deposits, NOW accounts,
passbook   savings  and  money  market  savings   increased  by  $200,000  while
certificates of deposit increased by $5.8 million. Borrowings increased by $16.0
million  during the year.  At December 31, 1999,  borrowings  consisted of $23.0
million in FHLB advances and at December 31, 1998  borrowings  consisted of $7.0
million in FHLB advances.

Shareholders'  equity  totaled $16.1 million at December 31, 1999, a decrease of
$342,000,  or 2.1%, from December 31, 1998. The decrease resulted primarily from
payment of $521,000 in regular  quarterly  dividends,  common stock  repurchases
totaling $696,000, and a $483,000 increase in unrealized losses on available for
sale  securities.  Equity was  increased by the effects of  amortization  of the
Company's  Recognition  and  Retention  Plan and net earnings for the year ended
December 31, 1999, of $1.2 million.

Comparison  of Results of Operations  for the Years Ended  December 31, 1999 and
1998

Net  earnings  totaled  $1.2  million for the year ended  December  31,  1999, a
$23,000, or 1.8%, decrease from the net earnings reported for 1998. The decrease
in net earnings resulted  primarily from an increase of $99,000 in the provision
for losses on loans,  a decrease of $110,000 in other  income and an increase of
$345,000 in general,  administrative  and other  expense,  which were  partially
offset by an  increase  of  $453,000  in net  interest  income and a decrease of
$78,000 in the provision for income taxes.

                                        7


<PAGE>



                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Comparison  of Results of Operations  for the Years Ended  December 31, 1999 and
1998 (continued)

Interest Income

The Company's total interest income was $7.6 million for the year ended December
31, 1999,  compared to $6.6 million during 1998, an increase of $1.0 million, or
15.5%.  The increase in average  interest  earning  assets from $86.7 million in
1998 to $101.4  million in 1999  helped  contribute  to the  increase.  However,
falling loan rates  contributed to a 9 basis point decrease in the average yield
on interest earning assets, to 7.53% in 1999 compared to 7.62% in 1998.

Interest Expense

Interest  expense  increased by $567,000,  or 16.3%, for the year ended December
31, 1999,  compared to 1998.  This increase was the result of an increase in the
average  balance  of  interest-bearing  liabilities  of  $15.8  million  and the
decrease in the average cost of these liabilities by 25 basis points, from 4.92%
during 1998 to 4.67% in 1999. Local competition resulted in pressure to maintain
competitive  rates on deposits,  while use of FHLB advances  lowered the cost of
interest bearing liabilities.

Net Interest Income

Net interest  income  increased by $453,000,  or 14.6%,  to  approximately  $3.6
million in 1999, as compared to $3.1 million in 1998.  The net yield on weighted
average interest-earning assets declined in 1999 to 3.54% from 3.61% in 1998.

Provision for Losses on Loans

The  Company's  provision  for losses on loans for the years ended  December 31,
1999 and 1998, was $162,000 and $63,000,  respectively.  A larger  provision was
recorded  in  1999  due to the  increase  in the  volume  of  loans  secured  by
nonresidential and commercial real estate.  Management considered this provision
and the related  increase in the allowance for loan losses adequate based on the
degree  of  delinquencies  in the loan  portfolio  and the  Company's  loan loss
history.  There were no recoveries in 1999 and 1998, while  charge-offs  totaled
$7,000  and  $23,000  in 1999 and 1998,  respectively.  The  Company  provides a
general  allowance  that reflects an estimate of inherent  losses based upon the
types and categories of outstanding  loans as well as problem loans. At December
31, 1999 and 1998, the allowance was $440,000 and $285,000,  respectively, for a
ratio to total loans of .47% in 1999 and .38% in 1998.  Non-performing  loans at
these dates were $666,000 and $315,000, respectively. The ratio of allowance for
loan losses to non-performing loans decreased from 90.5% at December 31, 1998 to
66.1% at December 31, 1999.  Based on management's  review of the loan portfolio
during these years, the allowance for loan losses at December 31, 1999 and 1998,
is considered adequate to cover potential losses inherent in the loan portfolio.

Other Income

The  Company's  other income for the year ended  December 31, 1999,  without the
loss on equity  investments,  was  $296,000,  compared to $285,000 in 1998.  The
$121,000 loss on equity investments  recorded in 1999 had an after tax effect of
approximately  $40,000,  when  considering the tax benefit and the available tax
credits generated by the project.

                                        8


<PAGE>



                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Comparison  of Results of Operations  for the Years Ended  December 31, 1999 and
1998 (continued)

General, Administrative and Other Expense

General, administrative and other expense totaled $1.7 million in 1999, compared
to  $1.3  million  in  1998,  an  increase  of  $345,000,   or  26.1%.  Employee
compensation  and benefits  increased by $182,000,  or 24.5%,  due  primarily to
additional  personnel.  Data processing fees increased by $37,000, or 33.6%, due
primarily  to  increased  account  volume  and the  additional  commercial  loan
software  maintenance  costs.  Various  other  operating  expenses  increased by
$50,000,  or 14.7%.  The  majority of the  increase  was  related to  additional
operating  costs  associated  with  increased  account  volume,   new  services,
consulting fees and office supplies,  all of which were primarily related to the
new building and additional personnel.

Income Tax Expense

Income tax expense for the years ended  December 31, 1999 and 1998, was $678,000
and  $756,000,  respectively.  Pretax  income  decreased  only  slightly in 1999
compared to 1998,  but  approximately  $40,000 of tax credits were  available in
1999.  This  resulted in a  corresponding  decrease in income tax  expense.  The
effective  tax rates were 35.6% and 37.7% for the years ended  December 31, 1999
and 1998, respectively.

Comparison  of Results of Operations  for the Years Ended  December 31, 1998 and
1997

Net  earnings  totaled  $1.2  million for the year ended  December  31,  1998, a
$15,000, or 1.2%, increase over the net earnings reported for 1997. The increase
in net  earnings  resulted  primarily  from a $117,000  increase in net interest
income and a $115,000 increase in other income, which were partially offset by a
$37,000  increase in the provision for losses on loans,  a $152,000  increase in
general,  administrative  and  other  expense  and a  $28,000  increase  in  the
provision for federal income taxes.

Interest Income

The Company's total interest income was $6.6 million for the year ended December
31, 1998,  compared to $6.1 million  during  1997,  an increase of $478,000,  or
7.8%.  The increase in average  interest  earning  assets from $78.6  million in
1997,  to $86.7  million in 1998 helped  contribute  to the  increase.  However,
falling loan rates contributed to a 21 basis point decrease in the average yield
on interest earning assets, to 7.62% in 1998 compared to 7.83% in 1997.  Average
loan yield,  yield on  mortgage-backed  securities,  investment  securities  and
interest-earning deposits all declined during the year.

Interest Expense

Interest  expense  increased by $361,000,  or 11.6%, for the year ended December
31, 1998  compared to 1997.  This  increase was the result of an increase in the
average balance of interest-bearing liabilities of $7.0 million and the increase
in the average cost of these  liabilities  by 3 basis points,  from 4.89% during
1997 to 4.92% in 1998.  Local  competition  resulted  in  pressure  to  maintain
competitive rates, resulting in a continued decline in the interest rate spread.

                                        9


<PAGE>



                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Comparison  of Results of Operations  for the Years Ended  December 31, 1998 and
1997 (continued)

Net Interest Income

Net interest  income  increased  by $117,000,  or 3.9%,  to  approximately  $3.1
million in 1998, as compared to $3.0 million in 1997.  The net yield on weighted
average interest-earning assets declined in 1998 to 3.61% from 3.86% in 1997.

Provision for Losses on Loans

The  Company's  provision  for losses on loans for the years ended  December 31,
1998 and 1997,  was $63,000 and $26,000,  respectively.  A larger  provision was
made in 1998 due primarily to the development of a commercial  loan  department.
Management  considered this provision and the related  increase in the allowance
for loan  losses  adequate  based on the  degree  of  delinquencies  in the loan
portfolio and the Company's loan loss history. There were no recoveries in 1998,
recoveries of $1,100 in 1997, and charge-offs of $23,000 and $18,000 in 1998 and
1997,  respectively.  The Bank also recorded as a charitable  donation an $8,000
property held in real estate acquired through foreclosure during 1997, which the
Bank donated to Habitat for Humanity of Cass County,  Indiana,  Inc. The Company
provides a general  allowance that reflects an estimate of inherent losses based
upon the types and categories of outstanding  loans as well as problem loans. At
December  31,  1998  and  1997,   the   allowance  was  $285,000  and  $245,000,
respectively,  for a ratio of .38% of total  loans at each date.  Non-performing
loans at these dates were  $315,000  and  $431,000,  respectively.  The ratio of
allowance  for loan  losses to  non-performing  loans  increased  from  56.8% at
December 31, 1997 to 90.5% at December 31, 1998. Based on management's review of
the loan portfolio during these years, the allowance for loan losses at December
31, 1998 and 1997, is considered  adequate to cover potential losses inherent in
the loan portfolio.

Other Income

The  Company's  other income for the years ended  December 31, 1998 and 1997 was
$285,000 and $170,000, respectively. The year ended December 31, 1997 included a
$24,000 recovery on investments previously written off. During 1997, the Company
recorded $50,000 of net losses on sales of securities.  Structured notes of $2.0
million  were  sold at a net loss and the  proceeds  were  reinvested  in higher
yielding  securities,  primarily  mortgage  and other  asset-backed  securities.
During  1998,  the Company had net gains of $4,000 on  security  sales.  Service
charges on deposit accounts increased by $18,000 in 1998 compared to 1997.

General, Administrative and Other Expense

General, administrative and other expense totaled $1.3 million in 1998, compared
to  $1.2  million  in  1997,  an  increase  of  $152,000,   or  13.0%.  Employee
compensation  and benefits  increased by $95,000,  or 14.6%,  due primarily to a
general  compensation  increase and additional  personnel.  Data processing fees
increased  $14,000,  or 14.6%,  for the year.  Various other operating  expenses
increased  by $30,000,  or 9.7%.  The  majority of the  increase  was related to
additional  operating  costs  associated  with  increased  account  volume,  new
services and advertising.

Income Tax Expense

Income tax expense for the years ended  December 31, 1998 and 1997, was $756,000
and $728,000,  respectively.  Pretax income increased only slightly in 1998 over
1997.  This  resulted in a  corresponding  increase in income tax  expense.  The
effective  tax rates were 37.7% and 37.1% for the years ended  December 31, 1998
and 1997, respectively.

                                       10


<PAGE>

                  AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA

The following  table  presents for the periods  indicated the month-end  average
balances  of  each  category  of  the  Company's   interest-earning  assets  and
interest-bearing  liabilities,  and the average yields earned and interest rates
paid on such balances.  Such yields and costs are determined by dividing  income
or expense by the average  balance of assets or liabilities,  respectively,  for
the periods presented.

<TABLE>
<CAPTION>
                                                                        Year ended December 31,
                                                   1999                            1998                           1997
                                     Average   Interest                  Average  Interest              Average   Interest
                                 outstanding    earned/     Yield/   outstanding   earned/  Yield/  outstanding   earned/     Yield/
                                     balance       paid       rate       balance      paid    rate      balance     paid       rate
                                                                            (Dollars in thousands)
<S>                                <C>          <C>           <C>     <C>      <C>             <C>    <C>     <C>            <C>
Interest-earning assets:
  Interest-earning deposits        $   4,571    $   205       4.48%   $  4,699 $   232         4.93%  $3,398  $   179        5.27%
  Mortgage- and other asset-
    backed securities (1)              7,032        421       5.99       9,327     522         5.60    8,380      559        6.67
  Other investment securities (1)      6,820        453       6.64       4,337     277         6.39    6,715      444        6.61
  Loans receivable (2)                82,091      6,484       7.90      67,793   5,535         8.16   59,606    4,932        8.27
  Stock in FHLB of Indianapolis          864         69       8.00         549      44         8.01      466       37        7.94
                                   ---------    -------               -------- -------              --------  -------
     Total interest-earning assets   101,378      7,632       7.53      86,705   6,610         7.62   78,565    6,151        7.83

Non-interest-earning assets            6,446                             4,562                         3,650
                                    --------                           -------                       -------

     Total assets                   $107,824                           $91,267                       $82,215
                                    ========                           =======                       =======

Interest-bearing liabilities:
  Savings accounts                $    3,260         98       3.01    $  3,258      98         3.01 $  3,347      101        3.02
  NOW and money market accounts       25,735        930       3.61      23,185     930         4.01   20,169      823        4.08
  Certificates of deposit             43,059      2,291       5.32      37,581   2,069         5.51   35,636    1,940        5.44
  Borrowings                          14,446        724       5.01       6,628     379         5.72    4,535      251        5.53
                                      ------     ------                -------  ------               -------   ------
    Total interest-bearing
      liabilities                     86,500      4,043       4.67      70,652   3,476         4.92   63,687    3,115        4.89
                                                 ------    -------              ------      -------            ------      ------

Other liabilities                      4,629                             3,862                         2,506
                                    --------                           -------                       -------

    Total liabilities                 91,129                            74,514                        66,193

Shareholders' equity                  16,695                            16,753                        16,022
                                     -------                            ------                        ------

    Total liabilities and
      shareholders' equity          $107,824                           $91,267                       $82,215
                                    ========                           =======                       =======

Net interest-earning assets        $  14,878                           $16,053                       $14,878
                                    ========                            ======                        ======
Net interest income                              $3,589                         $3,134                         $3,036
                                                 ======                          =====                          =====
Interest rate spread (3)                                      2.86%                            2.70%                         2.94%
                                                          ========                         ========                          ====
Net yield on weighted average
  interest-earning assets (4)                                 3.54%                            3.61%                         3.86%
                                                          ========                         ========                          ====
Average interest-earning assets
  to average interest-bearing liabilities                   117.20%                          122.72%                       123.36%
                                                          ========                         ========                        ======
Adjustment of interest on tax-exempt
  securities to a tax-equivalent basis         $     33                       $     31                       $     50
                                                =======                        =======                        =======

</TABLE>
---------------------------


(1)  Includes securities  available for sale at amortized cost prior to SFAS No.
     115  adjustments.
(2)  Comprised of total loans less undisbursed loans in process.
(3)  Interest rate spread is calculated by subtracting weighted average interest
     rate  cost  from  weighted  average  interest  rate  yield  for the  period
     indicated.
(4)  The net yield on weighted average  interest-earning  asset is calculated by
     dividing net interest income by weighted  average  interest-earning  assets
     for the period indicated.

                                       11


<PAGE>


                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Rate/Volume Table

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


                                                                      Year ended December 31,
                                                  1999 vs. 1998                          1998 vs. 1997
                                                   Increase                                Increase
                                                  (decrease)                              (decrease)
                                                   due to                                   due to
                                             Volume       Rate         Total          Volume      Rate      Total
                                                                         (In thousands)
Interest-earning assets:
<S>                                         <C>          <C>          <C>          <C>          <C>          <C>
  Interest-earning deposits                 $    (6)     $   (21)     $   (27)     $    65      $   (12)     $    53
  Mortgage-backed securities                   (135)          34         (101)          59          (96)         (37)
  Investment securities                         165           11          176         (152)         (15)        (167)
  Loans receivable                            1,131         (182)         949          670          (67)         603
  Stock in FHLB of Indianapolis                  25           --           25            7           --            7
                                            -------      -------      -------      -------      -------      -------
     Total interest-earning assets            1,180         (158)       1,022          649         (190)         459

Interest-bearing liabilities:
  Savings accounts                               --           --           --           (2)          (1)          (3)
  NOW and money market accounts                  97          (97)          --          121          (14)         107
  Certificates of deposit                       292          (70)         222          108           21          129
  Borrowings                                    397          (52)         345          119            9          128
                                            -------      -------      -------      -------      -------      -------
     Total interest-bearing liabilities         786         (219)         567          346           15          361
                                            -------      -------      -------      -------      -------      -------

Change in net interest income
  (fully taxable equivalent basis)              394           61          455          303         (205)          98

Tax equivalent adjustment                        (2)          --           (2)          16            3           19
                                            -------      -------      -------      -------      -------      -------

Change in net interest income               $   392      $    61      $   453      $   319      $  (202)     $   117
                                            =======      =======      =======      =======      =======      =======
</TABLE>





                                                                  12


<PAGE>


                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Rate/Volume Table (continued)

The  Company's  results of  operations  have been  determined  primarily  by net
interest income and, to a lesser extent,  fee income,  miscellaneous  income and
general and  administrative  expenses.  Net interest income is determined by the
interest rate spread  between the yields earned on  interest-earning  assets and
the rates paid on  interest-bearing  liabilities and by the relative  amounts of
interest-earning assets and interest-bearing liabilities.

The  following  table sets forth the weighted  average  effective  interest rate
earned by the Company on its loan and investment portfolio, the weighted average
effective  costs of the  Company's  deposits and  borrowings,  the interest rate
spread of the Company,  and the net yield on weighted  average  interest-earning
assets for the periods and as of the date shown.  Average  balances are based on
month-end average balances.
<TABLE>
<CAPTION>

                                                             At December 31,                  Year Ended December 31,
                                                                   1999                  1999         1998         1997

Weighted average interest rate earned on:

<S>                                                               <C>                   <C>           <C>          <C>
  Interest-earning deposits                                       4.50%                 4.48%         4.93%        5.27%
  Mortgage-backed securities                                      6.79                  5.99          5.60         6.67
  Investment securities                                           6.71                  6.64          6.39         6.61
  Loans receivable                                                7.91                  7.90          8.16         8.27
  Stock in FHLB of Indianapolis                                   7.27                  8.00          8.01         7.94
     Total interest-earning assets                                7.63                  7.53          7.62         7.83

Weighted average interest rate cost of:

  Savings accounts                                                2.97                  3.01          3.01         3.02
  NOW and money market accounts                                   3.75                  3.61          4.01         4.08
  Certificates of deposit                                         5.43                  5.32          5.51         5.44
  Borrowings                                                      5.75                  5.01          5.72         5.53
     Total interest-bearing liabilities                           5.00                  4.67          4.92         4.89

Interest rate spread (1)                                          2.63                  2.86          2.70         2.94

Net yield on weighted average
  interest-earning assets (2)                                      N/A                  3.54          3.61         3.86
</TABLE>

(1)  Interest rate spread is calculated by subtracting weighted average interest
     rate cost  from  weighted  average  interest  rate  earned  for the  period
     indicated.  Interest rate spread figures must be considered in light of the
     relationship   between   the   amounts  of   interest-earning   assets  and
     interest-bearing  liabilities.  Since the Company's interest-earning assets
     exceeded its interest-bearing liabilities for each of the three years shown
     above, a positive interest rate spread resulted in net interest income.

(2)  The net yield on weighted average  interest-earning  asset is calculated by
     dividing net interest income by weighted  average  interest-earning  assets
     for the period indicated.  No net yield percentage is presented at December
     31, 1999,  because the  computation of net yield is applicable  only over a
     period rather than at a specific date.

                                                                  13


<PAGE>





                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Asset/Liability Management

The Bank, like other savings  associations,  is subject to interest rate risk to
the degree that its interest-bearing liabilities, primarily deposits with short-
and  medium-term  maturities,  mature or  reprice  at  different  rates than its
interest-earning  assets.  Management  of the Bank  believes  it is  critical to
manage the relationship  between interest rates and the effect on the Bank's net
portfolio value ("NPV").  Generally,  NPV is the discounted present value of the
difference between incoming cash flows on interest-earning  and other assets and
outgoing cash flows on  interest-bearing  liabilities.  Management of the Bank's
assets and liabilities is done within the context of the marketplace, regulatory
limitations  and within  limits  established  by the Board of  Directors  on the
amount of change in NPV which is acceptable given certain interest rate changes.

The Office of Thrift Supervision ("OTS") issued a regulation,  effective January
1, 1994, which uses a net market value  methodology to measure the interest rate
risk exposure of thrift  institutions.  Under OTS regulations,  an institution's
"normal"  level of  interest  rate  risk in the  event of an  assumed  change in
interest rates is a decrease in the institution's NPV in an amount not exceeding
2% of the  present  value of its  assets.  Thrift  institutions  with  over $300
million in assets or less than a 12%  risk-based  capital  ratio are required to
file OTS Schedule  CMR.  Data from  Schedule CMR is used by the OTS to calculate
changes in NPV (and the related "normal" level of interest rate risk) based upon
certain interest rate changes (discussed below).  Institutions which do not meet
either of the filing requirements are not required to file OTS Schedule CMR, but
may do so  voluntarily.  The  Bank  does  not  currently  meet  either  of these
requirements,  but it does voluntarily file Schedule CMR. Presented below, as of
September  30,  1999 (the latest  available  date) and  December  31, 1998 is an
analysis  performed by the OTS of the Bank's  interest  rate risk as measured by
changes in NPV for  instantaneous  and  sustained  parallel  shifts in the yield
curve,  in 100  basis  point  increments,  up and down 300 basis  points  and in
accordance with OTS regulations.  As illustrated in the table, the Bank's NPV is
more sensitive to rising rates than  declining  rates.  This occurs  principally
because,   as  rates  rise,   the  market  value  of  the  Bank's   investments,
adjustable-rate  mortgage loans (many of which have maximum per year adjustments
of 1%), fixed-rate loans and mortgage-backed securities declines due to the rate
increases.   The  value  of  the  Bank's  deposits  and  borrowings   change  in
approximately the same proportion in rising or falling rate scenarios.

<TABLE>
<CAPTION>
                                             September 30, 1999
    Change in
    interest rate                      Net Portfolio Value                             NPV as % of PV of Assets
    (Basis Points)        $ Amount         $ Change           % Change                  NPV Ratio       Change
                                (In thousands)

<S>                        <C>              <C>                  <C>                      <C>        <C>
      +300                 $13,371          $(5,267)             (28)%                    12.43%     (382 bp)
      +200                  15,408           (3,230)              (7)                     13.99      (226 bp)
      +100                  17,207           (1,431)              (8)                     15.28       (97 bp)
        -                   18,638               -                 -                      16.25            -
      -100                  19,432              794                4                      16.72        47 bp
      -200                  19,895            1,257                7                      16.95        70 bp
      -300                  20,538            1,900               10                      17.29       104 bp
</TABLE>



                                                                  14


<PAGE>


                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

    Asset and Liability Management (continued)
<TABLE>
<CAPTION>

                                              December 31, 1998
Change in
interest rate                          Net Portfolio Value                             NPV as % of PV of Assets
(Basis Points)            $ Amount         $ Change           % Change                  NPV Ratio       Change
                                (In thousands)
<S>                        <C>              <C>                  <C>                      <C>        <C>
      +300                  $14,054         $(3,634)           (21)%                    15.15%     (298 bp)
      +200                   15,596          (2,092)           (12)                     16.47      (166 bp)
      +100                   16,808            (880)            (5)                     17.46       (67 bp)
        -                    17,688           -               -                         18.13            -
      -100                   18,471             783              4                      18.71        58 bp
      -200                   19,413           1,725             10                      19.39       126 bp
      -300                   20,082           2,394             14                      20.34       221 bp
</TABLE>


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

Liquidity and Capital Resources

The Company's primary sources of funds are deposits, proceeds from principal and
interest  payments  of loans,  and  proceeds  from  maturing  securities.  While
maturities  and  scheduled  amortization  of loans are a  predictable  source of
funds,  deposit  flows and mortgage  prepayments  are  generally  influenced  by
general interest rates, economic conditions and competition.

The primary  investing  activity of the Company is the  origination  of mortgage
loans and the purchase of investment securities. During the years ended December
31, 1999,  1998 and 1997, the Company  originated  mortgage loans and commercial
loans  in the  amounts  of $36.6  million,  $16.3  million  and  $13.6  million,
respectively.  The Company  originated  consumer  loans of $7.8  million,  $10.5
million  and $6.2  million,  respectively.  The Company  purchased  loans in the
amount of $981,000 in 1999 and $350,000 in 1998. The Company purchased no loans,
excluding  commercial  paper, in 1997.  Loan  repayments,  excluding  commercial
paper, totaled $27.4 million, $17.6 million and $12.8 million for 1999, 1998 and
1997, respectively.

                                                                  15


<PAGE>





                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Liquidity and Capital Resources (continued)

During the years ended December 31, 1999,  1998 and 1997, the Company  purchased
investment  securities  in the amounts of $4.9  million,  $6.1  million and $7.2
million,  respectively.  Sales  or  maturities  of such  securities  held by the
Company and payments on mortgage-backed  or other  asset-backed  securities were
$2.8  million,   $8.6  million  and  $6.1  million  for  1999,  1998  and  1997,
respectively.

Deposits grew by $9.4 million from  December 31, 1997 to December 31, 1998,  and
by $6.0 million from December 31, 1998 to December 31, 1999.

Cash and cash  equivalents  increased  by  $818,000  from  December  31, 1998 to
December 31, 1999.

The Company had outstanding loan  commitments,  including  undisbursed  loans in
process and standby letters of credit,  totaling $11.5 million and $5.8 million,
at December 31, 1999 and 1998,  respectively.  The Company  anticipates  that it
will have  sufficient  funds  available  to meet its current  loan  commitments.
Certificates  of deposit  that are  scheduled to mature in one year or less from
December  31,  1999  and  1998  totaled   $19.8   million  and  $22.3   million,
respectively. Based upon historical deposit flow data, the Company's competitive
pricing in its market and management's  experience,  management  believes that a
significant portion of such deposits will remain with the Company.

Liquidity  management  is both a daily and  long-term  function of the Company's
management  strategy.  In the event that the Company should require funds beyond
its ability to generate them internally,  additional funds are available through
the use of FHLB advances, and also may be available through sales of securities,
although no sales of securities are planned.  At December 31, 1999 and 1998, the
Company  had  outstanding  FHLB  advances  of $23.0  million  and $7.0  million,
respectively.

For each  calendar  month,  the Bank is required  to  maintain an average  daily
balance of liquid assets (cash,  certain time  deposits,  bankers'  acceptances,
specified United States Government, state or federal agency obligations,  shares
of certain  mutual funds and certain  corporate  debt  securities and commercial
paper)  equal to an  amount  not less  than a  specified  percentage  of its net
withdrawable  deposit  accounts  plus  short-term  borrowings.   This  liquidity
requirement may be changed from time to time by the OTS to any amount within the
range of 4% to 10% depending  upon economic  conditions and the savings flows of
member  institutions.  The current OTS required level of liquid assets that must
be held  by a  savings  association  is  equal  to 4% of the  association's  net
withdrawable  accounts plus short-term  borrowings  based upon the average daily
balance of such liquid assets for each quarter of the association's fiscal year.
The OTS may impose  monetary  penalties upon savings  associations  that fail to
comply with those liquidity requirements.  As of December 31, 1999, the Bank had
liquid assets of $18.5 million, and a regulatory liquidity ratio of 26.1%.

                                                                  16


<PAGE>





                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Liquidity and Capital Resources (continued)

Pursuant to OTS capital regulations,  savings associations must currently meet a
1.5%  tangible  capital  requirement,  a 4.0%  leverage  ratio (or core capital)
requirement,  and a total risk-based  capital to  risk-weighted  assets ratio of
8.0%. At December 31, 1999,  the Bank's  tangible  capital ratio was 12.9%,  its
leverage ratio 12.9%, and its risk-based  capital to risk-weighted  assets ratio
21.7%.  Therefore,  at  December  31,  1999,  the Bank's  capital  significantly
exceeded  all of the capital  requirements  currently in effect.  The  following
table  provides  the  minimum  regulatory  capital  requirements  and the Bank's
capital ratios as of December 31, 1999.
<TABLE>
<CAPTION>
                                      OTS Requirement           The Bank's Capital Level
                              % of                                % of                        Amount
                            Assets            Amount            Assets (1)       Amount    of excess
                                                          (Dollars in thousands)
<S>                            <C>            <C>                <C>            <C>          <C>
    Tangible capital           1.5%           $1,761             12.9%          $15,152      $13,391
    Core capital (2)           4.0             4,695             12.9            15,152       10,457
    Risk-based capital         8.0             5,747             21.7            15,592 (3     9,845
</TABLE>


(1)  Tangible and core capital levels are shown as a percentage of total assets;
     risk-based  capital  levels  are  shown as a  percentage  of  risk-weighted
     assets.

(2)  During  1999,  the OTS  adopted  a core  capital  requirement  for  savings
     associations  comparable to that recently adopted by the Comptroller of the
     Currency for national  banks.  The new  regulation  requires at least 3% of
     total adjusted  assets for savings  associations  that received the highest
     supervisory  rating for safety and soundness,  and 4% for all other savings
     associations.

(3)  The Bank's  risk-based  capital  includes  $440,000  of  general  valuation
     allowances.

As of December 31, 1999, management is not aware of any current  recommendations
by regulatory authorities which, if they were to be implemented,  would have, or
are  reasonably  likely  to  have,  a  material  adverse  effect  on the  Bank's
liquidity, capital resources or results of operations.

                                                                  17


<PAGE>





                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Effects of Recent Accounting Pronouncements

In June 1998,  the  Financial  Accounting  Standards  Board (the "FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities,"  which  requires  entities to
recognize  all  derivatives  in their  financial  statements as either assets or
liabilities  measured at fair value.  SFAS No. 133 also specifies new methods of
accounting for hedging transactions,  prescribes the items and transactions that
may be hedged,  and specifies  detailed  criteria to be met to qualify for hedge
accounting.

The definition of a derivative  financial instrument is complex, but in general,
it is an instrument  with one or more  underlyings,  such as an interest rate or
foreign exchange rate, that is applied to a notional  amount,  such as an amount
of currency,  to determine the settlement  amount(s).  It generally  requires no
significant initial investment and can be settled net or by delivery of an asset
that is  readily  convertible  to cash.  SFAS No.  133  applies  to  derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

SFAS No.  133,  as amended  by SFAS No.  137,  is  effective  for  fiscal  years
beginning  after June 15, 2000. On adoption,  entities are permitted to transfer
held-to-maturity  debt securities to the  available-for-sale or trading category
without  calling into  question  their intent to hold other debt  securities  to
maturity in the future.  SFAS No. 133 is not expected to have a material  impact
on the Company's financial position or results of operations.

The  foregoing  discussion  of the effects of recent  accounting  pronouncements
contains  forward-looking  statements  that  involve  risks  and  uncertainties.
Changes in economic  circumstances  or interest rates could cause the effects of
the accounting pronouncement to differ from management's foregoing assessment.

Year 2000 Compliance Issues

As with all  providers of  financial  services,  the  Company's  operations  are
heavily  dependent  on  information  technology  systems.  During the three year
period ended  December 31, 1999, the Bank's  management  addressed the potential
problems  associated  with the  possibility  that the computers  that control or
operate the Bank's  information  technology  systems and  infrastructure may not
have been programmed to read four-digit date codes and, upon arrival of the year
2000,  may have  recognized  the two-digit  code "00" as the year 1900,  causing
systems to fail to function or to generate erroneous data.

The Company's data processing is performed  primarily by a third party servicer.
The Company also uses software and hardware which are covered under  maintenance
agreements  with third party vendors.  Consequently  the Company is dependent on
these  vendors to conduct its  business.  The Company  contacted  each vendor to
request time tables for Year 2000  compliance and the expected costs, if any, to
be passed along to the Company.  During 1999, the Company had been informed that
its primary service  provider's testing related to Year 2000 compliance had been
satisfactorily completed.

The Company  replaced or upgraded all  equipment to be Year 2000  compliant at a
cost of less than  $45,000,  which was charged to  operations  primarily  during
1998.  The  Company  realized no  technology-related  problems  upon  arrival of
January 1, 2000, and had no interruption of services to its customers.

                                       18


<PAGE>


                           Logansport Financial Corp.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Year 2000 Compliance Issues (continued)

In addition to possible expense related to its own systems, the Bank could incur
losses if loan  payments  are delayed due to Year 2000  problems  affecting  any
major  borrowers  in the Bank's  primary  market  area.  Because the Bank's loan
portfolio is highly diversified with regard to individual borrowers and types of
businesses,  and the Bank's primary market areas are not significantly dependent
upon any one employer or industry, the Bank does not expect, and to date has not
experienced,  any  significant  or prolonged  difficulties  that will affect net
earnings or cash flow.

                                                                  19


<PAGE>





                     MARKET PRICE OF LOGANSPORT FINANCIAL'S
                COMMON SHARES AND RELATED SECURITY HOLDER MATTERS

The  common  stock of the  Company  is traded  on the  National  Association  of
Securities Dealers Automated Quotation System ("Nasdaq") Small Cap Market, under
the symbol  "LOGN." As of February  10,  2000,  there were 865  shareholders  of
record of the Company's  common stock. The table below presents the high and low
trade  prices for the common  shares of the  Company,  together  with  dividends
declared per share,  for each  quarter of the years ended  December 31, 1999 and
1998. Such price information was obtained from Nasdaq.

                                                                      Per Share
    Year Ending December 31,                    High       Low        dividends

    1999

    Quarter ending March 31, 1999              $14.000     $12.000      $0.11
    Quarter ending June 30, 1999                12.500      11.130       0.11
    Quarter ending September 30, 1999           11.560       9.630       0.11
    Quarter ending December 31, 1999            10.500       9.030       0.11

    1998

    Quarter ending March 31, 1998              $18.125     $16.000      $0.10
    Quarter ending June 30, 1998                19.625      16.500       0.11
    Quarter ending September 30, 1998           17.250      13.000       0.11
    Quarter ending December 31, 1998            16.375      13.375       0.11


TRANSFER AGENT AND REGISTRAR.  The Fifth Third Bank of Cincinnati,  Ohio ("Fifth
Third")  is the  Company's  stock  transfer  agent and  registrar.  Fifth  Third
maintains  the  Company's  shareholder  records.  To  change  name,  address  or
ownership of stock,  to report lost  certificates,  or to consolidate  accounts,
contact:

                                Fifth Third Bank
                           Corporate Trust Operations
                                Mail Drop 1090D2
                               38 Fountain Square
                             Cincinnati, Ohio 45263
                                 (800) 837-2755

    GENERAL COUNSEL.                              INDEPENDENT AUDITOR.

    Barnes & Thornburg                            Grant Thornton LLP
    11 South Meridian Street                      625 Eden Park Drive, Suite 900
    Indianapolis, Indiana  46204                  Cincinnati, Ohio  45202

SHAREHOLDER  & GENERAL  INQUIRIES.  The  Company is  required  to file an Annual
Report on Form 10-K for its year ended December 31, 1999 with the Securities and
Exchange Commission. Copies of this annual report may be obtained without charge
upon written request to:

                                 Dottye Robeson
                           Logansport Financial Corp.
                           723 East Broadway, Box 569
                            Logansport, Indiana 46947
                                 (219) 722-3855

    OFFICE LOCATION.

    723 East Broadway
    Logansport, Indiana  46947
    (219) 722-3855
    Fax - (219) 722-3857
    Email - logansavings@cqc.com

                                                                  20


<PAGE>






               Report of Independent Certified Public Accountants

Board of Directors
Logansport Financial Corp.

We have audited the accompanying  consolidated statements of financial condition
of Logansport  Financial Corp. as of December 31, 1999 and 1998, and the related
consolidated statements of earnings,  shareholders' equity, comprehensive income
and cash flows for each of the years ended  December  31,  1999,  1998 and 1997.
These   consolidated   financial   statements  are  the  responsibility  of  the
Corporation's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  Logansport
Financial Corp. as of December 31, 1999 and 1998, and the  consolidated  results
of its  operations,  comprehensive  income  and cash flows for each of the years
ended December 31, 1999,  1998 and 1997, in conformity  with generally  accepted
accounting principles.




/s/ Grant Thornton LLP

Cincinnati, Ohio
February 22, 2000

                                                                  21


<PAGE>





                           Logansport Financial Corp.

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                  December 31,
                        (In thousands, except share data)
<TABLE>
<CAPTION>



         ASSETS                                                                       1999           1998

<S>                                                                                <C>            <C>
Cash and due from banks                                                            $   1,336      $     363
Interest-bearing deposits in other financial institutions                              3,810          3,965
                                                                                   ---------      ---------
         Cash and cash equivalents                                                     5,146          4,328

Investment securities designated as available for sale - at market                     8,539          5,033
Mortgage-backed securities designated as available for sale - at market                5,898          8,129
Loans receivable - net                                                                90,900         73,073
Office premises and equipment - at depreciated cost                                    1,902          1,528
Federal Home Loan Bank stock - at cost                                                 1,273            568
Investment in real estate partnership                                                  1,485          1,566
Accrued interest receivable on loans                                                     416            337
Accrued interest receivable on mortgage-backed securities                                 47             66
Accrued interest receivable on investments and interest-bearing deposits                 115             62
Prepaid expenses and other assets                                                         45             36
Cash surrender value of life insurance                                                 1,184          1,135
Deferred income tax asset                                                                472            195
Prepaid income taxes                                                                      46             29
                                                                                   ---------      ---------

         Total assets                                                              $ 117,468      $  96,085
                                                                                   =========      =========

         LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                           $  76,011      $  70,011
Advances from the Federal Home Loan Bank                                              23,000          7,000
Notes payable                                                                          1,307          1,375
Accrued interest and other liabilities                                                 1,004          1,211
                                                                                   ---------      ---------
         Total liabilities                                                           101,322         79,597

Commitments                                                                               --             --

Shareholders' equity

  Preferred stock - no par value, 2,000,000 shares authorized; none issued                --             --
  Common stock - no par value, 5,000,000 shares authorized; 1,130,510
    and 1,198,710 shares at aggregate value issued and outstanding at
    December 31, 1999 and 1998, respectively                                           5,979          6,670
  Retained earnings - restricted                                                      10,734         10,031
  Less shares acquired by stock benefit plan                                            (239)          (368)
  Accumulated comprehensive income (loss), unrealized gains (losses)
    on securities designated as available for sale, net of related tax effects          (328)           155
                                                                                   ---------      ---------
         Total shareholders' equity                                                   16,146         16,488
                                                                                   ---------      ---------

         Total liabilities and shareholders' equity                                $ 117,468      $  96,085
                                                                                   =========      =========

</TABLE>


The accompanying notes are an integral part of these statements.

                                       22


<PAGE>





                           Logansport Financial Corp.

                       CONSOLIDATED STATEMENTS OF EARNINGS

                         For the year ended December 31,
                        (In thousands, except share data)
<TABLE>
<CAPTION>

                                                                          1999         1998         1997
<S>                                                                    <C>          <C>          <C>
Interest income

  Loans                                                                $ 6,484      $ 5,538      $ 4,932
  Mortgage-backed securities                                               421          522          559
  Investment securities                                                    420          243          394
  Interest-bearing deposits and other                                      274          276          216
                                                                       -------      -------      -------
         Total interest income                                           7,599        6,579        6,101

Interest expense
  Deposits                                                               3,319        3,097        2,864
  Borrowings                                                               724          379          251
                                                                       -------      -------      -------
         Total interest expense                                          4,043        3,476        3,115
                                                                       -------      -------      -------

         Net interest income                                             3,556        3,103        2,986

Provision for losses on loans                                              162           63           26
                                                                       -------      -------      -------

         Net interest income after provision for losses on loans         3,394        3,040        2,960

Other income
  Service charges on deposit accounts                                      139          106           88
  Gain (loss) on sale of investment and mortgage-backed securities          --            4          (50)
  Gain on sale of real estate acquired through foreclosure                  --            6            1
  Loss on investment in real estate partnership                           (121)          --           --
  Other operating                                                          157          169          131
                                                                       -------      -------      -------
         Total other income                                                175          285          170

General, administrative and other expense
  Employee compensation and benefits                                       926          744          649
  Occupancy and equipment                                                  163           90           78
  Federal deposit insurance premiums                                        41           38           37
  Data processing                                                          147          110           96
  Other operating                                                          390          340          310
                                                                       -------      -------      -------
         Total general, administrative and other expense                 1,667        1,322        1,170
                                                                       -------      -------      -------

         Earnings before income taxes                                    1,902        2,003        1,960

Income taxes
  Current                                                                  706          789          761
  Deferred                                                                 (28)         (33)         (33)
                                                                       -------      -------      -------
         Total income taxes                                                678          756          728
                                                                       -------      -------      -------

         NET EARNINGS                                                  $ 1,224      $ 1,247      $ 1,232
                                                                       =======      =======      =======

         EARNINGS PER SHARE
           Basic                                                       $  1.03      $  1.00      $   .98
                                                                       =======      =======      =======

           Diluted                                                     $  1.02      $   .97      $   .95
                                                                       =======      =======      =======

</TABLE>
The accompanying notes are an integral part of these statements.

                                       23


<PAGE>



                           Logansport Financial Corp.

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                         For the year ended December 31,
                                 (In thousands)
<TABLE>
<CAPTION>


                                                                 1999         1998         1997

<S>                                                           <C>          <C>          <C>
Net earnings                                                  $ 1,224      $ 1,247      $ 1,232

Other comprehensive income, net of tax:
  Unrealized holding gains (losses) on securities
    during the period, net of tax of $249, $50 and $96
    as of December 31, 1999, 1998 and 1997, respectively         (483)          98          184
  Reclassification adjustment for realized (gains)
    losses included in earnings, net of tax of $1 and $17
    for the years ended December 31, 1998
    and 1997, respectively                                         --           (3)          33
                                                              -------      -------      -------

Comprehensive income                                          $   741      $ 1,342      $ 1,449
                                                              =======      =======      =======

Accumulated comprehensive income (loss)                       $  (328)     $   155      $    60
                                                              =======      =======      =======
</TABLE>










The accompanying notes are an integral part of these statements.

                                       24


<PAGE>





                           Logansport Financial Corp.

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

              For the years ended December 31, 1999, 1998 and 1997
                        (In thousands, except share data)
<TABLE>
<CAPTION>
                                                                                                Unrealized
                                                                                  Shares     gains (losses)
                                                                                acquired     on securities
                                                                                by stock     designated as
                                                    Common       Retained        benefit         available
                                                     stock       earnings           plan          for sale        Total

<S>                                                 <C>            <C>             <C>               <C>        <C>
Balance at January 1, 1997                          $7,518         $8,588          $(522)            $(157)     $15,427

Net earnings for the year ended December 31, 1997       -           1,232             -                 -         1,232
Issuance of shares under stock option plan              48             -              -                 -            48
Unrealized gains on securities designated
  as available for sale, net of related tax effects     -              -              -                217          217
Amortization expense of stock benefit plan              -              -             122                -           122
Cash dividends of $.40 per share                        -            (504)            -                 -          (504)
                                                   -------         ------            ---               ---     --------

Balance at December 31, 1997                         7,566          9,316           (400)               60       16,542

Net earnings for the year ended December 31, 1998       -           1,247             -                 -         1,247
Purchase of shares for stock benefit plan               -              -             (93)               -           (93)
Purchase of shares                                    (945)            -              -                 -          (945)
Issuance of shares under stock option plan               9             -              -                 -             9
Unrealized gains on securities designated
  as available for sale, net of related tax effects     -              -              -                 95           95
Amortization expense of stock benefit plan              40             -             125                -           165
Cash dividends of $.43 per share                        -            (532)            -                 -          (532)
                                                     -----       --------            ---                --     --------

Balance at December 31, 1998                         6,670         10,031           (368)              155       16,488

Net earnings for the year ended December 31, 1999        -          1,224              -                -         1,224
Purchase of shares                                    (696)             -              -                -          (696)
Issuance of shares under stock option plan               5              -              -                -             5
Unrealized losses on securities designated
  as available for sale, net of related tax effects      -              -              -              (483)        (483)
Amortization expense of stock benefit plan               -              -            129                -           129
Cash dividends of $.44 per share                         -           (521)             -                -          (521)
                                                  --------         -------          ----              ----      --------

Balance at December 31, 1999                        $5,979        $10,734          $(239)            $(328)     $16,146
                                                     =====         ======           ====              ====       ======
</TABLE>






The accompanying notes are an integral part of these statements.

                                       25


<PAGE>





                           Logansport Financial Corp.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                         For the year ended December 31,
                                 (In thousands)

<TABLE>
<CAPTION>


                                                                                       1999          1998          1997
<S>                                                                                <C>           <C>           <C>
Cash flows from operating activities:
  Net earnings for the year                                                        $  1,224      $  1,247      $  1,232
  Adjustments to reconcile net earnings to net cash provided by
  (used in) operating activities:
    Depreciation and amortization                                                        81            39            37
    Amortization of premiums on investments and mortgage-backed securities               95           200           104
    Amortization expense of stock benefit plan                                          129           165           122
    (Gain) loss on sale of investment and mortgage-backed securities                     --            (4)           50
    Provision for losses on loans                                                       162            63            26
    Gain on sale of real estate acquired through foreclosure                             --            (6)           (1)
    Loss on investment in real estate partnership                                       121            --            --
    Increase (decrease) in cash, due to changes in:
      Accrued interest receivable on loans                                              (79)          (38)          (33)
      Accrued interest receivable on mortgage-backed securities                          19            17           (29)
      Accrued interest receivable on investments                                        (53)           59             6
      Prepaid expenses and other assets                                                  (9)           (3)            9
      Accrued interest and other liabilities                                           (207)          350          (530)
      Federal income taxes
        Current                                                                         (17)         (121)           38
        Deferred                                                                        (28)          (33)          (33)
                                                                                   --------      --------      --------
         Net cash provided by operating activities                                    1,438         1,935           998

Cash flows provided by (used in) investing activities:
  Decrease in certificates of deposit in other financial institutions                    --           100            --
  Proceeds from sale of investment securities designated as available for sale           --           806         2,495
  Purchase of investment securities designated as available for sale                 (4,925)       (3,057)       (2,100)
  Maturities of investment securities designated as available for sale                  875         3,104         1,471
  Proceeds from sale of mortgage-backed securities designated as
    available for sale                                                                   --         1,174           421
  Purchase of mortgage-backed securities designated as available for sale                --        (3,039)       (5,126)
  Principal repayments on mortgage-backed securities designated as
    available for sale                                                                1,948         3,472         1,665
  Purchase of loans                                                                    (981)         (350)           --
  Loan disbursements                                                                (44,410)      (26,775)      (19,769)
  Principal repayments on loans                                                      27,402        17,585        12,791
  Investment in real estate partnership                                                (108)         (176)          (15)
  Purchases and additions to office premises and equipment                             (455)       (1,102)          (26)
  Purchase of Federal Home Loan Bank stock                                             (705)          (74)         (107)
  Proceeds from sale of real estate acquired through foreclosure                         --           151            14
  Increase in cash surrender value of life insurance policy                             (49)          (50)          (45)
                                                                                   --------      --------      --------
         Net cash used in investing activities                                      (21,408)       (8,231)       (8,331)
                                                                                   --------      --------      --------

         Net cash used in operating and investing activities
           (subtotal carried forward)                                               (19,970)       (6,296)       (7,333)
                                                                                   --------      --------      --------
</TABLE>




                                       26


<PAGE>





                           Logansport Financial Corp.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                         For the year ended December 31,
                                 (In thousands)

<TABLE>
<CAPTION>


                                                                                         1999          1998          1997
<S>                                                                                  <C>           <C>           <C>
         Net cash used in operating and investing activities
           (subtotal brought forward)                                                $(19,970)     $ (6,296)     $ (7,333)

Cash provided by (used in) financing activities:

  Net increase in deposit accounts                                                      6,000         9,416         3,199
  Proceeds from Federal Home Loan Bank advances                                        31,000         8,000        10,500
  Proceeds from note payable                                                               --            --           100
  Repayment of Federal Home Loan Bank advances                                        (15,000)       (7,500)       (6,000)
  Repayment of note payable                                                                --            --        (1,500)
  Proceeds from the exercise of stock options                                               5             9            48
  Purchase of shares for stock benefit plan                                                --           (93)           --
  Dividends on common stock                                                              (521)         (532)         (504)
  Purchase of shares                                                                     (696)         (945)           --
                                                                                     --------      --------      --------
         Net cash provided by financing activities                                     20,788         8,355         5,843
                                                                                     --------      --------      --------

Net increase (decrease) in cash and cash equivalents                                      818         2,059        (1,490)

Cash and cash equivalents at beginning of year                                          4,328         2,269         3,759
                                                                                     --------      --------      --------

Cash and cash equivalents at end of year                                             $  5,146      $  4,328      $  2,269
                                                                                     ========      ========      ========


Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Income taxes                                                                     $    724      $    689      $    680
                                                                                     ========      ========      ========
    Interest on deposits and borrowings                                              $  4,054      $  3,465      $  3,129
                                                                                     ========      ========      ========

Supplemental disclosure of noncash investing and financing activities:
  Foreclosed mortgage loans transferred to real estate acquired
    through foreclosure                                                              $     --      $     40      $    136
                                                                                     ========      ========      ========

  Investment in real estate partnership via financing from notes payable             $     --      $     --      $  1,525
                                                                                     ========      ========      ========

  Unrealized gains (losses) on securities designated as available
    for sale, net of related tax effects                                             $   (483)     $     95      $    217
                                                                                     ========      ========      ========



</TABLE>


The accompanying notes are an integral part of these statements.

                                       27


<PAGE>





                           Logansport Financial Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997


NOTE A - SUMMARY OF ACCOUNTING POLICIES

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

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

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

     1.   Principles of Consolidation

     The  consolidated   financial   statements  include  the  accounts  of  the
     Corporation  and  its   subsidiary,   the  Savings  Bank.  All  significant
     intercompany balances and transactions have been eliminated.

     2.   Investment and Mortgage-backed Securities

     The Corporation accounts for investments and mortgage-backed  securities in
     accordance with Statement of Financial  Accounting  Standards  ("SFAS") No.
     115  "Accounting  for Certain  Investments in Debt and Equity  Securities".
     SFAS No. 115 requires that investments be categorized as  held-to-maturity,
     trading, or available for sale.  Securities  classified as held to maturity
     are carried at cost only if the  Corporation  has the  positive  intent and
     ability  to hold these  securities  to  maturity.  Trading  securities  and
     securities  available  for sale are  carried at fair  value with  resulting
     unrealized gains or losses recorded to operations or shareholders'  equity,
     respectively.  At December 31, 1999, the Corporation's shareholders' equity
     accounts  reflected a net unrealized  loss on available for sale securities
     of $328,000.  At December 31, 1998, the Corporation's  shareholders' equity
     accounts  reflected a net unrealized  gain on available for sale securities
     of $155,000.

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

                                       28


<PAGE>





                           Logansport Financial Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    3.  Loans Receivable

    Loans  receivable are stated at the principal amount  outstanding,  adjusted
    for the allowance for loan losses. Interest is accrued as earned, unless the
    collectibility of the loan is in doubt. Uncollectible interest on loans that
    are  contractually  past due is charged off, or an allowance is  established
    based on management's periodic evaluation. The allowance is established by a
    charge to interest  income equal to all  interest  previously  accrued,  and
    income is subsequently  recognized only to the extent that cash payments are
    received  until, in management's  judgment,  the borrower's  ability to make
    periodic  interest and principal  payments has returned to normal,  in which
    case the loan is returned to accrual status. If the ultimate  collectibility
    of the loan is in  doubt,  in whole or in part,  all  payments  received  on
    nonaccrual  loans  are  applied  to reduce  principal  until  such  doubt is
    eliminated.

    4.  Loan Origination Fees

    The Savings Bank accounts for loan  origination fees in accordance with SFAS
    No.  91,  "Accounting  for  Nonrefundable  Fees and  Costs  Associated  with
    Originating or Acquiring Loans and Initial Direct Costs of Leases". Pursuant
    to the provisions of SFAS No. 91,  origination fees received from loans, net
    of certain direct  origination costs, are deferred and amortized to interest
    income using the interest method,  giving effect to actual loan prepayments.
    Additionally,   SFAS  No.  91  generally   limits  the  definition  of  loan
    origination  costs to the direct costs  attributable  to originating a loan,
    i.e.  principally actual personnel costs. Fees received for loan commitments
    that are expected to be drawn upon,  based on the Savings Bank's  experience
    with similar  commitments,  are deferred and amortized  over the life of the
    loan  using the  level-yield  method.  Fees for other loan  commitments  are
    deferred and amortized over the loan  commitment  period on a  straight-line
    basis.

    5.  Allowance for Losses on Loans

    It is  the  Savings  Bank's  policy  to  provide  valuation  allowances  for
    estimated losses on loans based on past loss experience, trends in the level
    of delinquent  and problem  loans,  adverse  situations  that may affect the
    borrower's   ability  to  repay,  the  estimated  value  of  any  underlying
    collateral and current and  anticipated  economic  conditions in the primary
    lending area. When the collection of a loan becomes  doubtful,  or otherwise
    troubled,  the  Savings  Bank  records  a loan loss  provision  equal to the
    difference  between the fair value of the property securing the loan and the
    loan's  carrying  value.  Major loans and major  lending  areas are reviewed
    periodically to determine potential problems at an early date. The allowance
    for loan  losses is  increased  by  charges to  earnings  and  decreased  by
    charge-offs (net of recoveries).

    The Savings Bank  accounts for impaired  loans in  accordance  with SFAS No.
    114,  "Accounting  by  Creditors  for  Impairment  of a Loan".  SFAS No. 114
    requires  that  impaired  loans be measured  based upon the present value of
    expected future cash flows discounted at the loan's effective  interest rate
    or, as an alternative,  at the loan's  observable market price or fair value
    of the  collateral.  The Savings  Bank's  current  procedures for evaluating
    impaired  loans  result in carrying  such loans at the lower of cost or fair
    value.

                                       29


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    5.  Allowance for Losses on Loans (continued)

    A loan is  defined  under SFAS No. 114 as  impaired  when,  based on current
    information  and events,  it is probable  that a creditor  will be unable to
    collect all  amounts  due  according  to the  contractual  terms of the loan
    agreement.  In applying  the  provisions  of SFAS No. 114,  the Savings Bank
    considers  its  investment  in one- to  four-family  residential  loans  and
    consumer  installment  loans to be homogeneous  and therefore  excluded from
    separate  identification  for evaluation of impairment.  With respect to the
    Savings Bank's  investment in  nonresidential  and multi-family  residential
    real estate loans, and its evaluation of impairment thereof,  such loans are
    generally  collateral dependent and, as a result, are carried as a practical
    expedient at the lower of cost or fair value.

    Collateral  dependent  loans which are more than ninety days  delinquent are
    considered  to  constitute  more than a minimum  delay in repayment  and are
    evaluated for impairment under SFAS No. 114 at that time.

    At December 31, 1999, the Savings Bank had two loans totaling  approximately
    $485,000  that would be defined as impaired  under SFAS No. 114. At December
    31,  1998,  the Savings  Bank had no loans that would be defined as impaired
    under SFAS No. 114.

    6.  Real Estate Acquired Through Foreclosure

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

    7.  Office Premises and Equipment

    Office  premises and equipment are carried at cost and include  expenditures
    which extend the useful lives of existing assets.  Maintenance,  repairs and
    minor   renewals  are  expensed  as  incurred.   For  financial   reporting,
    depreciation  and  amortization  are  provided  on  the   straight-line  and
    accelerated  methods  over the useful  lives of the assets,  estimated to be
    thirty to forty  years for  buildings,  five to  twenty  years for  building
    improvements,  five to fifteen  years for  furniture  and equipment and five
    years for  automobiles.  An  accelerated  method  is used for tax  reporting
    purposes.

    8.  Investment in Real Estate Partnership

    During  1997,  the  Corporation  invested  $1.5  million  in a  real  estate
    partnership  which  will  construct  and  manage   residential  real  estate
    apartments for low and moderate income residents.  The investment reflects a
    49.5%  participation  in the partnership and is accounted for by the Savings
    Bank using the equity  method.  The Savings Bank  realized an after tax loss
    from the investment of approximately  $70,000 during the year ended December
    31,  1999,  in  addition  to  federal  income tax  credits of  approximately
    $40,000. This affordable housing project is expected to generate significant
    tax credits for the Savings Bank in future years.

                                       30


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    9.  Income Taxes

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

    Deferral of income taxes results  primarily  from the  different  methods of
    accounting for certain  retirement  plans,  general loan loss allowances and
    percentage of earnings bad debt deductions. Additional temporary differences
    result  from  depreciation   computed  using  accelerated  methods  for  tax
    purposes.

    10.  Benefit Plans

    Employees of the Savings Bank are covered by the Pentegra Group,  previously
    the Financial Institutions  Retirement Fund (the "Fund"), which is a defined
    benefit pension plan to which  contributions are made for the benefit of the
    employees.  Contributions are determined to cover the normal cost of pension
    benefits,  the  one-year  cost of the  pre-retirement  death and  disability
    benefits and the amortization of any unfunded accrued liabilities.

    The Fund had previously advised the Savings Bank that the pension plan meets
    the  criteria of a  multi-employer  pension  plan as defined in SFAS No. 87,
    "Employers'  Accounting for Pensions".  In accordance  with SFAS No. 87, net
    pension cost is recognized for any required  contribution  for the period. A
    liability is recognized for any contributions  due and unpaid.  During 1993,
    the Savings Bank acquired  additional  benefits for all qualified  employees
    covered by the Fund which were paid for by reducing the  overfunded  amount.
    Due to a continuation of the funds overfunded  status, no contributions were
    made to the pension plan during the years ended December 31, 1999,  1998 and
    1997. The provision for pension expense was computed by the Fund's actuaries
    utilizing the  projected  unit credit cost method and assuming a 7.5% return
    on Fund assets.

    The Savings Bank has purchased life insurance  policies on certain  officers
    and  directors.  The insurance  policies had an  approximate  cash surrender
    value of $1.2  million  and $1.1  million  at  December  31,  1999 and 1998,
    respectively.  The Savings Bank has approved compensation  arrangements that
    provide  retirement  benefits to certain  officers  and deferral of fees for
    directors  covered  by  the  policies.   The  benefit  arrangement  for  one
    individual  requires that the individual provide consulting  services to the
    Savings Bank during the five-year period following retirement.  The benefits
    to be paid, excluding amounts attributable to consulting,  are being accrued
    from  the  date of  approval  of the  arrangements  to the  date  that  full
    eligibility  is  attained.  Expense  related  to the above  described  plans
    totaled $81,000,  $85,000 and $99,000 for the years ended December 31, 1999,
    1998 and 1997, respectively.

                                       31


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    10.  Benefit Plans (continued)

    The Savings Bank adopted the  Logansport  Savings Bank,  FSB Employee  Stock
    Ownership Plan and Trust Agreement  ("ESOP") in 1995, for eligible employees
    of the  Savings  Bank.  The ESOP will be funded  by  discretionary  employer
    contributions  made  in  cash,  which  will be  invested  in  shares  of the
    Corporation's  common stock. No  contributions  were made to the ESOP during
    the years ended December 31, 1999, 1998 or 1997.

    In April  1996,  the  Corporation's  shareholders  approved  the  Logansport
    Savings Bank, FSB  Recognition  and Retention Plan and Trust ("RRP"),  which
    provided for the  acquisition  of up to 52,900  shares of the  Corporation's
    common stock for awards to management.  Shares  awarded to management  under
    the RRP  generally  vest at a rate  of 20% at the  end of each  full  twelve
    months of service with the Savings Bank after the date of the award.  During
    1996, the Savings Bank  contributed  $615,000 to the RRP for the purchase of
    46,675 shares of the  Corporation's  common stock awarded to management  and
    recorded the amount as unearned compensation.  During 1998, the Savings Bank
    contributed  $93,000  for the  purchase  of the  6,225  remaining  allowable
    shares.  Amortization  expense under the RRP totaled $129,000,  $125,000 and
    $123,000 for the years ended December 31, 1999, 1998 and 1997, respectively.

    In April,  1999,  the  Corporation  implemented a  contributory  401(K) plan
    covering all employees  who have  attained the age of 21 and have  completed
    one year of service. Contributions to the plan are voluntary and are subject
    to matching by the employer.  The Savings Bank's  contributions  to the plan
    totaled approximately $11,000 for the year ended December 31, 1999.

    11.  Earnings Per Share

    Basic earnings per share is computed based upon the weighted-average  shares
    outstanding  during the year.  Weighted-average  common  shares  outstanding
    totaled 1,194,070,  1,243,972 and 1,259,162 for the years ended December 31,
    1999, 1998 and 1997,  respectively.  Diluted  earnings per share is computed
    taking into  consideration  common shares outstanding and dilutive potential
    common  shares  to be issued  under the  Corporation's  stock  option  plan.
    Weighted-average  common shares deemed outstanding for purposes of computing
    diluted earnings per share,  which gives effect to 9,254,  43,879 and 32,384
    incremental  shares from the  assumed  exercise  of stock  options,  totaled
    1,203,324,  1,287,851 and  1,291,546 for the years ended  December 31, 1999,
    1998 and 1997, respectively.

    12.  Cash and Cash Equivalents

    For purposes of reporting  cash flows,  cash and cash  equivalents  includes
    cash and due from banks and  interest-bearing  deposits  in other  financial
    institutions with original maturities of less than 90 days.

    13.  Fair Value of Financial Instruments

    SFAS No.  107,  "Disclosures  about  Fair Value of  Financial  Instruments",
    requires disclosure of fair value of financial instruments,  both assets and
    liabilities,  whether or not  recognized  in the  consolidated  statement of
    financial condition, for which it is practicable to estimate that value. For
    financial  instruments  where quoted market prices are not  available,  fair
    values  are based on  estimates  using  present  value  and other  valuation
    methods.

                                       32


<PAGE>


                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    13.  Fair Value of Financial Instruments (continued)

    The methods used are greatly affected by the assumptions applied,  including
    the discount  rate and estimates of future cash flows.  Therefore,  the fair
    values  presented  may not  represent  amounts  that could be realized in an
    exchange for certain financial instruments.

    The  following  methods  and  assumptions  were used by the  Corporation  in
    estimating its fair value disclosures for financial  instruments at December
    31, 1999 and 1998:

        Cash  and  cash  equivalents:  The  carrying  amounts  presented  in the
        consolidated  statements  of  financial  condition  for  cash  and  cash
        equivalents are deemed to approximate fair value.

        Investment   and   mortgage-backed   securities:   For   investment  and
        mortgage-backed  securities,  fair  value is deemed to equal the  quoted
        market price.

        Loans receivable:  The loan portfolio has been segregate into categories
        with similar  characteristics,  such as one- to four-family residential,
        multi-family residential, nonresidential real estate and consumer. These
        loan   categories   were  further   delineated   into   fixed-rate   and
        adjustable-rate loans. The fair values for the resultant loan categories
        were computed via discounted cash flow analysis,  using current interest
        rates  offered  for loans with  similar  terms to  borrowers  of similar
        credit quality.

        Federal  Home Loan Bank stock:  The  carrying  amount  presented  in the
        consolidated  statements of financial condition is deemed to approximate
        fair value.

        Deposits:  The fair value of NOW accounts,  passbook and club  accounts,
        and money market deposits is deemed to approximate the amount payable on
        demand  at  December  31,  1999 and 1998.  Fair  values  for  fixed-rate
        certificates of deposit have been estimated using a discounted cash flow
        calculation  using the interest rates currently  offered for deposits of
        similar remaining maturities.

        Federal  Home Loan Bank  advances:  The fair value of Federal  Home Loan
        Bank advances has been estimated  using  discounted  cash flow analysis,
        based on the interest  rates  currently  offered for advances of similar
        remaining maturities.

        Notes Payable:  The fair value of notes payable is deemed to approximate
        the carrying value.

        Commitments to extend credit:  For fixed-rate and  adjustable-rate  loan
        commitments,  the fair value estimate  considers the difference  between
        current  levels of interest rates and committed  rates.  At December 31,
        1999 and 1998, the difference between the fair value and notional amount
        of loan commitments was not material.

                                       33


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    13. Fair Value of Financial Instruments (continued)


    Based on the foregoing methods and assumptions,  the carrying value and fair
    value of the Corporation's  financial instruments are as follows at December
    31:
<TABLE>
<CAPTION>


                                                                         1999                           1998
                                                             Carrying            Fair       Carrying            Fair
                                                                value           value          value           value
                                                                                    (In thousands)
    Financial assets

<S>                                                         <C>              <C>            <C>             <C>
      Cash and cash equivalents                             $   5,146        $  5,146       $  4,328        $  4,328
      Investment securities                                     8,539           8,539          5,033           5,033
      Mortgage-backed securities                                5,898           5,898          8,129           8,129
      Loans receivable                                         90,900          89,169         73,073          74,668
      Federal Home Loan Bank stock                              1,273           1,273            568             568
                                                              -------         -------       --------        --------

                                                             $111,756        $110,025        $91,131         $92,726
                                                              =======         =======         ======          ======

    Financial liabilities

      Deposits                                               $ 76,011        $ 76,047        $70,011         $70,406
      Advances from Federal Home Loan Bank                     23,000          22,870          7,000           6,999
      Notes payable                                             1,307           1,307          1,375           1,375
                                                             --------         -------        -------         -------

                                                             $100,318        $100,224        $78,386         $78,780
                                                              =======         =======         ======          ======
</TABLE>


    14.  Advertising

    Advertising costs are expensed when incurred.

    15.  Reclassifications

    Certain  prior year  amounts have been  reclassified  to conform to the 1999
    consolidated financial statement presentation.

                                       34


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE B - INVESTMENT AND MORTGAGE-BACKED SECURITIES

    The amortized cost, gross unrealized  gains,  gross unrealized  losses,  and
    estimated  fair value of investment  securities  designated as available for
    sale at December 31, 1999 and 1998, are as follows:
<TABLE>
<CAPTION>


                                                                                     1999

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

<S>                                                        <C>           <C>                    <C>           <C>
    U.S. Government agency obligations                     $6,295        $   -                  $394          $5,901
    State and municipal obligations                         1,931             20                  12           1,939
    FHLMC stock                                                 4            172                 -               176
    Corporate debt obligations                                560            -                    37             523
                                                           ------          -----                ----           -----

      Total investment securities                          $8,790           $192                $443          $8,539
                                                            =====            ===                 ===           =====


                                                                                     1998

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

    U.S. Government agency obligations                     $2,845         $    3               $  23          $2,825
    State and municipal obligations                         1,323             70                  -            1,393
    FHLMC stock                                                 4            240                  -              244
    Corporate debt obligations                                561             10                  -              571
                                                           ------           ----                 ---          ------

      Total investment securities                          $4,733           $323               $  23          $5,033
                                                            =====            ===                ====           =====

</TABLE>


                                       35


<PAGE>


                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


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

    The amortized cost and estimated fair value of investment securities by term
    to maturity at December 31, 1999, are shown below.


                                                               Estimated
                                             Amortized              fair
                                                  cost             value

                                                       (In thousands)

    Due in one year or less                     $  300            $  294
    Due after one year through three years         150               150
    Due after three through five years           1,204             1,203
    Due after five through ten years             4,029             3,815
    Due after ten years                          3,103             2,901
                                                 -----             -----
                                                 8,786             8,363
    FHLMC stock                                      4               176
                                               -------            ------

                                                $8,790            $8,539
                                                 =====             =====

    Proceeds from  maturities and calls of investment  securities  available for
    sale during the year ended December 31, 1999, totaled $875,000, resulting in
    no realized gains or losses.

    Proceeds  from sales and calls of investment  securities  available for sale
    during the year ended December 31, 1998, totaled $3.9 million,  resulting in
    gross realized gains of $96,000 and gross realized losses of $92,000.

    Proceeds  from sales and calls of investment  securities  available for sale
    during the year ended December 31, 1997, totaled $3.7 million,  resulting in
    gross realized gains of $2,000 and gross realized losses of $54,000.

    The amortized cost, gross  unrealized  gains,  gross  unrealized  losses and
    estimated fair values of mortgage-backed securities at December 31, 1999 and
    1998 are presented below.
<TABLE>
<CAPTION>


                                                                                     1999
                                                                           Gross             Gross         Estimated
                                                      Amortized       unrealized        unrealized              fair
                                                           cost            gains            losses             value
                                                                                  (In thousands)
<S>                                                      <C>                 <C>              <C>             <C>
    Federal Home Loan Mortgage
      Corporation participation certificates             $  822              $ -              $ 52            $  770
    Government National Mortgage
      Association participation certificates              2,602                -               125             2,477
    Federal National Mortgage
      Association participation certificates              1,144                -                29             1,115
    Federal Housing Authority participation
      certificates                                          863                -                25               838
    Small Business Administration
      participation certificates                            714                -                16               698
                                                          -----               --              ----            ------

      Total mortgage-backed securities                   $6,145              $ -             $ 247            $5,898
                                                          =====               ==              ====             =====

</TABLE>

                                       36


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE B - INVESTMENT AND MORTGAGE-BACKED SECURITIES (continued)
<TABLE>
<CAPTION>

                                                                                     1998

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

 <S>                                                     <C>               <C>               <C>              <C>
    Federal Home Loan Mortgage
      Corporation participation certificates            $   994           $    1            $    4           $   991
    Government National Mortgage
      Association participation certificates              3,701                1                60             3,642
    Federal National Mortgage
      Association participation certificates              1,584                7                10             1,581
    Federal Housing Authority participation
      certificates                                          874               10                -                884
    Small Business Administration
      participation certificates                          1,040                1                10             1,031
                                                          -----            -----              ----             -----

      Total mortgage-backed securities                   $8,193            $  20             $  84            $8,129
                                                          =====             ====              ====             =====
</TABLE>

    The amortized cost and estimated fair value of mortgage-backed securities at
    December 31, 1999 and 1998,  by  contractual  terms to  maturity,  are shown
    below.  Expected maturities will differ from contractual  maturities because
    borrowers may generally prepay obligations without prepayment penalties.

<TABLE>
<CAPTION>
                                                                     1999                              1998
                                                                           Estimated                          Estimated
                                                         Amortized              fair        Amortized              fair
                                                              cost             value             cost             value
                                                                                     (In thousands)
<S>                                                      <C>               <C>              <C>               <C>
      Due within one year                                $  863            $  834           $2,337            $2,309
      Due after one year to three years                   1,174             1,132            1,859             1,838
      Due after three years to five years                   781               751              864               861
      Due after five years to ten years                   1,291             1,236              875               868
      Due after ten years                                 2,036             1,945            2,258             2,253
                                                          -----             -----            -----             -----

      Total mortgage-backed securities                   $6,145            $5,898           $8,193            $8,129
                                                          =====             =====            =====             =====
</TABLE>

    Proceeds  from  sales of  mortgage-backed  securities  during the year ended
    December 31, 1998,  totaled $1.2 million,  resulting in gross realized gains
    of $3,000 and gross realized losses of $3,000.

    Proceeds  from  sales of  mortgage-backed  securities  during the year ended
    December 31, 1997,  totaled  $421,000,  resulting in gross realized gains of
    $2,000 and no gross realized losses.

                                       37


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE C - LOANS RECEIVABLE

    The composition of the loan portfolio at December 31 is as follows:

                                                         1999              1998
                                                             (In thousands)
    Residential real estate

      One- to four-family residential                 $57,889           $52,205
      Multi-family residential                          2,111             1,584
      Construction                                      2,575             3,492
    Nonresidential real estate and land                11,825             3,492
    Commercial                                          4,102             1,486
    Commercial leases                                   1,609             -
    Consumer and other                                 12,914            13,014
                                                       ------            ------
                                                       93,025            75,273

    Less:
      Undisbursed portion of loans in process           1,685             1,915
      Allowance for loan losses                           440               285
                                                      -------          --------

                                                      $90,900           $73,073
                                                       ======            ======

    The Savings  Bank's  lending  efforts have  historically  focused on one- to
    four-family  residential  and  multi-family  residential  real estate loans,
    which  comprised  approximately  $61.2  million,  or 67%,  of the total loan
    portfolio  at December  31, 1999,  and $55.4  million,  or 76%, of the total
    portfolio at December 31, 1998. Generally, such loans have been underwritten
    on  the  basis  of no  more  than  an 80%  loan-to-value  ratio,  which  has
    historically  provided the Savings Bank with adequate collateral coverage in
    the event of default.  Nevertheless,  the Savings  Bank, as with any lending
    institution,   is  subject  to  the  risk  that  real  estate  values  could
    deteriorate in its primary lending area of  north-central  Indiana,  thereby
    impairing collateral values. However,  management is of the belief that real
    estate  values in the Savings  Bank's  primary  lending  area are  presently
    stable.

    In the normal  course of  business,  the Savings  Bank has made loans to its
    directors,  officers and their related business interests. In the opinion of
    management,  such loans are consistent with sound lending  practices and are
    within  applicable  regulatory  lending  limitations.  Loans to officers and
    directors totaled  approximately  $977,000 and $721,000 at December 31, 1999
    and 1998, respectively.

                                       38


<PAGE>


                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE D - ALLOWANCE FOR LOAN LOSSES

    The activity in the allowance for loan losses for the year ended December 31
    is as follows:

                                              1999          1998         1997
                                                        (In thousands)

    Beginning balance                         $285          $245         $236
    Provision for loan losses                  162            63           26
    Charge-offs of loans - net                  (7)          (23)         (17)
                                             -----          ----         ----

    Ending balance                            $440          $285         $245
                                               ===           ===          ===

    At December  31,  1999,  the Savings  Bank's  allowance  for loan losses was
    comprised entirely of a general loan loss allowance which is includible as a
    component of regulatory risk-based capital.

    At December 31, 1999, 1998 and 1997, the Savings Bank had loans of $666,000,
    $315,000 and  $431,000,  respectively,  which had been placed on  nonaccrual
    status due to concerns as to borrowers' ability to pay. Interest income that
    would have been  recognized  had  nonaccrual  loans  performed  pursuant  to
    contractual terms totaled approximately $36,000, $26,000 and $24,000 for the
    years ended December 31, 1999, 1998 and 1997, respectively.

NOTE E - OFFICE PREMISES AND EQUIPMENT

    Office premises and equipment is comprised of the following at December 31:

                                                         1999            1998
                                                            (In thousands)

    Land                                              $   203         $   203
    Buildings and improvements                          1,742           1,459
    Furniture and equipment                               510             367
                                                        -----          ------
                                                        2,455           2,029
    Less accumulated depreciation and amortization       (553)           (501)
                                                       ------          ------

                                                       $1,902          $1,528
                                                        =====           =====




                                       39


<PAGE>


                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


<TABLE>
<CAPTION>
NOTE F - DEPOSITS

<S>                                                                                 <C>               <C>
    Deposits consist of the following major classifications at December 31:

    Deposit type and weighted average
    interest rate                                                                    1999              1998
                                                                                            (In thousands)
    NOW accounts
      December 31, 1999 - 2.29%                                                   $ 5,677
      December 31, 1998 - 2.04%                                                                     $ 5,156
    Passbook and club accounts
      December 31, 1999 - 3.02%                                                     2,869
      December 31, 1998 - 2.98%                                                                       3,171
    Money market deposit accounts
      December 31, 1999 - 4.35%                                                    19,287
      December 31, 1998 - 4.02%                                                                      20,515
    Non-interest bearing accounts                                                   2,681             1,492
                                                                                  -------           -------

        Total demand, transaction and passbook deposits                            30,514            30,334

    Certificates of deposit
     Original maturities of:
        Less than 12 months
          December 31, 1999 - 5.41%                                                 3,760
          December 31, 1998 - 4.69%                                                                   4,818
        12 months to 18 months
          December 31, 1999 - 5.42%                                                13,301
          December 31, 1998 - 5.33%                                                                   7,803
        24 months to 30 months
          December 31, 1999 - 5.38%                                                19,912
          December 31, 1998 - 5.62%                                                                  18,702
        More than 30 months

          December 31, 1999 - 5.71%                                                 3,395
          December 31, 1998 - 5.65%                                                                   3,619
      Individual retirement accounts
        December 31, 1999 - 5.44%                                                   5,129
        December 31, 1998 - 5.11%                                                                     4,735
                                                                                  -------           -------
      Total certificates of deposit                                                45,497            39,677
                                                                                   ------            ------

      Total deposits                                                              $76,011           $70,011
                                                                                   ======            ======
</TABLE>

    At December 31, 1999 and 1998,  the Savings Bank had  certificate of deposit
    accounts with balances greater than $100,000  totaling $4.1 million and $3.5
    million, respectively.

                                       40


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997



NOTE F - DEPOSITS (continued)

    Interest expense on deposits for the year ended December 31 is summarized as
    follows:
<TABLE>
<CAPTION>

                                                       1999           1998            1997
                                                                  (In thousands)
<S>                                                 <C>            <C>             <C>
    Passbook and money market deposit accounts      $   903        $   923         $   837
    NOW accounts                                        125            105              87
    Certificates of deposit                           2,291          2,069           1,940
                                                      -----          -----           -----

                                                     $3,319         $3,097          $2,864
                                                      =====          =====           =====
</TABLE>

    Maturities  of  outstanding  certificates  of  deposit  at  December  31 are
    summarized as follows:

                                                       1999              1998
                                                            (In thousands)

    Less than one year                              $19,777           $22,342
    One to three years                               22,304            15,368
    Over three years                                  3,416             1,967
                                                    -------           -------

                                                    $45,497           $39,677
                                                     ======            ======


NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

    Advances  from the Federal  Home Loan Bank,  collateralized  at December 31,
    1999 by a blanket  pledge  of  residential  mortgage  loans  totaling  $55.7
    million, and the Savings Bank's investment in certain U.S. Government agency
    securities  and  mortgage-backed  securities  totaling  $11.8  million,  are
    summarized as follows:

<TABLE>
<CAPTION>


                                             Maturing year                       December 31,
    Interest rate                        ending December 31,              1999                1998
                                                                                (In thousands)

<S>                                                <C>             <C>                      <C>
    5.19% - 6.09%                                  1999            $    -                   $5,000
    4.87% - 6.22%                                  2000                 12,000               2,000
    5.65% - 5.94%                                  2004                  8,000                   -
    4.53%                                          2009                  3,000                   -
                                                                       -------              ------
                                                                       $23,000              $7,000
                                                                        ======               =====

    Weighted-average interest rate                                        5.70%               5.24%
                                                                        ======                ====

</TABLE>


                                       41


<PAGE>


                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE H - NOTES PAYABLE

    At  December  31, 1999 and 1998,  notes  payable  consists  of  construction
    borrowings  secured  by the  Savings  Bank's  investment  in a  real  estate
    partnership.  The Savings Bank pays only  interest  until  completion of the
    project  at  which  time  repayment   terms  will  convert  to  a  ten  year
    amortization. The interest rate on the variable rate borrowing was 3.76% and
    3.02% at December 31, 1999 and 1998, respectively.

NOTE I - INCOME TAXES

    The  provision  for income taxes differs from that computed at the statutory
    corporate tax rate for the year ended December 31 as follows:
<TABLE>
<CAPTION>


                                                                        1999            1998           1997
                                                                                    (In thousands)

<S>                                                                     <C>             <C>            <C>
    Federal income taxes computed at the statutory rate                 $647            $681           $666
    Increase (decrease) in taxes resulting from:
      Tax exempt interest                                                (22)            (23)           (34)
      Increase in cash surrender value of life insurance                 (17)            (17)           (15)
      Real estate partnership tax credits                                (40)           -              -
      State income taxes                                                 111             116            112
      Other                                                               (1)             (1)            (1)
                                                                       -----           -----          -----

    Income tax provision per consolidated
      financial statements                                              $678            $756           $728
                                                                         ===             ===            ===


</TABLE>

                                       42


<PAGE>


                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE I - INCOME TAXES (continued)

    The composition of the  Corporation's  net deferred tax asset at December 31
    is as follows:
<TABLE>
<CAPTION>


    Taxes (payable) refundable on temporary                                            1999            1998
    differences at statutory rate:                                                          (In thousands)
<S>                                                                                   <C>             <C>

    Deferred tax assets:
      Other than temporary declines in investment securities                          $  23           $  23
      Retirement expense                                                                183             134
      General loan loss allowance                                                       187             115
      Stock benefit plan expense                                                         53              91
      Unrealized losses on securities designated as
           available for sale                                                           170             -
      Other                                                                              17              10
                                                                                       ----            ----
           Total deferred tax assets                                                    633             373

    Deferred tax liabilities:
      State income taxes                                                                (27)            (27)
      Percentage of earnings bad debt deduction                                         (49)            (61)
      Unrealized gains on securities designated as available for sale                    -              (81)
      Loss on investment in real estate partnership                                     (41)            -
      Book vs. tax depreciation                                                         (19)             (9)
      Other                                                                             (25)             -
                                                                                      -----           -----
           Total deferred tax liabilities                                              (161)           (178)
                                                                                       ----             ---

           Net deferred tax asset                                                      $472            $195
                                                                                        ===             ===

</TABLE>

    The  Savings  Bank was  allowed  a  special  bad debt  deduction  based on a
    percentage of earnings, generally limited to 8% of otherwise taxable income,
    or the amount of qualifying and nonqualifying  loans outstanding and subject
    to certain limitations based on aggregate loans and savings account balances
    at the end of the year.  This  percentage of earnings bad debt deduction had
    accumulated  to  approximately  $1.7 million as of December 31, 1999. If the
    amounts that qualify as deductions  for federal  income taxes are later used
    for  purposes  other  than  bad  debt  losses,  including  distributions  in
    liquidation,  such  distributions will be subject to federal income taxes at
    the then  current  corporate  income  tax rate.  The  approximate  amount of
    unrecognized  deferred tax  liability  relating to the  cumulative  bad debt
    deduction is approximately $500,000 at December 31, 1999.

    The Savings Bank is required to recapture  as taxable  income  approximately
    $220,000,  representing  its  post-1987  percentage  of  earnings  bad  debt
    deductions. The Savings Bank has provided deferred taxes for this amount and
    is permitted by such  legislation  to recapture  such income over a six year
    period, which commenced in 1998.

                                       43


<PAGE>



                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE J - COMMITMENTS

    The Savings Bank is a party to financial instruments with  off-balance-sheet
    risk in the normal  course of  business to meet the  financing  needs of its
    customers including  commitments to extend credit. Such commitments involve,
    to varying degrees,  elements of credit and interest-rate  risk in excess of
    the amount recognized in the consolidated  statement of financial condition.
    The contract or notional  amounts of the  commitments  reflect the extent of
    the Savings Bank's involvement in such financial instruments.

    The Savings Bank's exposure to credit loss in the event of nonperformance by
    the other party to the financial instrument for commitments to extend credit
    is represented by the contractual notional amount of those instruments.  The
    Savings  Bank  uses the same  credit  policies  in  making  commitments  and
    conditional obligations as those utilized for on-balance-sheet instruments.

    At December  31,  1999,  the Savings  Bank had  outstanding  commitments  of
    approximately  $358,000 to originate  residential  one-to-four family loans.
    The Savings Bank also had outstanding  commitments of approximately $700,000
    to  originate  non-residential  real  estate  loans and  approximately  $2.3
    million  to  originate  other   commercial   loans  at  December  31,  1999.
    Additionally,  the Savings Bank had unused lines of credit under home equity
    loans and  commercial  loans of  approximately  $700,000 and $4.8 million at
    December 31, 1999, respectively.  Finally, the Savings Bank had a commitment
    under a standby letter of credit totaling $1.0 million at December 31, 1999.
    Standby letters of credit are conditional  commitments issued by the Savings
    Bank to guarantee  the  performance  of a customer to a third party.  In the
    opinion of management,  all loan commitments  equaled or exceeded  prevalent
    market  interest  rates as of  December  31,  1999,  and will be funded from
    normal cash flow from operations.

NOTE K - REGULATORY CAPITAL

    The Savings Bank is subject to minimum capital  requirements  promulgated by
    the Office of Thrift  Supervision  ("OTS").  Failure to meet minimum capital
    requirements  can  initiate  certain  mandatory  - and  possibly  additional
    discretionary  - actions by  regulators  that, if  undertaken,  could have a
    direct  material effect on the  Corporation's  financial  statements.  Under
    capital  adequacy  guidelines  and  the  regulatory   framework  for  prompt
    corrective  action,  the Savings Bank must meet specific capital  guidelines
    that  involve   quantitative   measures  of  the  Savings   Bank's   assets,
    liabilities,   and  certain  off-balance-sheet  items  as  calculated  under
    regulatory  accounting  practices.  The Savings Bank's  capital  amounts and
    classifications are also subject to qualitative  judgments by the regulators
    about components,  risk weightings,  and other factors. Such minimum capital
    standards generally require the maintenance of regulatory capital sufficient
    to meet each of three tests,  hereinafter  described as the tangible capital
    requirement,  the  core  capital  requirement  and  the  risk-based  capital
    requirement.  The tangible capital requirement provides for minimum tangible
    capital (defined as shareholders'  equity less all intangible  assets) equal
    to 1.5% of adjusted total assets. The core capital requirement  provides for
    minimum core capital  (tangible  capital plus certain  forms of  supervisory
    goodwill and other qualifying  intangible assets) generally equal to 4.0% of
    adjusted  total  assets  except  for  those  associations  with the  highest
    examination rating and acceptable levels of risk.

                                       44


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE K - REGULATORY CAPITAL (continued)

    The risk-based capital requirement currently provides for the maintenance of
    core  capital  plus   general  loan  loss   allowances   equal  to  8.0%  of
    risk-weighted  assets. In computing  risk-weighted  assets, the Savings Bank
    multiplies  the value of each asset on its statement of financial  condition
    by a defined  risk-weighting  factor, e.g., one- to four-family  residential
    loans carry a risk-weighted factor of 50%.

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

    As of December 31, 1999 and 1998,  management believes that the Savings Bank
    met all capital adequacy requirements to which it was subject.

<TABLE>
<CAPTION>
    1999:                                                                                     To be "well-
                                                                                           capitalized" under
                                                                 For capital                prompt corrective
                                         Actual                adequacy purposes           action provisions
                                     Amount    Ratio           Amount     Ratio             Amount    Ratio
                                                              (Dollars in thousands)
<S>                                 <C>        <C>             <C>                <C>         <C>        <C>
    Tangible capital                $15,152    12.9%          *$1,761            *1.5%       *$5,869    *5.0%

    Core capital                    $15,152    12.9%          *$4,695            *4.0%       *$7,042    *6.0%

    Risk-based capital              $15,592    21.7%          *$5,747            *8.0%       *$7,184   *10.0%


    1998:                                                                                     To be "well-
                                                                                           capitalized" under
                                                                 For capital                prompt corrective
                                         Actual                adequacy purposes           action provisions
                                     Amount    Ratio           Amount     Ratio             Amount    Ratio
                                                              (Dollars in thousands)

    Tangible capital                $16,263    17.0%          *$1,436       *1.5%         *$4,787    *5.0%

    Core capital                    $16,263    17.0%          *$3,831       *4.0%         *$5,745    *6.0%

    Risk-based capital              $16,548    30.1%          *$4,398       *8.0%         *$5,498   *10.0%
</TABLE>


    The Savings Bank's  management  believes that, under the current  regulatory
    capital  regulations,  the  Savings  Bank will  continue to meet its minimum
    capital requirements in the foreseeable future.  However,  events beyond the
    control of the Savings Bank, such as increased  interest rates or a downturn
    in the economy in the primary  market area,  could  adversely  affect future
    earnings and,  consequently,  the ability to meet future minimum  regulatory
    capital requirements.

                                       45


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE K - REGULATORY CAPITAL (continued)

    The Savings Bank is subject to regulations  imposed by the OTS regarding the
    amount of capital distributions payable to the Corporation.  Generally,  the
    Savings Bank's payment of dividends is limited,  without prior OTS approval,
    to net  earnings  for the  current  calendar  year  plus  the two  preceding
    calendar  years,  less capital  distributions  paid over the comparable time
    period.  Insured  institutions  are required to file an application with the
    OTS for capital  distributions in excess of this limitation.  During October
    1999,  the Savings Bank  received OTS approval to make up to $2.0 million in
    capital  distributions to the Corporation.  Of this amount, $1.0 million was
    paid in 1999,  leaving  $1.0  million  available  to be paid during the year
    ended December 31, 2000.

NOTE L - STOCK OPTION PLANS

    During  1996,  the  Board of  Directors  adopted  a Stock  Option  Plan that
    provided  for the  issuance of 132,250  shares of  authorized,  but unissued
    shares of common stock at the fair value at the date of grant.  During 1999,
    the Board of Directors  adopted a second Stock Option Plan that provided for
    the issuance of 115,000 shares of authorized,  but unissued shares of common
    stock at the fair value at the date of grant.

    The Corporation  accounts for its stock option plans in accordance with SFAS
    No. 123,  "Accounting for Stock-Based  Compensation,"  which contains a fair
    value-based  method for valuing  stock-based  compensation that entities may
    use,  which measures  compensation  cost at the grant date based on the fair
    value of the award. Compensation is then recognized over the service period,
    which is usually the  vesting  period.  Alternatively,  SFAS No. 123 permits
    entities  to  continue  to account  for stock  options  and  similar  equity
    instruments  under  Accounting  Principles  Board  ("APB")  Opinion  No. 25,
    "Accounting  for Stock  Issued to  Employees."  Entities  that  continue  to
    account for stock  options using APB Opinion No. 25 are required to make pro
    forma  disclosures  of net earnings  and earnings per share,  as if the fair
    value-based method of accounting defined in SFAS No. 123 had been applied.

    The Corporation  applies APB Opinion No. 25 and related  Interpretations  in
    accounting for its stock option plans. Accordingly, no compensation cost has
    been recognized for the plans. Had compensation  cost for the  Corporation's
    stock  option  plans  been  determined  based on the fair value at the grant
    dates for  awards  under the plans  consistent  with the  accounting  method
    utilized  in SFAS No. 123,  there would have been no material  effect on the
    Corporation's net earnings and earnings per share.

                                       46


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE L - STOCK OPTION PLANS (continued)


    A  summary  of the  status of the  Corporation's  stock  option  plans as of
    December 31,  1999,  1998 and 1997,  and changes  during the years ending on
    those dates is presented below:
<TABLE>
<CAPTION>


                                                1999                        1998                         1997
                                                   Weighted-                  Weighted-                    Weighted-
                                                     average                    average                      average
                                                    exercise                   exercise                     exercise
                                        Shares         price        Shares        price         Shares         price

<S>                                    <C>           <C>           <C>          <C>            <C>            <C>
    Outstanding at beginning of year   126,415       $10.59        124,795      $ 10.53        129,340        $10.53
    Granted                              -               -           2,500        13.75             -            -
    Exercised                             (500)       10.53           (880)       10.53         (4,545)        10.53
    Forfeited                            -               -              -           -               -            -
                                       -------       ------        -------      --------    ---------         -------

    Outstanding at end of year         125,915       $10.59        126,415      $10.59         124,795       $10.53
                                       =======        =====        =======       =====         =======        =====

    Options exercisable at year-end     72,179       $10.55         46,311      $10.53          21,323       $10.53
                                        ======        =====         ======       =====        ========        =====
    Weighted-average fair value of
      options granted during the year                 N/A                        $2.77                        N/A
                                                      ===                         ====                        ===

</TABLE>

    The following  information  applies to options  outstanding  at December 31,
    1999:

    Number outstanding                                                   125,915
    Range of exercise prices                                       $10.53-$13.75
    Weighted-average exercise price                                       $10.59
    Weighted-average remaining contractual life                       6.33 years



                                       47


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE M - CONDENSED FINANCIAL STATEMENTS OF LOGANSPORT FINANCIAL CORP.

    The  following  condensed  financial   statements  summarize  the  financial
    position of Logansport Financial Corp. as of December 31, 1999 and 1998, and
    the results of its  operations  and cash flows for the years ended  December
    31, 1999, 1998 and 1997.

                           Logansport Financial Corp.

                        STATEMENTS OF FINANCIAL CONDITION

                                  December 31,

                                 (In thousands)

    ASSETS                                                     1999        1998

    Cash and cash equivalents                              $    374    $    152
    Investment in subsidiary                                 14,824      16,418
    Dividend receivable from subsidiary                       1,001          --
    Prepaid expenses and other                                   75          52
                                                           --------    --------

       Total assets                                        $ 16,274    $ 16,622
                                                           ========    ========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Accrued expenses and other liabilities                 $    128    $    134

    Shareholders' equity

      Common stock                                            5,979       6,670
      Retained earnings                                      10,734      10,031
      Shares acquired by stock benefit plan                    (239)       (368)
      Unrealized gains (losses) on securities designated
        as available for sale, net                             (328)        155
                                                           --------    --------
       Total shareholders' equity                            16,146      16,488
                                                           --------    --------

       Total liabilities and shareholders' equity          $ 16,274    $ 16,622
                                                           ========    ========



                                       48


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE  M  -  CONDENSED  FINANCIAL   STATEMENTS  OF  LOGANSPORT   FINANCIAL  CORP.
(continued)


                           Logansport Financial Corp.

                             STATEMENTS OF EARNINGS
                             Year ended December 31,
                                 (In thousands)

                                                1999         1998         1997
    Revenue

      Interest income                        $    12      $    13      $    12
      Equity in earnings of subsidiary         1,260        1,279        1,270
                                             -------      -------      -------
      Total revenue                            1,272        1,292        1,282

    Interest expense                              --           --            5

    General and administrative expenses           72           66           70
                                             -------      -------      -------

      Earnings before income tax credits       1,200        1,226        1,207

    Income tax credits                           (24)         (21)         (25)
                                             -------      -------      -------

      NET EARNINGS                           $ 1,224      $ 1,247      $ 1,232
                                             =======      =======      =======



                                       49


<PAGE>





                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE  M  -  CONDENSED  FINANCIAL   STATEMENTS  OF  LOGANSPORT   FINANCIAL  CORP.
(continued)


                           Logansport Financial Corp.

                            STATEMENTS OF CASH FLOWS
                             Year ended December 31,
                                 (In thousands)
<TABLE>
<CAPTION>


                                                                   1999         1998         1997
     <S>                                                        <C>          <C>          <C>
     Cash flows provided by (used in) operating activities:

       Net earnings for the year                                $ 1,224      $ 1,247      $ 1,232
       Adjustments to reconcile net earnings to net cash
       provided by (used in) operating activities:
         Excess distributions from consolidated subsidiary          239          221          730
         Increase (decrease) in cash due to changes in:
           Other liabilities                                         (6)          40          (34)
           Other                                                    (23)         (48)          (1)
                                                                -------      -------      -------
           Net cash provided by operating activities              1,434        1,460        1,927


     Cash flows provided by (used in) financing activities:

       Proceeds from exercise of stock options                        5            9           48
       Proceeds from note payable                                    --           --          100
       Repayment of note payable                                     --           --       (1,500)
       Dividends on common stock                                   (521)        (532)        (504)
       Purchase of shares                                          (696)        (945)          --
                                                                -------      -------      -------
           Net cash used in financing activities                 (1,212)      (1,468)      (1,856)
                                                                -------      -------      -------

     Net increase (decrease) in cash and cash equivalents           222           (8)          71

     Cash and cash equivalents at beginning of year                 152          160           89
                                                                -------      -------      -------

     Cash and cash equivalents at end of year                   $   374      $   152      $   160
                                                                =======      =======      =======

</TABLE>


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<PAGE>




                           Logansport Financial Corp.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        December 31, 1999, 1998 and 1997


NOTE N - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

    The following table summarizes the  Corporation's  quarterly results for the
    years ended  December  31, 1999 and 1998.  Certain  amounts,  as  previously
    reported, have been reclassified to conform to the 1999 presentation.
<TABLE>
<CAPTION>


                                                                     Three Months Ended
                                                  March 31,     June 30,    September 30,      December 31,
    1999:                                                 (In thousands, except per share data)

<S>                                                  <C>          <C>              <C>               <C>
    Total interest income                            $1,730       $1,821           $1,945            $2,103
    Total interest expense                              875          950            1,060             1,158
                                                     ------       ------            -----             -----

    Net interest income                                 855          871              885               945
    Provision for losses on loans                        41           40               41                40
    Other income                                         66           12               44                53
    General, administrative and other expense           426          420              397               424
                                                     ------       ------           ------            ------

    Earnings before income taxes                        454          423              491               534
    Income taxes                                        172          152              173               181
                                                     ------       ------           ------            ------

    Net earnings                                    $   282      $   271          $   318           $   353
                                                     ======       ======           ======            ======

    Earnings per share:
      Basic                                           $.24          $.22             $.27              $.30
                                                       ===           ===              ===               ===

      Diluted                                         $.23          $.22             $.27              $.30
                                                       ===           ===              ===               ===

                                                                     Three Months Ended
                                                  March 31,     June 30,    September 30,      December 31,
    1998:                                                 (In thousands, except per share data)

    Total interest income                            $1,588       $1,639           $1,664            $1,688
    Total interest expense                              826          857              894               899
                                                     ------       ------           ------            ------

    Net interest income                                 762          782              770               789
    Provision for losses on loans                         9            9               13                32
    Other income                                         52           70               60               103
    General, administrative and other expense           317          320              320               365
                                                      -----       ------           ------            ------

    Earnings before income taxes                        488          523              497               495
    Income taxes                                        184          198              189               185
                                                     ------       ------           ------            ------

    Net earnings                                    $   304      $   325           $  308           $   310
                                                     ======       ======            =====            ======

    Earnings per share:
      Basic                                           $.24          $.26             $.24              $.26
                                                       ===           ===              ===               ===

      Diluted                                         $.23          $.25             $.24              $.25
                                                       ===           ===              ===               ===
</TABLE>



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