================================================================================
                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

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


For the fiscal year ended December 31, 1999

                                       or

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

For the transition period from _____________ to _______________

Commission File Number              0-25910

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

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

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

Registrant's telephone number including area code:

                                 (219) 722-3855

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements  for the past 90 days.    YES  X     NO ____

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

The aggregate market value of the issuer's voting stock held by  non-affiliates,
as of March 1, 2000, was $9,195,220.

The  number of shares of the  Registrant's  Common  Stock,  without  par  value,
outstanding as of March 1, 2000, was 1,094,510 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to  Shareholders  for the year ended  December 31,
1999, are  incorporated  into Part II.  Portions of the Proxy  Statement for the
2000 Annual Meeting of Shareholders are incorporated in Part I and Part III.

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

<PAGE>

                           LOGANSPORT FINANCIAL CORP.

                                    Form 10-K

                                      INDEX

                                                                            Page

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

PART I

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

PART II

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

             Stockholder Matters............................................. 26
Item  6.   Selected Financial Data........................................... 27
Item  7.   Management's Discussion and Analysis of Financial
             Condition and Results of Operations............................. 27
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk........ 27
Item  8.   Financial Statements and Supplementary Data....................... 27
Item  9.   Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure............................. 27
PART III

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

PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports
             on Form 8-K..................................................... 29
           Signatures........................................................ 30


<PAGE>
                           FORWARD LOOKING STATEMENTS

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

                                     PART I

Item 1.       Business.

General

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

         The  Bank  is  the  oldest  financial   institution   headquartered  in
Logansport,  Indiana.  Management  believes  the  Bank  has  developed  a  solid
reputation  among its loyal  customer base because of its commitment to personal
service and its strong support of the local community.  The Bank offers a number
of consumer and  commercial  financial  services.  These services  include:  (i)
residential  real estate loans;  (ii) home equity loans;  (iii) home improvement
loans;  (iv)  construction  loans; (v) share loans;  (vi) commercial real estate
loans; (vii) multi-family loans;  (viii) consumer loans; (ix) NOW accounts;  (x)
passbook  savings  accounts;  (xi)  certificates of deposit;  (xii) consumer and
commercial demand deposit accounts;  and (xiii) individual  retirement accounts.
In the fourth  quarter  of 1998,  the Bank  decided to offer a complete  line of
commercial  lending to include  operating lines of credit secured by receivables
and inventory and term  financing for  equipment  purchases.  In 1999,  the Bank
began offering  agricultural loans and equipment leases. The Holding Company and
the Bank  conduct  business  out of their main  office  located  in  Logansport,
Indiana.  The  Bank is and  historically  has  been a  significant  real  estate
mortgage lender in Cass County, Indiana,  originating approximately 36.2% of the
mortgage loan volume recorded in Cass County by Cass County  institutions during
the year ended December 31, 1999.

         The Bank  historically has  concentrated its lending  activities on the
origination  of  loans  secured  by  first  mortgage  liens  for  the  purchase,
construction  or refinancing of one- to four-family  residential  real property.
One- to four-family residential mortgage loans continue to be the major focus of
the Bank's loan  origination  activities,  representing  62.2% of the  Company's
total loan  portfolio at December 31,  1999.  The Bank also offers  multi-family
mortgage loans,  commercial real estate loans,  construction  loans,  commercial
loans and leases and consumer  loans.  Mortgage  loans  secured by  multi-family
properties and  commercial  real estate  totaled  approximately  2.3% and 12.7%,
respectively,  of the  Company's  total loan  portfolio  at December  31,  1999.
Commercial loans  constituted 4.4% and commercial  leases 1.7% of the total loan
portfolio.  Residential,  multi-family  and commercial real estate  construction
loans  constituted  approximately  2.8% of the Company's total loan portfolio at
December 31, 1999.  Installment,  share, home equity, and home improvement loans
constituted  approximately  6.6%,  .3%,  1.0%,  and 6.0%,  respectively,  of the
Company's total loan portfolio at December 31, 1999.



                                     - 1 -
<PAGE>

Lending Activities

         Loan Portfolio  Data. The following table sets forth the composition of
the  Company's  loan  portfolio by loan type and  security  type as of the dates
indicated,   including  a   reconciliation   of  gross  loans  receivable  after
consideration of the allowance for loan losses and loans in process.
<TABLE>
<CAPTION>
                                                                         At December 31,
                                  --------------------------------------------------------------------------------------------------
                                       1999                1998               1997                 1996                 1995
                                  -----------------   -----------------  ----------------    ------------------   ------------------
                                            Percent             Percent           Percent               Percent             Percent
                                  Amount   of Total   Amount   of Total  Amount  of Total    Amount    of Total   Amount    of Total
                                  ------   --------   ------   --------  ------  --------    ------    --------   ------    --------
                                                                     (Dollars in thousands)
TYPE OF LOAN
Mortgage loans:
<S>                               <C>        <C>     <C>        <C>      <C>      <C>     <C>           <C>       <C>        <C>
   Residential.................   $57,889    62.23%  $52,205    69.35%   $46,419  72.48%  $  41,109     72.05%    $36,608    73.15%
   Commercial real estate......    11,825    12.71     3,492     4.64      3,072   4.80       2,701      4.73       1,620     3.24
   Multi-family................     2,111     2.27     1,584     2.10      1,844   2.88       2,370      4.15       1,915     3.83
Construction:
   Residential ................     2,575     2.77     1,742     2.31      1,333   2.08         574      1.01         575     1.15
   Commercial
     real estate...............       ---      ---    1,400     1.86         ---    ---         194       .34         198      .39
   Multi-family................       ---      ---      350      .47         ---    ---         248       .43         250      .50
Commercial paper ..............       ---      ---      ---      ---         ---    ---         ---       ---         878     1.75
Commercial loans...............     4,102     4.41    1,486     1.97         ---    ---         ---       ---        ---       ---
Commercial leases..............     1,609     1.73      ---      ---         ---    ---         ---       ---        ---       ---
Consumer loans:
   Installment (2).............     6,107     6.56     6,021     8.00      5,409   8.44       4,615      8.09       3,729     7.45
   Share ......................       289      .31       314      .42        313    .49         286       .50         219      .44
   Home equity.................       974     1.05     1,090     1.45        685   1.07         595      1.04         398      .79
   Home improvement............     5,544     5.96     5,589     7.43      4,972   7.76       4,368      7.66       3,656     7.31
                                  -------   ------   -------   ------    ------- ------   ---------    ------     -------   ------
     Gross loans receivable....   $93,025   100.00%  $75,273   100.00%   $64,047 100.00%  $  57,060    100.00%    $50,046   100.00%
                                  =======   ======   =======   ======    ======= ======   =========    ======     =======   ======

TYPE OF SECURITY

   Residential (1).............   $66,150    71.11%  $61,291    81.42%   $53,409  83.39%  $  46,689     81.83%    $41,407    82.74%
   Commercial real estate......    12,334    13.26     4,108     5.46      3,212   5.02       2,895      5.07       1,818     3.63
   Multi-family................     2,088     2.25     1,934     2.57      1,844   2.88       2,618      4.59       2,165     4.33
   Deposits....................       289      .31       314      .42        313    .49         286       .50         219      .44
   Auto........................     2,477     2.66     2,210     2.94      2,148   3.35       2,042      3.58       1,288     2.57
   Consumer residential (2)....     1,599     1.72     1,918     2.55      1,617   2.52       1,074      1.88       1,232     2.46
   Other security..............     8,088     8.69     3,498     4.64      1,504   2.35       1,456      2.55       1,039     2.08
   Unsecured (3)...............       ---      ---      ---       ---       ---     ---        ---        ---        878      1.75
                                  -------   ------   -------   ------    ------- ------   ---------    ------     -------   ------
     Gross loans receivable....    93,025   100.00%   75,273   100.00%    64,047 100.00%     57,060    100.00%     50,046   100.00%
Deduct:
Allowance for loan losses......       440      .47       285      .38        245    .38         236       .41         223      .45
Loans in process...............     1,685     1.81     1,915     2.54        167    .26          22       .04         116      .23
                                  -------   ------   -------   ------    ------- ------   ---------    ------     -------   ------
   Net loans receivable........   $90,900    97.72%  $73,073    97.08%   $63,635  99.36%  $  56,802     99.55%    $49,707    99.32%
                                  =======   ======   =======   ======    ======= ======   =========    ======     =======   ======
Mortgage Loans:
   Adjustable-rate.............   $48,119    64.68%  $45,552    74.95%   $42,984  81.61%  $  38,729     82.06%    $34,715    84.33%
   Fixed-rate..................    26,281    35.32    15,221    25.05      9,684  18.39       8,467     17.94       6,451    15.67
                                  -------   ------   -------   ------    ------- ------   ---------    ------     -------   ------
     Total.....................   $74,400   100.00%  $60,773   100.00%   $52,668 100.00%  $  47,196    100.00%    $41,166   100.00%
                                  =======   ======   =======   ======    ======= ======   =========    ======     =======   ======
</TABLE>
-------------
(1)  Includes home equity, residential construction and home improvement loans.
(2)  Includes  "one-pay"  notes due in less than one year secured by residential
     real estate.
(3)  Includes commercial paper and bankers' acceptances.

                                     - 2 -
<PAGE>

         The  following  table sets forth  certain  information  at December 31,
1999,  regarding  the dollar  amount of loans  maturing  in the  Company's  loan
portfolio  based on the date that  final  payment  is due under the terms of the
loan.  Demand  loans  having  no stated  schedule  of  repayments  and no stated
maturity and overdrafts  are reported as due in one year or less.  This schedule
does  not  reflect  the  effects  of  possible  prepayments  or  enforcement  of
due-on-sale clauses. Management expects prepayments will cause actual maturities
to be shorter.
<TABLE>
<CAPTION>


                                     Balance                      Due during years ending December 31,
                                   Outstanding                                    2003       2005       2010       2015
                                  at December 31,                                  to         to         to         and
                                      1999        2000      2001       2002       2004       2009       2014     following
                                  --------------  ----      ----      ------    -------   ---------    ------    ----------
                                                                  (In thousands)
<S>                                  <C>        <C>       <C>       <C>        <C>        <C>          <C>         <C>
Mortgage loans:
   Residential ....................  $60,464    $   166   $   145   $   139    $   825    $  7,276     $13,237     $38,676
   Multi-family....................    2,111        350       ---       ---        854         131         776         ---
   Commercial real estate..........   11,825         53        20       316        578       4,359       2,978       3,521
Commercial loans...................    4,102      2,786       604        50        519         143         ---         ---
Commercial leases..................    1,609        ---       122        91        379       1,017         ---         ---
Consumer loans:
   Home improvement................    5,544         40       202       212      1,053       2,299       1,424         314
   Home equity.....................      974        ---       ---       ---        ---         ---         974         ---
   Installment.....................    6,107      2,750       427       727      1,438         386         379         ---
   Share...........................      289        289       ---       ---        ---         ---         ---         ---
                                     -------     ------    ------    ------     ------     -------     -------     -------
   Total...........................  $93,025     $6,434    $1,520    $1,535     $5,646     $15,611     $19,768     $42,511
                                     =======     ======    ======    ======     ======     =======     =======     =======
</TABLE>

         The  following  table sets forth,  as of December 31, 1999,  the dollar
amount  of all loans due after one year  which  have  fixed  interest  rates and
floating or adjustable rates.

                                           Due After December 31, 2000
                                 -------------------------------------------
                                 Fixed Rates     Variable Rates      Total
                                                 (In thousands)

Mortgage loans:
   Residential ...............    $20,194           $40,104         $60,298
   Multi-family...............        187             1,574           1,761
   Commercial real estate.....      5,625             6,147          11,772
Commercial loans..............        744               572           1,316
Comercial leases..............      1,609               ---           1,609
Consumer loans:
   Home improvement...........      5,504               ---           5,504
   Home equity................        ---               974             974
   Installment................      3,357               ---           3,357
                                  -------           -------         -------
     Total....................    $37,220           $49,371         $86,591
                                  =======           =======         =======

         Residential  Loans.  Residential  loans  consist  primarily  of one- to
four-family  loans.  Approximately  $57.9  million,  or 62.2%  of the  Company's
portfolio  of loans at  December  31,  1999,  consisted  of one- to  four-family
residential mortgage loans, of which approximately 64.7% had adjustable rates.

         The  Bank  currently   offers   adjustable-rate   one-  to  four-family
residential mortgage loans ("ARMs") which adjust annually and are indexed to the
one-year U.S. Treasury securities yields adjusted to a constant maturity.  These
ARMs have a current  margin  above  such  index of 2.75%,  or 3.00% for loans in
which  interest is  amortized  and payments are due  bi-weekly.  Interest  rates
cannot  adjust  lower  than  the rate at the  time of  origination.  Many of the
residential ARMs in the Company's  portfolio at December 31, 1999 provided for a
maximum rate  adjustment  per year of 1%,  although  the Bank began  originating
residential  ARMs which provide for a maximum rate  adjustment of 2% per year in
1995. The Bank's  residential  ARMs provide for a maximum rate  adjustment of 5%
over the life of the loan.  These ARMs generally bear terms of between 15 and 25
years.

         The Bank also currently  offers  fixed-rate loans which provide for the
payment of principal and interest over a period that  generally  does not exceed
15 years.  At December 31, 1999,  35.3% of the  Company's  residential  mortgage
loans had fixed rates of interest.

                                     - 3 -
<PAGE>

         The Bank does not currently originate residential mortgage loans if the
ratio of the loan amount to the lesser of current cost or appraised value of the
property (i.e.,  the  "loan-to-value  ratio") exceeds 95% and does not currently
require private  mortgage  insurance on its residential  single-family  mortgage
loans.

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

         The Bank's  residential  mortgage loans are not originated on terms and
conditions  and using  documentation  that conform to the standard  underwriting
criteria required to sell such loans on the secondary market. The Bank generally
retains its loans in its portfolio and does not  anticipate the need to sell its
non-conforming loans. See "-- Origination, Purchase and Sale of Loans."

         At December 31, 1999,  residential loans amounting to $343,000,  or .4%
of total loans, were included in non-performing  assets. See "Non-Performing and
Problem Assets."

         Commercial Real Estate Loans. At December 31, 1999,  $11.8 million,  or
12.7% of the Company's total loan portfolio, consisted of commercial real estate
loans. Of these loans, $1.1 million constituted  participations in loans secured
by  commercial   real  estate  which  were   purchased   from  other   financial
institutions.  The  commercial  real  estate  loans  included  in the  Company's
portfolio are  primarily  secured by  non-residential  real estate such as small
office  buildings,  nursing homes,  churches,  light  manufacturing  facilities,
retail and service  outlets,  warehouses,  professional  buildings and farm real
estate.  The  Bank  currently   originates   commercial  real  estate  loans  as
adjustable-rate  loans indexed to the one-year  U.S.  Treasury or the prime with
various margins,  or as fixed rate loans. The Bank underwrites  these loans on a
case-by-case  basis and, in addition to its normal  underwriting  criteria,  the
Bank evaluates the borrower's ability to service the debt from the net operating
income of the property.  No single  commercial  real estate loan at December 31,
1999  exceeded  $912,000.  No  commercial  real  estate  loans were  included in
non-performing assets at that date.

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

         Multi-Family  Loans.   Approximately  $2.1  million,  or  2.3%  of  the
Company's  portfolio of loans at December 31,  1999,  consisted of  multi-family
loans.  These  loans are  generally  purchased  participations  and  secured  by
apartment complexes and other multi-family  residential properties.  At December
31, 1999, $233,000 of the multi-family loans included in the Company's portfolio
was included in non-performing assets.

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

         At December 31, 1999,  $2.6 million,  or 2.8%,  of the Company's  total
loan  portfolio  consisted of  construction  loans.  All  construction  loans at
December  31,  1999 were one- to  four-family  residential  loans.  The  largest
construction  loan  at  December  31,  1999  was  approximately   $290,000.   No
construction loans were included in non-performing assets on that date.

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


                                     - 4 -
<PAGE>
          Commercial  Loans. At December 31, 1999, $4.1 million,  or 4.4% of the
Company's total loan portfolio consisted of commercial loans provided to finance
receivables, inventory or equipment. These loans were originated by the Bank and
provided  to  existing  businesses  located in Cass  County  and its  contiguous
counties. Loans are underwritten on a case-by-case basis with emphasis placed on
cash flow analysis and the borrower's debt service capacity. The majority of the
loans are  written  on a  variable  rate  using the  national  prime rate as the
primary index rate. The weighted  average  maturity of the variable rate portion
of the  portfolio was 14 months and the weighted  average  maturity of the fixed
rate portion of the portfolio was 45 months at December 31, 1999.

         Commercial  Leases. At December 31, 1999, $1.6 million,  or 1.7% of the
Company's  total loan  portfolio  consisted  of  commercial  leases  provided to
finance  equipment.  The Bank's lease  portfolio  consists of a joint  marketing
effort between the Bank and SCI Leasing Group, a Carmel,  Indiana based concern,
with all  credit  decisions  made  solely  by the Bank  and  following  the same
underwriting  standards as are applied to traditional  commercial loan requests.
Commercial  leases are a fixed rate  financing  tool with the  weighted  average
maturity of the Bank's lease portfolio at 68 months as of December 31, 1999.

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

         The Company's  consumer  loans,  consisting  primarily of  installment,
share, home improvement,  and home equity loans,  aggregated $12.9 million as of
December 31, 1999,  or 13.9% of the  Company's  total loan  portfolio.  The Bank
consistently originates consumer loans to meet the needs of its customers and to
assist in  meeting  its  asset/liability  management  goals.  All of the  Bank's
consumer loans originated by the Bank,  except home equity loans, are fixed-rate
loans, and substantially all are secured loans.

         Installment  loans,  totaling $6.1  million,  or 6.6% of total loans at
December  31,  1999,  are  fixed-rate  loans  generally  secured by  collateral,
including  automobiles,  and  are  made  for  maximum  terms  of up to 10  years
(depending  on the  collateral).  The  Bank's  installment  loans  also  include
"one-pay" notes, some of which are secured by residential real estate and all of
which  amortize at rates  similar to those for home  improvement  loans and have
maximum terms of 6 months to one year.

         Share loans,  totaling $289,000,  or .3% of total loans at December 31,
1999, are made up to 80% of the original account balance and accrue at a rate of
2-3% over the underlying certificate of deposit rate. Interest on share loans is
paid  quarterly.  Home  improvement  loans totaled $5.5 million,  or 6.0% of the
Company's  total loan  portfolio  at  December  31,  1999,  and are  close-ended
fixed-rate  loans  made  for  maximum  terms up to 15  years.  The  Bank's  home
improvement  loans are generally made only to those  borrowers for whom the Bank
holds the primary mortgage on the property, if any.

         The Bank also offers  open-ended  lines of credit  secured by a lien on
the equity in the borrower's home in amounts up to 90% of the appraised value of
the real estate (taking into account any other  mortgages on the property).  The
Bank's home equity loans are adjustable-rate  loans with interest rates equal to
the national  prime rate plus 2%, and payments equal to the greater of 2% of the
outstanding loan balance or $50. The Bank's home equity loans are generally made
only to those  borrowers  for whom the Bank holds the  primary  mortgage  on the
property, if any, and generally have a maximum term of 15 years. At December 31,
1999, the Bank had approved  $1,685,000 of home equity loans,  of which $974,000
were outstanding.



                                     - 5 -
<PAGE>

         As a general rule,  consumer  loans involve a higher level of risk than
one- to  four-family  residential  mortgage  loans  because  consumer  loans are
generally  made based upon the  borrower's  ability to repay the loan,  which is
subject to change, rather than the value of the underlying  collateral,  if any.
However,  the relatively higher yields and shorter terms to maturity of consumer
loans are believed to be helpful in reducing  interest-rate  risk.  The Bank has
thus far been  successful  in managing  consumer  loan risk.  As of December 31,
1999, consumer loans totaling $90,000 were included in non-performing assets.

         Letters  of  Credit  Securing  Tax-Exempt  Bonds.  The  Bank  currently
maintains  four  letters of credit,  each in the amount of  $253,000,  to secure
payments  required under  tax-exempt  bonds issued to raise funds for low-income
housing  projects in Franklin,  Kokomo and Michigan City,  Indiana and Hamilton,
Ohio.  The issuer of the  tax-exempt  bonds is permitted  to draw against  these
letters of credit  only in the event it  defaults  in making  payments  required
under the bonds,  and any such draws made against the letters of credit would be
secured by a mortgage  on the  subject  housing  project.  No draws  against any
letters of credit had been made as of  December  31,  1999.  In  addition to the
above,  the Bank held $195,000 in standby  letters of credit for two  commercial
loan customers.

         Origination,  Purchase and Sale of Loans. In an effort to control costs
incurred by its mortgage customers,  the Bank currently  originates its mortgage
loans  pursuant to its own  underwriting  standards  which are not in conformity
with the  standard  criteria  of the  Federal  Home  Loan  Mortgage  Corporation
("FHLMC") or Federal National Mortgage  Association  ("FNMA").  If it desired to
sell its mortgage  loans,  the Bank might  therefore  experience some difficulty
selling such loans quickly in the secondary  market.  The Bank has no intention,
however,  of attempting to sell such loans.  The Bank's ARMs vary from secondary
market criteria because,  among other things,  the Bank does not require current
property  surveys in most cases and does not require  escrow  accounts for taxes
and insurance.

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

         Under the Financial Institutions Reform,  Recovery, and Enforcement Act
of 1989 ("FIRREA"),  a savings association  generally may not make any loan to a
borrower or its  related  entities if the total of all such loans by the savings
association  exceeds 15% of its capital (plus up to an additional 10% of capital
in the case of loans fully  collateralized  by readily  marketable  collateral);
provided,  however,  that  loans up to  $500,000  regardless  of the  percentage
limitations  may be made  and  certain  housing  development  loans of up to $30
million or 30% of capital,  whichever is less, are permitted. The maximum amount
which the Bank could have  loaned to one  borrower  and the  borrower's  related
entities  under the 15% of capital  limitation  was $2.3 million at December 31,
1999. The Company's  portfolio of loans currently  contains no loans that exceed
the 15% of capital limitation.

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

         The Bank generally requires  appraisals or loan officer  evaluations on
all property  securing its loans and requires title insurance or an abstract and
a valid lien on its  mortgaged  real estate.  Appraisals  for  residential  real
property are performed  either by an in-house  appraiser who is a state-licensed
residential appraiser or an independent  state-licensed  residential  appraiser.
From time to time,  the Bank also uses the  services  of  certified  residential
appraisers, who are not in-house, for performance of appraisals related to loans
in excess of $250,000. The Bank requires fire and extended coverage insurance in
amounts at least equal to the  principal  amount of the loan.  It also  requires
flood insurance to protect the property securing its interest if the property is
in a flood plain.

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

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

                                     - 6 -
<PAGE>

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

                                                                     Year Ended December 31,
                                                         ----------------------------------------------
                                                           1999               1998               1997
                                                         -------             -------            -------
                                                                          (In thousands)
<S>                                                      <C>                 <C>                <C>
Gross loans receivable
   at beginning of period........................        $75,273             $64,047            $57,060
Originations:
   Mortgage loans:
     Residential.................................         17,229              14,691             13,102
     Commercial real estate and lines of credit
       and multi-family..........................         19,368               1,400                417
                                                         -------             -------            -------
     Total mortgage loans and commercial loans...         36,597              16,091             13,519
   Consumer loans:
     Installment.................................          5,597               7,321              3,476
     Share.......................................            169                 294                101
     Home improvement............................          1,944               2,333              2,510
     Home equity.................................            103                 736                163
                                                         -------             -------            -------
       Total consumer loans......................          7,813              10,684              6,250
                                                         -------             -------            -------
            Total originations...................         44,410              26,775             19,769
   Purchases:
     Commercial real estate and multi-family.....            981                 350                ---
     Commercial paper............................            ---                 ---                ---
                                                         -------             -------            -------
       Total originations and purchases..........         45,391              27,125             19,769
   Repayments and deductions.....................         27,639              15,899             12,782
                                                         -------             -------            -------
   Gross loans receivable at end of period.......        $93,025             $75,273            $64,047
                                                         =======             =======            =======
</TABLE>


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

Non-Performing and Problem Assets

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

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

         Non-Performing  Assets. At December 31, 1999, $666,000,  or .57% of the
Company's total assets, were  non-performing  assets (loans delinquent more than
90  days,   non-accruing  loans,  real  estate  owned  ("REO"),   troubled  debt
restructurings and non-accruing investments),  compared to $315,000, or .33%, of
the  Company's  total  assets at  December  31,  1998.  At  December  31,  1999,
residential  loans,  multi-family  loans and consumer loans accounted for 51.5%,
35.0%,  and  13.5%,  respectively,  of  non-performing  assets.  There  were  no
non-accruing investments at December 31, 1999.

                                     - 7 -
<PAGE>

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

<TABLE>
<CAPTION>
                                                                      At December 31,
                                                 ---------------------------------------------------------
                                                 1999         1998         1997         1996          1995
                                                 ----         ----         ----         ----          ----
                                                                    (Dollars in thousands)
<S>                                              <C>          <C>          <C>           <C>          <C>
Non-accruing loans (1).........................  $666         $315         $431          $406         $311
Real estate owned, net.........................   ---          ---          106           ---          ---
   Total non-performing assets.................  $666         $315         $537          $406         $311
                                                 ====         ====         ====          ====         ====

Non-performing loans to total loans, net (2)...   .72%          .42%         .67%         .71%         .63%
Non-performing assets to total assets..........   .57           .33          .62          .52          .42
</TABLE>
---------------

(1)  The Company generally places loans on a non-accruing  status when the loans
     become  contractually  past  due 90 days or more.  At  December  31,  1999,
     $343,000 of  non-accruing  loans were  residential  loans,  $233,000  was a
     multi-family  housing  purchased   participation  loan,  and  $90,000  were
     consumer loans. For the year ended December 31, 1999, the income that would
     have been recorded had the non-accruing  loans not been in a non-performing
     status totaled $36,000.

(2)  Total loans less loans in process.

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

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



                                     - 8 -
<PAGE>

         At December 31, 1999, the aggregate amount of the Company's  classified
assets and the Company's general and specific loss allowances were as follows:

                                                         At December 31, 1999
                                                         --------------------
                                                            (In thousands)
Substandard loans...................................            $918
Doubtful loans......................................             ---
Loss loans..........................................             ---
                                                                ----
   Total classified loans...........................            $918
                                                                ====
General loss allowances.............................            $440
Specific loss allowances............................             ---
                                                                ----
   Total allowances.................................            $440
                                                                ====

         The Company  regularly  reviews its loan portfolio to determine whether
any loans require classification in accordance with applicable regulations.  The
substandard  loans consist of all nonaccrual loans and one additional  purchased
participation  multi-family  real estate loan of  $252,000,  which is current on
payments but considered substandard because of cash flow.

Allowance for Loan Losses

         The allowance  for loan losses is maintained  through the provision for
loan losses,  which is charged to  earnings.  The  provision  for loan losses is
determined in  conjunction  with  management's  review and evaluation of current
economic conditions (including those of the Bank's lending area), changes in the
character and size of the loan portfolio,  loan delinquencies (current status as
well as past and  anticipated  trends) and adequacy of collateral  securing loan
delinquencies,  historical and estimated net  charge-offs,  and other  pertinent
information  derived  from a  review  of the  loan  portfolio.  In  management's
opinion,  the  Company's  allowance  for  loan  losses  is  adequate  to  absorb
anticipated future losses from loans at December 31, 1999. However, there can be
no assurance that regulators, when reviewing the Company's loan portfolio in the
future,  will not require  increases in its  allowances  for loan losses or that
changes in economic  conditions  will not adversely  affect the  Company's  loan
portfolio.

         Summary of Loan Loss  Experience.  The following table analyzes changes
in the allowance for loan losses during the past five (5) one-year periods ended
December 31, 1999.
<TABLE>
<CAPTION>

                                                                    Year Ended December 31,
                                                  ---------------------------------------------------------
                                                  1999          1998         1997         1996         1995
                                                  ----          ----         ----         ----         ----
                                                                    (Dollars in thousands)
<S>                                                <C>          <C>         <C>          <C>          <C>
Balance of allowance at beginning
   of period.............................          $285         $245        $ 236        $ 223        $ 206
Recoveries...............................           ---          ---            1            1          ---
Less charge-offs:
   Residential real estate loans.........           ---           13           10          ---          ---
   Consumer loans........................             7           10            8          ---            3
                                                   ----         ----         ----         ----         ----
Net charge-offs..........................             7           23           17           (1)           3
Provisions for losses on loans...........           162           63           26           12           20
                                                   ----         ----         ----         ----         ----
Balance of allowance at end of period....          $440         $285         $245         $236         $223
                                                   ====         ====         ====         ====         ====
   Net charge-offs to total average
     loans receivable for period.........           (*)          .03          .03           (*)          (*)
   Allowance at end of period to
     net loans receivable at end
     of period (1).......................           .47          .38          .38          .41          .45
   Allowance to total non-performing
     loans at end of period..............         66.07        90.48        56.84        58.12        71.61
-------------------
</TABLE>

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



                                     - 9 -
<PAGE>

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


                                                                  At December 31,
                              --------------------------------------------------------------------------------------
                                    1999             1998               1997             1996              1995
                              ----------------  ---------------   ---------------  ---------------- ----------------
                                       Percent          Percent           Percent           Percent          Percent
                                      of loans         of loans          of loans          of loans         of loans
                                       in each          in each           in each           in each          in each
                                      category         category          category          category         category
                                      of total         of total          of total          of total         of total
                              Amount   loans    Amount   loans    Amount   loans   Amount   loans   Amount   loans
                              ------   -----    ------   -----    ------   -----   ------   -----   ------   -----
                                                                (Dollars in thousands)
<S>                             <C>    <C>       <C>     <C>       <C>    <C>       <C>     <C>       <C>    <C>
Balance at end of period
   applicable to:
Residential..................   $270   62.23%    $232    69.35%    $193   72.48%    $158    72.05%    $122   73.15%
Commercial real estate.......      8   12.71        6     4.64        6    4.80        6     4.73        6    3.24
Multi-family.................    117    2.27        1     2.10        1    2.88        1     4.15        1    3.83
Construction loans...........    ---    2.77      ---     4.64      ---    2.08      ---     1.78      ---    2.04
Commercial paper and
   bankers' acceptances......    ---     ---      ---      ---      ---     ---      ---      ---      ---    1.75
Commercial loans.............    ---    4.41      ---     1.97      ---     ---      ---      ---      ---     ---
Commercial leases............    ---    1.73      ---      ---      ---     ---      ---      ---      ---     ---
Consumer loans...............     45   13.88       46    17.30       45   17.76       71    17.29       86   15.99
Unallocated..................    ---     ---      ---      ---     ---      ---      ---      ---        8     ---
                                ----  ------     ----   ------     ----  ------     ----   ------     ----  ------
   Total.....................   $440  100.00%    $285   100.00%    $245  100.00%    $236   100.00%    $223  100.00%
                                ====  ======     ====   ======     ====  ======     ====   ======     ====  ======
</TABLE>


Investments and Mortgage- and Other Asset-Backed Securities

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

         The Company's  investments  consist of U.S. government and other agency
securities,  mortgage- and other  asset-backed  securities,  state and municipal
bonds, corporate obligations,  marketable equity securities,  and FHLB stock. At
December 31, 1999,  approximately $15.7 million, or 13.4% of the Company's total
assets, consisted of such investments.

         At December  31, 1999,  the Company had $5.9  million of mortgage-  and
other  asset-backed  securities  outstanding,  all of which were  classified  as
available for sale. These fixed-rate mortgage- and other asset-backed securities
may be used as collateral for borrowings and through repayments,  as a source of
liquidity.  Mortgage- and other asset-backed securities offer yields above those
available  for   investments   of  comparable   credit   quality  and  duration.
Mortgage-backed securities are qualifying thrift investments under the Qualified
Thrift Lender test. See "Regulation--Qualified Thrift Lender."



                                     - 10 -
<PAGE>

         The following  table sets forth the amortized  cost and market value of
the Company's investments and mortgage- and other asset-backed securities at the
dates indicated.
<TABLE>
<CAPTION>
                                                                         At December 31,
                                         ---------------------------------------------------------------------------
                                                  1999                        1998                     1997
                                         ---------------------     ---------------------     -----------------------
                                         Amortized      Market     Amortized      Market     Amortized        Market
                                            Cost         Value        Cost         Value        Cost           Value
                                         ---------      ------     ---------      ------     ---------        ------
                                                                         (In thousands)
<S>                                      <C>            <C>        <C>          <C>            <C>           <C>
Securities available for sale:
   Federal agencies...................   $  6,295       $5,901     $  2,845     $  2,825       $3,598        $3,451
   State and municipal................      1,931        1,939        1,323        1,393        1,780         1,847
   Mortgage- and other asset-backed
     securities.......................      6,145        5,898        8,193        8,129        9,998         9,932
   Corporate obligations..............        560          523          561          571          200           209
   Marketable equity securities.......          4          176            4          244            6           243
     Total securities

     available for sale...............     14,935       14,437       12,926       13,162       15,582        15,682
Certificate of deposit (1)............        ---          ---          ---          ---          100           100
FHLB stock (1)........................      1,273        1,273          568          568          494           494
                                          -------      -------      -------      -------      -------       -------
     Total investments................    $16,208      $15,710      $13,494      $13,730      $16,176       $16,276
                                          =======      =======      =======      =======      =======       =======
</TABLE>


(1)  Market value approximates carrying values.

         Included in the  Company's  investment  portfolio  at December 31, 1999
were approximately  $300,000  (amortized cost) in derivative  securities,  which
were  structured  notes  issued by the FHLBs.  The fair value of these  security
investments was  approximately  $294,000 at December 31, 1999.  These structured
notes,  which are not  obligations  of, or  guaranteed  by, the  United  States,
represent  obligations to repay  principal with interest that is either fixed or
fluctuates in accordance with an interest formula tied to various  indices.  The
interest on the  Company's  structured  notes  generally  adjusts  quarterly  or
semi-annually  based on  certain  indices  such as the LIBOR  and the CMT.  This
structured  note had  fluctuating  interest  rates that adjust on the basis of a
formula  tied to two  different  indices,  such as the CMT and an inverse  LIBOR
rate.  This dually  indexed  security was  classified  as available  for sale at
December 31, 1999 and will mature in July, 2000.

         The average yield of these derivative  securities at December 31, 1999,
was 2.98%. In a rising  interest rate  environment,  it is anticipated  that the
yield on and market  value of these  securities  will  decline,  and may decline
substantially.

                                     - 11 -
<PAGE>

         The following  table sets forth  investment  securities,  mortgage- and
other  asset-backed  securities  and FHLB stock which mature  during each of the
periods  indicated and the weighted  average yields for each range of maturities
at December 31, 1999.

<TABLE>
<CAPTION>
                                                      Amount at December 31, 1999, which matures in
                                  -------------------------------------------------------------------------------------
                                          One                 One to                Five to                  Over
                                     Year or Less           Five Years             Ten Years            Ten Years(4)
                                  ------------------- -------------------    -------------------   --------------------
                                             Weighted            Weighted               Weighted               Weighted
                                  Amortized   Average Amortized   Average    Amortized   Average   Amortized    Average
                                    Cost       Yield     Cost      Yield        Cost      Yield       Cost       Yield
                                  ---------  -------- ---------  --------    ---------  --------   ---------   --------
                                                                 (Dollars in thousands)

<S>                                <C>         <C>       <C>        <C>        <C>          <C>        <C>        <C>
Securities available for sale (1)(3) :
   Federal agencies..............  $  300      2.98%     $  500     6.02%      $2,795       6.31%      $2,700     7.38%
   State and municipal (2).......     ---       ---         854     8.02          774       7.89          303     8.49
   Mortgage- and other
      asset-backed securities....     863      6.11       1,955     6.52        1,291       7.04        2,036     7.05
   Corporate obligations.........     ---       ---         ---      ---          460       6.12          100     7.40
   Marketable equity securities..     ---       ---         ---      ---          ---        ---            4    58.23
                                   ------      ----      ------     ----       ------       ----       ------     ----
     Total securities
        available for sale.......   1,163      5.30       3,309     6.83        5,320       6.70        5,143     7.35
FHLB stock.......................     ---       ---        ---       ---          ---        ---        1,273     8.00
                                   ------      ----      ------     ----       ------       ----       ------     ----
     Total investments...........  $1,163      5.30%     $3,309     6.83%      $5,320       6.70%      $6,416     7.48%
                                   ======      ====      ======     ====       ======       ====       ======     ====
</TABLE>
(1)      Securities  available  for sale are set  forth  at  amortized  cost for
         purposes of this table.
(2)      Fully taxable equivalent basis.
(3)      No effect is given for possible prepayments.
(4)      Includes perpetual marketable equity securities.


Sources of Funds

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

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

         Deposits totaled $76.0 million at December 31, 1999.

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

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



                                     - 12 -
<PAGE>

         An analysis of the Bank's deposit accounts by type, maturity,  and rate
at December 31, 1999, is as follows:

<TABLE>
<CAPTION>
                                                Minimum         Balance at                          Weighted
                                                Opening        December 31,         % of             Average
Type of Account                                 Balance            1999           Deposits            Rate
---------------                                 -------            ----           --------            ----
                                                                   (Dollars in thousands)
<S>                                           <C>               <C>                 <C>               <C>
Withdrawable:
   Passbook savings accounts..............    $      25         $  2,869            3.77%             3.02%
   Regular money market accounts..........        2,500            1,166            1.53              3.24
   Hi yield money market accounts.........       10,000           18,121           23.84              4.32
   Super NOW accounts.....................        2,500              327             .43              2.41
   NOW and other transaction accounts.....          200            5,350            7.04              2.02
   Non-interest bearing accounts..........          100            2,681            3.53               ---
                                                                 -------          ------              ----
Total withdrawable........................                        30,514           40.14              3.35
Certificates (original terms):
   91 days................................        1,000              522             .69              4.59
   6 months...............................        1,000            3,238            4.26              4.60
   12 months..............................        1,000           12,169           16.01              5.43
   18 months..............................          500            1,132            1.49              5.28
   24 months..............................          500           11,769           15.48              5.38
   30 months..............................          500            8,143           10.71              5.78
   60 months..............................        1,000            3,395            4.47              5.71
IRAs
   18 months..............................          100            5,129            6.75              5.25
                                                                 -------          ------              ----
Total certificates........................                        45,497           59.86              5.43
                                                                 -------          ------              ----
Total deposits ...........................                       $76,011          100.00%             4.59%
                                                                 =======          ======              ====
</TABLE>


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

                                                    At December 31,
                                         ------------------------------------
                                            1999         1998          1997
                                           -------      -------       -------
                                                    (In thousands)

4.00% and under.......................     $   175      $   234       $   136
4.01 - 6.00 %.........................      44,496       39,027        35,087
6.01 - 8.00%..........................         826          416           508
                                           -------      -------       -------
Total  ...............................     $45,497      $39,677       $35,731
                                           =======      =======       =======

         The following table  represents,  by various  interest rate categories,
the amounts of time deposits  maturing  during each of the three years following
December  31,  1999,  and  the  total  amount   maturing   thereafter.   Matured
certificates  which have not been  renewed as of December  31,  1999,  have been
allocated based upon certain rollover assumptions:

                                                  Amounts At
                                        December 31, 1999, Maturing in
                            --------------------------------------------------
                            One Year       Two          Three     Greater Than
                             or Less      Years         Years      Three Years
                             -------       ------       ------      ------
                                            (In thousands)
4.00% and under........      $   175       $  ---       $  ---      $  ---
4.01 - 6.00 %..........       30,180        8,947        2,151       3,218
6.01-8.00%.............          354          202           72         198
                             -------       ------       ------      ------
Total  ................      $30,709       $9,149       $2,223      $3,416
                             =======       ======       ======      ======

                                     - 13 -
<PAGE>

         The following table indicates the amount of the Bank's  certificates of
deposit of greater than $100,000 by time remaining until maturity as of December
31, 1999.

            Maturity                                         (In thousands)
            --------                                         --------------
     Three months or less.................................     $    326
     Greater than three months
          through six months..............................        1,568
     Greater than six months
          through twelve months...........................        1,838
     Over twelve months...................................          357
                                                                 ------
          Total...........................................       $4,089
                                                                 ======



                                     - 14 -
<PAGE>

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

<TABLE>
<CAPTION>
                                                                        Deposit Activity
                                        ------------------------------------------------------------------------------
                                                                     Increase                               Increase
                                                                    (Decrease)                             (Decrease)
                                         Balance at                    from      Balance at                   from
                                        December 31,       % of    December 31, December 31,     % of     December 31,
                                            1999         Deposits      1998         1998       Deposits       1997
                                        ------------     --------  -----------  ------------   --------   ------------
                                                                     (Dollars in thousands)
Withdrawable:
<S>                                        <C>             <C>         <C>        <C>             <C>       <C>
   Passbook savings accounts............   $2,869          3.77%       (302)      $3,171          4.53%     $   101
   Regular money market accounts........    1,166          1.53          13        1,153          1.65          103
   Hi yield money market accounts.......   18,121         23.84      (1,241)      19,362         27.66        3,676
   Super NOW accounts...................      327           .43         (39)         366           .52          (98)
   NOW accounts.........................    5,350          7.04         560        4,790          6.84        1,058
   Non-interest bearing accounts........    2,681          3.53       1,189        1,492          2.13          630
                                          -------        ------      ------      -------        ------       ------
Total withdrawable......................   30,514         40.14         180       30,334         43.33        5,470
Certificates (original terms):
   91 days..............................      522           .69        (705)       1,227          1.75          865
   6 months.............................    3,238          4.26        (353)       3,591          5.13           50
   12 months............................   12,169         16.01       6,198        5,971          8.53          220
   18 months............................    1,132          1.49        (700)       1,832          2.62          813
   24 months............................   11,769         15.48         636       11,133         15.90          603
   30 months............................    8,143         10.71         574        7,569         10.81        1,287
   60 months............................    3,395          4.47        (224)       3,619          5.17           67
IRAs

   18 months............................    5,129          6.75         394        4,735          6.76           41
                                          -------        ------      ------      -------        ------       ------
Total certificates......................   45,497         59.86       5,820       39,677         56.67        3,946
                                          -------        ------      ------      -------        ------       ------
Total deposits..........................  $76,011        100.00%     $6,000      $70,011        100.00%      $9,416
                                          =======        ======      ======      =======        ======       ======
</TABLE>

<TABLE>
<CAPTION>
                                                    Deposit Activity
                                      ------------------------------------------
                                                                      Increase
                                                                     (Decrease)
                                      Balance at                        from
                                      December 31,       % of       December 31,
                                          1997         Deposits         1996
                                      ------------    ----------    ------------
                                                 (Dollars in thousands)
<S>                                     <C>              <C>        <C>
Withdrawable:
   Passbook savings accounts........    $3,070           5.07%      $    (49)
   Regular money market accounts....     1,050           1.73           (108)
   Hi yield money market accounts...    15,686          25.89          1,198
   Super NOW accounts...............       464            .76           (222)
   NOW accounts.....................     3,732           6.16            401
   Non-interest bearing accounts....       862           1.42            231
                                       -------         ------         ------
Total withdrawable..................    24,864          41.03          1,451
Certificates (original terms):
   91 days..........................       362            .60             43
   6 months.........................     3,541           5.84         (1,023)
   12 months........................     5,751           9.49            789
   18 months........................     1,019           1.68             75
   24 months........................    10,530          17.38           (930)
   30 months........................     6,282          10.37          2,952
   60 months........................     3,552           5.86           (205)
IRAs

   18 months........................     4,694           7.75             47
                                       -------         ------         ------
Total certificates..................    35,731          58.97          1,748
                                       -------         ------         ------
Total deposits .....................   $60,595         100.00%        $3,199
                                       =======         ======         ======
</TABLE>

                                     - 15 -
<PAGE>


         Borrowings.  The Bank focuses on generating high quality loans and then
seeks the best source of funding from deposits, investments or borrowings. There
are  regulatory  restrictions  on advances from the FHLBs.  See  "Regulation  --
Federal Home Loan Bank System" and "-- Qualified Thrift Lender." At December 31,
1999, the Company had $12.0 million in borrowings  from the FHLB of Indianapolis
which mature  within one year and $11.0 million which mature in greater than one
year. The weighted  average  interest rate related to these borrowings was 5.70%
at December  31,  1999.  The  Company  does not  anticipate  any  difficulty  in
obtaining  advances  appropriate  to meet its  requirements  in the  future.  At
December 31, 1999, notes payable consisted of construction borrowings secured by
the Bank's investment in a real estate partnership.  The 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% at December 31, 1999.

Employees

         As of December  31, 1999,  the Bank  employed 17 persons on a full-time
basis and seven persons on a part-time  basis.  None of the Bank's employees are
represented by a collective bargaining group.  Management considers its employee
relations to be excellent.

         The Bank's employee  benefits for full-time  employees  include,  among
other  things,  a Financial  Institutions  Retirement  Fund,  which is a defined
benefit  pension plan ("FIRF" or the  "Pension  Plan"),  a 401(k) plan and major
medical and long-term disability insurance.

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

Competition

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

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

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

                                   REGULATION

General

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

         An OTS  regulation  establishes  a schedule for the  assessment of fees
upon all savings  associations to fund the operations of the OTS. The regulation
also  establishes a schedule of fees for the various types of  applications  and


                                     - 16 -
<PAGE>

filings made by savings associations with the OTS. The general assessment, to be
paid on a  semiannual  basis,  is based  upon the  savings  association's  total
assets, including consolidated  subsidiaries,  as reported in a recent quarterly
thrift financial report.  Currently,  the quarterly  assessment rates range from
 .01164% of assets for associations with assets of $67 million or less to .00308%
for  associations  with assets in excess of $35 billion.  The Bank's  semiannual
assessment under this assessment scheme, based upon its total assets at December
31, 1999, was approximately $16,000.

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

Holding Company Regulation

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

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

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

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

         Notwithstanding  the above rules as to permissible  business activities
of unitary  savings  and loan  holding  companies,  if the  savings  association
subsidiary of such a holding  company fails to meet the Qualified  Thrift Lender
("QTL")  test,  then such unitary  holding  company would be deemed to be a bank
holding company subject to all of the provisions of the Bank Holding Company Act
of 1956 and other  statutes  applicable to bank holding  companies,  to the same
extent as if the Holding Company were a bank holding company and the Bank were a
bank.  See  "-Qualified  Thrift  Lender." At December 31, 1999, the Bank's asset
composition  was in excess of that required to qualify us as a Qualified  Thrift
Lender.



                                     - 17 -
<PAGE>

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

         The Director of the OTS may also approve acquisitions  resulting in the
formation of a multiple  savings and loan holding company which controls savings
associations  in more than one state,  if the multiple  savings and loan holding
company involved controls a savings  association which operated a home or branch
office in the state of the association to be acquired as of March 5,1987,  or if
the  laws of the  state in which  the  institution  to be  acquired  is  located
specifically permit institutions to be acquired by state-chartered  institutions
or savings and loan holding  companies  located in the state where the acquiring
entity is located (or by a holding  company that controls  such  state-chartered
savings institutions).  Also, the Director of the OTS may approve an acquisition
resulting in a multiple  savings and loan holding  company  controlling  savings
associations  in more than one  state in the case of  certain  emergency  thrift
acquisitions.

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

Federal Home Loan Bank System

         The  Bank is a  member  of the  FHLB of  Indianapolis,  which is one of
twelve  regional  FHLBs.  Each FHLB serves as a reserve or central  bank for its
member savings associations and other financial institutions within its assigned
region.  The FHLB is funded  primarily from funds deposited by banks and savings
associations and proceeds  derived from the sale of consolidated  obligations of
the FHLB System.  It makes loans to members (i.e.,  advances) in accordance with
policies and  procedures  established by the Board of Directors of the FHLB. All
FHLB advances  must be fully  secured by sufficient  collateral as determined by
the FHLB. The Federal  Housing Finance Board  ("FHFB"),  an independent  agency,
controls the FHLB System, including the FHLB of Indianapolis.

         Prior to the  enactment of the GLB Act, a federal  savings  association
was required to become a member of the FHLB for the district in which the thrift
is  located.  The GLB Act  abolished  this  requirement,  effective  six  months
following the enactment of the statute.  At that time,  membership with the FHLB
will  become  voluntary.  Any  savings  association  that  chooses to become (or
remain) a member of the FHLB following the  expiration of this six-month  period
will have to qualify for membership under the criteria that existed prior to the
enactment of the GLB Act. The Bank  currently  intends to remain a member of the
FHLB of Indianapolis.

      As a member of the FHLB,  the Bank is required to  purchase  and  maintain
stock  in the  FHLB of  Indianapolis  in an  amount  equal to at least 1% of its
aggregate unpaid residential mortgage loans, home purchase contracts, or similar


                                     - 18 -
<PAGE>

obligations  at the beginning of each year.  The Bank is currently in compliance
with this  requirement.  At December 31, 1999, the Bank's investment in stock of
the FHLB of Indianapolis was $1,273,000. The FHLB imposes various limitations on
advances  such as limiting  the amount of certain  types of real  estate-related
collateral to 30% of a member's capital and limiting total advances to a member.
Interest rates charged for advances vary  depending  upon maturity,  the cost of
funds to the FHLB of Indianapolis and the purpose of the borrowing.

      All twelve FHLBs are required by law to provide  funds for the  resolution
of troubled savings  associations and to establish  affordable  housing programs
through direct loans or interest subsidies on advances to members to be used for
lending   at   subsidized   interest   rates   for  low-  and   moderate-income,
owner-occupied  housing projects,  affordable rental housing,  and certain other
community projects.  These contributions and obligations have adversely affected
the level of FHLB dividends paid and could continue to do so in the future.  For
the fiscal year ended  December  31,  1999,  dividends  paid by FHLB to the Bank
totaled $69,000, for an annual rate of 8.0%.

Liquidity

         Federal  regulations  require  the Bank to maintain  minimum  levels of
liquid assets (cash,  certain time  deposits,  bankers'  acceptances,  specified
United States Government, state or federal agency obligations,  shares of 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 an  amount  within  the  range  of 4% to 10%
depending upon economic conditions and savings flows of member institutions. The
OTS recently  lowered the level of liquid  assets that must be held by a savings
association from 5% 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 Bank has  historically
maintained  its  liquidity  ratio  at a level in  excess  of that  required.  At
December 31, 1999, the Bank's liquidity ratio was 26.1%. The Bank has never been
subject to monetary penalties for failure to meet its liquidity requirements.

Insurance of Deposits

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

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

         In 1996, legislation was enacted that included  provisions  designed to
recapitalize the SAIF and eliminate the significant  premium  disparity  between
the BIF and the SAIF. Under the new law, the Bank was charged a one-time special
assessment equal to $.657 per $100 in assessable deposits at March 31, 1996. The
Bank recognized this one-time assessment as a non-recurring operating expense of
$335,000 during the three-month  period ended September 30, 1996. The assessment
was fully  deductible for both federal and state income tax purposes.  Beginning
January 1, 1997,  the Bank's annual deposit  insurance  premium was reduced from
 .23%  to  .06%  of  total  assessable  deposits.   BIF  institutions  pay  lower
assessments than comparable SAIF institutions  because BIF institutions pay only
20% of the rate being paid by SAIF  institutions  on their deposits with respect


                                     - 19 -
<PAGE>

to obligations issued by the federally-chartered corporation which provided some
of the financing to resolve the thrift crisis in the 1980's  ("FICO").  Although
Congress  has  considered  merging  the SAIF and the BIF,  until  then,  savings
associations  with SAIF  deposits may not transfer  deposits into the BIF system
without  paying  various  exit and entrance  fees,  and SAIF  institutions  will
continue to pay higher FICO assessments. Such exit and entrance fees need not be
paid if a SAIF institution  converts to a bank charter or merges with a bank, as
long as the resulting bank continues to pay applicable insurance  assessments to
the SAIF, and as long as certain other conditions are met.

Regulatory Capital

         Currently,  savings  associations are subject to three separate minimum
capital-to-assets  requirements:  (i) a leverage limit,  (ii) a tangible capital
requirement,  and  (iii) a  risk-based  capital  requirement.  The OTS  recently
adopted a  regulation,  which  became  effective  April 1, 1999,  that  requires
savings  associations that receive the highest supervisory rating for safety and
soundness to maintain "core  capital" of at least 3% of total assets.  All other
savings  associations must maintain core capital of at least 4% of total assets.
Core  capital is generally  defined as common  shareholders'  equity  (including
retained income),  noncumulative  perpetual preferred stock and related surplus,
certain  minority  equity  interests  in  subsidiaries,  qualifying  supervisory
goodwill,   purchased  mortgage  servicing  rights  and  purchased  credit  card
relationships (subject to certain limits) less nonqualifying intangibles.  Under
the tangible capital  requirement,  a savings association must maintain tangible
capital  (core capital less all  intangible  assets  except  purchased  mortgage
servicing  rights which may be included after making the above-noted  adjustment
in an amount up to 100% of tangible  capital) of at least 1.5% of total  assets.
Under the risk-based capital  requirements,  a minimum amount of capital must be
maintained by a savings  association  to account for the relative risks inherent
in the type and amount of assets held by the savings association. The risk-based
capital requirement  requires a savings association to maintain capital (defined
generally for these purposes as core capital plus general  valuation  allowances
and  permanent  or maturing  capital  instruments  such as  preferred  stock and
subordinated  debt  less  assets  required  to be  deducted)  equal  to  8.0% of
risk-weighted  assets.  Assets are  ranked as to risk in one of four  categories
(0-100%).  A credit  risk-free  asset,  such as  cash,  requires  no  risk-based
capital,  while an asset with a significant  credit risk,  such as a non-accrual
loan,  requires a risk  factor of 100%.  Moreover,  a savings  association  must
deduct from capital, for purposes of meeting the core capital,  tangible capital
and risk-based  capital  requirements,  its entire  investment in and loans to a
subsidiary engaged in activities not permissible for a national bank (other than
exclusively   agency   activities   for  its   customers  or  mortgage   banking
subsidiaries). At December 31, 1999, the Bank was in compliance with all capital
requirements imposed by law.

         The OTS has  promulgated  a rule which sets forth the  methodology  for
calculating an interest rate risk  component to be used by savings  associations
in calculating  regulatory  capital.  The OTS has delayed the  implementation of
this rule, however.  The rule requires savings  associations with "above normal"
interest rate risk  (institutions  whose portfolio equity would decline in value
by more than 2% of assets in the event of a hypothetical 200-basis-point move in
interest rates) to maintain  additional capital for interest rate risk under the
risk-based capital framework. If the OTS were to implement this regulation,  the
Bank would not be required to maintain  additional  capital at December 31, 1999
under the terms of the OTS proposed interest rate risk rule.

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

Prompt Corrective Action

         The Federal Deposit Insurance  Corporation  Improvement Act of 1991, as
amended ("FedICIA")  requires,  among other things, that federal bank regulatory
authorities take "prompt corrective action" with respect to institutions that do
not meet minimum capital requirements.  For these purposes,  FedICIA establishes


                                     - 20 -
<PAGE>

five capital tiers: well capitalized, adequately capitalized,  undercapitalized,
significantly undercapitalized, and critically undercapitalized. At December 31,
1999,  the Bank was  categorized as "well  capitalized,"  meaning that its total
risk-based  capital  ratio  exceeded  10%, its Tier I risk-based  capital  ratio
exceeded  6%,  its  leverage  ratio  exceeded  5%,  and it was not  subject to a
regulatory order, agreement or directive to meet and maintain a specific capital
level for any capital measure.

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

Capital Distributions Regulation

         The OTS adopted a regulation,  which became effective on April 1, 1999,
that revised the restrictions  that apply to "capital  distributions" by savings
associations.  The  amended  regulation  defines  a  capital  distribution  as a
distribution of cash or other property to a savings  association's  owners, made
on account of their ownership.  This definition includes a savings association's
payment  of  cash  dividends  to  shareholders,  or  any  payment  by a  savings
association  to  repurchase,  redeem,  retire,  or otherwise  acquire any of its
shares or debt instruments that are included in total capital, and any extension
of credit to finance an  affiliate's  acquisition  of those shares or interests.
The amended regulation does not apply to dividends  consisting only of a savings
association's shares or rights to purchase such shares.

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

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

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



                                     - 21 -
<PAGE>

Limitations on Rates Paid for Deposits

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

Safety and Soundness Standards

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

Real Estate Lending Standards

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

Loans to One Borrower

         Under OTS regulations, the Bank may not make a loan or extend credit to
a single or  related  group of  borrowers  in  excess  of 15% of its  unimpaired
capital and  surplus.  Additional  amounts may be lent,  not in excess of 10% of
unimpaired capital and surplus,  if such loans or extensions of credit are fully
secured by readily  marketable  collateral,  including  certain  debt and equity
securities but not including real estate.  In some cases, a savings  association
may lend up to 30 percent of unimpaired  capital and surplus to one borrower for
purposes  of  developing  domestic  residential   housing,   provided  that  the
association meets its regulatory capital requirements and the OTS authorizes the
association to use this expanded  lending  authority.  At December 31, 1999, the
Bank did not have any loans or extensions of credit to a single or related group
of borrowers in excess of its lending limits. The Bank does not believe that the
loans-to-one-borrower  limits  will have a  significant  impact on its  business
operations or earnings.

Qualified Thrift Lender

         Savings associations must meet a QTL test that requires the association
to  maintain an  appropriate  level of  qualified  thrift  investments  ("QTIs")
(primarily  residential  mortgages and related  investments,  including  certain
mortgage-related  securities)  and  otherwise  to qualify as a QTL. The required
percentage  of QTIs is 65% of  portfolio  assets  (defined  as all assets  minus
intangible  assets,  property used by the association in conducting its business
and liquid assets equal to 10% of total assets). Certain assets are subject to a
percentage  limitation  of  20%  of  portfolio  assets.  In  addition,   savings


                                     - 22 -
<PAGE>

associations may include shares of stock of the FHLBs,  FNMA, and FHLMC as QTIs.
Compliance  with the QTL test is  determined  on a monthly  basis in nine out of
every twelve months.

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

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

         At December 31, 1999,  85.5% of the Bank's portfolio assets (as defined
on that date) were invested in qualified thrift  investments (as defined on that
date), and therefore the Bank's asset composition was in excess of that required
to qualify the Bank as a QTL.  Also,  the Bank does not expect to  significantly
change its lending or investment activities in the near future. The Bank expects
to continue to qualify as a QTL, although there can be no such assurance.

Acquisitions or Dispositions and Branching

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

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

         The OTS has adopted  regulations which permit  nationwide  branching to
the extent permitted by federal statute. Federal statutes permit federal savings
associations to branch outside of their home state if the association  meets the
domestic  building  and loan  test in  ss.7701(a)(19)  of the Code or the  asset
composition  test of ss.7701(c) of the Code.  Branching that would result in the
formation of a multiple  savings and loan holding  company  controlling  savings
associations  in more  than one  state is  permitted  if the law of the state in
which the savings association to be acquired is located specifically  authorizes
acquisitions   of  its   state-chartered   associations   by  state-   chartered
associations  or their  holding  companies  in the  state  where  the  acquiring
association or holding company is located.  Moreover,  Indiana banks and savings
associations   are   permitted  to  acquire  other  Indiana  banks  and  savings
associations and to establish branches throughout Indiana.

         Finally,  the Riegle-Neal  Interstate Banking and Branching  Efficiency
Act of 1994 (the  "Riegle-Neal  Act") permits bank holding  companies to acquire
banks  in  other  states  and,   with  state  consent  and  subject  to  certain
limitations, allows banks to acquire out-of-state branches either through merger
or de novo  expansion.  The State of Indiana  enacted  legislation  establishing
interstate  branching  provisions for Indiana  state-chartered  banks consistent
with those established by the Riegle-Neal Act (the "Indiana Branching Law"). The
Indiana Branching Law, which became effective in 1996,  authorizes Indiana banks
to  branch  interstate  by  merger  or de novo  expansion,  provided  that  such


                                     - 23 -
<PAGE>

transactions  are not permitted to  out-of-state  banks unless the laws of their
home  states  permit  Indiana  banks to merge or  establish  de novo  banks on a
reciprocal basis.

Transactions with Affiliates

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

Federal Securities Law

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

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

Community Reinvestment Act Matters

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

                                    TAXATION

Federal Taxation

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

         Depending  on the  composition  of its items of income and  expense,  a
savings  institution  may be subject to the  alternative  minimum tax. A savings
institution must pay an alternative  minimum tax equal to the amount (if any) by
which 20% of  alternative  minimum  taxable  income  ("AMTI"),  as reduced by an


                                     - 24 -
<PAGE>

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

State Taxation

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

Item 2.  Properties.

         At  December  31,  1999,  the Bank and the  Holding  Company  conducted
business from a single office at 723 East  Broadway,  Logansport,  Indiana.  The
following  table  provides  certain  information  with respect to the  Company's
office as of December 31, 1999:
<TABLE>
<CAPTION>


                                             Total Deposits   Net Book Value
                                                   at          of Property,
                          Owned or    Year    December 31,      Furniture &       Approximate
Description and Address    Leased    Opened       1999           Fixtures       Square Footage
-----------------------    ------    ------       ----           --------       --------------
                                                 (Dollars in thousands)
<S>                         <C>       <C>        <C>              <C>               <C>
723 East Broadway           Owned     1962       $76,011          $1,902            11,000
Logansport, Indiana  46947
</TABLE>

         The Company owns computer and data  processing  equipment which is used
for transaction processing and accounting. The net book value of electronic data
processing equipment owned by the Company was $72,000 at December 31, 1999.

         The Bank also has  contracted  for the data  processing  and  reporting
services of the Intrieve Data Center in Cincinnati, Ohio. The cost of these data
processing services is approximately $12,000 per month.

Item 3.       Legal Proceedings.

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

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

         No matter was submitted to a vote of the Holding Company's shareholders
during the quarter ended December 31, 1999.



                                     - 25 -
<PAGE>

Item 4.5.     Executive Officers of the Registrant.

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

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

         Thomas G.  Williams  (age 67) has served as President of the Bank since
1971 and as President and Chief  Executive  Officer of the Holding Company since
its  organization.  He will retire from those positions at the conclusion of the
Annual Meeting of Shareholders to be held on April 11, 2000.

         Charles J. Evans (age 54) has served as Senior  Vice  President  of the
Bank since January,  2000 and as Vice President of the Holding Company since its
organization.  Prior to becoming Senior Vice President,  Mr. Evans had served as
Vice President and Senior Loan Officer of the Bank since 1980.

         Dottye  Robeson (age 50) has served as Chief  Financial  Officer of the
Bank since 1994 and as  Secretary/Treasurer  of the  Holding  Company  since its
organization. She has been a certified public accountant since 1987.

         Presented  below is certain  information  regarding David G. Wihebrink,
who will become President and Chief Executive Officer of the Holding Company and
the Bank at the conclusion of the Annual Meeting of  Shareholders  to be held on
April 11, 2000.

         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 Home retirement home in Logansport, Indiana.

                                     PART II

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

         Logansport  Savings Bank, FSB converted from a mutual savings bank to a
stock form federal savings bank effective June 13, 1995 (the  "Conversion")  and
simultaneously  formed a savings and loan holding company,  Logansport Financial
Corp. The Holding Company's common stock, without par value ("Common Stock"), is
quoted on the National  Association of Securities  Dealers  Automated  Quotation
System  ("NASDAQ"),  Small Cap Market,  under the symbol  "LOGN." The  following
table sets forth the high and low bid  prices  and  dividends  paid per share of
Common  Stock  for the  quarters  indicated.  Such  over-the-counter  quotations
reflect  inter-dealer prices,  without retail mark-up,  mark-down or commission,
and may not necessarily represent actual transactions.

         Quarter Ended          High Bid       Low Bid      Dividends Declared
         -------------          --------       -------      ------------------
         March 31, 1999         $ 14           $12              $  .11
         June 30, 1999            12 1/2        11 2/16            .11
         September 30, 1999       11 9/16       9 10/16            .11
         December 31, 1999        10 1/2        9 1/32             .11

         March 31, 1998           18 1/8        16                 .10
         June 30, 1998            19 5/8        16 1/2             .11
         September 30, 1998       17 1/4        13                 .11
         December 31, 1998        16 3/8        13 3/8             .11



                                     - 26 -
<PAGE>

         As of February 10, 2000,  there were 865 record  holders of the Holding
Company's  Common Stock.  The Holding Company has established a policy of paying
regular periodic cash dividends,  and the Board of Directors intends to continue
this  policy,  subject to the Holding  Company's  operating  results,  financial
condition,  capital,  income tax considerations,  regulatory  restrictions,  and
other relevant factors.

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

         Under OTS regulations,  a converted savings institution may not declare
or pay a cash  dividend if the effect would be to reduce its net worth below the
amount required for the liquidation account created at the time it converted. In
addition,  under OTS regulations,  the extent to which a savings institution may
make  a  "capital  distribution,"  which  includes,  among  other  things,  cash
dividends, will depend upon in which one of three categories,  based upon levels
of capital, that savings institution is classified.  The Bank is now and expects
to continue to be a "tier one  institution"  and therefore  would be able to pay
cash dividends to the Holding Company during any calendar year up to 100% of its
net income  during that  calendar  year plus the amount that would reduce by one
half its "surplus  capital ratio" (the excess over its fully  phased-in  capital
requirements)  at the beginning of the calendar year. See "Regulation -- Capital
Distributions  Regulation."  Prior notice of any dividend to be paid by the Bank
to the Holding Company will have to be given to the OTS.

         Income of the Bank  appropriated  to bad debt reserves and deducted for
federal  income tax purposes is not available  for payment of cash  dividends or
other distributions to the Holding Company without the payment of federal income
taxes by the Bank on the amount of such income deemed  removed from the reserves
at the then-current  income tax rate. At December 31, 1999,  approximately  $1.7
million of the Bank's retained income  represented bad debt deductions for which
no federal income tax provision had been made. See "Taxation--Federal Taxation."

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

Item 6.       Selected Financial Data.

         The  information  required by this item is incorporated by reference to
the  material  under  the  heading  "Selected  Consolidated  Financial  Data  of
Logansport  Financial  Corp.  and  Subsidiary"  on pages 4 and 5 of the  Holding
Company's 1999 Shareholder Annual Report (the "Shareholder Annual Report").

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

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

         The  information  required by this item is incorporated by reference to
pages 14 through 15 of the Shareholder Annual Report.

Item 8.       Financial Statements and Supplementary Data.

         The  Holding  Company's  Consolidated  Financial  Statements  and Notes
thereto  contained on pages 21 through 50 in the  Shareholder  Annual Report are
incorporated  herein by reference.  The Company's unaudited quarterly results of
operations   contained  on  page  51  in  the  Shareholder   Annual  Report  are
incorporated herein by reference.

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

         Not applicable.

                                     - 27 -
<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

         The  information  required by this item with  respect to  directors  is
incorporated  by  reference  to  pages 2  through  4 and  page 8 of the  Holding
Company's  Proxy  Statement for its 2000 Annual  Shareholder  Meeting (the "2000
Proxy  Statement").  Information  concerning  the  Holding  Company's  executive
officers is included in Item 4.5 in Part I of this report.

Item 11. Executive Compensation.

         The  information  required  by this  item  with  respect  to  executive
compensation  is  incorporated  by  reference  to  pages  5 to 8 of the  Holding
Company's 2000 Proxy Statement.

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

         The  information  required by this item is incorporated by reference to
pages 2 and 3 of the 2000 Proxy Statement.

Item 13.      Certain Relationships and Related Transactions.

         The  information  required by this item is incorporated by reference to
page 8 of the 2000 Proxy Statement.


                                     - 28 -
<PAGE>

                                     PART IV

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

         (a)  List the following documents filed as part of the report:
<TABLE>
<CAPTION>


              Financial Statements

<S>                                                                                   <C>
              Independent Auditor's Report (Grant Thornton LLP)....................   See Shareholder Annual Report
                                                                                        Page 21
              Consolidated Statements of Financial Condition
                  at December 31, 1999, and 1998...................................   See Shareholder Annual Report
                                                                                        Page 22
              Consolidated Statements of Earnings for the Years Ended
                  December 31, 1999, 1998, and 1997................................   See Shareholder Annual Report
                                                                                        Page 23
              Consolidated Statements of Comprehensive Income
                  for the Years Ended December 31, 1999, 1998 and 1997.............   See Shareholder Annual Report
                                                                                        Page 24

              Consolidated Statements of Changes in Shareholders' Equity
                  for the Years Ended December 31, 1999, 1998 and 1997.............   See Shareholder Annual Report
                                                                                        Page 25
              Consolidated Statements of Cash Flows for the Years Ended
                  December 31, 1999, 1998, and 1997................................   See Shareholder Annual Report
                                                                                        Page 26
              Notes to Consolidated Financial Statements...........................   See Shareholder Annual Report
                                                                                        Page 28
</TABLE>


         (b)  Reports on Form 8-K.

                  The Holding  Company filed the  following  reports on Form 8-K
                  during the fourth quarter of its 1999 fiscal year:

                  A Form 8-K was filed with the  Commission on November 15, 1999
                  concerning the Corporation's stock repurchase program.

                  A Form 8-K was filed with the  Commission  on December 8, 1999
                  concerning the Corporation's stock repurchase program.

         (c)      The  exhibits  filed  herewith or  incorporated  by  reference
                  herein  are set  forth  on the  Exhibit  Index  on  page  E-1.
                  Included in those  exhibits are Executive  Compensation  Plans
                  and  Arrangements  which  are  identified  as  Exhibits  10(1)
                  through 10(12).

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

                                     - 29 -
<PAGE>

                                   SIGNATURES

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

                                          LOGANSPORT FINANCIAL CORP.



Date: March 24, 2000                       By: /s/ Thomas G. Williams
                                               ---------------------------------
                                               Thomas G. Williams, President and
                                                   Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 24th day of March, 2000.

/s/ Thomas G. Williams
---------------------------------------
Thomas G. Williams
President, Chief Executive Officer and Director
(Principal Executive Officer)

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

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

/s/ Donald G. Pollitt
---------------------------------------
Susanne S. Ridlen, Director

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

/s/ David Wihebrink
---------------------------------------
David Wihebrink, Director

/s/ Brian Morrill
---------------------------------------
Brian Morrill, Director

                                  EXHIBIT INDEX

Exhibit                                                                   Page

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

          3(2)    The Code of By-Laws of the Registrant are  incorporated
                  by  reference  to Exhibit  3.2 to the Form 10-Q for the
                  period ended June 30, 1997,  filed with the  Commission
                  on August 13, 1997 and  resolutions  dated  October 13,
                  1998, filed herewith.

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

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

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

          10(4)   Employment  Agreement between  Logansport Savings Bank,
                  FSB and Thomas G. Williams is incorporated by reference
                  to Exhibit 10(5) to the Registration  Statement on Form
                  S-1 (Registration No. 33-89788).

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

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

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

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

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

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

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

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

          13      1999 Shareholder Annual Report                          ______

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

          23      Independent  Auditor's  Consent  (Grant  Thornton  LLP) ______

          27      Financial  Data  Schedule  for the twelve  month period
                  ended December 31, 1999                                 ______