<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

     Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Fiscal Year Ended: December 31, 1996      Commission File No.: 0-17947

                             HAVERFIELD CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

              Ohio                                        34-1606726
-------------------------------               --------------------------------
(State or other jurisdiction of               (IRS Employer Identification No.) 
incorporation or organization)
                        
             Terminal Tower
50 Public Square, Suite 444, Cleveland, Ohio              44113-2203
--------------------------------------------              ----------
 (Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (216) 348-2800
        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock ($.0l par value)
                          -----------------------------
                                (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
Registrant was $32,047,712 as of February 28, 1997. In calculating the market
value of securities held by non-affiliates, Registrant has treated as securities
held by affiliates voting stock owned of record by its directors and executive
officers whose aggregate value totaled $7,032,443. 

On February 28, 1997, the Registrant had outstanding 1,906,349 shares of common
stock, par value of $.01 per share.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement of the Registrant relating to the
annual meeting of shareholders to be held on April 23, 1997, and Appendix A
thereto, have been incorporated by reference into Parts II, III, and IV hereof.

Page 1 of 160 pages                          Exhibit index located on page 18
<PAGE>   2
<TABLE>
                               TABLE OF CONTENTS

<CAPTION>
                    ITEM NUMBER                                    PAGE NUMBER
-------------------------------------------------------------------------------
<S>                 <C>                                               <C>
PART I.
                 1. BUSINESS
                    General                                                3
                    Forward-looking Statements                             3
                    Market Area                                            4
                    Competition                                            4
                    Lending Activities                                     5
                    Sources of Funds                                       8
                    Yields Earned and Rates Paid                           9
                    Subsidiaries of the Bank                               9
                    Regulation                                            10
                    Federal Taxation                                      15
                    State Taxation                                        15
                    Employees                                             15
                    Executive Officers                                    16
                 2. PROPERTIES                                            16
                 3. LEGAL PROCEEDINGS                                     16
                 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS     16
PART II.
                 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED      17
                    STOCKHOLDER MATTERS                                   
                 6. SELECTED FINANCIAL DATA                               17
                 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL     17
                    CONDITION AND RESULTS OF OPERATIONS
                 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA           17
                 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                    ACCOUNTING AND FINANCIAL DISCLOSURE                   17
PART III.
                10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT    17
                11. EXECUTIVE COMPENSATION                                17
                12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND   17
                    MANAGEMENT
                13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS        17
PART IV.
                14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS  18
                    ON FORM 8-K

Signatures                                                                20
</TABLE>
<PAGE>   3

                                     PART 1

ITEM 1. BUSINESS

GENERAL
-------

Haverfield Corporation ("Haverfield", the "Company" or the "Registrant") is a
unitary savings and loan holding company organized under the laws of the State
of Ohio in 1989. The Company's principal operating subsidiary is Home Bank,
F.S.B. which was originally organized in 1911. Effective February 23, 1995, the
Company's principal operating subsidiary changed its corporate name from "Home
Federal Savings Bank, Northern Ohio" to Home Bank, F.S.B. (the "Bank"). As used
throughout this document, the term "Company" means the "Bank" wherever such
meaning is appropriate. 

The Company's business currently is conducted through its corporate headquarters
in Cleveland, Ohio and is currently limited to the holding of the Bank's
outstanding capital stock. The Bank is the Company's only direct subsidiary and
its primary investment. The net income of the Company is presently derived from
the business of the Bank. Future establishment or acquisition of subsidiaries by
the Company is possible. Nonetheless, it is expected that the Bank will account
for virtually all of the Company's net income in the foreseeable future.

The Company is principally engaged in the business of attracting deposits from
the general public and using such deposits, together with borrowings and other
funds, to make loans secured by real estate and, to a lesser extent, various
types of consumer loans and commercial loans in its market area. The Company's
income is derived predominantly from interest on loans and investments and, to a
lesser extent, noninterest income. The Company's principal expenses are interest
paid on deposits and borrowings, and normal operating costs. The Company's
operations are principally in the savings industry, which constitutes a single
industry segment. The Bank's subsidiaries engage in real estate development
activities and investment counseling which are not material to its operations as
a whole.

The Bank is subject to examination and comprehensive regulation by the Office of
Thrift Supervision (the "OTS") and the Federal Deposit Insurance Corporation
("FDIC"). It is also a member of the Federal Home Loan Bank of Cincinnati ("FHLB
of Cincinnati" or "FHLB"). The Bank is further subject to regulation by the
Board of Governors of the Federal Reserve System ("Federal Reserve Board"),
governing reserves to be maintained against deposits and certain other matters.
Management is not aware of any current recommendations by the federal financial
institution regulatory authorities which, if implemented, would have a material
effect on the liquidity, capital resources or operations of Haverfield.

The Company has retained Charles Webb & Company, a division of Keefe, Bruyette &
Woods, to render investment banking advice to the Board of Directors of the
Company with respect to enhancement of shareholder value. The scope of the
engagement includes assistance in formulating the business plan of the Company
and advice regarding possible strategic affiliation with other entities.

The Company's principal executive offices are located in the Terminal Tower, 50
Public Square, Suite 444, Cleveland, Ohio 44113-2203. The Company's telephone
number is (216) 348-2800. The Company's facsimile transmission number is (216)
348-8840.

FORWARD-LOOKING STATEMENTS 
--------------------------

The Company is hereby filing certain cautionary statements for the purposes 
of establishing a readily available document which may be referenced
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 (the "Reform Act"). The Company wishes to ensure that any
forward-looking statements are accompanied by meaningful cautionary statements
in order to maximize to the fullest extent possible the protections of the safe
harbor established in the Reform Act. Accordingly, any such statements are
qualified in their entirety by reference to, and are accompanied by, the
following important factors, among others, that could cause the Company's
actual results to differ materially from those projected in forward-looking
statements of the Company made by or on behalf of the Company in oral or
written communications and in documents filed with the Securities and Exchange
Commission.


                                       3

<PAGE>   4

Various discussions include certain forward-looking statements based on
management's current expectations. Those factors which could cause future
results to vary from these expectations include, and are not limited to, the
following: general market rates, general economic conditions,
legislative/regulatory changes, monetary and fiscal policies of the U.S.
Treasury and the Federal Reserve, changes in the quality or composition of the
Company's loan and investment portfolios, demand for loan products, deposit
flows, competition, demand for financial services in the Company's markets,
increased expenses, failure to obtain new customers or retain existing
customers, inability to carry out marketing and sales plans, loss or retirement
of key executives, and changes in accounting principles, policies and
procedures.

Further, any forward-looking statement speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time and it is not
possible for management to predict all of such factors, nor can management
assess the impact of each such factor on the business or extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Therefore,
forward-looking statements should not be relied upon as a prediction of actual
future results.

Market Area 
-----------

The Company's principal market area consists of suburban communities of
Cleveland. The Company's business is conducted through its corporate office
located in Cleveland, Ohio and ten branch offices located in Beachwood,
Brooklyn, Cleveland, Euclid, Lakewood, Mayfield Village, Mentor, Rocky River,
University Heights, and Westlake, Ohio. Loans and deposits are primarily
generated from the areas where its banking offices are located. The Company does
not actively solicit deposits and loans outside its primary market areas and
does not use brokers to obtain deposits. The Company may consider expansion
within or outside of Ohio provided appropriate opportunities and conditions
exist.

The Bank is a community financial institution that is committed to serving the
credit needs of those communities and neighborhoods from which it derives its
deposits and in which its banking offices are located. Bank policy is to respond
to all creditworthy segments of its market. Management believes that doing so is
basic to good business practice and to the Bank's long-term vitality. The Bank
makes an active effort to determine the credit needs of the community, including
those of low- and moderate-income areas and individuals, and to evaluate the
products it offers and the design of those products to determine whether the
Bank's responsiveness to the community can be improved.

Competition 
------------

The Company faces substantial competition both in the attraction of deposits and
in the making of loans. The market for banking and bank-related services is
highly competitive. The Company and its subsidiaries face competition from
commercial banks, savings and loan associations, credit unions, money market
funds, insurance companies, and a growing list of other local, regional and
national institutions which offer financial services. It has become increasingly
more difficult for an institution to evaluate its overall competitive situation,
since it can no longer merely acknowledge and monitor its traditional
competitors - other savings and loan associations and commercial banks. Many of
the non-bank competitors are not subject to the same extensive federal
regulations that govern the Bank. As a result, such non-bank competitors may
have certain advantages over the Company in providing certain services. The
relative market share position of the Company cannot be calculated in any
meaningful way because the sources and amounts of competition for loans and
deposits cannot be determined with any degree of accuracy.

The Company competes by offering quality and innovative services at competitive
prices. It competes for loans principally through the interest rates and loan
fees it charges for its loan products. Further, the Company believes it offers a
high degree of professionalism and quality in the services it provides borrowers
and their real estate brokers. It competes for deposits by offering a variety of
deposit accounts at competitive rates, convenient business hours, and convenient
branch locations with interbranch deposit and withdrawal privileges at each. Due
to this fact, management believes it has the ability to maintain the deposit
base. The Company does not rely upon any individual, group, or entity for a
significant portion of its deposits. In addition, through the Bank's subsidiary,
Home Financial, Inc., the Company


                                       4

<PAGE>   5

is able to offer the customer many non-traditional banking services that provide
investment and product diversification. The Company believes that it will be
able to retain or increase its relative market share through emphasis on
controlled growth of loans and deposits.

Lending Activities 
-------------------
GENERAL. The Company has consistently maintained a conservative posture with
respect to credit risk. Lending activities have traditionally concentrated on
conventional first mortgage loans secured by residential property. The Company
has no foreign loans nor significant loan concentrations to any one borrower. At
December 31, 1996, the net loan portfolio amounted to $293.8 million,
representing approximately 84.7% of the Company's $346.9 million of assets at
that date.

The following table sets forth the composition of the Bank's portfolio of loans
held for investment by fixed and adjustable rate loans, indicated in dollar
amounts and percentages:

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                  ----------------------------------------------------------------------------
                                                             1996                     1995                       1994
                                                  -----------------------    ---------------------      ----------------------
                                                    Amount            %       Amount           %         Amount            % 
                                                    ------            -       ------           -         ------            -
                                                                             (Dollars in thousands)
<S>                                                <C>               <C>     <C>             <C>        <C>             <C>   
Adjustable rate loans
         Real estate - mortgage                    $143,422          48.8%   $154,055        54.33%     $173,897        62.18%
         Real estate - construction                   3,547          1.21       1,142          .40            --           --
         Real estate - commercial                    21,184          7.21      20,521         7.24        19,193         6.86
         Land loans                                   3,076          1.05       3,264         1.15         2,620          .94
         Consumer loans                              43,148         14.68      38,703        13.65        30,214        10.80
         Business loans                               6,614          2.25       4,665         1.65         1,652          .59
                                                   --------        ------    --------       ------      --------       ------ 
                  Total adjustable rate loans       220,991         75.22     222,350        78.42       227,576        81.37
                                                   --------        ------    --------       ------      --------       ------ 

Fixed rate loans
         Real estate - mortgage                      62,451         21.26      50,255        17.72        37,922        13.56
         Real estate - construction                      --            --          --           --         1,529          .55
         Real estate - commercial                     8,615          2.93       9,772         3.44        11,395         4.08
         Land loans                                      --            --          --                        261          .09
         Consumer loans                               1,721           .59       1,165          .41           997          .35
         Business loans                                  14            --          18          .01            --           --
                                                   --------        ------    --------       ------      --------       ------ 
                  Total fixed rate loans             72,801         24.78      61,210        21.58        52,104        18.63
                                                   --------        ------    --------       ------      --------       ------ 
                  Total loans                      $293,792        100.00%    283,560       100.00%     $279,680       100.00%
                                                   ========        ======    ========       ======      ========       ====== 
</TABLE>

LENDING PROGRAMS AND POLICY. As a federally chartered savings institution, the
Bank has general authority to make real estate loans secured by properties
located throughout the United States. At December 31, 1996, however,
substantially all loans were secured by real estate located in the seven-county
Cleveland-Akron-Lorain Consolidated Metropolitan Statistical Area ("CMSA").

The Bank markets adjustable-rate residential real estate loan products with a
12-year, 15-year or 30-year amortization period and repricing intervals of
either 12 or 36 months, depending on the plan. Fixed-rate real estate loans with
a 10-year, 15-year or 30-year amortization period are also originated.

To a lesser extent, the Bank also offers permanent loans secured by apartment
buildings and other commercial real estate. Loans collateralized by commercial
properties, including multi-family residential properties, can involve greater
credit risks than one-to-four-family residential mortgage loans. The commercial
real estate business is cyclical and subject to downturns, over-building,
fluctuations in market value and local economic conditions. Typically, such
loans are substantially larger than one- to four-family residential mortgage
loans. Because repayment is often dependent on the cash flow of a successfully
operated or managed property, repayment of such loans may be more susceptible to
adverse conditions in the real estate market or the economy generally than is
the case with residential mortgages. The Bank currently offers both fixed-rate
and adjustable-rate commercial real estate loans. Adjustable-rate commercial
real estate loans are based on a 25 year amortization schedule with a ten-year
term. Interest rates and payments are adjusted


                                       5

<PAGE>   6

every one, three, or five years, depending on the plan. Fixed-rate commercial
real estate loans are based on a 15-year amortization schedule with a ten-year
term. All real estate collateralizing the commercial real estate loans is
located in Ohio.

Historically, the Bank has not originated a substantial amount of residential
construction loans because they are generally considered to involve a higher
risk of loss than long-term financing on improved real estate. Moreover, because
of the uncertainties inherent in estimating construction costs, delays, labor
problems, material shortages and other unpredictable contingencies, it is
relatively difficult to evaluate accurately the total amount required to
complete a project and the related loan-to-value ratios. Furthermore, in the
event of foreclosure on an unfinished project, the Bank must either incur the
burden, delay and uncertain cost of finishing the construction or,
alternatively, it may be forced to liquidate the collateral at an unfavorable
price due to its incomplete state. During periods of rising interest rates,
borrowers' cash reserves are strained, usually at the same time market
conditions for sales deteriorate. However, construction loans are offered to
qualified individuals employing the services of a bona fide general contractor.
The maximum loan term is 18 months, and the applicant must submit plans,
specifications and a cost breakdown.

Federal regulations limit the amount of a real estate loan made by a federally
chartered savings institution to a specified percentage of the appraised value
of the property securing the loan (referred to as the "loan-to-value ratio") at
the time of origination. Regulations require each savings association to
establish and maintain written internal real estate lending standards consistent
with safe and sound banking practices and appropriate to the size of the
institution and the nature and scope of its real estate lending activities. The
policy also must be consistent with accompanying OTS guidelines, which include
loan-to-value ratios for the following types of real estate loans: raw land
(65%); land development (75%); nonresidential construction (80%); improved
property (85%); and one- to four-family residential construction (85%). One-
to-four-family mortgages and home equity loans do not have maximum loan-to-value
ratio limits, but one-to-four family mortgages with a loan-to-value ratio at
origination of 90% or greater are expected to be backed by private mortgage
insurance or readily marketable collateral. Institutions also are permitted to
make a limited amount of loans that do not conform to the proposed loan-to-value
limitations so long as such exceptions are reviewed and justified appropriately.
The guidelines also list a number of lending situations in which exceptions to
the loan-to-value standards are justified.

Under policies adopted by the Board of Directors (the "Board"), the
loan-to-value ratio is limited to 80% on residential mortgage loans, or up to
95% with private mortgage insurance that reduces the loan-to-value ratio to 80%
or less. Commercial real estate loans generally may not exceed 75% of the value
of the security property. Lines of credit secured by the equity in the
borrower's residence, in combination with the existing first mortgage, generally
cannot exceed 85% and 70% of the value of owner-occupied, single-family
residences and investment properties, respectively, which secure such credit.

A "due-on-sale" clause is customarily included in documentation evidencing
conventional mortgage loans. This clause gives the Bank the right to declare a
loan immediately due and payable in the event, among other things, that the
borrower sells or otherwise disposes of the real property subject to the
mortgage and the loan is not repaid. Enforcement of the due-on-sale clause is a
means by which the Bank can increase the rate on existing fixed-rate mortgage
loans. The due-on-sale clause may be used to convert loans containing such
provisions to loans which bear market rates of interest.

The Loan Committee, whose members are appointed by the Board, has authority to
approve residential loan applications up to $250,000. Applications to borrow
above this amount must be reviewed and approved by the Special Loan Committee or
by the Board.

All of the Bank's mortgage lending is subject to its written, nondiscriminatory
underwriting standards and to loan origination procedures prescribed by the
Board. Decisions on loan applications are made on the basis of detailed
applications and property valuations by independent appraisers approved by the
Board conforming to the OTS appraisal standards. The loan applications are
designed to determine the borrower's ability to repay, and the more significant
items on the applications are verified through the use of credit reports,
financial statements and confirmations.

It is the Bank's policy to obtain title insurance policies insuring that the
Bank has a valid lien on the mortgaged real estate. Borrowers also must obtain
fire and casualty insurance policies prior to closing and, when required by the
Department of Housing and Urban Development, flood insurance policies.


                                       6

<PAGE>   7

CONSUMER LOANS. In addition to mortgage lending, the Bank offers consumer loans
(e.g., for cars, boats, home and other property improvement loans with terms up
to 15 years, lines of credit secured by the equity in the borrower's residence,
loans to depositors in an amount up to 90% of their account balances which
secure such loans, student loans guaranteed by the Ohio Student Loan Commission,
MasterCard Gold credit card loans, which are also secured by equity in the
borrower's residence and/or savings deposits, and unsecured MasterCard credit
card loans). The Bank has emphasized the origination of consumer loans as part
of its operating strategy because such loans have shorter terms than mortgages,
provide for higher interest rates and yields and have maturities that more
closely match the liabilities funding them. Individual consumer loans involve
greater credit risk than single-family mortgage loans; however, the risk is in
smaller increments. At December 31, 1996 and 1995, the equity line of credit
loans and MasterCard loans totaled $43.2 million and $38.8 million,
respectively.

LOAN CONTRACTUAL MATURITIES. Contractual maturities of loans do not reflect the
actual term of the loan portfolio. The average life of mortgage loans is
substantially less than their contractual terms because of loan prepayments and
due-on-sale clauses. The average life of mortgage loans tends to increase,
however, when current mortgage rates substantially exceed rates on existing
mortgages. The following table presents information regarding loan contractual
maturities by categories of loans during the periods indicated:

<TABLE>
<CAPTION>
                         Principal Balance at       Amounts Due in Years Ending December 31,
                          December 31, 1996         ----------------------------------------
                         --------------------     
                                                                        2000-     2002-    2007-    After
                                               1997   1998     1999     2001      2006     2011     2011
                                               -----------------------------------------------------------
                                                                     (In thousands)
<S>                             <C>           <C>        <C>     <C>     <C>    <C>      <C>       <C>    
Real estate - mortgage          $209,058      1,127      5       47      956    57,219   28,568    121,136
Real estate - construction         4,272      4,272      0        0        0         0        0          0
Real estate - commercial          30,244         24     12       13      272    15,134   12,806      1,983
Land                               3,682      1,521  1,302       59        0         0      799          0
Consumer                          45,028      5,550    164      180      697    22,499    3,233     12,706
Business                           6,720      4,602    405      208      802       703        0          0
                                --------     ------  -----      ---    -----    ------   ------    -------
                                $299,004     17,096  1,888      507    2,727    95,555   45,406    135,825
                                ========     ======  =====      ===    =====    ======   ======    =======
</TABLE>

ENVIRONMENTAL RISKS. The Bank encounters certain environmental risks in its
lending activities. Under federal and state environment laws, lenders may become
liable for the costs of cleaning up hazardous materials found at locations on
which the lender may have a security interest in the property. Certain states
may also impose liens with higher priorities than first mortgages on properties
to recover funds used in such efforts. Although these risks are more usually
associated with industrial and commercial loans, environmental risks may be
substantial for residential lenders since environmental contamination may render
the property unsuitable for residential use. In addition, the value of the
residential property may become substantially diminished by the contamination of
nearby properties. In accordance with the guidelines of the Federal Home Loan
Mortgage Corporation ("FHLMC") and the Federal National Mortgage Association
("FNMA"), appraisals for single-family homes include comments on environmental
influences and conditions. The Bank attempts to control its exposure to
environmental risks with respect to loans secured by larger properties by
training its underwriters to recognize the signs of environmental problems when
they inspect properties; by requiring borrowers to represent and warrant that
properties securing loans do not contain hazardous waste, asbestos or other such
substances; by requiring borrowers to indemnify the Bank, with personal
recourse, against environmental losses; by obtaining reports, where deemed
appropriate, from environmental engineers on loans secured by non-residential
properties and multi-family residential properties; and by obtaining further
environmental reviews and tests where indicated by information obtained from
borrowers or from property inspections or otherwise. No assurance can be given,
however, that the value of properties securing loans in the Bank's loan
portfolio will not be adversely affected by the presence of hazardous materials
or that future changes in federal or state laws will not increase the Bank's
exposure to liability for environmental cleanup. 

SERVICING OF MORTGAGE LOANS. Mortgage servicing rights represent the right to
service mortgage loans owned by others. In return for undertaking the
contractual obligation to process and pass through principal and interest
payments from borrowers to investors, to maintain escrow accounts for the
payment of taxes and insurance to the appropriate parties,


                                       7

<PAGE>   8

and to perform related servicing functions, the Bank receives an annual
servicing fee. This annual fee is generally 3/8% of the outstanding balance of
the loan. The value of servicing rights is not reflected as a balance sheet
asset; rather, income from these rights is recognized over time as earned and
the related servicing costs are expensed as incurred. The expenses related to
servicing, which are included in the Bank's noninterest expense, include the
staff and support systems needed to service these mortgage loans. See Note 5 of
the "Notes to Consolidated Financial Statements" for further information.

Mortgage servicing rights are generally considered to have a value represented
by the present value of the estimated future net servicing revenue to be
received from those rights. The price of servicing rights may vary based on
numerous factors such as the nature of servicing (adjustable-rate, fixed-rate,
30-year term or 15-year term), the remaining life of the loans, the interest
rate on the loans, or payment and delinquency histories. The estimated value of
servicing rights is largely dependent upon the duration of the associated loans.
Value estimates are based upon certain prepayment and other assumptions. To the
extent these assumptions prove inaccurate, the actual value of the servicing
rights may be more or less than estimated. Prepayments have historically been
affected by interest rate fluctuations, economic conditions and other factors.
The market value of servicing rights, in addition to being affected by
prepayments, may be affected by other factors as well, such as the market supply
and demand for servicing rights. 

SOURCES OF FUNDS 
-----------------

GENERAL. Savings accounts, time certificates of deposit and other types of
deposits have traditionally been the principal source of funds for use in
lending and for other general business purposes. In addition to deposits, funds
are derived from loan repayments. Borrowings may be used on a short-term basis
to compensate for seasonal or other reductions in deposits or inflows at less
than projected levels, as well as on a longer term basis to support expanded
lending activities.

DEPOSITS. A number of different programs have been designed to attract both
short-term and long-term savings of the general public. Although the variety of
deposit accounts offered increases the Company's ability to retain deposits and
allows it to be more competitive in obtaining new funds, it has not eliminated
the risk of disintermediation (the flow of funds away from savings institutions
into direct investment vehicles such as government and corporate securities).
The Company has become much more subject to short-term fluctuations in deposit
flows as customers have become more rate-conscious. As customers have become
more rate-conscious and willing to move funds to higher yielding accounts, the
ability of the Company to attract and retain deposits and the Company's cost of
funds has been, and will continue to be, significantly affected by money market
conditions.

The principal methods used to attract deposits include the offering of a wide
variety of services and accounts, competitive interest rates, and convenient
office locations and service hours. Traditional marketing methods are utilized
to attract new customers and deposits, including mass media advertising and
direct mailings.

BORROWINGS. The Bank obtains advances from the FHLB of Cincinnati and pledges as
security for such advances the capital stock it owns in that entity, deposits it
has with the FHLB of Cincinnati, and certain of its home mortgages. Such
advances are made pursuant to several different credit programs, each of which
has its own interest rate and range of maturities. FHLB of Cincinnati advances
are generally available to meet seasonal and other withdrawals of savings
accounts, and to expand lending, as well as to aid the efforts of members to
establish better asset/liability management by extending the maturities of
liabilities. Under these borrowing agreements, the maximum level of advances
available to the Bank is generally limited to 25% of the Bank's total assets;
however, the FHLB of Cincinnati may approve in excess of this limit based upon
the Bank meeting all of its regulatory capital requirements. At December 31,
1996, the Bank had $30.0 million outstanding FHLB of Cincinnati advances.

The Bank may also obtain funds from sales of securities to institutional
investors under agreements to repurchase, which are considered borrowings. The
Bank did not borrow from such sources in 1996.

It is also possible to borrow funds from governmental sources other than the
FHLB of Cincinnati, including the Federal Reserve Bank in limited circumstances,
and from non-governmental sources such as commercial banks or insurance
companies. The Bank did not borrow from such sources in 1996.

                                       8
<PAGE>   9

YIELDS EARNED AND RATES PAID
----------------------------

Net interest income is the largest component of net income. Net interest income
is affected by the difference or spread between yields earned by the Company on
its loan, investment and mortgage-backed securities portfolios and the rates of
interest paid by the Company for its deposits and other borrowings, as well as
the relative amounts of its interest-earning assets and interest-bearing
liabilities. The following table sets forth information concerning the yields
received by the Company on its loans and other investments, the rates paid on
its deposits and borrowings, and the Company's resultant spread for the periods
and dates indicated:
<TABLE>
<CAPTION>
                                                   At or For the Year Ended December 31,
                               -------------------------------------------------------------------------------------------------
                                             1996                           1995                             1994
                                   For Period   End of Period   For Period      End of Period     For Period       End of Period
<S>                                  <C>          <C>           <C>              <C>           <C>            <C>  
Weighted-average yield on loan
  portfolio                           8.45%         8.42%         8.20%            8.43%            7.47%              7.67%
Weighted-average yield on
  investment portfolio                6.33%         6.78%         6.24%            6.84%            3.98%              6.27%
Weighted average yield on
  mortgage-backed securities          7.91%         8.63%         8.02%            8.30%            7.47%              8.14%
Weighted-average yield on all
  interest-earning assets             8.19%         8.13%         7.92%            8.06%            7.18%              7.47%
Weighted-average rate paid on
  deposits                            4.78%         4.70%         4.92%            5.04%            3.84%              4.19%
Weighted-average rate paid on
  FHLB advances                       5.79%         5.80%         9.91%              --             9.92%             10.30%
Weighted-average rate paid on
  long-term borrowings                  --            --            --               --             6.92%                --
Weighted-average rate paid on
  all interest-bearing liabilities    4.83%         4.82%         4.93%            5.04%            3.92%              4.23%
Weighted-average interest
  rate spread (1)                     3.36%         3.31%         2.99%            3.02%            3.26%              3.24%
</TABLE>
----------------
(1)  Weighted-average interest rate spread is the weighted-average yield on all
     interest-earning assets during or at the end of the period less the
     weighted-average rate paid on all interest-bearing liabilities during or at
     the end of the period.

SUBSIDIARIES OF THE BANK
------------------------
Regulations permit federally chartered institutions to invest in the capital
stock, obligations, or other specified types of securities of subsidiaries
(referred to as "service corporations") and to make loans to such subsidiaries,
and to joint ventures in which such subsidiaries are participants, in an
aggregate amount not exceeding 3% of an institution's assets. If the federal
savings association's investment in service corporations exceeds 1% of the
institution's assets, not less than one half of the investment which exceeds 1%
of the association's assets must be used primarily for inner-city and community
development purposes. In addition, the Bank is authorized to make unlimited
investments in any subsidiary of the Bank that is engaged in activities in which
the Bank can directly engage. 

The Bank has three wholly owned service corporation subsidiaries, Home
Financial, Inc., Home Community Development Corporation and Ridgewood Financial
Company. Through Home Financial, Inc., the Company offers its customers mutual
funds, annuities, and other financial products. Home Community Development
Corporation was incorporated on July 15, 1996. The newly formed corporation will
be the operating unit for the Ohio Mezzanine Fund, which provides financing for
borrowers. Ridgewood Financial Company was established to invest in limited
partnerships that are engaged in real estate development activities. Management
does not anticipate any expansion of such activities by Ridgewood Financial
Company. The activities of these subsidiaries are not significant and do not
constitute a business segment.


                                       9

<PAGE>   10

REGULATION
----------
GENERAL. To the extent that the information set forth in this document describes
statutory or regulatory provisions, it is qualified in its entirety by reference
to the particular statutory and regulatory provisions. Any change in applicable
law or regulation may have a material effect on the business and prospects of
the Company and/or the Bank. The operations of the Company and the Bank may be
affected by legislative changes and by the policies of various regulatory
authorities. 

The Bank is a federally chartered stock savings institution, the deposits of
which are insured by the FDIC up to applicable limits. Such insurance is backed
by the full faith and credit of the United States Government. The Bank is a
member of the Savings Association Insurance Fund ("SAIF") and the FHLB of
Cincinnati and, accordingly, is subject to broad federal regulation and
oversight extending to all its operations, including certain limited regulation
by the Federal Reserve Board. As the savings and loan holding company of the
Bank, the Company is also subject to federal regulation and oversight.

HOLDING COMPANY REGULATION. The Company is a unitary savings and loan holding
company subject to regulatory oversight by the OTS. As such, the Company is
required to register and file reports with the OTS and is subject to regulations
and examination by the OTS. In addition, the OTS has enforcement authority over
the Company and its non-savings institution subsidiaries which also permits the
OTS to restrict or prohibit activities that are determined to be a serious risk
to the subsidiary savings institution.

As a unitary savings and loan holding company, the Company generally is not
subject to activity restrictions. If the Company acquires control of another
savings institution as a separate subsidiary, it would become a multiple savings
and loan holding company, and the activities of the Company and any of its
subsidiaries (other than the Bank or any other SAIF-insured savings institution)
would become subject to such restrictions unless such other institutions each
qualify as a qualified thrift lender ("QTL") and were acquired in a supervisory
acquisition.


FEDERAL REGULATION OF SAVINGS INSTITUTIONS. The activities of savings
institutions are governed by the Home Owner's Loan Act, as amended (the "HOLA")
and, in certain respects, the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA"). The federal banking statutes (1) restrict the use of
brokered deposits by troubled savings institutions that are not
well-capitalized, (2) prohibit the acquisition of any corporate debt security
that is not rated in one of the four highest rating categories, (3) restrict the
aggregate amount of loans secured by non-residential real estate property to
400% of capital, (4) permit savings and loan holding companies to acquire up to
5% of the voting shares of non-subsidiary savings institutions or savings and
loan holding companies without prior approval, (5) permit bank holding companies
to acquire healthy savings institutions and (6) require the federal banking
agencies to establish by regulation loan-to-value limitations on real estate
lending. The Bank is in compliance with each of these restrictions. The Bank
does have the authority under HOLA to make certain loans or investments, not
exceeding 5.0% of its total assets, on each of (i) non-conforming loans (loans
in excess of the specific limitations of HOLA) and (ii) construction loans
without security for the purpose of financing what is or is expected to be
residential property. To assure repayment of such loans, the Bank relies
substantially on the borrower's general credit standing, personal guarantee and
projected future income on the properties.

The OTS has extensive authority over the operations of savings institutions,
such as the Bank. As a result of this authority, the Bank is required to file
periodic reports with the OTS and is subject to periodic examinations by the OTS
and the FDIC. When these examinations are conducted by the OTS and the FDIC, the
examiners may require the Bank to provide for higher general or specific loan
loss reserves. The Bank was examined by the OTS in May, 1996, while the Company
was examined by the OTS in June, 1996.

ENFORCEMENT. Under the Federal Deposit Insurance Act ("FDIC Act"), the OTS has
primary enforcement responsibility over savings institutions and has the
authority to bring enforcement action against all "institution-affiliated
parties," including shareholders, and any attorneys, appraisers and accountants
who knowingly or recklessly participate in wrongful action likely to have an
adverse effect on an insured institution. This enforcement authority includes,
among other things, the ability to assess civil money penalties, to issue
cease-and-desist or removal orders and to initiate injunctive actions. In
general, these enforcement actions may be initiated for violations of laws and
regulations and unsafe or unsound practices. Other actions or inactions may
provide the basis for enforcement action, including misleading or untimely
reports filed with the OTS. Except under certain circumstances, public
disclosure of final


                                       10

<PAGE>   11

enforcement actions by the OTS is required. Under the FDIC Act, the FDIC has the
authority to recommend to the Director of OTS that enforcement action be taken
with respect to a particular savings institution. If action is not taken by the
Director, the FDIC has authority to take such action under certain
circumstances.

LOANS TO ONE BORROWER. Under federal regulations, the aggregate amount of loans
that may be made to any borrower, including related entities, is limited to 15%
of the Bank's unimpaired capital and surplus (unimpaired capital is equity and
loan loss reserves less goodwill; subordinated debt up to 50% of this total may
be included). An additional amount may be lent, equal to 10% of unimpaired
capital and surplus, if such loan is secured by readily-marketable collateral,
which is defined to include certain securities and bullion, but generally does
not include real estate. At December 31, 1996, the Bank's loans-to-one borrower
limit was $4.0 million. Loans secured by readily marketable collateral may be
made up to 25% of unimpaired capital. The Bank did not have any borrowers at
December 31, 1996, whose aggregate outstanding credit was in excess of the
loans-to-one-borrower regulation. At December 31, 1996, the five largest loans
or group of loans to any one borrower, including related entities, amounted to
$1.6 million, $1.5 million, $1.5 million, $1.4 million and $1.3 million,
respectively. The five loans mentioned above were all performing at December 31,
1996. The Bank is in compliance with the loans-to-one borrower limitation.

ASSESSMENTS. Savings institutions are required to pay assessments to the OTS to
fund the operation of the OTS. The general assessment is paid on a semi-annual
basis, and is computed upon the savings institution's total assets, including
consolidated subsidiaries, as reported in the Bank's latest quarterly thrift
financial report. The assessments paid by the Bank in 1996 totaled $86,000.

INSURANCE OF DEPOSIT ACCOUNTS. The Bank is a member of SAIF, which is
administered by the FDIC and is backed by the full faith and credit of the U.S.
Government. Savings deposits are insured up to $100,000 per insured member (as
defined by law and regulation) by the FDIC. As the insurer, the FDIC imposes
deposit insurance premiums and is authorized to conduct examinations of and to
require reporting by FDIC-insured institutions. It also may prohibit any
FDIC-insured institution from engaging in any activity the FDIC determines by
regulations or order to pose a serious risk to the FDIC. 

The FDIC has adopted a risk-based deposit insurance system that assesses deposit
insurance premiums according to the level of risk involved in an institution's
activities. An institution's risk category is based upon one of three capital
categories that are substantially similar to the prompt corrective action ratios
and consist of (i) well capitalized, (ii) adequately capitalized and (iii)
undercapitalized categories. An institution also is assigned by the FDIC to one
of three supervisory subgroups within each capital group. The supervisory
subgroup to which an institution is assigned is based on a supervisory
evaluation provided to the FDIC by the institution's primary federal regulator
and information which the FDIC determines to be relevant to the institution's
financial condition and the risk posed to the deposit insurance funds (which may
include, if applicable, information provided by the institution's state
supervisor). An institution's assessment rate depends on the capital category
and supervisory category to which it is assigned. The Bank is classified in the
highest ranked category of "well capitalized" and "healthy" institution.

Absent a waiver from the FDIC, an insured depository institution is not
permitted to accept brokered deposits unless the institution is "well
capitalized". Deposit brokers are required to register with the FDIC. At
December 31, 1996, the Bank had no brokered deposits.

The FDIC may terminate the deposit insurance of any insured depository
institution if it determines after a hearing that the institution has engaged or
is engaging in unsafe or unsound practices, is in an unsafe or unsound condition
to continue operations, or has violated any applicable law, regulation, order or
any condition imposed by an agreement with the FDIC. If insurance of accounts is
terminated, the accounts at the institution at the time of the termination, less
subsequent withdrawals, shall continue to be insured for a period of six months
to two years, as determined by the FDIC. Management is aware of no existing
circumstances which could result in termination of the deposit insurance of the
Bank.

REGULATORY CAPITAL REQUIREMENTS. Federally insured savings institutions, such as
the Bank, are required to maintain a minimum level of regulatory capital. All
subsidiaries of the Bank are consolidated for capital purposes. The OTS capital
regulations require savings institutions to meet three minimum capital
standards: a 1.5% tangible capital ratio, a 3% leverage (core captial) ratio and
an 8% risk-based capital ratio. In addition, the prompt corrective action
standards

                                       11

<PAGE>   12

also establish, in effect, a minimum 2% tangible capital standard, a 4% leverage
(core) captial ratio (3% for institutions receiving the highest rating on the
CAMEL financial institution rating system), and, together with the risk-based
capital standard itself, a 4% Tier I risk-based capital standard. Core capital
is defined as common stockholders' equity (including retained earnings), certain
noncumulative perpetual preferred stock and related surplus, and minority
interests in equity accounts of consolidated subsidiaries less intangibles other
than certain purchased mortgage servicing rights and credit card relationships.
The OTS regulations also require that, in meeting the leverage ratio, tangible
and risk-based capital standards, institutions must generally deduct investments
in and loans to subsidiaries engaged in activities not permissible for a
national bank.

The risk-based capital standard for savings institutions requires the
maintenance of Tier 1 (core) and total capital (which is defined as core capital
and supplementary capital) to risk-weighted assets of 4% and 8%, respectively.
In determining the amount of risk-weighted assets, all assets, including certain
off-balance sheet assets, are multiplied by a risk-weight of 0% to 100%, as
assigned by the OTS capital regulation based on the risks OTS believes are
inherent in the type of asset. The components of Tier 1 (core) capital are
equivalent to those discussed earlier. The components of supplementary capital
currently include cumulative preferred stock, long-term perpetual preferred
stock, mandatory convertible securities, subordinated debt and intermediate
preferred stock and the allowance for loan and lease losses limited to a maximum
of 1.25% of risk-weighted assets. Overall, the amount of supplementary capital
included as part of total capital cannot exceed 100% of core capital. At
December 31, 1996, the Bank had no instruments that qualify as supplementary
capital and its general loss reserves were less than 1.25% of risk-weighted
assets.

The OTS regulatory capital requirements also incorporate an interest rate risk
component. Savings institutions with "above normal" interest rate risk exposure
are subject to a deduction from total capital for purposes of calculating their
risk-based capital requirements. A savings association's interest rate risk is
measured by the decline in the net portfolio value of its assets (i.e., the
difference between incoming and outgoing discounted cash flows from assets,
liabilities and off-balance sheet contracts) that would result from a
hypothetical 200 basis point increase or decrease in market interest rates
(except when the 3-month Treasury bond equivalent yield falls below 4%, then the
decrease will be equal to one-half of that Treasury rate) divided by the
estimated economic value of the association's assets, as calculated in
accordance with guidelines set forth by the OTS. A savings association whose
measured interest rate risk exposure exceeds 2% must deduct an interest rate
risk component in calculating its total capital under the risk-based capital
rule. The interest rate risk component is an amount equal to one-half of the
difference between the institution's measured interest rate risk and 2%,
multiplied by the estimated economic value of the association's assets. That
dollar amount is deducted from an association's total capital in calculating
compliance with its risk-based capital requirement. Under the rule, there is a
two quarter lag between the reporting date of an institution's financial data
and the effective date for the new capital requirement based on that data. The
Director of the OTS may waive or defer an association's interest rate risk
component on a case-by-case basis. For the present time, the OTS has deferred
implementation of the interest rate risk component.

If the OTS determines that an institution is in an unsafe or unsound condition
or is engaged in an unsafe or unsound practice, it is authorized to reclassify a
well capitalized institution (i.e., significantly exceeds its capital
requirements as defined by the OTS) as an adequately capitalized institution and
if the institution is adequately capitalized, to impose the restrictions
applicable to an undercapitalized institution. If the institution is
undercapitalized, the OTS is authorized to impose the restrictions applicable to
a significantly undercapitalized institution. The imposition by the OTS or the
FDIC of any of these measures on the Bank, which is not anticipated, may have a
substantial adverse effect on the Bank's and Company's operations and
profitability and the value of the Company's Common Stock. Shareholders do not
have preemptive rights, and therefore, if the Company is directed by the OTS or
the FDIC to issue additional shares of common stock, such issuance may result in
a dilution in the percentage of ownership of the Company's shareholders.

LIMITATIONS ON DIVIDENDS OF THE BANK. The Company is a legal entity separate and
distinct from the Bank and its other subsidiaries. The principal source of the
Company's funds on an unconsolidated basis is expected to be dividends from the
Bank. Various statutory and regulatory restrictions, however, limit directly or
indirectly the amount of dividends the Bank can pay.

                                       12

<PAGE>   13

The capital distributions regulation imposes uniform limitations on the ability
of savings institutions to engage in various distributions of capital such as
dividends, stock repurchases, and cash-out mergers. The OTS believes that
uniform treatment of these transactions provides a consistent policy regarding
savings institutions' capital needs and the necessity of preserving and
enhancing the tangible capital levels of all savings institutions.

The Bank is currently a Tier 1 association. As a Tier 1 association, the Bank is
permitted (without application) to make aggregate capital distributions during a
calendar year up to 100% of its net income to date plus the amount that would
reduce by one-half its surplus capital ratio at the beginning of the calendar
year. Capital distributions in excess of such amount require that the
association follow the regulation's advance notice and opportunity for objection
procedures.

A savings institution with net capital below its regulatory capital requirement
(or a savings institution meeting its capital requirement but which has received
notice from the OTS that it is in need of more than normal supervision) is not
authorized to make any capital distributions unless it receives prior written
approval from the OTS, or if the association is operating in compliance with an
approved capital plan, the capital distribution is consistent with the
association's capital plan. The Bank has not been specifically notified by the
OTS that it is in need of more than normal supervision.

The OTS may prohibit any capital distribution otherwise permitted under this
regulation upon a determination that the making of the capital distribution
would constitute an unsafe and unsound practice, such as where an association's
capital is diminishing due to substantial losses. All limitations on capital
distributions set forth in the regulation apply also to any direct or indirect
distributions of capital to affiliates, including those in connection with a
corporate reorganization.

In connection with the approval of the holding company reorganization whereby
the Bank became a wholly-owned subsidiary of the Company, the Federal Home Loan
Bank Board, predecessor of the OTS, required the Company to agree that for a
period of ten years after the reorganization, unless the Bank obtains the prior
approval of its Regional Director of the OTS - Chicago, (i) at any time when the
Bank meets its minimum capital requirement, such dividends will be limited to
100% of cumulative net income for the prior eight quarters, as reduced by
dividends paid for such quarters; and (ii) the company may not accept from the
Bank, nor cause the Bank to pay, any dividend that would cause the Bank's
regulatory capital to fall below its Minimum Capital Requirement. Furthermore,
the Bank must give the OTS at least 30 days advance notice of any proposed
declaration of dividends on its stock.

QUALIFIED THRIFT LENDER ("QTL") TEST. All savings institutions, including the
Bank, are required to meet a QTL test to avoid certain restrictions on their
operations. This test requires a savings bank to have at least 65% of its
portfolio assets (as defined in the statue) in qualified thrift investments. At
December 31, 1996, the Bank is in compliance with a ratio of 81.01%. The Bank
projects continued compliance for the foreseeable future.

A savings association that does not meet the QTL test must either convert to a
bank charter or comply with the following restrictions on its operations: (i)
the association may not engage in any new activity or make any new investment,
directly or indirctly, unless such activity or investment is permissible for a
national bank; (ii) the branching powers of the association shall be restricted
to those of a national bank; (iii) the association shall not be eligible to
obtain any advances from its FHLB; and (iv) payment of dividends by the
association shall be subject to the rules regarding payment of dividends by a
national bank. Upon the expiration of three years from the date the association
ceases to be a QTL, it must cease any activity and not retain any investment not
permissible for a national bank and immediately repay any outstanding FHLB
advances (subject to safety and soundness considerations). In addition, within
one year of the date on which a savings association controlled by a company
ceases to be a QTL, the company must register as a bank holding company and
becomes subject to the rules applicable to such companies.

LIQUIDITY. All savings institutions, including the Bank, are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. This liquid asset ratio requirement may
vary from time to time (between 4% and 10%) depending upon economic conditions
and savings flows of all savings institutions. At the present time, the minimum
liquid asset ratio is 5%.


                                       13

<PAGE>   14

In addition, short-term liquid assets (e.g., cash, certain time deposits,
certain bankers acceptances and short-term United States Treasury obligations)
currently must constitute at least 1% of the institution's average daily balance
of net withdrawable deposit accounts and current borrowings. Monetary penalties
may be imposed upon institutions for violations of liquidity requirements. At
December 31, 1996, the Bank was in compliance with both requirements, with an
overall liquid asset ratio of 7.88% and a short-term liquid asset ratio of
1.14%.

COMMUNITY REINVESTMENT. Under the Community Reinvestment Act ("CRA"), as
implemented by OTS regulations, a savings institution has a continuing and
affirmative obligation consistent with its safe and sound operation to help meet
the credit needs of its entire community, including low- and moderate-income
neighborhoods. Each financial institution's efforts in meeting community credit
needs currently are evaluated as part of the examination process, as well as
when an institution applies to undertake a merger, acquisition or to open a
branch facility. Under recently enacted revisions to the CRA regulations, the
current CRA assessment system is being replaced with a new evaluation system
that would rate institutions based on their actual perfomance (rather than
efforts) in meeting community credit needs. Under these new regulations, each
institution would be evaluated based on the degree to which it is providing
loans (the lending test), branches and other services (the service test) and
investments (the investment test) to low- and moderate-income areas in the
communities it serves, based on the communities' demographics, characteristics
and needs, the institution's capacity, product offerings and business strategy.
The Bank does not believe that the new CRA regulations will substantially change
its programs and policies designed to meet the needs of its communities.

TRANSACTIONS WITH RELATED PARTIES. The Bank's authority to engage in
transactions with related parties or "affiliates" (i.e., any company that
controls or is under common control with an institution, including the Company)
or to make loans to certain insiders, is limited by Section 23A and 23B of the
Federal Reserve Act ("FRA"). Section 23A limits the aggregate amount of
transactions with any individual affiliate to 10% of the capital and surplus of
the savings institution and also limits the aggregate amount of transactions
with all affiliates to 20% of the savings institution's capital and surplus.
Certain transactions with affiliates are required to be secured by collateral in
an amount and of a type specified in the FRA, and the purchase of low quality
assets from affiliates is generally prohibited. Section 23B provides that
certain transactions with affiliates, including loans and asset purchases, must
be on terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to the institution as those
prevailing at the time for comparable transactions with nonaffiliated companies.
In the absence of comparable transactions, such transactions may only occur
under terms and circumstances, including credit standards, that in good faith
would be offered to or would apply to nonaffiliated companies. Notwithstanding
Sections 23A and 23B, savings institutions are prohibited from lending to any
affiliate that is engaged in activities that are not permissible for bank
holding companies under Section 4(c) of the Bank Holding Company Act ("BHC
Act"). Further, no savings institutions may purchase the securities of any
affiliate other than a subsidiary.

The Bank's authority to extend credit to executive officers, directors and 10%
shareholders, as well as any entities that such persons control, are governed by
Section 22(h) of the FRA, Regulation O thereunder, Section 22(g) of the FRA and
the OTS's Conflicts Rule at 12 CFR 563.43. Among other things, these regulations
(i) require such loans to be made on terms substantially similar to those
offered to unaffiliated individuals, (ii) place limits on the amount of loans
the Bank may make to such persons based, in part, on the Bank's capital
position, and (iii) require certain approval procedures to be followed. Certain
of these transactions are also subject to conflict-of-interest regulations
enforced by the OTS. These regulations cover transactions by the Bank and its
subsidiaries with affiliated persons involving the sale, purchase or lease of
property. Affiliated persons include officers, directors and controlling
shareholders. These conflict-of-interest regulations and other statutes also
impose restrictions on loans to affiliated persons. Among other things, such
loans must be made on terms substantially the same as loans to unaffiliated
individuals.

FEDERAL HOME LOAN BANK SYSTEM. The Bank is a member of the FHLB of Cincinnati,
which is one of 12 regional FHLBs that administers the home financing credit
function of savings institutions. Each FHLB serves as a reserve or control bank
for its members within its assigned region. It is funded primarily from 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. As a member, the Bank is
required to purchase and maintain stock in the FHLB of Cincinnati. At December
31, 1996, the Bank had $2.8 million in FHLB stock, which was in compliance with
the requirement.


                                       14

<PAGE>   15

The FHLBs are required to provide funds to cover certain obligations on banks
issued to fund the resolution of insolvent thrifts and to contribute funds for
affordable housing programs. These requirements could reduce the amount of
dividends that the FHLBs pay to their members and could also have an adverse
effect on the value of the FHLB stock in the future. For the fiscal year ended
December 31, 1996, dividends paid by the FHLB of Cincinnati to the Bank totaled
$187,800.

FEDERAL RESERVE SYSTEM. The Federal Reserve Board requires all depository
institutions to maintain non-interest-bearing reserves at specified levels
against their transaction accounts (primarily checking NOW accounts) and
non-personal time deposits. At December 31, 1996, the Bank was in compliance
with these reserve requirements. The balances maintained to meet the reserve
requirements imposed by the Federal Reserve Board may be used to satisfy
liquidity requirements that may be imposed by the OTS. See the subsection
"Liquidity." Because required reserves must be maintained in the form of vault
cash or a noninterest-bearing account at a Federal Reserve Bank, the effect of
this reserve requirement is to reduce the Bank's earning assets.

Savings institutions are authorized to borrow from the Federal Reserve Bank
"discount windows," but Federal Reserve Board regulations require institutions
to exhaust other reasonable alternative sources of funds, including FHLB
borrowings, before borrowing from the Federal Reserve Bank.

FEDERAL SECURITIES LAW. The common stock of the Company is registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the Company is subject to the information,
proxy solicitation, insider trading restrictions and other requirements of the
Securities and Exchange Commission under the Exchange Act.

FEDERAL TAXATION 
-----------------

The Company is subject to the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), which subjects corporations to an income tax generally
calculated at 35% of taxable income. The Company and its subsidiaries file a
consolidated federal income tax return.

At December 31, 1996, the Company had no net operating loss carryforwards for
federal income tax purposes. Federal income tax rules allow net operaing losses
to be carried back three years and carried forward 15 years.

Federal income tax returns have been audited by the Internal Revenue Service
through the Company's taxable year ended December 31, 1991.

See Note 1 and Note 13 of the "Notes to Consolidated Financial Statements" for
further information concerning the financial statement reporting of federal
income taxes of the Company and a discussion of 1996 legislation affecting the
tax treatment of the bad debt deduction.

STATE TAXATION 
---------------
The Company is subject to the Ohio franchise tax on holding companies of
financial institutions. The tax imposed is the greater of the tax on net worth
after adjustments to exclude the portion attributable to the financial
institution or the tax on net income. The tax on net income is computed on
federal taxable income adjusted to exclude distributions from the financial
institution, and subject to certain other adjustments. The rate of tax differs
for the net worth and net income computations and can include a surtax if based
on net income and an add-on litter tax under either method.

The Bank is also taxed under Ohio law. The Bank is subject to an Ohio franchise
tax based on its net worth plus certain reserve amounts. Total net worth for
this purpose is reduced by certain exempt assets. The Bank pays the tax at a
rate of 1.5% of net worth.

EMPLOYEES 
----------
As of December 31, 1996, the Company and its subsidiaries had 91 full-time and
21 part-time employees. The Company is not a party to any collective bargaining
agreement with respect to its employees, and the Company believes it enjoys
harmonious relations with its personnel.

                                       15

<PAGE>   16

EXECUTIVE OFFICERS 
-------------------

The following information is supplied with respect to executive officers of the
Registrant and its subsidiaries. The executive officers of the Registrant are
the same as the executive officers of the Bank. There are no arrangements or
understandings pursuant to which any of the officers were selected as an
officer, and no executive officer is related to any other executive officer or
director by blood, marriage or adoption.

William A. Valerian (Age 53) - Mr. Valerian was appointed President and Chief
Executive Officer of both the Company and the Bank in May, 1990. Mr. Valerian
has been the President of the Bank since 1986. He joined the Bank in February,
1978.

Marlene D. Culbertson (Age 36) - Mrs. Culbertson was appointed Vice President of
both the Company and the Bank in January, 1996. Since joining the Bank in 1986,
Mrs. Culbertson has held various positions within the Bank.

Nancy M. Czupik (Age 48) - Ms. Czupik has been Corporate Counsel and Secretary
of both the Company and the Bank since June, 1993. From May, 1989 until joining
the Company in 1993, Ms. Czupik was Assistant Vice President and Assistant Legal
Counsel at another Cleveland-area financial institution.

Richard C. Ebner (Age 46) - Mr. Ebner, a certified public accountant, was
appointed Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Treasurer of both the Company and the Bank in May, 1990. He joined
the Bank in 1984.

Ennio F. Izzo (Age 57) - Mr. Izzo joined the Company in April, 1995 as Vice
President of both the Company and the Bank. Prior to joining the Company, Mr.
Izzo operated a consulting practice engaged in advising both small and large
corporations regarding financial, operational, strategic management and
international issues. In 1991, Mr. Izzo founded Enterprise Bank and served as
President and CEO through 1993.

Nick J. Nero, Jr. (Age 53) - Mr. Nero was appointed Vice President of the
Company in August, 1989. He is also Vice President in charge of operations of
the Bank and has held this position since December, 1983. He has been employed
by the Bank since 1982.

Edward R. Turza (Age 47) - Mr. Turza was appointed Vice President of both the
Company and the Bank in January, 1993. He had been an Assistant Vice President
of the Bank since 1977. He joined the Bank in 1974.

ITEM 2. PROPERTIES 
--------------------------
OFFICES AND OTHER MATERIAL PROPERTIES. The Company neither owns nor leases any
real property; for the present, it uses the premises, equipment and furniture of
the Bank without direct payment of any rental fees to the Bank. The headquarters
of the Company and its subsidiaries are located on the fourth and fifth floors
of the Terminal Tower, in downtown Cleveland, Ohio. The Company's offices in the
Terminal Tower are comprised of 29,000 square feet, which are leased for an
initial period of ten and one-half years, expiring on June 30, 2004. The Company
has renewal options for two additional lease terms of five years each, and
expansion options for up to 6,000 additional square feet of space.

The Bank currently operates ten full-service offices in the greater Cleveland
area, of which three are owned and seven are leased. The book value of the
Bank's owned premises and leasehold improvements (net of accumulated
depreciation) at December 31, 1996 was $2.9 million.

ITEM 3. LEGAL PROCEEDINGS 
--------------------------
The Company and its subsidiaries are not parties to any material legal
proceedings other than routine litigation incidental to their business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 
------------------------------------------------------------
There were no matters submitted to a vote of security holders during the quarter
ended December 31, 1996.


                                       16

<PAGE>   17

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
----------------------------------------------------------------------------
The information required by this item is set forth on page A-1 of Appendix A to
the Definitive Proxy Statement of the Company relating to the 1997 Annual
Meeting of Shareholders to be held on April 23, 1997, and is incorporated herein
by this reference.

ITEM 6. SELECTED FINANCIAL DATA 
--------------------------------
The information required by this item is set forth on page A-2 of Appendix A to
the Definitive Proxy Statement of the Company relating to the 1997 Annual
Meeting of Shareholders to be held on April 23, 1997, and is incorporated herein
by this reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------------------------------------------------------------------------------
OF OPERATIONS
-------------
The information required by this item is set forth on pages A-3 through A-16 of
Appendix A to the Definitive Proxy Statement of the Company relating to the 1997
Annual Meeting of Shareholders to be held on April 23, 1997, and is incorporated
herein by this reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
---------------------------------------------------
The information required by this item is set forth on pages A-17 through A-40 of
Appendix A to the Definitive Proxy Statement of the Company relating to the 1997
Annual Meeting of Shareholders to be held on April 23, 1997, and is incorporated
herein by this reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-----------------------------------------------------------------------
FINANCIAL DISCLOSURE 
---------------------
Not applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-----------------------------------------------------------
The information required by this item regarding the directors of the Company is
set forth on pages 3 through 7 of the Definitive Proxy Statement of the Company
relating to the 1997 Annual Meeting of Shareholders to be held on April 23,
1997, under the caption "The Board of Directors and its Committees", and is
incorporated herein by this reference. The information required by this item
regarding executive officers of the Company is set forth under Part I, Item 1
under the caption "Executive Officers" on page 16 of this Annual Report on Form
10-K. 

ITEM 11. EXECUTIVE COMPENSATION 
--------------------------------
The information required by this item is set forth on pages 7 through 13 of the
Definitive Proxy Statement of the Company relating to the 1997 Annual Meeting of
Shareholders to be held on April 23, 1997, under the caption "Remuneration and
Other Information," and is incorporated herein by this reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------
The information required by this item is set forth on pages 2 and 3 of the
Definitive Proxy Statement of the Company relating to the 1997 Annual Meeting of
Shareholders to be held on April 23, 1997, under the caption "Beneficial
Ownership," and is incorporated herein by this reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
--------------------------------------------------------
The information required by this item is set forth on pages 14 and 15 of the
Definitive Proxy Statement of the Company relating to the 1997 Annual Meeting of
Shareholders to be held on April 23, 1997, under the caption "Certain
Transactions," and is incorporated herein by this reference.


                                       17
<PAGE>   18

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------
(a)(l) The following consolidated financial statements of Registrant and its
subsidiaries included in the Definitive Proxy Statement of the Company relating
to the 1997 Annual Meeting of Shareholders to be held on April 23, 1997 are
incorporated herein by reference. The remaining information appearing in the
definitive proxy statement is not deemed to be filed as part of this report,
except as expressly provided herein and throughout this document.

<TABLE>
<CAPTION>
Financial Statements                                                                           Page
--------------------                                                                           ----
<S>                                                                                        <C>
Report of Independent Auditors                                                                 A-18
Consolidated Statements of Financial Condition as of December 31, 1996 and 1995.               A-19
Consolidated Statements of Income for the three years ended December 31, 1996.                 A-20 
Consolidated Statements of Cash Flows for the three years ended December 31, 1996.             A-21 
Consolidated Statements of Shareholders' Equity for the three years ended December 31, 1996.   A-22 
Notes to Consolidated Financial Statements.                                                    A-23 
</TABLE>

(a)(2) All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instruction, or are inapplicable and therefore have been omitted.

(a)(3) The following exhibits are filed herewith or are incorporated herein by
reference:
<TABLE>
<CAPTION>
                                                                               Page Number in
Exhibit No.                   Exhibit                                      manually signed Report
----------                    -------                                      ----------------------
<S>      <C>                                                            <C>
         3.1      Amended Articles of Incorporation                                (a)

         3.2      Code of Regulations, as amended                                  (b)

         4.1      Specimen of Stock Certificate                                    (a)

         10.1     Directors' Stock Option Plan                                     (a)

         10.2     Management Incentive Compensation Plan                           (a)

         10.3     1995 Stock Option Plan                                           (f)

         10.4     Agreement for Dividend Investment Service and
                    Monthly Investment Plan                                        (a)

         10.5     Haverfield Corporation Employee Stock Ownership Plan             (c)

         10.6     First and Second Amendment to the Haverfield Corporation
                    Employee Stock Ownership Plan                                  (d)

         10.7     Third Amendment to the Haverfield Corporation Employee Stock
                    Ownership Plan                                                 (e)

         10.8     Fourth Amendment to the Haverfield Corporation Employee Stock
                    Ownership Plan                                                 (f)

         10.9     Correction to the Haverfield Corporation Employee Stock 
                    Ownership Plan                                                  21

         10.10    Consulting Agreement dated August 1, 1996 with Peter E. Shimrak   23
</TABLE>

                                       18

<PAGE>   19
<TABLE>
<CAPTION>
                                                                               Page Number in
Exhibit No.                   Exhibit                                      manually signed Report
----------                    -------                                      ----------------------
<S>      <C>                                                            <C>
         10.11    Employment Agreement between Registrant and William A. 
                    Valerian dated August 28, 1996.                                  31

         10.12    Change in Control Agreement between Registrant and Richard C. 
                    Ebner dated August 30, 1996.                                     44

         10.13    Change in Control Agreement between Registrant and Ennio F. 
                    Izzo dated August 30, 1996.                                      52

         10.14    Change in Control Agreement between Registrant and Nick J. 
                    Nero, Jr., dated August 30, 1996.                                60

         10.15    Change in Control Agreement between Registrant and Marlene D. 
                    Culbertson dated August 30, 1996.                                68

         10.16    Change in Control Agreement between Registrant and Edward R. 
                    Turza dated August 30, 1996.                                     76

         11       Statement re: Computation of per share earnings                    84

         22       Subsidiaries of the Registrant                                     86

         24       Consent of Deloitte & Touche LLP                                   88

         27       Financial Data Schedule (EDGAR only)

         28.1     The Definitive Proxy Statement of the Company for the Annual
                    Meeting of Shareholders to be held April 23, 1997 and 
                    Appendix A thereto                                               90

         28.2     Form 11-K                                                         149
</TABLE>

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

     (a) Exhibit is incorporated herein by reference to Form S-4 Registration
     Statement No. 33-27266 previously filed by Registrant on March 21, 1990.

     (b) Exhibit is incorporated herein by reference to the June 30, 1992 Form
     10-Q.

     (c) Exhibit is incorporated herein by reference to the December 31, 1991
     Form 10-K

     (d) Exhibit is incorporated herein by reference to the December 31, 1992
     Form 10-K.

     (e) Exhibit is incorporated herein by reference to the December 31, 1993
     Form 10-K.

     (f) Exhibit is incorporated herein by reference to the December 31, 1994
     Form 10-K.

(b) Registrant did not file any reports on Form 8-K during the quarter ended
December 31, 1996.

(c) See (a)(3) above for all exhibits filed herewith or incorporated herein by
reference.

(d) Separate financial statements are not applicable.


                                       19
<PAGE>   20

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. 

                             Haverfield Corporation
                             ----------------------
                                   Registrant

By: /s/ William A. Valerian                  Dated:         March 19, 1997
    -------------------------------------                   --------------
    William A. Valerian
    Chairman of the Board,
    President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

/s/ William A. Valerian                      Dated:         March 19, 1997
-----------------------------------------                   --------------
William A. Valerian, Chairman of the Board,
President and Chief Executive Officer

/s/ Michael T. Gaul                          Dated:         March 19, 1997
-----------------------------------------                   --------------
Michael T. Gaul, Director

/s/ Mark R. Magnotto                         Dated:         March 19, 1997
-----------------------------------------                   --------------
Mark R. Magnotto, Director

/s/ Robert M. Mooney                         Dated:         March 19, 1997
-----------------------------------------                   --------------
Robert M. Mooney, Director

/s/ David A. Nolan                           Dated:         March 19, 1997
-----------------------------------------                   --------------
David A. Nolan, Director

/s/ Jacques C. Pomeroy                       Dated:         March 19, 1997
-----------------------------------------                   --------------
Jacques C. Pomeroy, Director

/s/ Peter E. Shimrak                         Dated:         March 19, 1997
-----------------------------------------                   --------------
Peter E. Shimrak, Director

/s/ Richard C. Ebner                         Dated:         March 19, 1997
-----------------------------------------                   --------------
Richard C. Ebner, Executive Vice President, 
Chief Operating Officer, Chief Financial 
Officer and Treasurer




                                       20