W
                                       V
                                        S

                                   FINANCIAL
                                  -----------
                                  CORPORATION

                 THE HOLDING COMPANY OF WEST VIEW SAVINGS BANK















                               1999 ANNUAL REPORT


<PAGE>

                                TABLE OF CONTENTS
                                                                        Page
                                                                       Number
                                                                       ------

         Stockholders' Letter                                              1

         Selected Financial and Other Data                                 2

         Management's Discussion and Analysis                              4

         Report of Independent Auditors                                   21

         Consolidated Balance Sheets                                      22

         Consolidated Statements of Income                                23

         Consolidated Statements of Changes in Stockholders' Equity       24

         Consolidated Statements of Cash Flows                            25

         Notes to the Consolidated Financial Statements                   26

         Common Stock Market Price and Dividend Information               54

         Corporate Information


<PAGE>
To Our Stockholders:

         Fiscal 1999 was a year of growth and record  earnings for WVS Financial
Corp. and West View Savings Bank.  Consolidated  assets grew over $51 million or
17.3% and totaled $348.4 million at June 30, 1999.  Company net income increased
$539  thousand or 15.4% and  totaled a record  $4.03  million for the year.  The
Company's  Board of Directors and employees  worked hard  throughout the year to
mitigate a less than  favorable  interest rate  environment  by  increasing  our
marketing efforts to new and existing customers.

         During  fiscal  1999,  we  emphasized  the   origination  of  consumer,
commercial  and  small  business  loans in  order to  alleviate  the  impact  of
declining mortgage rates on our business.  In addition to earning higher lending
spreads,  we were also able to gain additional deposit balances.  On the deposit
side of the business, total deposits grew by $3.3 million during fiscal 1999. We
are  particularly  pleased  with the  growth in our core  checking  and  savings
accounts.  These  accounts,  in our view,  represent  the basis for  building  a
primary  banking  relationship  with our  customers on both the deposit and loan
side of the business.

         Community  bank stocks  were  adversely  impacted  during the past year
primarily due to concerns over the Year 2000 computer  issue and a flat interest
rate environment. During fiscal 1999, the Company's Board of Directors evaluated
a number of strategic options to enhance long-term  shareholder value. Since our
core business remains strong and we are confident in our growing franchise,  the
Board of Directors  authorized a series of common stock  repurchases in order to
better manage our strong  capital  position.  The goals of the stock  repurchase
program are: (1) to increase per share  earnings by spreading  net income over a
reduced  number of shares and (2) to  increase  return on average  stockholders'
equity. We were successful on both goals.  During fiscal 1999,  diluted earnings
per share  increased  19.4% to $1.17 per  diluted  share from $0.98 per  diluted
share in fiscal 1998. Return on average  stockholders'  equity increased sharply
from 10.45% at the end of fiscal 1998 to 13.01%  during  fiscal 1999.  We expect
continued progress on both goals during fiscal 2000.

         A  considerable  amount of internal  resources were devoted to concerns
over  the  Year  2000  computer   issue.   West  View  Savings  Bank  outsources
substantially all of its data processing operations. Beginning in fiscal 1998 we
began to work  diligently  with our third party  processors to identify  mission
critical systems to determine what programs needed to be changed. We are pleased
to report  that all  mission  critical  customer  software  has been  tested and
retested.  Accordingly,  we  expect  no  Year  2000  related  problems  for  our
customers.  West View Savings Bank has been in business since 1908 and we pledge
to continue meeting our customers' needs well into the next millennium.

         It is with a great deal of  personal  sadness  that we note the passing
away of two dedicated and seasoned  directors-James  S. McKain, Jr. and James H.
Ritchie.  Jim McKain was elected a director of West View  Savings in 1960 and he
served as our Chairman of the Board since 1984.  Many of you may remember him as
the owner of the Jim McKain Ford auto  dealership  in  Wexford.  Jim Ritchie was
elected a director of West View Savings in 1977. Mr. Ritchie owned a pharmacy in
Ingomar for over 22 years.  Both men were active at West View Savings and in our
communities. Their advice, humor, leadership and sound business judgment will be
missed.
<PAGE>
         William J. Hoegel was elected Chairman of the Board of Directors in May
1999.  Bill has been a director of West View Savings  since 1984 and  previously
served as Vice Chairman of the Board of Directors. Bill's community involvement,
marketing background and demonstrated leadership will be invaluable resources to
the Company's growth plans.

         On behalf of the Board of Directors  and employees of West View Savings
Bank,  we would like to thank you for your ongoing  interest in our Company.  We
are proud of our  achievements  during  fiscal 1999 and we will continue to work
hard to earn our customers' business every day.




/s/DAVID J. BURSIC                                         /s/WILLIAM J. HOEGEL
------------------                                         --------------------
DAVID J. BURSIC                                            WILLIAM J. HOEGEL
President and                                              Chairman of the Board
Chief Executive Officer


<PAGE>
<TABLE>
<CAPTION>
                                     FIVE YEAR SUMMARY OF SELECTED CONSOLIDATED
                                              FINANCIAL AND OTHER DATA

                                                             As of or For the Year Ended June 30,
                                        --------------------------------------------------------------------------
                                            1999            1998            1997            1996            1995
                                        ----------      ----------      ----------      ----------      ----------
                                                                      (Dollars in Thousands)
---------------------------------
<S>                                     <C>             <C>             <C>             <C>             <C>
Selected Financial Data:
Total assets                            $  348,408      $  297,054      $  294,693      $  259,622      $  227,368
Net loans receivable                       170,327         157,737         158,134         149,011         133,343
Mortgage-backed securities                  72,380          46,314          37,490          42,118          22,655
Investment securities                       92,166          81,268          87,548          59,218          61,525
Real estate owned                              218             ---             ---             ---             ---
Savings deposit accounts                   171,114         167,670         170,879         170,843         168,786
FHLB advances                              116,900          88,857          77,857          38,000          14,984
Other borrowings                            25,820             889           6,784          10,652           4,047
Stockholders' equity                        27,938          32,978          32,889          34,038          33,809
Nonperforming assets and troubled
debt restructurings(1)                         765             603             274             980           1,959

Selected Operating Data:
Interest income                         $   22,999      $   22,146      $   21,125      $   18,317      $   15,612
Interest expense                            12,739          11,781          10,884           8,840           7,372
                                        ----------      ----------      ----------      ----------      ----------
Net interest income                         10,260          10,365          10,241           9,477           8,240
Provision for loan losses                      ---            (120)             60             150             211
                                        ----------      ----------      ----------      ----------      ----------
Net interest income after provision
for loan losses                             10,260          10,485          10,181           9,327           8,029
Non-interest income                            490             538             374             383             307
Non-interest expense                         4,285           5,422           5,666           4,067           4,894
                                        ----------      ----------      ----------      ----------      ----------
Income before income tax expense             6,465           5,601           4,889           5,643           3,442
Income tax expense                           2,434           2,109           1,930           2,066           1,652
                                        ----------      ----------      ----------      ----------      ----------
Net income                              $    4,031      $    3,492      $    2,959      $    3,577      $    1,790
                                        ==========      ==========      ==========      ==========      ==========

Per Share Information(2)(3):
Basic earnings                          $     1.18      $     1.01      $     0.88      $     1.07      $     0.54
Diluted earnings                        $     1.17      $     0.98      $     0.85      $     1.04      $     0.52
Dividends per share(4)                  $     0.63      $     1.50      $     1.50      $     1.03      $     0.21
Dividend payout ratio(4)                     53.39%         148.51%         170.45%          96.26%          38.89%
Book value per share at period end      $     8.81      $     9.12      $     9.41      $     9.80      $     9.73
Average shares outstanding:
     Basic                               3,405,662       3,470,479       3,369,796       3,347,363       3,331,086
     Diluted                             3,435,738       3,574,043       3,490,226       3,452,854       3,409,688

</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
                                                              As of or For the Year Ended June 30,
                                               -----------------------------------------------------------------
                                                1999           1998           1997          1996           1995
                                               ------         ------         ------        ------         ------
                                                                     (Dollars in Thousands)
<S>                                              <C>            <C>            <C>           <C>            <C>
Selected Operating Ratios(5):
Average yield earned on interest-
  earning assets                                 7.32%          7.69%          7.69%         7.83%          7.33%
Average rate paid on interest-
  bearing liabilities                            4.70           4.78           4.78          4.58           4.19
Average interest rate spread(6)                  2.62           2.91           2.91          3.25           3.14
Net interest margin(6)                           3.27           3.60           3.73          4.05           3.87
Ratio of interest-earning assets to
  interest-bearing liabilities                 118.88         116.65         120.70        121.18         121.09
Non-interest expense as a percent of
  average assets                                 1.35           1.86           2.04          1.71           2.26
Return on average assets                         1.27           1.20           1.06          1.51           0.83
Return on average equity                        13.01          10.45           8.63         10.19           5.34
Ratio of average equity to average
  assets                                         9.76          11.48          12.33         14.81          15.48
Full-service offices at end of period            5              5              5             5              5

Asset Quality Ratios(5):
Non-performing loans and troubled
  debt restructurings as a percent of
  net total loans(1)                             0.32%          0.38%          0.17%         0.66%          1.47%
Non-performing assets as a percent
  of total assets(1)                             0.22           0.20           0.09          0.15           0.45
Non-performing assets and troubled
  debt restructurings as a percent of
  total assets                                   0.22           0.20           0.09          0.38           0.86
Allowance for loan losses as a
  percent of total loans receivable              1.07           1.08           1.16          1.17           1.25
Allowance for loan losses as a
  percent of non-performing loans              336.75         308.46         733.21        520.95         178.43
Charge-offs to average loans
  receivable outstanding during the
  period                                         0.02           0.02           0.01          0.02           0.01

Capital Ratios(5):
Tier 1 risk-based capital ratio                 15.85%         20.90%         24.52%        27.19%         27.06%
Total risk-based capital ratio                  16.90          22.09          25.77         28.44          28.32
Tier 1 leverage capital ratio                    8.29          10.98          11.44         13.90          14.74
</TABLE>
<PAGE>
(1)  Non-performing assets consist of non-performing loans and real estate owned
     ("REO").  Nonperforming  loans  consist of  non-accrual  loans and accruing
     loans  greater than 90 days  delinquent,  while REO consists of real estate
     acquired  through  foreclosure  and real estate acquired by acceptance of a
     deed in lieu of foreclosure.
(2)  All per share  information  for fiscal years ended June 30, 1997,  1996 and
     1995 have been restated to reflect the  two-for-one  stock split of May 22,
     1998.
(3)  Dividends  per  share and  dividend  payout  ratio  includes  special  cash
     dividends of $0.95,  $1.15,  and $0.85 per share,  paid during fiscal 1998,
     1997 and 1996, respectively.
(4)  Consolidated  asset  quality  ratios and  capital  ratios are end of period
     ratios, except for net charge-offs to average net loans. With the exception
     of end of period ratios,  all ratios are based on average monthly  balances
     during the indicated periods.
(5)  Interest rate spread represents the difference between the weighted average
     yield  on  interest-earning   assets  and  the  weighted  average  cost  of
     interest-bearing  liabilities,  and  net  interest  margin  represents  net
     interest income as a percent of average interest-earning assets.


                                       3
<PAGE>
                       WVS FINANCIAL CORP. AND SUBSIDIARY
                       ----------------------------------

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



WVS Financial  Corp.  ("WVS" or the "Company") is the parent holding  company of
West View  Savings Bank ("West  View" or the  "Savings  Bank").  The Company was
organized in July 1993 as a Pennsylvania-chartered  unitary bank holding company
and acquired 100% of the common stock of the Savings Bank in November 1993.

West View Savings Bank is a  Pennsylvania-chartered,  SAIF-insured stock savings
bank  conducting  business  from six  offices  in the  North  Hills  suburbs  of
Pittsburgh.  The  Savings  Bank  converted  to the stock  form of  ownership  in
November 1993. The Savings Bank had no subsidiaries at June 30, 1999.

The  operating  results of the Company  depend  primarily  upon its net interest
income, which is determined by the difference between income on interest-earning
assets, principally loans, mortgage-backed securities and investment securities,
and interest expense on interest-bearing liabilities, which consist primarily of
deposits  and  borrowings.  The  Company's  net income is also  affected  by its
provision  for loan  losses,  as well as the level of its  non-interest  income,
including loan fees and service charges, and its non-interest expenses,  such as
compensation  and  employee  benefits,   income  taxes,  deposit  insurance  and
occupancy costs.

The Company's  strategy focuses on  community-based  lending,  maintaining asset
quality and generating consistent earnings growth. Specific strategic components
include:

Commitment  to Capital  Management  - The  Company is  committed  to  maximizing
long-term  shareholder value.  Specific components of this strategy include: (1)
the repurchase of 498,303 shares of Company common stock during fiscal 1999; (2)
growing Company assets to increase net income;  and (3) paying an  above-average
dividend yield of 4.17% on the Company's common stock during fiscal 1999.

Core Deposits - As of June 30, 1999, $77.2 million or 45.1% of West View's total
deposits  consisted of regular  savings and club accounts,  money market deposit
accounts,  and checking accounts.  Approximately  $38.9 million or 50.4% of core
deposits  consisted  of regular  savings  and club  accounts.  Checking  account
balances grew $2.8 million or 12.4% during fiscal 1999 and totaled $25.7 million
or 33.3% of core  deposits at June 30, 1999.  The  continued  growth in checking
account  deposits was  primarily  due to  increased  marketing  and  promotional
efforts by the Company to gain market share.  Core deposits are considered to be
more  stable  and lower  cost  funds  than  certificates  of  deposit  and other
borrowings.

Consistent  Earnings  Growth - Net income has grown from $1.8  million in fiscal
1995 to $4.0 million in fiscal 1999.  Diluted  earnings per share have increased
from $0.52 in fiscal 1995 to $1.17 in fiscal 1999;  this equates to a compounded
annual growth rate in diluted earnings per share of 22.7%.
<PAGE>
Community-based  Lending  - West  View  has  consistently  focused  its  lending
activities  on  generating  loans in our market  area.  Typical  loan  offerings
include  home  mortgages,  construction  loans,  and  consumer  loans  for  home
improvement,  automobile  loans and home equity loans.  During fiscal 1999, West
View also  expanded its small  business  lending  program to include term loans,
business inventory loans and loans for business machinery.

Asset Quality - Largely reflecting a lending strategy that emphasizes local loan
origination,  West View has not had significant  non-performing  assets. For the
fiscal  years  ended  June 30,  1999,  1998 and 1997,  the  Company's  ratios of
non-performing  assets and  troubled  debt  restructurings  to total assets were

                                       4
<PAGE>
0.16%,  0.20% and 0.09%,  respectively.  Total net recoveries for the past three
fiscal years have aggregated $86 thousand.

Non-interest Expense Ratios - For the fiscal years ended June 30, 1999, 1998 and
1997, the Company's ratios of non-interest expense to average assets were 1.35%,
1.86% and 2.04%,  respectively.  Excluding  unusual items  relating to severance
costs and the one-time SAIF  recapitalization  charge,  the Company's  ratios of
non-interest  expense  to average  assets  were  1.35%,  1.68% and 1.63% for the
fiscal years ended June 30, 1999, 1998 and 1997, respectively.


CHANGES IN FINANCIAL CONDITION
<TABLE>
<CAPTION>

                                           Condensed Balance Sheet
                                           -----------------------

                                             June 30,      June 30,               Change
                                                                        ------------------------
                                               1999          1998         Dollars     Percentage
                                               ----          ----         -------     ----------
                                                             (Dollars in thousands)
<S>                                        <C>           <C>            <C>              <C>
           Cash and interest-earning
           deposits                        $    1,893    $    2,506     $    (613)       (24.5%)

           Investment securities               98,361        85,943        12,418         14.4

           Mortgage-backed securities          72,380        46,314        26,066         56.3

           Net loans receivable               170,327       157,737        12,590          8.0

           Total assets                       348,408       297,054        51,354         17.3

           Deposits                           174,244       170,982         3,262          1.9

           FHLB and other borrowings          142,720        89,746        52,974         59.0

           Total liabilities                  320,470       264,076        56,394         21.4

           Total equity                        27,938        32,978        (5,040)       (15.5)

</TABLE>

General.  The $51.4  million  or 17.3%  growth  in total  assets  was  primarily
comprised of a $26.1 million  increase in  mortgage-backed  securities,  a $12.6
million increase in net loans receivable, a $12.4 million increase in investment
securities and Federal Home Loan Bank ("FHLB") stock.

The $56.4 million or 21.4% increase in total liabilities was primarily comprised
of a $53.0 million  increase in FHLB advances and other  borrowings,  and a $3.3
million increase in total deposits.
<PAGE>
Total stockholders'  equity decreased $5.1 million or 15.5% primarily due to the
Company's  ongoing  commitment to manage its capital  levels to further  enhance
stockholder  value.  The $5.1  million  decrease  in  stockholders'  equity  was
principally  attributable to the repurchase of $7.6 million of the Company's own
common stock,  $2.2 million of cash dividends paid to  stockholders,  and a $188
thousand increase in unrealized  securities losses,  which were partially offset
by $4.0 million of Company net income and an $863  thousand  increase in capital
attributable to stock option  exercises,  Employee Stock Ownership Plan ("ESOP")
share releases and Recognition and Retention Plan ("RRP") equity contributions.



                                       5
<PAGE>
Cash on Hand and  Interest-earning  Deposits.  Cash on hand and interest-earning
deposits represent cash equivalents. Cash equivalents decreased $613 thousand or
24.5% to $1.9  million  at June 30,  1999 from $2.6  million  at June 30,  1998.
Decreases  in these  accounts are  primarily  due to a  combination  of new loan
originations,  customer  withdrawals,  investment  purchases  and  repayments of
borrowings.  Increases in these accounts are usually the result of a combination
of  customer  deposits,  loan  and  investment  repayments,  and  proceeds  from
borrowings.

Investments.  The Company's overall investment portfolio increased $38.5 million
or 29.1% to $170.8  million  at June 30,  1999 from  $132.3  million at June 30,
1998.  Mortgage-backed  securities  increased  $26.1  million  or 56.3% to $72.4
million at June 30,  1999.  These  purchases  were made in order to mitigate the
principal  calls on the Company's  callable bond  portfolio and to earn a higher
yield with an expected average life profile  comparable to longer-term  callable
agency bonds.  Investment  securities  increased $12.4 million or 14.4% to $98.4
million at June 30, 1999.  These  purchases were made as a part of the Company's
investment growth program.

Net Loans  Receivable.  Net loans receivable  increased $12.6 million or 8.0% to
$170.3  million  at  June  30,  1999.  The  increase  in  loans  receivable  was
principally the result of increased mortgage and commercial loan originations.

Deposits.  Total  deposits  increased  $3.3 million or 1.9% to $142.7 million at
June 30, 1999.  Interest-bearing and  non-interest-bearing  accounts, as well as
time deposits increased during the year.

Borrowed  Funds.  Borrowed  funds  increased  $52.9  million  or 58.9% to $142.7
million at June 30, 1999. The increase is principally  the result of funding the
Company's  investment growth program.  FHLB advances  increased $28.0 million or
31.5% to  $116.9  million  at June  30,  1999 and  other  short-term  borrowings
increased $24.9 million or 2,766.7% to $25.8 million at June 30, 1999.

Stockholders' Equity. Total stockholders' equity decreased $5.1 million or 15.5%
to $27.9 million at June 30, 1999.  The decrease was  principally  the result of
the  repurchase of $7.6 million of the Company's  common stock,  $2.2 million of
cash dividends paid to stockholders,  and a $188 thousand increase in unrealized
securities  losses,  which were partially  offset by $4.0 million of Company net
income and an $863  thousand  increase in capital  attributable  to stock option
exercises, ESOP share releases and RRP equity contributions.


                                       6
<PAGE>
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
                                      Condensed Statements of Income
                                      ------------------------------

                              June 30,                 June 30,                   June 30,
                               1999        Change        1998          Change       1997
                             -------      -------      --------      -------      -------
                                                   (Dollars in thousands)
<S>                           <C>          <C>          <C>           <C>          <C>
Interest income               $22,999      $   853      $ 22,146      $ 1,021      $21,125
                                               3.9%                       4.8%

Interest expense              $12,739      $   958      $ 11,781      $   897      $10,884
                                               8.1%                       8.3%

Net interest income           $10,260      $  (105)     $ 10,365      $   124      $10,241
                                             (1.0%)                       1.2%

Provision for loan losses     $     0      $   120      $   (120)     $  (180)     $    60
                                             100.0%                    (300.0%)

Non-interest income           $   490      $   (48)     $    538      $   164      $   374
                                              (8.9%)                     43.9%

Non-interest expense          $ 4,285      $(1,137)     $  5,422      $  (244)     $ 5,666
                                            (21.0%)                      (4.3%)

Income tax expense            $ 2,434      $   325      $  2,109      $   179      $ 1,930
                                              15.4%                       9.3%

Net income                    $ 4,031      $   539      $  3,492      $   533      $ 2,959
                                              15.4%                      18.0%
</TABLE>
General. WVS reported net income of $4.0 million,  $3.5 million and $3.0 million
for the fiscal years ended June 30, 1999, 1998 and 1997, respectively.  The $539
thousand or 15.4%  increase in net income  during  fiscal 1999 was primarily the
result of a $1.1 million decrease in non-interest  expense,  which was partially
offset by the  absence of $120  thousand  reduction  in the  provision  for loan
losses due to the payoff of a commercial  loan  participation  in fiscal 1998, a
$105  thousand  decrease in net  interest  income,  a $48  thousand  decrease in
non-interest income and a $325 thousand increase in income tax expense. Earnings
per share totaled $1.18 (basic) and $1.17  (diluted) for fiscal 1999 as compared
to $1.01 (basic) and $0.98  (diluted) for fiscal 1998.  The increase in earnings
per share was due to an increase in net income and a reduction  in the  weighted
average  number of shares  outstanding  due to the Company's  stock  repurchases
during fiscal 1999.

                                       7
<PAGE>
Average  Balances,  Net Interest  Income and Yields  Earned and Rates Paid.  The
following  average  balance  sheet  table  sets  forth  at and for  the  periods
indicated, information on the Company regarding: (1) the total dollar amounts of
interest income on interest-earning assets and the resulting average yields; (2)
the total dollar amounts of interest expense on interest-bearing liabilities and
the resulting average costs; (3) net interest income;  (4) interest rate spread;
(5) net  interest-earning  assets  (interest-bearing  liabilities);  (6) the net
yield  earned  on   interest-earning   assets;   and  (7)  the  ratio  of  total
interest-earning assets to total interest-bearing liabilities.  Average balances
are derived from month-end balances. Management does not believe that the use of
month-end  balances  instead of daily  average  balances has caused any material
differences in the information presented.
<PAGE>
<TABLE>
<CAPTION>
                                                              For the Years Ended June 30,
                            At June 30,  -------------------------------------------------------------------------------------------
                                1999                 1999                          1998                             1997
                            -----------  -----------------------------   -----------------------------  ----------------------------
                             Period End  Average             Average     Average             Average    Average             Average
                             Rate/Cost   Balance   Interest Yield/Rate   Balance  Interest  Yield/Rate  Balance  Interest Yield/Rate
                             ---------   -------   -------- ----------   -------  --------  ----------  -------  -------- ----------
                                                                    (Dollars in Thousands)
 <S>                           <C>       <C>         <C>      <C>        <C>         <C>      <C>        <C>        <C>       <C>
Interest-earning assets:
     Net loans receivable(1)    7.62%   $158,651    $12,850    8.10%    $163,046    $13,191    8.09%    $153,726   $12,440     8.09%
     Mortgage-backed
         securities             6.63      66,685      4,280    6.42       40,066      2,715    6.78       39,451     2,724     6.90
     Investments                6.95      87,116      5,792    6.65       82,877      6,167    7.44       79,128     5,881     7.43
     Interest-bearing
     deposits                   5.35       1,995         77    3.86        1,842         73    3.96        2,335        80     3.43
                                        --------    -------             --------    -------             --------   -------
     Total interest-earning
         assets                 7.21%    314,447     22,999    7.32%     287,831     22,146    7.69%     274,640    21,125     7.69%
                                ====               --------    ====                 -------    ====                -------     ====
     Non-interest-earning
         assets                            3,324                           3,143                           3,331
                                        --------                        --------                        --------
           Total assets                 $317,771                        $290,974                        $277,971
                                        ========                        ========                        ========

Interest-bearing
liabilities:
     Interest-bearing
     deposits and escrows       3.64%   $161,189     $6,537    4.27%    $161,855     $6,943    4.29%    $165,017    $7,086     4.29%
     Borrowings                 5.38     113,338      6,202    5.47       84,887      4,838    5.70       62,522     3,798     6.07
                                        --------    -------             --------    -------             --------   -------
     Total interest-bearing
         liabilities            4.43%    274,527     12,739    4.70%     246,742     11,781    4.78%     227,539    10,884     4.78%
                                ====                 ------    ====                 -------    ====                 ------     ====
     Non-interest-bearing
         accounts                          8,306                           7,073                           6,459
                                        --------                        --------                        --------
     Total interest-bearing
         liabilities and
         non-interest-bearing
         accounts                        282,833                         253,815                         233,998
     Non-interest-bearing
         liabilities                       3,934                           3,747                           9,686
                                        --------                        --------                        --------
           Total liabilities             286,767                         257,562                         243,684
Retained income                           31,004                          33,412                          34,287
                                        --------                        --------                        --------
Total liabilities and
    retained income                     $317,771                        $290,974                        $277,971
                                        ========                        ========                        ========
Net interest income                                 $10,260                         $10,365                        $10,241
                                                    =======                         =======                        =======
Interest rate spread            2.78%                          2.62%                           2.91%                           2.91%
                              ======                         ======                          ======                          ======
Net yield on interest-
    earning assets(2)           3.00%                          3.27%                           3.60%                           3.73%
                              ======                         ======                          ======                          ======
Ratio of interest-earning
    assets to interest-
    bearing liabilities       111.38%                        118.88%                         116.65%                         120.70%
                              ======                         ======                          ======                          ======
</TABLE>
 (1)Includes non-accrual loans.
 (2)Net interest income divided by interest-earning assets.

                                       8
<PAGE>
Rate/Volume Analysis.  The following table describes the extent to which changes
in  interest  rates  and  changes  in  volume  of  interest-related  assets  and
liabilities  have affected the Company's  interest income and expense during the
periods   indicated.   For  each   category  of   interest-earning   assets  and
interest-bearing  liabilities,  information is provided on changes  attributable
to: (1) changes in volume (change in volume  multiplied by prior year rate), (2)
changes in rate (change in rate multiplied by prior year volume),  and (3) total
change in rate and  volume.  The  combined  effect of  changes  in both rate and
volume  has been  allocated  proportionately  to the  change due to rate and the
change due to volume.
<TABLE>
<CAPTION>
                                                                     Year Ended June 30,
                                          --------------------------------------------------------------------------
                                                     1999 vs. 1998                         1998 vs. 1997
                                          ----------------------------------    ------------------------------------
                                           Increase (Decrease)                    Increase (Decrease)
                                                   Due to           Total                Due to              Total
                                           ------------------     Increase        -------------------      Increase
                                            Volume       Rate    (Decrease)        Volume       Rate      (Decrease)
                                            ------       ----    ----------        ------       ----      ----------
                                                                     (Dollars in Thousands)
 <S>                                        <C>        <C>          <C>            <C>        <C>           <C>
Interest-earning assets:
     Net loans receivable                  $ (357)    $    16      $ (341)        $  751     $     0       $  751
     Mortgage-backed securities             1,716        (151)      1,565             39         (48)          (9)
     Investments                              302        (677)       (375)           278           8          286
     Interest-bearing deposits                  6          (2)          4            (18)         11           (7)
                                           ------     -------      ------         ------     -------       ------
           Total interest-earning assets    1,667        (814)        853          1,050         (29)       1,021
Interest-bearing liabilities:
     Interest-bearing deposits and
        escrows                               (86)       (320)       (406)          (212)         69         (143)
     Other borrowings                       1,566        (202)      1,364          1,283        (243)       1,040
                                           ------     -------      ------         ------     -------       ------
           Total interest-bearing
           liabilities                      1,480        (522)        958          1,071        (174)         897
                                           ------     -------      ------         ------     -------       ------
Increase (decrease) in net interest
   income                                  $  187      $ (292)     $ (105)       $  (21)       $  145      $  124
                                           ======      ======      ======        ======        ======      ======
</TABLE>

Net Interest Income. Net interest income is determined by the Company's interest
rate  spread   (i.e.   the   difference   between  the  yields   earned  on  its
interest-earning assets and the rates paid on its interest-bearing  liabilities)
and  the  relative  amounts  of  interest-earning  assets  and  interest-bearing
liabilities.

Interest Income. Total interest income increased by $853 thousand or 3.9% during
fiscal 1999 and  increased  by $1.0  million or 4.8%  during  fiscal  1998.  The
increase  in fiscal  1999 was  primarily  a result of a $1.6  million and a $119
thousand  increase  in interest on  mortgage-backed  securities  and FHLB stock,
respectively, which were partially offset by a $494 thousand and a $341 thousand
decrease in interest on investment securities and loans, respectively.
<PAGE>
Interest income on net loans  receivable  decreased $341 thousand or 2.6% during
fiscal 1999 and increased $751 thousand or 6.0% during fiscal 1998. The decrease
in fiscal  1999 was  attributable  to a $4.4  million  decrease  in the  average
balance of net loans  outstanding  and a 1 basis point  increase in the weighted
average yield on the Company's loan  portfolio.  The increase in fiscal 1998 was
attributable  to a $9.3  million  increase in the  average  balance of net loans
outstanding while maintaining a constant weighted average yield on the Company's
loan portfolio.

Interest income on investment  securities and FHLB stock decreased $375 thousand
or 6.1% during  fiscal 1999 and  increased  $286  thousand or 4.9% during fiscal
1998. The decrease in fiscal 1999 was primarily attributable to a decrease of 79
basis  points  in  the  weighted  average  yield  on  the  Company's  investment
securities  which was partially offset by a $4.2 million increase in the average
balance  of  investment  securities  primarily  due to  increased  purchases  of
callable  government  agency  securities.   The  increase  in  fiscal  1998  was
attributable  to a $3.7 million  increase in the average  balance of  investment
securities  outstanding,  while  maintaining a constant  weighted  average yield
earned on the Company's investment securities portfolio.



                                       9
<PAGE>
Interest income on  mortgage-backed  securities  increased $1.6 million or 57.6%
during  fiscal 1999 and  decreased $9 thousand or 0.3% during  fiscal 1998.  The
increase  during  fiscal  1999 was  attributable  to an  increase in the average
outstanding  balance of mortgage-backed  securities of $26.6 million,  partially
offset by a decrease in the  weighted  average  interest  rate yield of 36 basis
points.   During   fiscal  1999,   the  Company   increased   its  purchases  of
mortgage-backed  securities  in order to  mitigate  the  principal  calls on the
Company's  callable  bond  portfolio and to earn a higher yield with an expected
average life profile  comparable  to  longer-term  callable  agency  bonds.  The
increase  in fiscal 1998 was  attributable  to a $615  thousand  increase in the
average balance of mortgage-backed securities outstanding, partially offset by a
12 basis point decrease in the weighted average interest rate yield.

Interest Expense.  Total interest expense increased $958 thousand or 8.1% during
fiscal 1999 and  increased  by $897  thousand or 8.2% during  fiscal  1998.  The
increase  during fiscal 1999 is  attributable  to an increase of $1.4 million of
interest expense on borrowings  partially offset by a $406 thousand  decrease of
interest expense on deposits.

Interest  expense on  borrowings  increased  $1.4 million or 28.2% during fiscal
1999 and increased  $1.0 million or 27.4% during fiscal 1998.  The increases for
both  fiscal  1999 and 1998 were  primarily  attributable  to  increases  in the
average  balance of  borrowings  outstanding  totaling  $28.5  million and $22.3
million,  respectively.  In order to better match investment  opportunities  and
resources and enhance its net interest income,  the Company continues to utilize
short- and  intermediate-term  borrowings to fund purchases of  interest-earning
assets and other commitments.

Interest  expense  on  interest-bearing  deposits  and  escrows  decreased  $406
thousand or 5.9% in fiscal 1999 and  decreased  $143  thousand or 2.0% in fiscal
1998. The decrease in fiscal 1999 was primarily  attributable to a $10.7 million
decrease  in the  average  balance  of  interest-bearing  deposits  and  escrows
outstanding and a decrease of 26 basis points in the weighted  average rate paid
on  the  Company's  deposits.  The  decrease  in  fiscal  1998  was  principally
attributable   to  a  $3.2   million   decrease  in  the   average   balance  of
interest-bearing deposits and escrows outstanding,  which was slightly offset by
an increase of 4 basis points in the weighted average rate paid on the Company's
deposits.

Provision for Loan Losses. A provision for loan losses is charged to earnings to
bring the total allowance to a level considered adequate by management to absorb
potential losses in the portfolio. Management's determination of the adequacy of
the allowance is based on periodic evaluations of the loan portfolio considering
past experience, current economic conditions, volume, growth, composition of the
loan portfolio and other relevant factors.

The Company did not record a provision for loan losses for fiscal 1999 primarily
due to adequate current loan loss reserves.  The Company decreased the provision
by $120  thousand  in fiscal  1998  primarily  due to a recovery  of  previously
established  loan loss reserves  attributable to the payoff of a commercial loan
participation.  The  provision for fiscal 1997 was primarily due to increases in
the Company's general allowance for losses on loans.
<PAGE>
Non-interest Income. Total non-interest income decreased by $48 thousand or 8.9%
in fiscal  1999 and  increased  by $164  thousand or 43.9% in fiscal  1998.  The
decrease in fiscal 1999 was primarily due to the absence of a $133 thousand gain
on the sale of an office  building  in  fiscal  1998  partially  offset by a $30
thousand  increase in service charges on deposits and a $36 thousand net gain on
sale of investments.  The increase in  non-interest  income for fiscal year 1998
was  primarily  attributable  to service  charges  applied to a larger number of
transaction accounts opened during fiscal 1998 which was partially offset by the
absence of a $30 thousand gain from the sale of securities in 1997.

Non-interest Expense. Total non-interest expense decreased $1.1 million or 21.0%
and $244  thousand  or 4.3%  during  fiscal  1999 and  1998,  respectively.  The
decrease in fiscal 1999 was principally  attributable to a $1.1 million decrease
in  salaries  and  employee  benefits  and  a $57  thousand  decrease  in  other


                                       10
<PAGE>
non-interest  expenses.  The decrease in salaries and employee  benefits  during
fiscal 1999 was primarily  due to the absence of a $533  thousand  non-recurring
charge  related to the  resignation  of the  Company's  former  Chief  Executive
Officer in fiscal  1998,  $430  thousand of  reductions  in  discretionary  ESOP
contributions  and lower RRP expenses  and a $63  thousand  decrease in employee
compensation expense. The decrease in fiscal 1998 was primarily  attributable to
a $1.2  million  decrease in deposit  insurance  premiums,  which was  partially
offset  by  an  $893  thousand  increase  in  employee  salaries  and  benefits,
principally the $533 thousand one-time expense as discussed above.

Income Taxes.  Income taxes  increased $325 thousand or 15.4% during fiscal 1999
and increased  $179 thousand or 9.3% during fiscal 1998. The increases in fiscal
1999 and 1998 were primarily  attributable to increases in taxable  income.  The
Company's  effective tax rate was 37.7% at June 30, 1999 and 1998,  and 39.4% at
June 30, 1997.


ASSET AND LIABILITY MANAGEMENT

The  Company   continued  a  strategy  designed  to  reduce  the  interest  rate
sensitivity of its financial  assets to its financial  liabilities.  The primary
elements of this strategy include:

     1)   expanding the Company's  investment growth program in order to enhance
          net interest income;
     2)   maintaining  the Company's level of short-term  liquid  investments by
          funding  loan  commitments  and  purchasing   longer-term   investment
          securities;
     3)   emphasizing  the  retention of lower-cost  savings  accounts and other
          core deposits; and
     4)   pricing the Company's certificates of deposit and loan products nearer
          to the market  average rate as  opposed  to the upper  range of market
          offered rates.

The Company has continued its investment growth program, originally initiated in
the third  quarter of fiscal  1994,  throughout  fiscal 1999 in order to realize
additional net interest income.  Under this strategy,  a longer-term callable or
non-callable investment security, or mortgage-backed  security, is purchased and
funded  through  the use of  short-term  non-deposit  liabilities,  such as FHLB
advances and short-term  borrowings.  With this strategy,  the Company increases
its net  interest  income,  but also  faces the risk,  during  periods of rising
market interest  rates,  that it may experience a decline in net interest income
if the rate paid on its  various  borrowings  rises above the rate earned on the
investment security purchased. In order to mitigate this exposure, the Board has
placed certain restrictions on the investment growth program, including:

     1)   the average  outstanding daily balance of total  borrowings,  computed
          quarterly, may not exceed $165.0 million;
     2)   suitable  investments  shall be restricted to those meeting the credit
          quality criteria outlined in the Company's investment policy;
     3)   each  security   purchased   shall   initially   yield  a  minimum  of
          seventy-five   basis  points  above  the  incremental   rate  paid  on
          short-term borrowings, at the time of purchase; and
     4)   the  Company's  total  borrowed  funds  position may not exceed $175.0
          million.
<PAGE>
In most cases, the initial yield spread earned on investment  security purchases
exceeded approximately one hundred to two hundred and eighty basis points.

During  the  fiscal  year  ended  June  30,  1999,  the  Company  increased  its
mortgage-backed  securities  holdings  by $26.1  million.  At June 30,  1999 the
Company held $72.4 million of  mortgage-backed  securities  with an  approximate
yield of 6.6%. The  mortgage-backed  securities  purchases were made in order to
mitigate the principal calls on the Company's callable bond portfolio and earn a
higher yield with an expected  average life profile  comparable  to  longer-term
callable agency bonds. In order to mitigate risks associated with a general rise
in market interest rates,  approximately $16.4 million or 22.7% of the Company's
mortgage-backed  securities  portfolio  were  floating  rate  securities  with a
weighted average yield of 6.2%.


                                       11
<PAGE>
The  Company  has  continued  to  purchase  callable  bonds in order to  capture
additional net interest income.  Callable bonds generally provide investors with
higher rates of return than noncallable  bonds because the issuer has the option
to redeem  the bonds  before  maturity.  During a period of  declining  interest
rates,  the  Company  would be exposed to the risk that the  investment  will be
redeemed prior to its final stated maturity. In order to mitigate this risk, the
Company has funded a significant portion of its purchases of callable bonds with
short-term borrowings. Approximately $83.5 million of callable agency bonds with
an estimated  weighted  average rate of 7.22% were called during the fiscal year
ended June 30,  1999.  During the fiscal year ended June 30,  1999,  the Company
purchased  approximately  $123.7  million of callable  bonds with an approximate
weighted average yield to call and maturity of 6.81% and 7.09%, respectively.

During the fiscal year ended June 30, 1999, the Company  borrowed  approximately
$125.2 million in various  borrowings from the FHLB with a weighted average rate
of 5.08% and incurred $130.3 million in other borrowings with a weighted average
rate of 5.03%.  During the twelve months ended June 30, 1999, the Company repaid
$97.2 million of FHLB advances and $105.2 million of other borrowings.  Due to a
decline  in market  interest  rates  during  most of fiscal  1999,  the  Company
lengthened the maturity structure of its incremental borrowings to lock in lower
cost, longer-term liability funding.

The Company also makes available for origination residential mortgage loans with
interest rates which adjust pursuant to a designated  index,  although  customer
acceptance  has been somewhat  limited in the Savings  Bank's  market area.  The
Company  will  continue  to  selectively  offer  commercial  real  estate,  land
acquisition and development,  and shorter-term  construction loans, primarily on
residential properties, to partially increase its loan asset sensitivity. Due to
relatively low fifteen and thirty year mortgage  yields,  the Company intends to
emphasize higher yielding commercial real estate, home equity and small business
loans to existing customers and seasoned prospective customers.

As of June 30, 1999, the implementation of these asset and liability  management
initiatives resulted in the following:

     1)   an  aggregate  of $49.2  million  or 28.9% of the  Company's  net loan
          portfolio had adjustable  interest rates or maturities of less than 12
          months;
     2)   $16.4 million or 22.7% of the Company's  portfolio of  mortgage-backed
          securities  (including  collateralized  mortgage obligations - "CMOs")
          were secured by floating rate securities;
     3)   $1.2 million or 1.3% of the Company's investment  securities portfolio
          had scheduled maturities of one year or less; and
     4)   $89.5  million  or  97.4%  of  the  Company's  investment   securities
          portfolio was comprised of callable bonds.


The effect of  interest  rate  changes on a financial  institution's  assets and
liabilities may be analyzed by examining the "interest rate  sensitivity" of the
assets  and  liabilities  and  by  monitoring  an  institution's  interest  rate
sensitivity  "gap".  An asset or liability is said to be interest rate sensitive
within a specific  time period if it will mature or reprice  within a given time
period.  A gap is  considered  positive  (negative)  when  the  amount  of  rate

<PAGE>

sensitive assets (liabilities)  exceeds the amount of rate sensitive liabilities
(assets).  During a period of falling  interest rates, a negative gap would tend
to result  in an  increase  in net  interest  income.  During a period of rising
interest  rates,  a  positive  gap would  tend to result in an  increase  in net
interest income. The Company's one year cumulative interest rate sensitivity gap
is estimated at a negative 8.9% of total assets at June 30, 1999, as compared to
a  negative  24.6%  at  June  30,  1998,  in each  instance,  based  on  certain
assumptions  by management  with respect to the repricing of certain  assets and
liabilities. At June 30, 1999, the Company's interest-earning assets maturing or
repricing   within  one  year  totaled   $99.7   million   while  the  Company's
interest-bearing  liabilities  maturing  or  repricing  within one year  totaled
$130.8  million,   providing  a  deficiency  of  interest-earning   assets  over
interest-bearing  liabilities of $31.1 million. At June 30, 1999, the percentage
of the Company's assets to liabilities maturing or repricing within one year was
76.3%.



                                       12
<PAGE>
The  following  table  sets forth  certain  information  at the dates  indicated
relating  to  the  Company's   interest-earning   assets  and   interest-bearing
liabilities which are estimated to mature or are scheduled to reprice within one
year.
<TABLE>
<CAPTION>
                                                                                   June 30,
                                                             ---------------------------------------------------
                                                               1999                  1998                 1997
                                                             --------              --------             --------
                                                                           (Dollars in Thousands)
<S>                                                          <C>                   <C>                  <C>
 Interest-earning assets maturing or
   repricing within one year(1)                              $ 99,729              $107,186             $103,161
Interest-bearing liabilities maturing or
   repricing within one year(2)                               130,788               180,318              142,265
                                                             --------              --------             --------

Interest sensitivity gap                                     $(31,059)             $(73,132)            $(39,104)
                                                             ========              ========             ========

Interest sensitivity gap as a percentage of
   total assets                                                  (8.9)%               (24.6)%              (13.3)%
Ratio of assets to liabilities
   maturing or repricing within one year                         76.3%                 59.4%                72.5 %
</TABLE>
----------------

     (1)  Adjustable  and  floating  rate  assets are  included in the period in
          which  interest  rates are next scheduled to adjust rather than in the
          period in which they are contractually  due to mature,  and fixed rate
          loans are  included in the periods in which they are  scheduled  to be
          repaid, based on scheduled  amortization,  in each case as adjusted to
          take into account  estimated  prepayments based on the assumptions set
          forth in the footnotes to the following  table.  The Company  believes
          that the  assumptions  utilized,  which are based on statistical  data
          provided by a federal  regulatory agency in the Company's market area,
          are reasonable.

     (2)  Deposit  decay  rates  are based on the  assumptions  set forth in the
          footnotes to the following table.



                                       13
<PAGE>
The following table  summarizes the  anticipated  maturities or repricing of the
Company's  interest-earning  assets and interest-bearing  liabilities as of June
30, 1999,  based on the information and assumptions set forth in the notes.  The
Company believes that the assumptions  utilized,  which are based on statistical
data provided by a federal  regulatory  agency in the Company's market area, are
reasonable.
<TABLE>
<CAPTION>
                                                                       More Than        More Than
                                      Within           Six to          One Year           Three            Over
                                       Six             Twelve          to Three         Years to           Five
                                      Months           Months            Years         Five Years          Years           Total
                                    -----------      -----------      -----------      -----------      -----------     -----------
<S>                                 <C>              <C>              <C>              <C>              <C>             <C>
Interest-earning assets:
  Loans receivable (1)(2)(3)(4)     $    35,408      $    20,804      $    43,532      $    23,251      $    49,991     $   172,986
  Mortgage-backed securities             23,389            5,498           11,331            7,437           24,794          72,449
  Investments(5)                         13,481              ---              ---              ---           84,858          98,339
  Interest-bearing deposits               1,148              ---              ---              ---              ---           1,148
                                    -----------      -----------      -----------      -----------      -----------     -----------
       Total                             73,426           26,302           54,863           30,688          159,643         344,922
                                    -----------      -----------      -----------      -----------      -----------     -----------
Interest-bearing liabilities:
  Interest-bearing deposits
    and escrows(6)(7)(8)                 48,367           43,201           39,722           19,265           23,689         174,244
  Borrowings                             33,820            5,400           56,500              ---           47,000         142,720
                                    -----------      -----------      -----------      -----------      -----------     -----------
       Total                             82,187           48,601           96,222           19,265           70,689         316,964
                                    -----------      -----------      -----------      -----------      -----------     -----------
Interest sensitivity gap                 (8,761)         (22,299)         (41,359)          11,423           88,954
                                    -----------      -----------      -----------      -----------      -----------
Cumulative interest sensitivity
    gap                                  (8,761)         (31,060)         (72,419)         (60,996)          27,958
                                    -----------      -----------      -----------      -----------      -----------
Ratio of  cumulative gap to
    total assets                           (2.5)%           (8.9)%          (20.8)%          (17.5)%            8.0%
                                    -----------      -----------      -----------      -----------      -----------
</TABLE>
---------------------
(1)  Net of  undisbursed  loan  proceeds and does not include net deferred  loan
     fees or the allowance for loan losses.
(2)  For  single-family  residential  loans,  assumes  annual  amortization  and
     prepayment rate at 30% for adjustable rate loans,  and 11% to 41% for fixed
     rate loans. For  multi-family  residential  loans and other loans,  assumes
     amortization and prepayment rate of 12%.
(3)  For second mortgage loans,  assumes annual amortization and prepayment rate
     of 18%.
(4)  Consumer loans assumes amortization and prepayment rate of 13%.
(5)  Totals  include the  Company's  investment in Federal Home Loan Bank stock.
     Amounts  adjusted  to  reflect  called   investment   securities   totaling
     approximately $5,000.
<PAGE>
(6)  For regular savings accounts, assumes an annual decay rate of 17% for three
     years or less,  16% for more than three through five years and 14% for more
     than five years.
(7)  For NOW accounts, assumes an annual decay rate of 37% for one year or less,
     32% for more than one  through  three  years  and 17% for more  than  three
     years.
(8)  For money market deposit accounts,  assumes an annual decay rate of 79% for
     one year or less and 31% for more than one year.


                                       14
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company's  primary  market risk  exposure  is interest  rate risk and, to a
lesser extent, liquidity risk. All of the Company's transactions are denominated
in US dollars with no specific foreign exchange  exposure.  The Savings Bank has
no agricultural  loan assets and therefore would not have a specific exposure to
changes in commodity prices.  Any impacts that changes in foreign exchange rates
and  commodity  prices would have on interest  rates are assumed to be exogenous
and will be analyzed on an ex post basis.

Interest rate risk ("IRR") is the exposure of a banking organization's financial
condition to adverse movements in interest rates.  Accepting this risk can be an
important  source of  profitability  and shareholder  value,  however  excessive
levels  of IRR can pose a  significant  threat  to the  Company's  earnings  and
capital base.  Accordingly,  effective  risk  management  that  maintains IRR at
prudent levels is essential to the Company's safety and soundness.

Evaluating  a financial  institution's  exposure  to changes in  interest  rates
includes  assessing both the adequacy of the management  process used to control
IRR and the organization's  quantitative  level of exposure.  When assessing the
IRR management process,  the Company seeks to ensure that appropriate  policies,
procedures, management information systems and internal controls are in place to
maintain IRR at prudent levels with  consistency and continuity.  Evaluating the
quantitative  level of IRR exposure  requires the Company to assess the existing
and potential  future effects of changes in interest  rates on its  consolidated
financial condition, including capital adequacy, earnings, liquidity, and, where
appropriate, asset quality.

The Federal  Reserve Board,  together with the Office of the  Comptroller of the
Currency and the Federal Deposit Insurance  Corporation,  adopted a Joint Agency
Policy  Statement on  Interest-Rate  Risk,  effective  June 26, 1996. The policy
statement  provides  guidance to examiners  and bankers on sound  practices  for
managing interest rate risk, which will form the basis for ongoing evaluation of
the adequacy of interest-rate  risk management at supervised  institutions.  The
policy  statement also outlines  fundamental  elements of sound  management that
have been  identified  in prior  Federal  Reserve  guidance  and  discusses  the
importance  of these  elements in the context of  managing  interest-rate  risk.
Specifically,  the guidance emphasizes the need for active board of director and
senior  management  oversight and a comprehensive  risk-management  process that
effectively  identifies,  measures,  and controls  interest-rate risk. Financial
institutions derive their income primarily from the excess of interest collected
over interest paid. The rates of interest an institution earns on its assets and
owes on its liabilities generally are established  contractually for a period of
time. Since market interest rates change over time, an institution is exposed to
lower profit  margins (or losses) if it cannot adapt to  interest-rate  changes.
For  example,  assume  that  an  institution's  assets  carry  intermediate-  or
long-term  fixed  rates  and that  those  assets  were  funded  with  short-term
liabilities.   If  market  interest  rates  rise  by  the  time  the  short-term
liabilities  must be  refinanced,  the  increase in the  institution's  interest
expense on its liabilities may not be sufficiently  offset if assets continue to
earn at the long-term fixed rates.  Accordingly,  an institution's profits could
decrease on existing assets because the  institution  will either have lower net
interest income or,  possibly,  net interest  expense.  Similar risks exist when
assets are subject to  contractual  interest-rate  ceilings,  or rate  sensitive
assets are funded by longer-term,  fixed-rate  liabilities in a  decreasing-rate
environment.
<PAGE>
An institution  may use several  techniques to minimize  interest rate risk. One
approach  used  by  the  Company  is to  periodically  analyze  its  assets  and
liabilities and make future financing and investment  decisions based on payment
streams,  interest rates,  contractual maturities,  and estimated sensitivity to
actual or potential changes in market interest rates. Such activities fall under
the broad  definition  of  asset/liability  management.  The  Company's  primary
asset/liability   management  technique  is  the  monitoring  of  the  Company's
asset/liability  gap,  which was  discussed in detail under "Asset and Liability
Management" commencing on page 12.

An institution  could also manage interest rate risk by selling existing assets,
repaying certain  liabilities or matching  repricing  periods for new assets and
liabilities (for example,  by shortening  terms of new loans or investments).  A

                                       15
<PAGE>
large  portion  of an  institution's  liabilities  may be  short-term  or due on
demand,  while  most  of its  assets  may be  invested  in  long-term  loans  or
investments.  Accordingly, the Company seeks to have in place sources of cash to
meet  short-term  demands.  These funds can be obtained by increasing  deposits,
borrowing,  or selling assets. Also, FHLB advances and wholesale borrowings have
become  increasingly  important sources of liquidity for the Company.  Financial
institutions  are also subject to prepayment risk in falling rate  environments.
For  example,  mortgage  loans and other  financial  assets  may be prepaid by a
debtor so that the  debtor  may  refund its  obligations  at new,  lower  rates.
Prepayments of assets carrying higher rates reduce the Company's interest income
and overall asset yields.

An institution might also invest in more complex financial  instruments intended
to hedge,  or  otherwise  change  the  interest  rate risk of  existing  assets,
liabilities,   or  anticipated   transactions.   Interest  rate  swaps,  futures
contracts,  options on futures, and other such derivative financial  instruments
often are used for this  purpose.  Because  these  instruments  are sensitive to
interest rate changes,  they require management  expertise to be effective.  The
Company has not purchased derivative financial  instruments in the past and does
not presently intend to purchase such instruments in the near future.

The  following  table  provides   information  about  the  Company's   financial
instruments  that are sensitive to changes in interest rates as of June 30, 1999
based on the information and assumptions in the notes. The Company's assumptions
are based on  statistical  data provided by a federal  regulatory  agency in the
Company's  market area,  and are believed to be  reasonable.  The Company had no
derivative  financial  instruments or trading portfolio as of June 30, 1999. The
expected maturity date values for loans receivable,  mortgage-backed securities,
and  investment   securities  were  calculated  by  adjusting  the  instrument's
contractual maturity date for expectations of prepayments.  Similarly,  expected
maturity date values for  interest-bearing  core deposits were calculated  based
upon estimates of the period over which the deposits would be outstanding.  With
respect to the Company's  adjustable rate  instruments,  expected  maturity date
values were measured by adjusting the instrument's contractual maturity date for
expectations  of  prepayments.  Substantially  all of the  Company's  investment
securities portfolio is comprised of callable government agency securities. From
a risk management  perspective,  the Company  believes that repricing  dates, as
opposed to expected  maturity dates,  may be a more relevant metric in analyzing
the value of such instruments.  Company borrowings were tabulated by contractual
maturity dates and without regard to any conversion or repricing dates.

                                       16
<PAGE>
<TABLE>
<CAPTION>
                                                      EXPECTED MATURITY DATE -
                                                     FISCAL YEAR ENDED JUNE 30,
                                     -------------------------------------------------------       There-                    Fair
                                       2000        2001        2002        2003        2004        after       Total         value
                                     -------     -------     -------     -------     -------      -------     --------     --------
ON-BALANCE SHEET FINANCIAL
INSTRUMENTS
<S>                                  <C>         <C>         <C>         <C>         <C>          <C>         <C>          <C>
Interest-earning assets:
  Loans receivable (1)(2)(3)(4)
    Fixed rate                       $29,065     $18,221     $13,709     $12,347     $ 9,783      $48,819     $131,944     $132,713
      Average interest rate            7.83%       7.61%       7.54%       7.56%       7.51%        7.43%

    Adjustable rate                   14,636       6,869       5,352       4,210       3,342        6,086       40,495       40,862
      Average interest rate(5)         6.76%       6.23%       6.19%       6.14%       6.10%        6.12%
  Mortgage-backed securities
    Fixed rate                            55         ---          80       1,622         ---       54,290       56,047       54,615
      Average interest rate            6.42%       0.00%       8.00%       6.02%       0.00%        6.78%

    Adjustable rate                      ---         ---         ---         ---         ---       16,402       16,402       16,825
      Average interest rate(6)         0.00%       0.00%       0.00%       0.00%       0.00%        6.20%

  Investments(7)                       5,906         ---         ---         ---         ---       92,433       98,339       95,447
      Average interest rate            5.88%       0.00%       0.00%       0.00%       0.00%        7.02%

  Interest-bearing deposits            1,148         ---         ---         ---         ---          ---        1,148        1,148
      Average interest rate            5.35%       0.00%       0.00%       0.00%       0.00%        0.00%
                                     -------     -------     -------     -------     -------      -------     --------     --------
        Total                        $50,810     $25,090     $19,141     $18,179     $13,125     $218,030     $344,375     $341,610

Interest-bearing liabilities:
  Interest-bearing deposits
   and escrows(8)(9)(10)             $91,568     $19,861     $19,861     $ 9,632     $ 9,632     $ 23,690     $174,244     $174,190
      Average interest rate            4.06%       3.44%       3.44%       3.63%       3.63%        2.17%

  Borrowings                          39,220      28,250      28,250         ---         ---       47,000      142,720      141,849
      Average interest rate            5.22%       5.72%       5.72%        0.00%       0.00%        5.10%
                                     -------     -------     -------     -------     -------      -------     --------     --------
        Total                       $130,788     $48,111     $48,111     $ 9,632     $ 9,632     $ 70,690     $316,964     $316,039

</TABLE>
----------------------------
<PAGE>
(1)  Net of  undisbursed  loan  proceeds and does not include net deferred  loan
     fees or the allowance for loan losses.
(2)  For  single-family  residential  loans,  assumes  annual  amortization  and
     prepayment rate at 30% for adjustable rate loans,  and 11% to 41% for fixed
     rate loans. For  multi-family  residential  loans and other loans,  assumes
     amortization and prepayment rate of 12%.
(3)  For second mortgage loans,  assumes annual amortization and prepayment rate
     of 18%.
(4)  Consumer loans assumes amortization and prepayment rate of 13%.
(5)  Substantially  all of the  Company's  adjustable  rate loans  reprice on an
     annual basis based upon changes in the one- year constant maturity treasury
     index with various market based annual and lifetime  interest rate caps and
     floors.
(6)  Substantially  all  of  the  Company's   adjustable  rate   mortgage-backed
     securities  reprice on a monthly  basis based upon changes in the one month
     LIBOR index with various lifetime caps and floors.
(7)  Totals  include the  Company's  investment in Federal Home Loan Bank stock.
     Amounts  adjusted  to  reflect  called   investment   securities   totaling
     approximately $5,000.
(8)  For regular savings accounts, assumes an annual decay rate of 17% for three
     years or less,  16% for more than three through five years and 14% for more
     than five years.
(9)  For NOW accounts, assumes an annual decay rate of 37% for one year or less,
     32% for more than one though three years and 17% for more than three years.
(10) For money market deposit accounts,  assumes an annual decay rate of 79% for
     one year or less and 31% for more than one year.



                                       17
<PAGE>
The  table  below   provides   information   about  the  Company's   anticipated
transactions comprised of firm loan commitments and other commitments, including
undisbursed  letters  and  lines  of  credit.  The  Company  used no  derivative
financial  instruments  to hedge such  anticipated  transactions  as of June 30,
1999.
<TABLE>
<CAPTION>


                            Anticipated Transactions
                            ------------------------

<S>                                                  <C>
              Undisbursed construction and
              land development loans
                   Fixed rate                        $ 5,919
                                                        7.64%

                   Adjustable rate                   $10,408
                                                        8.77%

               Undisbursed lines of credit
                   Adjustable rate                   $10,067
                                                        7.79%

               Loan origination commitments
                   Fixed rate                        $ 3,192
                                                        7.54%

                   Adjustable rate                   $   293
                                                        7.15%

               Letters of credit
                   Adjustable rate                   $    20
                                                       10.75%

                Unfunded security commitments
                   Fixed rate                        $10,220
                                                        7.72%
                                                     -------
                                                     $40,119
                                                     =======
</TABLE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

Liquidity is often analyzed by reviewing the cash flow statement.  Cash and cash
equivalents decreased by $613 thousand during fiscal 1999 primarily due to $51.7
million of net cash used for investing  activities.  This decrease was partially
offset by a $46.7 million net increase in cash provided by financing  activities
and $4.4 million of cash provided by operating activities.

Funds provided by operating  activities  totaled $4.4 million during fiscal 1999
as compared to $5.1 million  during fiscal 1998.  Net cash provided by operating
activities was primarily comprised of $4.0 million of net income.

Funds used for investing  activities totaled $51.7 million during fiscal 1999 as
compared to $2.2 million during fiscal 1998. Primary uses of funds during fiscal
1999 include  $195.8 in purchases of investment and  mortgage-backed  securities
and a $13.1  million  increase  in net loans  receivable,  which were  partially
offset  by  $157.9  million  in  proceeds  from  maturities  and  repayments  on
investment  and   mortgage-backed   securities.


                                       18
<PAGE>
Funds provided by financing  activities totaled $46.7 million for fiscal 1999 as
compared to $2.9 million used for financing  activities in fiscal 1998.  Primary
sources of funds for fiscal 1999 were a $52.9 million increase in FHLB and other
borrowings used to fund loan commitments and investment security purchases and a
$3.1 million  increase in deposits,  which were partially offset by $7.6 million
in common stock  repurchases  and $2.2 million of cash  dividends  paid.  During
fiscal  1999,  the  Company   purchased  498,303  shares  of  common  stock  for
approximately  $7.6  million.  Management  has  determined  that it currently is
maintaining  adequate  liquidity and  continues to better match funding  sources
with lending and investment opportunities.

The Company's primary sources of funds are deposits,  amortization,  prepayments
and  maturities of existing  loans,  mortgage-backed  securities  and investment
securities,  funds from operations, and funds obtained through FHLB advances and
other  borrowings.  At June  30,  1999,  the  total  approved  loan  commitments
outstanding amounted to $3.5 million. At the same date, commitments under unused
letters and lines of credit amounted to $10.0 million and the unadvanced portion
of  construction  loans  approximated  $16.3  million.  Certificates  of deposit
scheduled to mature in one year or less at June 30, 1999, totaled $61.9 million.
Management  believes that a significant portion of maturing deposits will remain
with the Company.

Historically,  the  Company  used its  sources  of funds  primarily  to meet its
ongoing  commitments  to  pay  maturing  certificates  of  deposit  and  savings
withdrawals,  fund loan  commitments  and  maintain a  substantial  portfolio of
investment  securities.  The Company has been able to generate  sufficient  cash
through the retail deposit market,  its traditional  funding source, and through
FHLB  advances and other  borrowings,  to provide the cash utilized in investing
activities.  The Company has access to the Federal Reserve Bank discount window.
Management  believes that the Company currently has adequate liquidity available
to respond to liquidity demands.

On July 27, 1999, the Company's  Board of Directors  declared a cash dividend of
$0.16 per share  payable on August  19,  1999 to  shareholders  of record at the
close of business on August 9, 1999.  Dividends are subject to determination and
declaration  by the Board of  Directors,  which take into account the  Company's
financial  condition,  statutory and regulatory  restrictions,  general economic
conditions and other  factors.  There can be no assurance that dividends will in
fact be paid on the common stock in the future or that, if paid,  such dividends
will not be reduced or eliminated in future periods.

As of June 30,  1999,  WVS  Financial  Corp.  exceeded  all  regulatory  capital
requirements and maintained Tier 1 and total  risk-based  capital equal to $28.0
million  or  15.9%  and  $29.8   million  or  16.9%,   respectively,   of  total
risk-weighted  assets,  and Tier 1 leverage  capital of $28.0 million or 8.3% of
average total assets.

Non-performing assets consist of non-accrual loans and real estate owned. A loan
is placed on  non-accrual  status  when,  in the  judgment  of  management,  the
probability of collection of interest is deemed  insufficient to warrant further
accrual.  When a loan is placed on non-accrual  status,  previously  accrued but
uncollected  interest is deducted from interest  income.  Non-performing  assets
increased $162 thousand or 26.9% to $765 thousand,  or 0.2% of total assets,  at
June 30, 1999. The increase was primarily the result of the  acquisition of $218
thousand  of real  estate  owned which was  partially  offset by a $56  thousand
decrease in non-accrual loans.


                                       19
<PAGE>
YEAR 2000 COMPLIANCE

The Company outsources substantially all of its data processing requirements and
it is to a large extent  dependent upon vendor  cooperation  for systems used in
its  day-to-day  business.  The Company,  in  conjunction  with its vendors,  is
testing its computer systems and requiring representations from its vendors that
the  products  provided  are or will be year 2000  compliant.  The  Company  has
developed  a plan of action to help ensure that its  operational  and  financial
systems will not be adversely affected by year 2000  software/hardware  failures
due to processing  errors  arising from  calculations  using the year 2000 date.
Substantially  all hardware and software products were compliant at December 31,
1998.  In the unlikely  event that the systems  tested do not, in fact,  operate
properly  when the year 2000 does arrive,  all customer  accounts,  deposits and
loans as well as  accounting  systems  will be  maintained  manually  to  ensure
business continuation while systems are being corrected. The Company has not and
does not expect to incur material  expenditures  to address the year 2000 issue.
Based upon current estimates, the Company does not expect to incur more than $75
thousand (pre-tax) in year 2000 remediation  expenses.  Any year 2000 compliance
failures,  which are currently unknown,  could result in additional  expenses or
business disruption to the Company.


FORWARD LOOKING STATEMENTS

When used in this Annual  Report,  or, in future filings by the Company with the
Securities  and Exchange  Commission,  in the Company's  press releases or other
public  or  shareholder  communications,  or in oral  statements  made  with the
approval of an authorized  executive officer,  the words or phrases "will likely
result",  "are expected to",  "will  continue",  "is  anticipated",  "estimate",
"project"  or similar  expressions  are  intended to identify  "forward  looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  statements  are  subject  to  certain  risks  and  uncertainties
including changes in economic  conditions in the Company's market area,  changes
in policies by regulatory  agencies,  fluctuations in interest rates, demand for
loans in the  Company's  market area and  competition  that could  cause  actual
results  to differ  materially  from  historical  earnings  and those  presently
anticipated  or projected.  The Company  wishes to caution  readers not to place
undue reliance on any such forward  looking  statements,  which speak only as of
the date made.  The Company  wishes to advise  readers  that the factors  listed
above  could  affect the  Company's  financial  performance  and could cause the
Company's  actual  results  for  future  periods to differ  materially  from any
opinions or statements  expressed  with respect to future periods in any current
statements.

The Company does not undertake,  and specifically  disclaims any obligation,  to
publicly  release  the  result of any  revisions  which  may be made to  forward
looking  statements  to  reflect  events  or  circumstances  after  the  date of
statements or to reflect the occurrence of anticipated or unanticipated events.



                                       20
<PAGE>
[SNODGRASS LETTERHEAD]



                         REPORT OF INDEPENDENT AUDITORS



Board of Directors and Stockholders
WVS Financial Corp.

We have audited the  accompanying  consolidated  balance sheets of WVS Financial
Corp. and subsidiary as of June 30, 1999 and 1998, and the related  consolidated
statements of income,  stockholders' equity and cash flows for each of the years
in the three-year period ended June 30, 1999. These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of WVS Financial Corp.
and subsidiary as of June 30, 1999 and 1998, and the results of their operations
and their cash flows for each of the years in the  three-year  period ended June
30, 1999, in conformity with generally accepted accounting principles.


/s/S.R. Snodgrass, A.C.
-----------------------
S.R. Snodgrass, A.C.


Wexford, PA
July 30, 1999

                                       21
<PAGE>
<TABLE>
<CAPTION>
                                  WVS FINANCIAL CORP.
                              CONSOLIDATED BALANCE SHEETS
                                    (In thousands)

                                                                         June 30,
                                                                    1999         1998
                                                                ----------     ----------
<S>                                                             <C>            <C>
ASSETS
Cash and due from banks                                         $     745      $     699
Interest-earning demand deposits                                    1,148          1,807
Investment securities available for sale (amortized
 cost of $1,380 and $17,481) (Note 4)                               1,402         17,519
Investment securities held to maturity (market value
 of $87,850 and $63,996) (Note 4)                                  90,764         63,749
Mortgage-backed securities available for sale
 (amortized cost of $9,342 and $18,842) (Note 5)                    9,273         19,041
Mortgage-backed securities held to maturity
 (market value of $62,167 and $27,777) (Note 5)                    63,107         27,273
Net loans receivable (allowance for loan losses of $1,842
 and $1,860) (Note 6)                                             170,327        157,737
Accrued interest receivable                                         3,105          2,414
Federal Home Loan Bank stock, at cost                               6,195          4,675
Premises and equipment                                              1,154          1,179
Deferred taxes and other assets                                     1,188            961
                                                                ---------      ---------

TOTAL ASSETS                                                    $ 348,408      $ 297,054
                                                                 =========      =========
LIABILITIES
Deposits (Note 11)                                              $ 174,244      $ 170,982
Federal Home Loan Bank advances (Note 12)                         116,900         88,857
Other borrowings (Note 13)                                         25,820            889
Accrued interest payable                                            1,929          1,874
Other liabilities                                                   1,577          1,474
                                                                ---------      ---------
TOTAL LIABILITIES                                                 320,470        264,076
                                                                 ---------      ---------
STOCKHOLDERS' EQUITY (Notes 15 and 16)
Preferred stock, no par value; 5,000,000 shares authorized;
 none outstanding                                                       -              -
Common stock, par value $.01; 10,000,000 shares authorized;
 3,668,060 and 3,617,120 shares issued                                 37             36
Additional paid-in capital                                         19,062         18,386
Treasury stock (498,303 shares at cost)                            (7,596)             -
Retained earnings - substantially restricted                       17,024         15,143
Accumulated other comprehensive income (loss)                         (31)           157
Unallocated shares - Employee Stock Ownership Plan                   (232)          (312)
Unallocated shares - Recognition and Retention Plans                 (326)          (432)
                                                                ---------      ---------
TOTAL STOCKHOLDERS' EQUITY                                         27,938         32,978
                                                                ---------      ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $ 348,408      $ 297,054
                                                                =========      =========
</TABLE>
See accompanying notes to the consolidated financial statements.

                                       22
<PAGE>
<TABLE>
<CAPTION>
                               WVS FINANCIAL CORP.
                        CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)

                                                   Year Ended June 30,
                                          1999            1998           1997
                                       ----------     ----------     ----------
<S>                                    <C>            <C>            <C>
INTEREST AND DIVIDEND INCOME
Loans                                  $   12,850     $   13,191     $   12,440
Investment securities                       5,414          5,908          5,696
Mortgage-backed securities                  4,280          2,715          2,724
Interest-earning demand deposits               77             73             80
Federal Home Loan Bank stock                  378            259            185
                                       ----------     ----------     ----------
Total interest and dividend income         22,999         22,146         21,125
                                       ----------     ----------     ----------

INTEREST EXPENSE
Deposits (Note 11)                          6,537          6,943          7,086
Borrowings                                  6,202          4,838          3,798
                                       ----------     ----------     ----------
Total interest expense                     12,739         11,781         10,884
                                       ----------     ----------     ----------

NET INTEREST INCOME                        10,260         10,365         10,241
Provision for loan losses (Note 7)              -           (120)            60
                                       ----------     ----------     ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES                            10,260         10,485         10,181
                                       ----------     ----------     ----------

NONINTEREST INCOME
Service charges on deposits                   264            234            203
Investment securities gains, net               36              -             30
Other                                         190            304            141
                                       ----------     ----------     ----------
Total noninterest income                      490            538            374
                                       ----------     ----------     ----------

NONINTEREST EXPENSE
Salaries and employee benefits              2,803          3,855          2,962
Occupancy and equipment                       362            399            416
Deposit insurance premium (Note 21)           101            107          1,294
Data processing                               175            169            171
Correspondent bank charges                    127            118            113
Other                                         717            774            710
                                       ----------     ----------     ----------
Total noninterest expense                   4,285          5,422          5,666
                                       ----------     ----------     ----------

Income before income taxes                  6,465          5,601          4,889

Income taxes (Note 18)                      2,434          2,109          1,930
                                       ----------     ----------     ----------

NET INCOME                             $    4,031       $  3,492       $  2,959
                                       ==========       ========       ========
<PAGE>
<CAPTION>
<S>                                    <C>            <C>            <C>
EARNINGS PER SHARE:
Basic                                  $     1.18       $   1.01       $   0.88
Diluted                                      1.17           0.98           0.85

AVERAGE SHARES OUTSTANDING:
Basic                                   3,405,662      3,470,479      3,369,796
Diluted                                 3,435,738      3,574,043      3,490,226

</TABLE>


See accompanying notes to the consolidated financial statements.


                                       23
<PAGE>
<TABLE>
<CAPTION>
                                                         WVS FINANCIAL CORP.
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                                (In thousands, except per share data)
                                                                                                                        Retained
                                                               Additional               Unallocated      Unallocated    Earnings-
                                                Common           Paid-in     Treasury   Shares Held      Shares Held   Substantially
                                                 Stock           Capital       Stock      by ESOP          by RRP       Restricted
                                               --------       -----------     --------    -------        --------        ---------
<S>                                            <C>            <C>             <C>         <C>             <C>            <C>
Balance, June 30, 1996                         $     17       $    16,947     $   -       $  (584)        $  (835)       $  18,861

Comprehensive income:
    Net income                                                                                                               2,959
    Unrealized gain on available
          for sale securities
    Reclassification adjustment for
          realized gains included in
          net income, net of tax                                                                                         ---------
    Total comprehensive income                                                                                               2,959

Release of earned ESOP shares                                         184                     131
Accrued compensation expense for RRPs                                                                         204
Exercise of stock options                                             105
Cash dividends declared ($1.50 per share)                                                                                   (4,920)
                                               --------       -----------     --------    -------        --------        ---------
Balance, June 30, 1997                               17            17,236        -           (453)           (631)          16,900

Comprehensive income:
    Net income                                                                                                               3,492
    Unrealized gain on available
          for sale securities
                                                                                                                         ---------
    Total comprehensive income                                                                                               3,492

Release of earned ESOP shares                                         360                     141
Accrued compensation expense for RRPs                                                                         199
Exercise of stock options                             1               635
Tax benefit from stock grants issued
    under RRPs                                                        173
Two-for-one stock split                              18               (18)
Cash dividends declared ($1.50 per share)                                                                                   (5,249)
                                               --------       -----------     --------    -------        --------        ---------

Balance, June 30, 1998                               36            18,386        -           (312)           (432)          15,143
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                            <C>            <C>             <C>         <C>             <C>            <C>
Comprehensive income:
    Net income                                                                                                               4,031
    Unrealized loss on available
          for sale securities
    Reclassification adjustment for
          realized gains included in
          net income, net of tax                                                                                         ---------
    Total comprehensive income                                                                                               4,031

Release of earned ESOP shares                                         165                      80
Accrued compensation expense for RRPs                                                                         106
Exercise of stock options                             1               253
Tax benefit from exercise of stock options                            257
Tax benefit from stock grants issued
    under RRPs                                                          1
Purchase of treasury stock                                                      (7,596)
Cash dividends declared ($0.63 per share)                                                                                   (2,150)
                                               --------       -----------     --------    -------        --------        ---------

Balance, June 30, 1999                         $     37       $    19,062     $ (7,596)   $  (232)       $   (326)       $  17,024
                                               ========       ===========     ========    =======        ========        =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                             Accumulated
                                                Other
                                            Comprehensive
                                             Income (Loss)         Total
                                             -------------         -----
<S>                                            <C>            <C>
Balance, June 30, 1996                         $   (368)      $    34,038

Comprehensive income:
    Net income                                                      2,959
    Unrealized gain on available
          for sale securities                       168               168
    Reclassification adjustment for
          realized gains included in
          net income, net of tax                     20                20
                                               --------       -----------
    Total comprehensive income                      188             3,147
Release of earned ESOP shares                                         315
Accrued compensation expense for RRPs                                 204
Exercise of stock options                                             105
Cash dividends declared ($1.50 per share)                          (4,920)
                                               --------       -----------
Balance, June 30, 1997                             (180)           32,889

Comprehensive income:
    Net income                                                      3,492
    Unrealized gain on available
          for sale securities                       337               337
                                               --------       -----------
    Total comprehensive income                      337             3,829
Release of earned ESOP shares                                         501
Accrued compensation expense for RRPs                                 199
Exercise of stock options                                             636
Tax benefit from stock grants issued
    under RRPs                                                        173
Two-for-one stock split                                                 -
Cash dividends declared ($1.50 per share)                          (5,249)
                                               --------       -----------

Balance, June 30, 1998                              157            32,978
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                            <C>            <C>
Comprehensive income:
    Net income                                                      4,031
    Unrealized loss on available
          for sale securities                      (212)             (212)
    Reclassification adjustment for
          realized gains included in
          net income, net of tax                     24                24
                                               --------       -----------
    Total comprehensive income                     (188)            3,843
Release of earned ESOP shares                                         245
Accrued compensation expense for RRPs                                 106
Exercise of stock options                                             254
Tax benefit from exercise of stock options                            257
Tax benefit from stock grants issued
    under RRPs                                                          1
Purchase of treasury stock                                         (7,596)
Cash dividends declared ($0.63 per share)                          (2,150)
                                               --------       -----------

Balance June 30, 1999                          $    (31)      $    27,938
                                               ========       ===========
</TABLE>
See accompanying notes to the consolidated financial statements.


                                       24
<PAGE>
<TABLE>
<CAPTION>

                                       WVS FINANCIAL CORP.
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (In thousands)

                                                                   Year Ended June 30,
                                                           1999            1998           1997
                                                         ---------      ---------      --------
<S>                                                      <C>            <C>            <C>
OPERATING ACTIVITIES
Net income                                               $   4,031      $   3,492      $  2,959
Adjustments to reconcile net income to net cash
  provided by operating activities:
Provision for loan losses                                        -           (120)           60
Depreciation and amortization, net                             116            126           134
Amortization of discounts, premiums, and
  deferred loan fees                                            96            (32)          111
Amortization of ESOP and RRP deferred
  compensation                                                 350            899           519
Investment securities gains, net                               (36)             -           (30)
Deferred income taxes                                           87           (202)          (52)
Decrease (increase) in accrued interest receivable            (691)           396          (436)
Increase in accrued interest payable                            56            106           343
Other, net                                                     363            445            71
                                                         ---------      ---------      --------
Net cash provided by operating activities                    4,372          5,110         3,679
                                                         ---------      ---------      --------

INVESTING ACTIVITIES
Available for sale:
Purchase of investment and mortgage-backed
  securities                                               (26,908)       (36,992)       (1,508)
Proceeds from repayments of investment and
  mortgage-backed securities                                52,022         20,731         2,711
Proceeds from sale of investment and
  mortgage-backed securities                                   905          2,192         1,678
Held to maturity:
Purchase of investment and mortgage-backed
  securities                                              (168,868)       (99,744)      (75,006)
Proceeds from repayments of investment and
  mortgage-backed securities                               105,881        112,017        48,856
Net increase in net loans receivable                       (13,139)        (2,602)       (9,476)
Proceeds from sale of real estate owned                          -              -            73
Proceeds from sale of loans                                      -          2,914             -
Increase in Federal Home Loan Bank stock                    (1,520)          (748)       (2,027)
Acquisition of premises and equipment                          (91)            (8)         (105)
Other, net                                                     (11)             -             -
                                                         ---------      ---------      --------
Net cash used for investing activities                     (51,729)        (2,240)      (34,804)
                                                         ---------      ---------      --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                      <C>            <C>            <C>
FINANCING ACTIVITIES
Net increase (decrease) in deposits                          3,261         (3,427)         (205)
Net increase in Federal Home Loan Bank advances             28,043         11,000        39,857
Net increase (decrease) in other borrowings                 24,931         (5,895)       (3,868)
Net proceeds from issuance of common stock                     255            636           105
Cash dividends paid                                         (2,150)        (5,249)       (4,920)
Purchase of treasury stock                                  (7,596)             -             -
                                                         ---------      ---------      --------
Net cash provided by (used for) financing activities        46,744         (2,935)       30,969
                                                         ---------      ---------      --------
Decrease in cash and cash equivalents                         (613)           (65)         (156)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR                                                      2,506          2,571         2,727
                                                         ---------      ---------      --------
CASH AND CASH EQUIVALENTS AT END OF YEAR                 $   1,893      $   2,506      $  2,571
                                                         =========      =========      ========

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Interest                                                 $  12,683      $  11,675      $ 10,541
Taxes                                                        2,059          2,286         2,118
</TABLE>

See accompanying notes to the consolidated financial statements.


                                       25
<PAGE>
                               WVS FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      (In thousands, except per share data)


1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization
------------

WVS Financial Corp. ("WVS" or the "Company") is a Pennsylvania-chartered unitary
bank  holding  company  which owns 100 percent of the common  stock of West View
Savings Bank ("West View" or the "Savings Bank").  The operating  results of the
Company depend primarily upon the operating  results of the Savings Bank and, to
a  lesser  extent,  income  from  interest-earning  assets  such  as  investment
securities.

West  View  is  a   Pennsylvania-chartered,   SAIF-insured  stock  savings  bank
conducting  business from six offices in the North Hills suburbs of  Pittsburgh.
The Savings Bank's  principal  sources of revenue  emanate from its portfolio of
residential  real estate and  commercial  mortgage  loans as well as income from
investment and mortgage-backed securities.

The Company is  supervised  by the Board of  Governors  of the  Federal  Reserve
System,  while the Savings Bank is subject to regulation and  supervision by the
Federal Deposit Insurance  Corporation ("FDIC") and the Pennsylvania  Department
of Banking.

Basis of Presentation
---------------------

The  consolidated  financial  statements  include  the  accounts  of WVS and its
wholly-owned  subsidiary,  West View. All  intercompany  transactions  have been
eliminated in  consolidation.  The accounting and reporting  policies of WVS and
West View conform with generally accepted accounting  principles.  The Company's
fiscal  year-end for financial  reporting is June 30. For  regulatory and income
tax reporting purposes, WVS reports on a December 31 calendar year basis.

In preparing the consolidated  financial  statements,  management is required to
make estimates and  assumptions  that effect the reported  amounts of assets and
liabilities  as of the balance  sheet date and  revenues  and  expenses for that
period. Actual results could differ significantly from those estimates.

Investment and Mortgage-backed Securities
-----------------------------------------

Investment  securities are classified at the time of purchase as securities held
to maturity or securities available for sale based on management's ability. Debt
and  mortgage-backed  securities acquired with the ability and intent to hold to
maturity are stated at cost adjusted for  amortization  of premium and accretion
of discount,  which are computed  using the interest  method and  recognized  as
adjustments  of  interest  income.   Amortization   rates  for   mortgage-backed
securities are periodically adjusted to reflect changes in the prepayment speeds
of the underlying  mortgages.  Certain other debt, equity,  and  mortgage-backed

<PAGE>

securities have been classified as available for sale to serve  principally as a
source of liquidity.  Unrealized holding gains and losses for available for sale
securities are reported as a separate component of stockholders'  equity, net of
tax, until realized. Realized securities gains and losses are computed using the
specific  identification  method.  Interest  and  dividends  on  investment  and
mortgage-backed securities are recognized as income when earned.

Common stock of the Federal Home Loan Bank (the "FHLB") represents  ownership in
an institution  which is  wholly-owned  by other  financial  institutions.  This
equity  security  is  accounted  for at  cost  and  reported  separately  on the
accompanying consolidated balance sheet.



                                       26
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Net Loans Receivable
--------------------

Net  loans  receivable  are  reported  at  their  principal  amount,  net of the
allowance  for loan  losses  and  deferred  loan  fees.  Interest  on  mortgage,
consumer,  and  commercial  loans  is  recognized  on the  accrual  method.  The
Company's  general policy is to stop accruing interest on loans when, based upon
relevant  factors,   the  collection  of  principal  or  interest  is  doubtful,
regardless of the contractual  status.  Interest received on nonaccrual loans is
recorded  as income or  applied  against  principal  according  to  management's
judgment as to the collectibility of such principal.

Loan  origination  and  commitment   fees,  and  all  incremental   direct  loan
origination  costs,  are deferred and recognized over the contractual  remaining
lives of the related loans on a level yield basis.

Allowance for Loan Losses
-------------------------

The allowance for loan losses  represents the amount which management  estimates
is adequate  to provide for  potential  loan losses in its loan  portfolio.  The
allowance  method is used in providing  for loan losses.  Accordingly,  all loan
losses are charged to the  allowance,  and all  recoveries  are  credited to the
allowance.  The allowance for loan losses is established through a provision for
loan  losses  which  is  charged  to  operations.  The  provision  is  based  on
management's  periodic  evaluation  of the  adequacy of the  allowance  for loan
losses  which  encompasses  the  overall  risk  characteristics  of the  various
portfolio  segments,  past  experience  with  losses,  the  impact  of  economic
conditions on  borrowers,  and other  relevant  factors.  The estimates  used in
determining the adequacy of the allowance for loan losses  including the amounts
and timing of future  cash flows  expected on  impaired  loans are  particularly
susceptible to significant change in the near term.

A loan is  considered  impaired  when it is probable the borrower will not repay
the loan  according to the  original  contractual  terms of the loan  agreement.
Management  has  determined  that first  mortgage  loans on  one-to-four  family
properties  and all consumer  loans  represent  large groups of  smaller-balance
homogeneous loans that are to be collectively  evaluated.  All other loans, such
as commercial  business loans and loans secured by commercial  real estate,  are
individually  evaluated.  Management  considers an insignificant delay, which is
defined  as  less  than  90 days by the  Company,  will  not  cause a loan to be
classified  as  impaired.  A loan is not  impaired  during a period  of delay in
payment if the Company  expects to collect all  amounts due  including  interest
accrued at the  contractual  interest  rate for the  period of delay.  All loans
identified as impaired are evaluated  independently  by management.  The Company
estimates credit losses on impaired loans based on the present value of expected
cash flows or the fair value of the underlying  collateral if the loan repayment
is  expected to come from the sale or  operation  of such  collateral.  Impaired
loans,  or  portions  thereof,  are  charged  off when it is  determined  that a
realized  loss has  occurred.  Until such time,  an allowance for loan losses is
maintained  for estimated  losses.  Cash receipts on impaired  loans are applied
first to accrued  interest  receivable,  unless  otherwise  required by the loan
terms, except when an impaired loan is also a nonaccrual loan, in which case the
portion of the receipts related to interest is recognized as income.
<PAGE>
Real Estate Owned
-----------------

Real estate owned acquired  through  foreclosure is carried at the lower of cost
or fair value minus estimated  costs to sell.  Costs relating to development and
improvement of the property are capitalized,  whereas costs of holding such real
estate are expensed as incurred.  Valuation  allowances for estimated losses are
provided when the carrying  value of the real estate  acquired  exceeds the fair
value.


                                       27
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Premises and Equipment
----------------------

Premises  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Depreciation  is  principally  computed  on the  straight-line  method  over the
estimated  useful  lives  of the  related  assets.  Leasehold  improvements  are
amortized over their  estimated  useful lives or their  respective  lease terms,
whichever  is  shorter.  Expenditures  for  maintenance  and repairs are charged
against  income as  incurred.  Costs of major  additions  and  improvements  are
capitalized.

Income Taxes
------------

Deferred tax assets and liabilities are computed based on the difference between
the financial statement and the income tax basis of assets and liabilities using
the enacted  marginal tax rates.  Deferred income taxes or benefits are based on
the changes in the deferred tax asset or liability from period to period.

The Company files a consolidated federal income tax return.  Deferred tax assets
and liabilities are reflected at currently  enacted income tax rates  applicable
to the period in which such items are  expected to be  realized  or settled.  As
changes  in tax rates are  enacted,  deferred  tax assets  and  liabilities  are
adjusted through the provision for income taxes.

Earnings Per Share
------------------

The Company provides dual  presentation of basic and diluted earnings per share.
Basic  earnings  per share is  calculated  by dividing  net income  available to
common stockholders by the weighted-average  number of common shares outstanding
during the period.  Diluted  earnings  per share is  calculated  by dividing net
income  available  to  common  stockholders,  adjusted  for the  effects  of any
dilutive   securities,   by  the   weighted-average   number  of  common  shares
outstanding, adjusted for the effects of any dilutive securities.

Comprehensive Income
--------------------

Effective July 1, 1998, the Company  adopted  Statement of Financial  Accounting
Standards No. 130, "Reporting  Comprehensive  Income." In adopting Statement No.
130, the Company is required to present  comprehensive income and its components
in a full set of general purpose financial statements for all periods presented.
The Company has  elected to report the effects of  Statement  No. 130 as part of
the Consolidated Statements of Stockholders' Equity.
<PAGE>
Cash Flow Information
---------------------

Cash and cash equivalents  include cash and due from banks and  interest-earning
demand deposits.

Reclassification of Comparative Figures
---------------------------------------

Certain comparative amounts for prior years have been reclassified to conform to
current year presentations. Such reclassifications did not effect net income.


                                       28
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements
--------------------------------

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and  Hedging  Activities."  The  statement  provides  accounting  and  reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other  contracts,  by requiring  the  recognition  of those items as
assets or liabilities in the statement of financial  position,  recorded at fair
value.  Statement  No. 133  precludes  a held to  maturity  security  from being
designated as a hedged item; however, at the date of initial application of this
statement, an entity is permitted to transfer any held to maturity security into
the available for sale or trading  categories.  The  unrealized  holding gain or
loss on such  transferred  securities  shall  be  reported  consistent  with the
requirements of Statement No. 115,  "Accounting for Certain  Investments in Debt
and  Equity  Securities."  Such  transfers  do not raise an issue  regarding  an
entity's intent to hold other debt securities to maturity in the future. In June
1999, the Financial  Accounting  Standards  Board issued  Statement of Financial
Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging
Activities  - Deferral  of the  Effective  Date of FASB  Statement  No. 133 - an
amendment of FASB Statement No. 133." This Statement  delayed the effective date
of  Statement  No. 133 for one year,  to fiscal years  beginning  after June 15,
2000. Earlier adoption is permitted for any fiscal quarter that begins after the
issue date of Statement No. 133.

The  Financial  Accounting  Standards  Board also issued  Statement of Financial
Accounting  Standards  No.  134,  "Accounting  for  Mortgage-backed   Securities
Retained After the  Securitization of Mortgage Loans Held for Sale by a Mortgage
Banking  Enterprise." This Statement  requires that after the  securitization of
mortgage loans, an entity classify the resulting  mortgage-backed  securities or
other  retained  interest  based on its ability and intent to sell or hold these
securities in accordance  with Statement No. 115. This Statement  applies to the
first fiscal quarter beginning after December 31, 1998; however,  early adoption
is permitted as of the issue date of the Statement.

The  Company  does not believe  the effect of the  adoption of these  accounting
statements will be material.

                                       29
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

2.     EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share.
<TABLE>
<CAPTION>
                                               1999            1998             1997
                                            ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
Weighted-average common shares
  outstanding                                3,662,402       3,548,088       3,477,126

Average treasury stock shares                 (201,716)              -               -

Average unearned ESOP shares                   (55,024)        (77,609)       (107,330)
                                            ----------      ----------      ----------

Weighted-average common shares and
  common stock equivalents used to
  calculate basic earnings per share         3,405,662       3,470,479       3,369,796

Additional common stock equivalents
  (stock options) used to calculate
  diluted earnings per share                    30,076         103,564         120,430
                                            ----------      ----------      ----------

Weighted-average common shares and
  common stock equivalents used
  to calculate diluted earnings per share    3,435,738       3,574,043       3,490,226
                                            ==========      ==========      ==========
</TABLE>

There  are no  convertible  securities  which  would  effect  the  numerator  in
calculating  basic and  diluted  earnings  per share;  therefore,  net income as
presented on the consolidated statements of income is used.

3.         COMMON STOCK SPLIT

On April 28, 1998,  the Board of Directors  approved a two-for-one  stock split.
All  references  to the number of common  shares and per share  amounts for 1997
have been restated to reflect the stock split.
<PAGE>

4.         INVESTMENT SECURITIES

The amortized cost and estimated market values of investments are as follows:
<TABLE>
<CAPTION>
                                                     1999
                              --------------------------------------------------
                                              Gross         Gross      Estimated
                              Amortized     Unrealized   Unrealized      Market
                                 Cost         Gains         Losses       Value
                              ---------     -----------  ----------    ---------
<S>                             <C>             <C>         <C>          <C>
AVAILABLE FOR SALE
Equity securities               $1,380          $42         $(20)        $1,402
                                ======          ===         ====         ======
</TABLE>
                                       30
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)


4.         INVESTMENT SECURITIES (Continued)
<TABLE>
<CAPTION>
                                                                1999
                                      --------------------------------------------------------
                                                         Gross          Gross        Estimated
                                      Amortized      Unrealized      Unrealized        Market
                                        Cost             Gains          Losses         Value
                                      ---------      -----------     ----------      ---------
<S>                                     <C>              <C>          <C>            <C>
HELD TO MATURITY
U.S. Government agency securities       $   88,714     $    6         $  (2,871)     $  85,849
Obligations of states and political
subdivisions                                 2,050         --               (49)         2,001
                                        ----------     ------         ---------      ---------

Total                                   $   90,764     $    6         $  (2,920)     $  87,850
                                        ==========     ======         =========      =========


<CAPTION>

                                                                1998
                                      --------------------------------------------------------
                                                         Gross          Gross        Estimated
                                      Amortized      Unrealized      Unrealized        Market
                                        Cost             Gains          Losses         Value
                                      ---------      -----------     ----------      ---------
<S>                                     <C>             <C>            <C>           <C>
AVAILABLE FOR SALE
Corporate securities                    $  15,419      $    --         $     (3)     $  15,416
Equity securities                           2,062           86              (45)         2,103
                                        ---------      -------         ---------     ---------

Total                                   $  17,481      $    86         $    (48)     $  17,519
                                        =========      =======         =========     =========

<CAPTION>
                                                                1998
                                      --------------------------------------------------------
                                                         Gross          Gross        Estimated
                                      Amortized      Unrealized      Unrealized        Market
                                        Cost             Gains          Losses         Value
                                      ---------      -----------     ----------      ---------
<S>                                     <C>             <C>            <C>           <C>
HELD TO MATURITY
U.S. Government agency securities       $  63,749      $   262         $    (15)     $  63,996
                                        ---------      -------         --------      ---------

       Total                            $  63,749      $   262         $    (15)     $  63,996
                                        =========      =======         ========      =========
</TABLE>
<PAGE>
The amortized  cost and estimated  market values of debt  securities at June 30,
1999, by contractual  maturity,  are shown below. Expected maturities may differ
from the  contractual  maturities  because  issuers  may have the  right to call
securities prior to their final maturities.
<TABLE>
<CAPTION>
                             Due in     Due after       Due after
                            one year    one through    five through     Due after
                             or less    five years      ten years       ten years     Total
                             -------    ----------      ---------       ---------     -----
<S>                          <C>          <C>            <C>             <C>         <C>
HELD TO MATURITY
Amortized cost               $ 1,215       $   -          $ 8,685        $80,864     $90,764
Estimated market value         1,215           -            8,642         77,993      87,850
</TABLE>

                                       31
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)


4.         INVESTMENT SECURITIES (Continued)

Proceeds from the sale of investment securities available for sale and the gross
realized gains and losses for the year ended June 30, are as follows:
<TABLE>
<CAPTION>
                                          1999             1998             1997
                                          ----           ------           ------
<S>                                       <C>            <C>              <C>
Proceeds                                  $905           $2,192           $1,678
Gross gains                                156                -               30
Gross losses                               120                -                -
</TABLE>


Investment  securities  with carrying values of $28,224 and $2,000 and estimated
market  values of $29,104  and $2,003 at June 30,  1999 and 1998,  respectively,
were pledged to secure public  deposits,  repurchase  agreements,  and for other
purposes as required by law.

5.         MORTGAGE-BACKED SECURITIES

The amortized cost and estimated market values of mortgage-backed securities are
as follows:
<TABLE>
<CAPTION>

                                                                              1999
                                                   --------------------------------------------------------
                                                                     Gross          Gross         Estimated
                                                   Amortized      Unrealized      Unrealized        Market
                                                      Cost           Gains          Losses          Value
                                                   ---------      -----------     ----------      ---------
<S>                                                  <C>             <C>            <C>           <C>
AVAILABLE FOR SALE
Federal National Mortgage
Association certificates                             $6,632          $ 1            $ (114)        $ 6,519
Government National Mortgage
Association certificates                                766           14                 -             780
Federal Home Loan Mortgage
Corporation certificates                                214            4                 -             218
Collateralized mortgage obligations issued
     by agencies of the U.S. Government                 878           24                 -             902
Corporate collateralized mortgage obligations           852            2                 -             854
                                                     ------         ----            ------         -------

Total                                                $9,342         $ 45            $ (114)        $ 9,273
                                                     ======         ====            ======         =======
</TABLE>


                                       32
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)


5.         MORTGAGE-BACKED SECURITIES(Continued)
<TABLE>
<CAPTION>

                                                                              1999
                                                   --------------------------------------------------------
                                                                     Gross          Gross         Estimated
                                                   Amortized      Unrealized      Unrealized        Market
                                                      Cost           Gains          Losses          Value
                                                   ---------      -----------     ----------      ---------
<S>                                                  <C>            <C>            <C>           <C>
HELD TO MATURITY
Federal National Mortgage
Association certificates                             $   103        $  4            $     -      $     107
Government National Mortgage
Association certificates                               1,107          10                 (8)         1,109
Federal Home Loan Mortgage
Corporation certificates                                 146          10                  -            156
Collateralized mortgage obligations issued
     by agencies of the U.S. Government               18,847         375               (130)        19,092
Corporate collateralized mortgage obligations         42,904          35             (1,236)        41,703
                                                    --------        ----            -------      ---------

Total                                               $ 63,107        $434            $(1,374)     $  62,167
                                                    ========        ====            =======      =========
<CAPTION>

                                                                              1998
                                                   --------------------------------------------------------
                                                                     Gross          Gross         Estimated
                                                   Amortized      Unrealized      Unrealized        Market
                                                      Cost           Gains          Losses          Value
                                                   ---------      -----------     ----------      ---------
<S>                                                  <C>            <C>            <C>           <C>
AVAILABLE FOR SALE
Federal National Mortgage
Association certificates                             $ 9,178        $ 83            $     (6)    $  9,255
Government National Mortgage
Association certificates                               1,022          27                   -        1,049
Federal Home Loan Mortgage
Corporation certificates                                 308           6                   -          314
Collateralized mortgage obligations issued
     by agencies of the U.S. Government                8,334          89                   -        8,423
                                                    --------        ----            --------     --------
Total                                               $ 18,842        $205            $     (6)    $ 19,041
                                                    =========       ====            ========     =========
</TABLE>


                                       33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)


5.         MORTGAGE-BACKED SECURITIES(Continued)

<TABLE>
<CAPTION>
                                                                              1998
                                                   --------------------------------------------------------
                                                                     Gross          Gross         Estimated
                                                   Amortized      Unrealized      Unrealized        Market
                                                      Cost           Gains          Losses          Value
                                                   ---------      -----------     ----------      ---------
<S>                                                  <C>            <C>            <C>           <C>
HELD TO MATURITY
Federal National Mortgage
Association certificates                           $   151          $   8          $      -      $    159
Government National Mortgage
Association certificates                             1,156             15                 -         1,171
Federal Home Loan Mortgage
Corporation certificates                               246             19                 -           265
Collateralized mortgage obligations issued
     by agencies of the U.S. Government             25,001            437                (7)       25,431
Collateralized mortgage obligations backed
     by securities issued by U.S. Government
     agencies                                          719             32                 -           751
                                                  --------          -----          --------      --------
Total                                             $ 27,273          $ 511          $     (7)     $ 27,777
                                                  ========          =====          ========      ========
</TABLE>
The amortized cost and estimated market values of mortgage-backed  securities at
June 30, 1999, by contractual maturity, are shown below. Expected maturities may
differ from the contractual  maturities  because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>

                                Due in           Due after             Due after
                                one year        one through         five through           Due after
                                or less         five years           ten years             ten years              Total
                             -----------       ------------          ---------          ------------          ------------
<S>                          <C>               <C>                   <C>                <C>                   <C>
AVAILABLE FOR SALE
Amortized cost               $        55       $      1,670          $      66          $      7,551          $      9,342
Estimated market value                55              1,631                 71                 7,516                 9,273

HELD TO MATURITY
Amortized cost               $         -       $         32          $     140          $     62,935          $     63,107
Estimated market value                 -                 33                150                61,984                62,167

</TABLE>
Mortgage-backed  securities  with a carrying  value of $31,183 and an  estimated
market value of $32,216 at June 30, 1999, were pledged to secure borrowings with
the Federal Home Loan Bank.


                                       34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)


6.         NET LOANS RECEIVABLE

Major classifications of loans are summarized as follows:
<TABLE>
<CAPTION>
                                                            1999          1998
                                                          --------      --------
<S>                                                       <C>           <C>
First mortgage loans:
1 - 4 family dwellings                                    $103,035      $104,849
Construction                                                23,810        17,779
Land acquisition and development                             7,646         7,233
Multi-family dwellings                                       5,925         4,012
Commercial                                                  27,826        20,291
                                                          --------      --------
                                                           168,242       154,164
                                                          --------      --------
Consumer loans:
Home equity                                                  5,727         7,801
Home equity lines of credit                                 10,740         5,812
Education loans                                                 11           591
Other                                                        2,153         2,336
                                                          --------      --------
                                                            18,631        16,540
                                                          --------      --------

Commercial loans                                             1,720           290
                                                          --------      --------

Obligations of state and political subdivisions                720           730
                                                          --------      --------

Less:
Undisbursed construction and land development               16,327        11,312
Net deferred loan fees                                         817           815
Allowance for loan losses                                    1,842         1,860
                                                          --------      --------
                                                            18,986        13,987
                                                          --------      --------

Net loans receivable                                      $170,327      $157,737
                                                          ========      ========
</TABLE>


The Company's  primary  business  activity is with customers  located within its
local trade area of Northern Allegheny and Southern Butler counties. The Company
has  concentrated  its lending efforts by granting  residential and construction
mortgage  loans to customers  throughout  its immediate  trade area. The Company
also selectively  funds and participates in commercial and residential  mortgage
loans  outside  of its  immediate  trade  area,  provided  such  loans  meet the
Company's  credit policy  guidelines.  In general,  the Company's loan portfolio
performance  at June 30, 1999 and 1998,  is  dependent  upon the local  economic
conditions.
<PAGE>
As of June 30, 1999,  1998,  and 1997 there were no material  impaired loans for
disclosure purposes. Total nonaccrual loans and troubled debt restructurings and
the  related  interest  income  recognized  for the years  ended June 30, are as
follows:
<TABLE>
<CAPTION>


                                                  1999         1998        1997
                                                  ----         ----         ----
<S>                                               <C>          <C>          <C>
Principal outstanding                             $546         $603         $274
                                                  ----         ----         ----
Interest income that would
  have been recognized                            $ 42         $ 64         $ 35
Interest income recognized                          41           44           20
                                                  ----         ----         ----

Interest income foregone                          $  1         $ 20         $ 15
                                                  ====         ====         ====


</TABLE>
                                       35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)


6.         NET LOANS RECEIVABLE(Continued)

Certain  officers,  directors,  and their  associates were customers of, and had
transactions with, the Company in the ordinary course of business.  A summary of
loan activity for those directors, executive officers, and their associates with
aggregate  loan balances  outstanding of at least $60,000 during the years ended
June 30, are as follows:
<TABLE>
<CAPTION>

                                                     1999                1998
                                                   -------              -------
<S>                                                <C>                  <C>
Balance, July 1                                    $ 1,664              $ 1,458
Additions                                              662                  335
Amounts collected                                     (768)                (129)
Other                                                 (732)                   -
                                                   -------              -------

Balance, June 30                                   $   826              $ 1,664
                                                   =======              =======

</TABLE>

7.         ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses are as follows:
<TABLE>
<CAPTION>


                                               1999          1998          1997
                                              ------       -------        ------
<S>                                           <C>          <C>            <C>
Balance, July 1                               $1,860       $ 2,009        $1,964
Add:
Provision charged to operations                    -          (120)           60
Recoveries                                         2            10             3
Less loans charged off                            20            39            18
                                              ------       -------        ------

Balance, June 30                              $1,842       $ 1,860        $2,009
                                              ======       =======        ======

</TABLE>
<PAGE>

8.         ACCRUED INTEREST RECEIVABLE

Accrued interest receivable consists of the following:
<TABLE>
<CAPTION>



                                                             1999          1998
                                                            ------        ------
<S>                                                         <C>           <C>
Investment and mortgage-backed securities                   $2,082        $1,406
Loans receivable                                             1,023         1,008
                                                            ------        ------

Total                                                       $3,105        $2,414
                                                            ======        ======

</TABLE>

9.         FEDERAL HOME LOAN BANK STOCK

The Savings Bank is a member of the Federal Home Loan Bank System.  As a member,
West View  maintains an investment in the capital stock of the Federal Home Loan
Bank  ("FHLB")  of  Pittsburgh  in an amount  not less than one  percent  of its
outstanding  qualifying assets as defined by the FHLB or 1/20 of its outstanding
FHLB borrowings, whichever is greater, as calculated throughout the year.



                                       36
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

10.        PREMISES AND EQUIPMENT

Major classifications of premises and equipment are summarized as follows:
<TABLE>
<CAPTION>
                                                          1999            1998
                                                         ------          ------
<S>                                                       <C>             <C>
Land and improvements                                     $  226          $  226
Buildings and improvements                                 1,937           1,923
Furniture, fixtures, and equipment                           970             915
                                                          ------          ------
                                                           3,133           3,064
Less accumulated depreciation                              1,979           1,885
                                                          ------          ------

Total                                                     $1,154          $1,179
                                                          ======          ======
</TABLE>
Depreciation charged to operations was $116, $126, and $134, for the years ended
June 30, 1999, 1998, and 1997, respectively.

During 1998,  having  satisfied  the criteria  defined in Statement of Financial
Accounting  Standards No. 66,  "Accounting for Sales of Real Estate," a deferred
gain on the sale of branch office  property of $136 was  recognized and included
in other noninterest income on the consolidated statements of income.
<PAGE>
11.        DEPOSITS

Deposit accounts are summarized as follows:
<TABLE>
<CAPTION>
                                              1999                           1998
                                        --------------------          ---------------------
                                                  Percent of                     Percent of
                                        Amount    Portfolio           Amount     Portfolio
                                        ------    ---------           ------     ---------
<S>                                    <C>              <C>           <C>             <C>
Noninterest-earning checking           $  9,037         5.2%          $  7,528        4.4%
Interest-earning checking                16,668         9.6             15,347        9.0
Savings accounts                         38,923        22.3             37,966       22.2
Money market accounts                    12,610         7.2             13,259        7.8
Advance payments by borrowers
   for taxes and insurance                3,130         1.8              3,312        1.9
                                       --------       -----           --------      -----
                                         80,368        46.1             77,412       45.3
                                       --------       -----           --------      -----

Savings certificates:
5.00% or less                            38,906        22.3             12,819        7.5
5.01 - 6.00%                             47,611        27.3             66,527       38.9
6.01 - 7.00%                              4,991         2.9              7,812        4.6
7.01 or more                              2,368         1.4              6,412        3.7
                                       --------       -----           --------      -----
                                         93,876        53.9             93,570       54.7
                                       --------       -----           --------      -----

Total                                  $174,244       100.0%          $170,982      100.0%
                                       ========       =====           ========      =====

</TABLE>

                                       37
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

11.        DEPOSITS(Continued)


The  maturities  of savings  certificates  at June 30, 1999,  are  summarized as
follows:
<TABLE>
<CAPTION>
<S>                                                                      <C>
Within one year                                                          $60,771
Beyond one year but within two years                                      14,323
Beyond two years but within three years                                    7,674
Beyond three years                                                        11,108
                                                                         -------

Total                                                                    $93,876
                                                                         =======
</TABLE>

Savings  certificates with balances of $100 thousand or more amounted to $10,948
and $10,250 on June 30, 1999 and 1998.  The Company  does not have any  brokered
deposits.

Interest  expense  by  deposit  category  for the years  ended  June 30,  are as
follows:
<TABLE>
<CAPTION>

                                             1999           1998           1997
                                            ------         ------         ------
<S>                                         <C>            <C>            <C>
Checking accounts                           $  141         $  180         $  172
Savings accounts                               920            957            940
Money market accounts                          316            309            327
Savings certificates                         5,160          5,497          5,647
                                            ------         ------         ------

Total                                       $6,537         $6,943         $7,086
                                            ======         ======         ======
</TABLE>
<PAGE>
12.        FEDERAL HOME LOAN BANK ADVANCES

The following table presents information regarding FHLB term advances as of June
30:
<TABLE>
<CAPTION>

                                                                     Weighted-                            Weighted-
         Maturing During                                               average                              average
        Fiscal Year Ended                                             Interest                             Interest
             June 30:                                1999               Rate             1998                Rate
             --------                                ----               ----             ----                ----
<S>            <C>                                <C>                                 <C>                     <C>
               2000                               $       -                -  %       $    6,357              5.16%
               2001                                       -                -               8,000              5.89
               2002                                  56,500             5.72              51,500              6.00
               2003                                       -                -                   -                 -
       2004 and thereafter                           47,000             5.11              23,000              5.05
                                                  ---------                           ----------

              Total                               $ 103,500                           $   88,857
                                                  =========                           ==========
</TABLE>


                                       38
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

12.        FEDERAL HOME LOAN BANK ADVANCES(Continued)


WVS also utilized  revolving  and  short-term  FHLB  advances.  Short-term  FHLB
advances  generally  mature within 90 days, while revolving FHLB advances may be
repaid by the Company without penalty.  The following table presents information
regarding such advances as of June 30:
<TABLE>
<CAPTION>
                                                          1999           1998
                                                        --------       --------
<S>                                                     <C>            <C>
FHLB revolving and short-term advances:
Ending balance                                          $ 13,400       $      -
Average balance during the year                           13,303          3,523
Maximum month-end balance during the year                 28,550         13,355
Average interest rate during the year                       5.57%          5.72%
Weighted-average rate at year end                           5.58%             -
</TABLE>


At June 30, 1999, WVS had an unused borrowing capacity of approximately $79,949.

Although no specific  collateral  is required to be pledged,  Federal  Home Loan
Bank  advances are secured by a blanket  security  agreement  that  includes the
Company's  FHLB  stock,  investment  and  mortgage-backed   securities  held  in
safekeeping at the FHLB, and certain qualifying first mortgage loans.

13.        OTHER BORROWINGS

Other  borrowings  include  Treasury,  Tax, and Loan  ("TT&L")  demand notes and
securities sold under  agreements to repurchase with  securities  brokers.  TT&L
notes amounted to $749 and $889 at June 30, 1999 and 1998. Repurchase agreements
amounted to $25,071 as of June 30, 1999.  There were no  outstanding  repurchase
agreements at June 30, 1998. The  outstanding  repurchase  agreements  generally
mature within one to 92 days from the transaction date and qualifying collateral
has been delivered.  The Company pledged  investment  securities with a carrying
value of $25,812 at June 30, 1999, as collateral for the  repurchase  agreements
as explained in Note 4. The following table presents information regarding other
borrowings as of June 30:
<TABLE>
<CAPTION>


                                                           1999           1998
                                                         --------       --------
<S>                                                      <C>            <C>
Ending balance                                           $25,820        $     -
Average balance during the year                           12,473          5,616
Maximum month-end balance during the year                 25,820         11,195
Average interest rate during the year                       5.12%          5.69%
Weighted-average rate at year end                           5.16%             -

</TABLE>
<PAGE>
14.        COMMITMENTS AND CONTINGENT LIABILITIES

Loan commitments
----------------

In the normal course of business,  there are various outstanding commitments and
certain  contingent  liabilities  which are not  reflected  in the  accompanying
consolidated  balance  sheet.  Various  loan  commitments  totaling  $30,009 and
$23,789 at June 30, 1999 and 1998, respectively, represent financial instruments
with off-balance sheet risk.

Loan commitments  involve,  to varying degrees,  elements of credit and interest
rate risk in excess of the amount recognized in the consolidated  balance sheet.
The  same  credit  policies  are  used in  making  commitments  and  conditional
obligations as for on-balance sheet instruments.  Generally, collateral, usually
in the form of real estate,  is required to support  financial  instruments with
credit risk.


                                       39
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)


14.        COMMITMENTS AND CONTINGENT LIABILITIES(Continued)

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the loan agreement.  These
commitments are comprised  primarily of the undisbursed  portion of construction
and land development loans (Note 6),  residential,  commercial real estate,  and
consumer loan originations.

The exposure to loss under these  commitments  is limited by subjecting  them to
credit  approval and monitoring  procedures.  Substantially  all  commitments to
extend  credit  are  contingent  upon  customers   maintaining  specific  credit
standards at the time of the loan funding.  Management  assesses the credit risk
associated with certain commitments to extend credit in determining the level of
the allowance for loan losses.

Litigation

The Company is involved with various other legal actions arising in the ordinary
course of business.  Management  believes the outcome of these matters will have
no material effect on the consolidated operations or financial condition of WVS.

15.        REGULATORY CAPITAL

Federal  regulations  require the Company and Savings  Bank to maintain  minimum
amounts of capital.  Specifically,  each is required to maintain certain minimum
dollar  amounts and ratios of Total and Tier I Capital to  Risk-weighted  Assets
and of Tier I Capital to Average Total Assets.

In  addition  to  the  capital  requirements,   the  Federal  Deposit  Insurance
Corporation  Improvement  Act  ("FDICIA")  established  five capital  categories
ranging  from  well  capitalized  to  critically  undercapitalized.  Should  any
institution  fail  to  meet  the   requirements  to  be  considered   adequately
capitalized,  respectively,  it would become subject to a series of increasingly
restrictive regulatory actions.

As of June 30, 1999 and 1998,  the FDIC  categorized  the  Savings  Bank as well
capitalized under the regulatory  framework for prompt corrective  action. To be
classified as a well capitalized financial institution, Total Risk-based, Tier 1
Risk-based, and Tier 1 Leverage Capital Ratios must be at least ten percent, six
percent, and five percent, respectively.

The  Company and Savings  Bank's  actual  capital  ratios are  presented  in the
following tables, which shows that both met all regulatory capital requirements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

15.        REGULATORY CAPITAL(Continued)

<TABLE>
<CAPTION>
                                                            June 30, 1999
                                          ------------------------------------------------
                                          WVS Financial Corp.       West View Savings Bank
                                          -------------------       ----------------------
                                          Amount        Ratio        Amount         Ratio
                                          ------        -----        ------         -----
<S>                                       <C>            <C>       <C>              <C>
Total Capital
  (to Risk-weighted Assets)
-------------------------

Actual                                    $29,821        16.90%    $  28,594        16.28%
To Be Well Capitalized                     17,644        10.00        17,560        10.00
For Capital Adequacy Purposes              14,115         8.00        14,048         8.00

Tier I Capital
  (to Risk-weighted Assets)
-------------------------

Actual                                    $27,969        15.85%    $  26,747        15.23%
To Be Well Capitalized                     10,587         6.00        10,536         6.00
For Capital Adequacy Purposes               7,058         4.00         7,024         4.00

Tier I Capital
  (to Average Total Assets)
-------------------------

Actual                                    $27,969         8.29%    $  26,747         7.95%
To Be Well Capitalized                     16,876         5.00        16,814         5.00
For Capital Adequacy Purposes              13,501         4.00        13,451         4.00

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                            June 30, 1998
                                          ------------------------------------------------
                                          WVS Financial Corp.       West View Savings Bank
                                          -------------------       ----------------------
                                          Amount        Ratio        Amount         Ratio
                                          ------        -----        ------         -----
<S>                                       <C>            <C>       <C>              <C>
Total Capital
  (to Risk-weighted Assets)
---------------------------

Actual                                    $34,681        22.10%     $29,665         19.40%
To Be Well Capitalized                     15,700        10.00       15,298         10.00
For Capital Adequacy Purposes              12,560         8.00       12,238          8.00

Tier I Capital
  (to Risk-weighted Assets)
---------------------------

Actual                                    $32,821        20.90%    $27,805          18.20%
To Be Well Capitalized                      9,420         6.00       9,179           6.00
For Capital Adequacy Purposes               6,280         4.00       6,119           4.00

Tier I Capital
  (to Average Total Assets)
---------------------------
Actual                                    $32,821        11.00%    $27,805           9.40%
To Be Well Capitalized                     14,941         5.00      14,712           5.00
For Capital Adequacy Purposes              11,952         4.00      11,770           4.00

</TABLE>

                                       41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

16.        STOCK BENEFIT PLANS

Stock Option Plan
-----------------

The Company  maintains  a Stock  Option Plan for the  directors,  officers,  and
employees.  An aggregate of 347,258  shares of  authorized  but unissued  common
stock of WVS were  reserved  for future  issuance  under  this  plan.  The stock
options  typically  have an  expiration  term of ten  years,  subject to certain
extensions and early terminations.  The per share exercise price of an incentive
stock option shall at a minimum equal the fair market value of a share of common
stock on the date the  option  is  granted.  The per share  exercise  price of a
compensatory  stock option granted shall at least equal the greater of par value
or 85 percent of the fair  market  value of a share of common  stock on the date
the option is  granted.  Proceeds  from the  exercise  of the stock  options are
credited to common stock for the  aggregate par value and the excess is credited
to paid-in capital.

The following table presents information related to the outstanding options:
<TABLE>
<CAPTION>
                                  Officers' and                        Weighted-
                                     Employees'       Directors'        average
                                       Stock           Stock           Exercise
                                      Options         Options            Price
                                      -------         -------            -----
 <S>                                  <C>             <C>             <C>
Outstanding, June 30, 1997            147,400          78,400         $    5.15

Granted                                91,084           2,800             15.63
Exercised                             (71,960)        (50,600)             5.19
Forfeited                             (12,640)              -             15.63
                                      -------         -------

Outstanding, June 30, 1998            153,884          30,600         $    9.82

Granted                                     -           2,800             14.75
Exercised                             (50,940)              -              5.00
Forfeited                              (3,320)              -             15.63
                                      -------         -------

Outstanding, June 30, 1999             99,624          33,400         $   11.56
                                      =======         =======

Exercisable at year end                48,597          33,400
                                      =======         =======

Available for future grant             24,600           2,814
                                      =======         =======
</TABLE>
<PAGE>

At June  30,  1999,  for  officers  and  employees  there  were  99,624  options
outstanding,  of which 48,597 were  exercisable at a weighted  average  exercise
price of  $13.05,  and a  weighted-average  remaining  contractual  life of 7.27
years.

There were also 33,400 options  outstanding  for directors with exercise  prices
between $5.00 and $15.625,  with a weighted average exercise price of $7.10, and
a weighted-average remaining contractual life of 5.9 years. All of these options
are exercisable.


                                       42
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

16.        STOCK BENEFIT PLANS (Continued)

As  permitted  under  Statement  of  Financial   Accounting  Standards  No.  123
"Accounting for Stock-based  Compensation,"  the Company has elected to continue
following  Accounting  Principles  Board Opinion No. 25,  "Accounting  for Stock
Issued to Employees" ("APB 25"), and related Interpretations,  in accounting for
stock-based awards to employees. Under APB 25, because the exercise price of the
Company's employee stock options equals the market price of the underlying stock
on the date of the grant, no compensation expense is recognized in the Company's
financial statements.  Had compensation expense included stock option plan costs
determined  based on the fair value at the grant dates for options granted under
these plans consistent with Statement No. 123, pro forma net income and earnings
per share would not have been  materially  different  than that presented on the
consolidated statements of income.

Retention and Recognition Plans ("RRP")
---------------------------------------

The Company also maintains an RRP for substantially all officers,  employees and
directors of the Company.  The objective of the RRPs is to enable the Company to
retain  its  corporate  officers,  key  employees,  and  directors  who have the
experience  and ability  necessary to manage WVS and the Savings Bank.  Officers
and  key   employees  of  the  Company  who  were   selected  by  members  of  a
Board-appointed  committee  are  eligible  to receive  benefits  under the RRPs.
Non-employee directors of the Company are eligible to participate in the RRP for
directors.  WVS has appointed an  independent  fiduciary to serve as trustee for
the RRP Trusts.

An  aggregate  of  300,000  shares  of  common  stock  of WVS were  acquired  at
conversion  for future  issuance  under these plans,  of which 60,000 shares are
subject to the RRP for directors  and 240,000  shares are subject to the RRP for
officers and key employees.

As of June 30, 1999, 126,880 RRP shares were available for future issuance.  RRP
costs are accrued to operations,  and added back to stockholders' equity, over a
four to ten-year vesting period.

Employee Stock Ownership Plan ("ESOP")
--------------------------------------

WVS maintains an ESOP for the benefit of officers and Savings Bank employees who
have met certain eligibility  requirements related to age and length of service.
An ESOP Trust was created,  and acquired 161,000 shares of common stock in WVS's
initial public offering, using proceeds of a loan obtained from WVS, which bears
interest at one quarter point over the prime rate, adjusted quarterly. The loan,
which is secured by the shares of stock purchased,  calls for quarterly interest
and principal payments over a ten-year term.
<PAGE>

The Savings Bank makes quarterly  contributions  to the Trust to allow the Trust
to make the required loan payments to WVS.  Shares are released from  collateral
based upon the  proportion  of annual  principal  payments made on the loan each
year  and  allocated  to  eligible  employees.   As  shares  are  released  from
collateral, the Savings Bank reports compensation expense based upon the amounts
contributed  or  committed  to be  contributed  each year and the shares  become
outstanding  for earnings per share  computations.  Dividends  paid on allocated
ESOP shares are recorded as a reduction of retained earnings.  Dividends paid on
unallocated   shares  are  added  to   participant   accounts  and  reported  as
compensation. Compensation expense for the ESOP was $310, $680, and $487 for the
years ended June 30, 1999, 1998, and 1997, respectively.

                                       43
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

16.        STOCK BENEFIT PLANS (Continued)

The following table presents the components of the ESOP shares at June 30:
<TABLE>
<CAPTION>
                                              1999          1998          1997
                                          ---------      --------     ---------
<S>                                          <C>           <C>           <C>
Allocated shares                             98,574        70,398        45,208

Shares released for allocation               16,099        28,176        26,124

Shares distributed                          (10,391)            -          (934)

Unallocated shares                           46,325        62,424        90,600
                                          ---------      --------     ---------

Total ESOP shares                           150,607       160,998       160,998
                                          =========      ========     =========

Fair value of unreleased ESOP shares      $     701      $    999     $   1,246
                                          =========      ========     =========
</TABLE>

During fiscal 1997, the ESOP  purchased an additional  1,200 shares of WVS stock
which is included in the allocated  share balance as of June 30, 1997. The 1,200
shares were purchased using vested participant funds.

17.        DIRECTOR, OFFICER, AND EMPLOYEE BENEFITS

Profit Sharing Plan
-------------------

The Company  maintains a  non-contributory  profit sharing plan (the "Plan") for
its  officers  and  employees  who  have  met  the  age and  length  of  service
requirements.  The Plan is a defined  contribution  plan with the  contributions
based on a percentage of salaries of the plan participants.  In conjunction with
the Plan,  an  integrated  401(k)  employee  savings plan was also  implemented.
Employees may contribute up to the maximum  allowed by law. The Company may make
matching  contributions as approved at the discretion of the Board of Directors.
The  Company  has  made  no  matching   contributions  to  date.  The  Company's
contributions to the Plan,  which were charged to expense,  were $200, $200, and
$172 for the years ended June 30, 1999, 1998, and 1997, respectively.
<PAGE>
Directors' Deferred Compensation Plan
-------------------------------------

The Company  maintains a deferred  compensation  plan (the "Plan") for directors
who elect to defer all or a portion of their directors' fees.  Deferred fees are
paid to the  participants in  installments  commencing in the year following the
year the individual is no longer a member of the Board of Directors.

The Plan allows for the deferred amounts to be paid in shares of common stock at
the prevailing market price on the date of distribution.  For fiscal years ended
June 30, 1999, 1998, and 1997, 42,598,  41,598, and 40,798 shares  respectively,
were held by the Plan.


                                       44
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

18.        INCOME TAXES

The provision for incomes taxes consits of:
<TABLE>
<CAPTION>
                                         1999            1998             1997
                                        ------         -------          -------
<S>                                     <C>            <C>              <C>
Currently payable:
Federal                                 $2,035         $ 2,064          $ 1,747
State                                      312             247              235
                                        ------         -------          -------
                                         2,347           2,311            1,982
Deferred                                    87            (202)             (52)
                                        ------         -------          -------

Total                                   $2,434         $ 2,109          $ 1,930
                                        ======         =======          =======
</TABLE>
The following temporary  differences gave rise to the net deferred tax assets at
June 30:
<TABLE>
<CAPTION>
                                                                1999       1998
                                                                ----      ------
<S>                                                             <C>       <C>
Deferred tax assets:
Allowance for loan losses                                       $639      $  646
Deferred origination fees, net                                     -          22
Net unrealized loss on securities available for sale              16           -
Deferred compensation                                            317         387
Other                                                             17          22
                                                                ----      ------
Total gross deferred tax assets                                  989       1,077
                                                                ----      ------

Deferred tax liabilities:
Bad debt reserve for tax reporting purposes                      279         353
Deferred origination fees, net                                    63           -
Net unrealized gain on securities available for sale               -          81
Other                                                             70          76
                                                                ----      ------
Total gross deferred tax liabilities                             412         510
                                                                ----      ------

Net deferred tax assets                                         $577      $  567
                                                                ====      ======
</TABLE>
No valuation  allowance  was  established  at June 30, 1999 and 1998, in view of
WVS's ability to carryback to taxes paid in previous years,  future  anticipated
taxable income, which is evidenced by WVS's earnings potential, and deferred tax
liabilities at June 30.

                                       45
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

18.        INCOME TAXES(Continued)

The following is a reconciliation  between the actual provision for income taxes
and the  amount of income  taxes  which  would  have been  provided  at  federal
statutory rates for the years ended June 30:
<TABLE>
<CAPTION>
                                           1999                  1998                     1997
                                    -------------------   ------------------      --------------------
                                                 % of                  % of                      % of
                                                Pretax                Pretax                    Pretax
                                    Amount      Income    Amount      Income      Amount        Income
                                    ------      ------    ------      ------      ------        ------
<S>                                  <C>         <C>       <C>          <C>       <C>          <C>
Provision at statutory rate          $2,198      34.0%     $1,904       34.0%     $1,662       34.0%
State income tax, net of federal
  tax benefit                           206       3.2         163        2.9         155        3.2
Other, net                               30       0.5          42        0.8         113        2.2
                                     ------      -----     ------       -----     ------       -----
Actual tax expense and
  effective rate                     $2,434     37.7%      $2,109       37.7%     $1,930       39.4%
                                     ======     ====       ======       ====      ======       ====

</TABLE>
19.        REGULATORY MATTERS

Cash and Due from Banks
-----------------------

The Federal  Reserve  requires  the Savings  Bank to  maintain  certain  reserve
balances.  The required  reserves are computed by applying  prescribed ratios to
the Savings Bank's average deposit transaction account balances.  As of June 30,
1999  and  1998,  the  Savings  Bank had  required  reserves  of $684 and  $577,
respectively.  The  required  reserves  are held in the form of vault cash and a
noninterest-bearing  depository  balance  maintained  directly  with the Federal
Reserve.

Loans
-----

Federal law  prohibits the Company from  borrowing  from the Savings Bank unless
the loans are secured by specific  obligations.  Further, such secured loans are
limited in amount to ten percent of the Savings Bank's capital surplus.

Dividend Restrictions
---------------------

The Savings Bank is subject to the Pennsylvania Banking Code which restricts the
availability of surplus for dividend  purposes.  At June 30, 1999, surplus funds
of $3,363 were not available for dividends.
<PAGE>
20.        CONVERSION AND REORGANIZATION

In accordance with  regulations at the time that the Savings Bank converted from
a mutual  savings bank to a stock savings  bank, a portion of retained  earnings
was restricted by establishing a liquidation  account.  The liquidation  account
will be maintained for the benefit of eligible  account  holders who continue to
maintain their accounts at the Savings Bank after the  conversion,  for a period
of ten years from the date of the stock conversion. The liquidation account will
be reduced  annually to the extent that  eligible  account  holders have reduced
their  qualifying  deposits.  Subsequent  increases will not restore an eligible
account holder's interest in the liquidation account. In the unlikely event of a
complete  liquidation of the Savings Bank,  each account holder will be entitled
to  receive  a  distribution   from  the   liquidation   account  in  an  amount
proportionate to the current adjusted  qualifying balances for the accounts then
held.



                                       46
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

21.        SAVINGS ASSOCIATION INSURANCE FUND RECAPITALIZATION

On September 30, 1996, the President signed into law legislation  which included
recapitalization  of the  Savings  Association  Insurance  Fund  ("SAIF") of the
Federal  Deposit  Insurance   Corporation  ("FDIC")  by  a  one-time  charge  to
SAIF-insured  institutions  of 65.7  basis  points  per one  hundred  dollars of
insurable  deposits.  The gross effect to the Savings  Bank  amounted to $1,138,
which is  reflected in the  consolidated  statement of income for the year ended
June 30, 1997.

22.        FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values at June 30, are as follows:
<TABLE>
<CAPTION>
                                                   1999                       1998
                                           -----------------------   -----------------------
                                            Carrying      Fair        Carrying       Fair
                                             Amount       Value        Amount        Value
                                            --------     --------     --------     --------
<S>                                         <C>             <C>       <C>          <C>
Financial Assets
Cash, due from banks and interest-
  earning demand deposits                   $  1,893     $  1,893     $  2,506     $  2,506
Investment securities                         92,166       89,252       81,268       81,515
Mortgage-backed securities                    72,380       71,440       46,314       46,818
Net loans receivable                         170,327      173,575      157,737      168,150
Accrued interest receivable                    3,105        3,105        2,414        2,414
Federal Home Loan Bank stock                   6,195        6,195        4,675        4,675
                                            --------     --------     --------     --------

Total financial assets                      $346,066     $345,460     $294,914     $306,078
                                            ========     ========     ========     ========

Financial Liabilities
Deposits                                    $174,244     $174,190     $170,982     $171,194
FHLB advances                                116,900      116,029       88,857       88,071
Other borrowings                              25,820       25,820          889          889
Accrued interest payable                       1,929        1,929        1,874        1,874
                                            --------     --------     --------     --------

Total financial liabilities                 $318,893     $317,968     $262,602     $262,028
                                            ========     ========     ========     ========
</TABLE>

Financial instruments are defined as cash, evidence of an ownership interest in
an entity,  or a contract  which  creates an  obligation  or right to receive or
deliver  cash or  another  financial  instrument  from or to a second  entity on
potentially favorable or unfavorable terms.

Fair value is defined as the  amount at which a  financial  instrument  could be
exchanged in a current  transaction  between  willing  parties,  other than in a
forced  or  liquidation  sale.  If a  quoted  market  price is  available  for a
financial  instrument,  the estimated fair value would be calculated  based upon
the market price per trading unit of the instrument.
<PAGE>

If no readily  available  market exists,  the fair value estimates for financial
instruments  should  be  based  upon  management's  judgment  regarding  current
economic  conditions,  interest rate risk, expected cash flows, future estimated
losses and other factors,  as determined through various option pricing formulas
or simulation modeling.  As many of these assumptions result from judgments made
by management based upon estimates which are inherently uncertain, the resulting
estimated values may not be indicative of the amount realizable in the sale of a
particular  financial  instrument.  In addition,  changes in the  assumptions on
which  the  estimated  values  are based  may have a  significant  impact on the
resulting estimated values.

                                       47
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

22.        FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

As certain  assets and  liabilities,  such as deferred tax assets,  premises and
equipment,  and  many  other  operational  elements  of WVS are  not  considered
financial  instruments,  but have value,  this estimated fair value of financial
instruments would not represent the full market value of WVS.

Estimated fair values have been determined by WVS using the best available data,
as generally  provided in internal Savings Bank reports and regulatory  reports,
using  an  estimation  methodology  suitable  for  each  category  of  financial
instruments. The estimation methodologies used are as follows:

Cash,  Due  from  Banks,  Interest-earning  Demand  Deposits,  Accrued  Interest
--------------------------------------------------------------------------------
Receivable and Payable, and Other Borrowings
--------------------------------------------

The fair value approximates the current book value.

Investment Securities, Mortgage-backed Securities, and FHLB stock
-----------------------------------------------------------------

The fair value of investment and mortgage-backed  securities held to maturity is
equal to the  available  quoted  market  price.  If no  quoted  market  price is
available,  fair value is  estimated  using the quoted  market price for similar
securities.  Since the FHLB stock is not actively  traded on a secondary  market
and held exclusively by member financial institutions, the estimated fair market
value approximates the carrying amount.

Net Loans Receivable and Deposits
---------------------------------

Fair value for  consumer  mortgage  loans is estimated  using  market  quotes or
discounting contractual cash flows for prepayment estimates. Discount rates were
obtained from  secondary  market  sources,  adjusted to reflect  differences  in
servicing, credit, and other characteristics.

The estimated fair values for consumer,  fixed rate commercial and  multi-family
real  estate  loans are  estimated  by  discounting  contractual  cash flows for
prepayment estimates.  Discount rates are based upon rates generally charged for
such loans with similar credit characteristics.

The estimated fair value for non-performing  loans is the appraised value of the
underlying collateral adjusted for estimated credit risk.

Demand,  savings,  and money market deposit accounts are reported at book value.
The fair value of certificates of deposit is based upon the discounted  value of
the contractual  cash flows. The discount rate is estimated using average market
rates for deposits with similar average terms.
<PAGE>

FHLB Advances
-------------

The fair value of fixed rate advances are estimated using discounted cash flows,
based on current  incremental  borrowing  rates for similar  types of  borrowing
arrangements.  The carrying amount on variable rate advances  approximates their
fair value.


                                       48
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

22.        FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Commitments to Extend Credit
----------------------------

These financial instruments are generally not subject to sale and estimated fair
values are not readily  available.  The carrying  value,  represented by the net
deferred  fee  arising  from the  unrecognized  commitment,  and the fair  value
determined by  discounting  the remaining  contractual  fee over the term of the
commitment  using fees currently  charged to enter into similar  agreements with
similar credit risk, are not considered material for disclosure. The contractual
amounts of unfunded  commitments  are  presented  in Note 14 to these  financial
statements.

23.        PARENT COMPANY

Condensed financial information of WVS Financial Corp. is as follows:

<TABLE>
<CAPTION>

                               CONDENSED BALANCE SHEET

                                                                    June 30,
                                                                1999         1998
                                                               -------     -------
<S>                                                            <C>         <C>
ASSETS
Interest-earning deposits with subsidiary bank                 $   325     $   502
Investment securities available for sale                         1,141       4,264
Investment and mortgage-backed securities held to maturity          18         616
Investment in subsidiary bank                                   26,151      27,200
Loan receivable from ESOP                                          232         312
Accrued interest receivable and other assets                        77         101
                                                                -------     -------

TOTAL ASSETS                                                   $27,944     $32,995
                                                                =======     =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Other liabilities                                              $     6     $    17
Stockholders' equity                                            27,938      32,978
                                                                -------     -------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $27,944     $32,995
                                                                =======     =======
</TABLE>


                                       49
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

23.        PARENT COMPANY(Continued)

<TABLE>
<CAPTION>
                          CONDENSED STATEMENT OF INCOME


                                                          Year Ended June 30,
                                                     1999        1998        1997
                                                    -------     ------     -------
<S>                                                <C>          <C>        <C>
INCOME
Loans                                              $    24      $   33     $    47
Investment and mortgage-backed securities              124         442         627
Dividend from subsidiary                             5,000           -       3,500
Interest-earning deposits with subsidiary bank          31          31          16
Investment securities gains, net                        36           -           4
                                                    -------      ------     -------

Total income                                         5,215         506       4,194
                                                   -------      ------     -------


OTHER OPERATING EXPENSE                                 94         111          86
                                                   -------      ------     -------

Income before equity in undistributed
  earnings of subsidiary                             5,121         395       4,108
Equity in undistributed earnings of subsidiary      (1,059)      3,202        (913)
                                                    -------      ------     -------

Income before income taxes                           4,062       3,597       3,195
Income taxes                                            31         105         236
                                                   -------      ------     -------

NET INCOME                                         $ 4,031      $3,492     $ 2,959
                                                   =======      ======     =======


</TABLE>
                                       50
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

23.        PARENT COMPANY(Continued)
<TABLE>
<CAPTION>
                             CONDENSED STATEMENT OF CASH FLOWS

                                                               Year Ended June 30,
                                                        1999          1998         1997
                                                       -------      --------      -------
<S>                                                    <C>          <C>           <C>
OPERATING ACTIVITIES
Net income                                             $ 4,031      $  3,492      $ 2,959
Adjustments to reconcile net income to net cash
  provided by operating activities:
Undistributed net income of subsidiary                   1,059        (3,202)         913
Amortization of investment discounts and premiums          (21)         (120)          16
Amortization of ESOP and RRP deferred compensation         164           360          184
Investment securities gains, net                           (36)            -           (4)
Decrease in accrued interest receivable                      2            63            8
Other                                                      276           293         (130)
                                                       -------      --------      -------
Net cash provided by operating activities                5,475           886        3,946
                                                       -------      --------      -------
INVESTING ACTIVITIES
Available for sale:
Purchase of investment and
  mortgage-backed securities                            (2,972)      (12,735)      (1,258)
Proceeds from sale of investment securities                905             -           13
Proceeds from repayments of investment and
  mortgage-backed securities                             5,229         9,842            -
Held to maturity:
Purchases of investment and mortgage-backed
  securities                                                 -        (7,579)           -
Proceeds from repayments of investment and
  mortgage-backed securities                               596        14,156        2,021
ESOP loan repayments                                        81           141          111
                                                       -------      --------      -------
Net cash provided by investing activities                3,839         3,825          887
                                                       -------      --------      -------
FINANCING ACTIVITIES
Net proceeds from issuance of common stock                 255           636          105
Cash dividends paid                                     (2,150)       (5,249)      (4,920)
Purchases of treasury stock                             (7,596)            -            -
                                                       -------      --------      -------
Net cash used for financing activities                  (9,491)       (4,613)      (4,815)
                                                       -------      --------      -------

Increase (decrease) in cash and cash equivalents          (177)           98           18

CASH AND CASH EQUIVALENTS
  BEGINNING OF PERIOD                                      502           404          386
                                                       -------      --------      -------

CASH AND CASH EQUIVALENTS END OF PERIOD                $   325      $    502       $  404
                                                       =======       ========      =======
</TABLE>
                                       51
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

24.        SELECTED QUARTERLY FINANCIAL DATA (unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                       -------------------------------------------------------------
                                        September       December            March           June
                                           1998            1998             1999            1999
                                       -----------     -----------      -----------     -----------

<S>                                    <C>             <C>              <C>             <C>
Total interest and dividend income     $     5,554     $     5,710      $     5,718     $     6,017
Total interest expense                       3,038           3,213            3,137           3,351
                                       -----------     -----------      -----------     -----------

Net interest income                          2,516           2,497            2,581           2,666
Provision for loan losses                        -               -               -               -
                                       -----------     -----------      -----------     -----------

Net interest income after
    provision for loan losses                2,516           2,497            2,581           2,666

Investment securities gains, net                 -              36                -               -
Total noninterest income                       102             126              109             117
Total noninterest expense                    1,061           1,113            1,039           1,072
                                       -----------     -----------      -----------     -----------

Income before income taxes                   1,557           1,546            1,651           1,711
Income taxes                                   607             563              644             620
                                       -----------     -----------      -----------     -----------

Net income                                     950     $       983      $     1,007     $     1,091
                                       ===========     ===========      ===========     ===========

Per share data:
Net income
    Basic                              $      0.26     $      0.28      $      0.30     $      0.34
    Diluted                                   0.26            0.28             0.30            0.33
Average shares outstanding
    Basic                                3,596,067       3,514,757        3,364,721       3,165,631
    Diluted                              3,627,719       3,545,577        3,394,679       3,193,476

</TABLE>
                                       52
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

24.        SELECTED QUARTERLY FINANCIAL DATA (unaudited)(Continued)
<TABLE>
<CAPTION>
                                                            Three Months Ended
                                       -------------------------------------------------------------
                                        September       December            March           June
                                           1997            1997             1998            1998
                                       -----------     -----------      -----------     -----------

<S>                                    <C>             <C>              <C>             <C>
Total interest and dividend income     $     5,550     $     5,484      $     5,515     $     5,597
Total interest expense                       2,969           2,939            2,892           2,981
                                       -----------     -----------      -----------     -----------

Net interest income                          2,581           2,545            2,623           2,616
Provision for loan losses                        -            (120)               -               -
                                       -----------     -----------      -----------     -----------

Net interest income after
    provision for loan losses                2,581           2,665            2,623           2,616

Investment securities gains, net                 -               -                -               -
Total noninterest income                        90             106               98             244
Total noninterest expense                    1,126           1,316            1,276           1,704
                                       -----------     -----------      -----------     -----------

Income before income taxes                   1,545           1,455            1,445           1,156
Income taxes                                   610             459              571             469
                                       -----------     -----------      -----------     -----------

Net income                             $       935     $       996      $       874     $       687
                                       ===========     ===========      ===========     ===========

Per share data:
Net income
    Basic                              $      0.27     $      0.29      $      0.25     $      0.20
    Diluted                                   0.26            0.28             0.24            0.20
Average shares outstanding
    Basic                                3,407,641       3,418,340        3,513,627       3,551,460
    Diluted                              3,531,473       3,547,240        3,593,231       3,633,379

</TABLE>
                                       53

<PAGE>
               COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION

WVS Financial Corp.'s common stock is traded on the over-the-counter  market and
quoted on the Nasdaq  Stock  MarketSM  National  Market  System under the symbol
"WVFC".  The bid and ask  quotations  for the common  stock on September 9, 1999
were:

                              Bid                        Ask
                              ---                        ---
                              $15                      $15 3/8

The  following  table  sets  forth  the high  and low  market  prices,  and cash
dividends  declared,  for the periods indicated.  All data has been adjusted for
the two-for-one stock split paid on May 22, 1998.
<TABLE>
<CAPTION>


                                            Market Price
                                      ------------------------       Cash Dividends
Quarter Ended                           High             Low             Declared
-------------                           ----             ---             --------
<S>                                  <C>              <C>               <C>
June 99                              $15 3/8          $14 7/8           $   0.16
March 99                              15 3/8           14 3/4               0.16
December 98                           15 1/2           14 5/8               0.16
September 98                          16 1/4           15 1/8               0.15

June 98                              $20 3/8          $16               $   0.15
March 98                              19 1/2           16 3/8               1.10(1)
December 97                           17 5/8           14 1/8               0.15
September 97                          14 5/8           12 5/8               0.10
</TABLE>

---------------
(1) Includes  special  cash  dividend of $0.95 per share paid during the quarter
ended March 31, 1998.

There were eight Nasdaq Market  Makers in the Company's  common stock as of June
30, 1999: F. J. Morrissey & Co.,  Inc.;  Legg Mason Wood Walker,  Inc.;  Sandler
O'Neill &  Partners;  Herzog,  Heine,  Geduld,  Inc.;  Ryan,  Beck & Co.,  Inc.;
Parker/Hunter, Inc.; Tucker Anthony, Inc.; and Spear, Leeds & Kellogg.

According  to  the  records  of  the  Company's   transfer  agent,   there  were
approximately  1014  shareholders  of record at September 9, 1999. This does not
include any persons or entities who hold their stock in nominee or "street name"
through various brokerage firms.

Dividends  are  subject  to  determination  and  declaration  by  the  Board  of
Directors, which takes into account the Company's financial condition, statutory
and regulatory restrictions, general economic condition and other factors.

                                       54
<PAGE>
                               WVS FINANCIAL CORP.
                              CORPORATE INFORMATION
                  --------------------------------------------
                                CORPORATE OFFICES
                  WVS FINANCIAL CORP. o WEST VIEW SAVINGS BANK
                     9001 Perry Highway Pittsburgh, PA 15237
                                  412-364-1911

                                  COMMON STOCK
         The common stock of WVS Financial Corp. is traded on The Nasdaq
                     Stock MarketSM under the symbol "WVFC".

                           TRANSFER AGENT & REGISTRAR
                         Registrar and Transfer Company
                                10 Commerce Drive
                               Cranford, NJ 07016
                                 1-800-368-5948

                               INVESTOR RELATIONS
                               Janet L. Campisino
                                  412-364-1911

                                     COUNSEL
                                Bruggeman & Linn

                                 SPECIAL COUNSEL
                      Elias, Matz, Tiernan & Herrick L.L.P.

                             WEST VIEW SAVINGS BANK
                               9001 Perry Highway
                              Pittsburgh, PA 15237
                                  412-364-1911

                                WEST VIEW OFFICE
                                456 Perry Highway
                                  412-931-2171

                                CRANBERRY OFFICE
                               20531 Perry Highway
                            412-931-6080/724-776-3480

                              FRANKLIN PARK OFFICE
                             2566 Brandt School Road
                                  724-935-7100

                                 BELLEVUE OFFICE
                               572 Lincoln Avenue
                                  412-761-5595

                              SHERWOOD OAKS OFFICE
                              Serving Sherwood Oaks
                                 Cranberry Twp.

                                LENDING DIVISION
                             2566 Brandt School Road
                                  724-935-7400

<PAGE>



                               BOARD OF DIRECTORS

                                David L. Aeberli
                                    President
                       McDonald-Aeberli Funeral Home, Inc.

                                Arthur H. Brandt
                  President and CEO Brandt Excavating, Inc. and
                       Retired - Former President and CEO
                               Brandt Paving, Inc.

                                William J. Hoegel
                                 Sole Proprietor
                         William J. Hoegel & Associates

                                 Donald E. Hook
                                    Chairman
                            Pittsburgh Cut Flower Co.

                                John M. Seifarth
                          Senior Engineer - Consultant
                       Nichols & Slagle Engineering, Inc.

                                 David J. Bursic
                      President and Chief Executive Officer
                             WVS Financial Corp. and
                             West View Savings Bank

                                Margaret VonDerau
                 Senior Vice President, Treasurer and Secretary
                             WVS Financial Corp. and
                             West View Savings Bank

                               EXECUTIVE OFFICERS

                                William J. Hoegel
                                    Chairman

                                 David J. Bursic
                                  President and
                             Chief Executive Officer

                                Margaret VonDerau
                      Senior Vice President, Treasurer and
                               Corporate Secretary

                                Edward M. Wielgus
                            Senior Vice President and
                              Chief Lending Officer

The  members  of the  Board of  Directors  serve in that  capacity  for both the
Company and the Savings Bank.