UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 (NO FEE  REQUIRED)

        For the fiscal year ended: June 30, 1998
                                          
                                       OR

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
        EXCHANGE ACT OF 1934  (NO  FEE REQUIRED)
                                      
        For  the  transition  period  from  __________ to __________
                                  
                          Commission File No.: 0-22444

                               WVS Financial Corp.
             ------------------------------------------------------ 
             (Exact name of registrant as specified in its charter)

           Pennsylvania                                       25-1710500
 ---------------------------------                      ----------------------
   (State or other jurisdiction                            (I.R.S. Employer
 of incorporation or organization)                      Identification Number)

        9001 Perry Highway
     Pittsburgh, Pennsylvania                                   15237
     ------------------------                                 ---------
       (Address of Principal                                  (Zip Code)
        Executive Offices)

       Registrant's telephone number, including area code: (412) 364-1911

           Securities registered pursuant to Section 12(b) of the Act:
                                 Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock (par value $.01 per share)
                     ---------------------------------------
                                (Title of Class)

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   [ X ]
<PAGE>
As of September 11, 1998, the aggregate value of the 2,995,717  shares of Common
Stock of the  Registrant  issued and  outstanding  on such date,  which excludes
667,403  shares held by all directors and officers of the Registrant as a group,
was  approximately  $46.1 million.  This figure is based on the last known trade
price of $15.375 per share of the  Registrant's  Common Stock on  September  11,
1998.

Number of shares of Common Stock outstanding as of September 11, 1998: 3,663,120

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents incorporated by reference and the Part of
the Form 10-K into which the document is incorporated:

(1) Portions of the Annual Report to Stockholders for the fiscal year ended June
30,  1998  are  incorporated  into  Parts  I, II and  IV.  

(2) Portions of the  definitive  proxy  statement for the 1998 Annual Meeting of
Stockholders are incorporated into Part III.
<PAGE>
PART I.

Item 1.       Business.


     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.  Originally  organized under  Pennsylvania  law in 1908 as West View
Building Loan  Association,  West View changed its name to West View Savings and
Loan   Association   in  1954.  In  June  1992,   West  View  converted  from  a
Pennsylvania-chartered    mutual    savings   and   loan    association   to   a
Pennsylvania-chartered  mutual  savings bank.  The Savings Bank converted to the
stock form of ownership in November 1993.  The Savings Bank had no  subsidiaries
at June 30, 1998.


Lending Activities

     General.  At June 30, 1998, the Company's net portfolio of loans receivable
totaled  $157.7  million,  as compared to $158.1  million at June 30, 1997.  Net
loans  receivable  comprised  53.1% of Company  total  assets and 94.1% of total
deposits at June 30, 1998, as compared to 53.6% and 92.5%, respectively, at June
30, 1997.  The  principal  categories  of loans in the  Company's  portfolio are
single-family  and multi-family  residential real estate loans,  commercial real
estate loans,  construction  loans,  land acquisition and development  loans and
consumer  loans.  Substantially  all of the Company's  mortgage  loan  portfolio
consists  of  conventional  mortgage  loans,  which are loans  that are  neither
insured by the Federal Housing  Administration  ("FHA") nor partially guaranteed
by the Department of Veterans Affairs ("VA").

     Historically,  the Company's  lending  activities have been concentrated in
single-family  residential  loans secured by  properties  located in its primary
market area of northern  Allegheny  County,  southern  Butler County and eastern
Beaver County,  Pennsylvania.  During fiscal 1998,  the Company's  single-family
real estate loans  decreased by $11.8  million or 10.1%  primarily due to weaker
consumer  demand for home  purchases and the Company's  decision not to directly
match  aggressive  local market  pricing with respect to mortgage  refinancings.
Commercial  real estate loans increased $6.4 million or 43.3% during fiscal 1998
principally due to the Company's  continued  focus on this market  segment.  The
Company's land  acquisition and  development  lending and  construction  lending
increased $0.6 million or 2.6% during fiscal 1998. The increase was  principally
due to a land  acquisition and development and construction  participation  loan
granted to a  personal  care home  during  1998  which was  partially  offset by
principal  paydowns and maturities in the existing  portfolio.  Land acquisition
and development lending, and speculative  construction lending to builders,  are
generally  considered  to  involve  a  higher  level  of  risk  as  compared  to
single-family  residential  lending.  The Company believes that its underwriting
standards are prudent and consistent with safe and sound banking practices.
<PAGE>
     On  occasion,   the  Company  has  also  purchased  whole  loans  and  loan
participations  secured by properties located outside of its primary market area
but predominantly in Pennsylvania. The Company believes that all of its mortgage
loans are secured by properties located in Pennsylvania. Moreover, substantially
all of the  Company's  non-mortgage  loan  portfolio  consists  of loans made to
residents and businesses located in the Company's primary market area.

     Federal  Regulations  impose  limitations on the aggregate  amount of loans
that a  savings  institution  can make to any one  borrower,  including  related
entities.  The permissible amount of loans-to-one  borrower follows the national
bank standard for all loans made by savings  institutions,  which generally does
not  permit  loans-to-one  borrower  to exceed  15% of  unimpaired  capital  and
surplus. Loans in an amount equal to an additional 10% of unimpaired capital and
surplus also may be made to a borrower if the loans are fully secured by readily
marketable   securities.   At  June  30,  1998,  the  Savings  Bank's  limit  on
loans-to-one  borrower was  approximately  $4.2 million.  The Company's  general
policy has been to limit loans-to-one  borrower,  including related entities, to
$2.0 million although this general limit may be exceeded based on the merit of a
particular  credit. At June 30, 1998, the Company's five largest loans or groups
of loans-to-one borrower,  including related entities,  ranged from an aggregate
of $2.2  million to $3.4  million,  and are  secured  primarily  by real  estate
located in the Company's primary market area.
<PAGE>
     Loan Portfolio Composition.  The following table sets forth the composition
of the  Company's  net loans  receivable  portfolio by type of loan at the dates
indicated.
<TABLE>
<CAPTION>
                                                                         At June 30,
                         --------------------------------------------------------------------------------------------------------
                                 1998                  1997                 1996                   1995                  1994
                         --------------------------------------------------------------------------------------------------------
                          Amount      %         Amount      %         Amount     %          Amount     %          Amount      %
                         --------   ------     --------   ------     --------  ------       -------  ------       -------  ------ 
                                                                  (Dollars in Thousands)
<S>                      <C>         <C>       <C>         <C>       <C>        <C>         <C>       <C>         <C>       <C>   
Real estate loans:
     Single-family       $104,849    61.06%    $116,663    67.25%    $109,776   65.16%      $92,710   63.17%      $85,661   60.06%
     Multi-family           4,012     2.34        3,499     2.02        3,235    1.92         2,303    1.57         2,931    2.05
     Commercial            21,021    12.24       14,669     8.46       13,088    7.77        12,138    8.27         9,087    6.37
     Construction          17,779    10.35       16,969     9.78       19,269   11.44        21,106   14.38        27,341   19.17
     Land acquisition
        & development       7,233     4.21        7,412     4.27        9,004    5.35         4,671    3.18         4,601    3.23
                         --------   ------     --------   ------     --------  ------       -------  ------       -------  ------ 
     Total real estate
         loans            154,894    90.20      159,212    91.78      154,372   91.64       132,928   90.57       129,621   90.88
                         --------   ------     --------   ------     --------  ------       -------  ------       -------  ------ 
Consumer loans:
     Home equity           13,613     7.93       12,258     7.06       11,963    7.10        12,477    8.50        11,601    8.13
     Education                591     0.34          516     0.30          590    0.35           394    0.27           353    0.25
     Other                  2,336     1.36        1,403     0.81        1,484    0.88           905    0.61           863    0.61
                         --------   ------     --------   ------     --------  ------       -------  ------       -------  ------ 
     Total consumer
        loans              16,540     9.63       14,177     8.17       14,037    8.33        13,776    9.38        12,817    8.99
                         --------   ------     --------   ------     --------  ------       -------  ------       -------  ------ 
Commercial loans              290     0.17           91     0.05           40    0.02           ---     ---           ---     ---
                         --------   ------     --------   ------     --------  ------       -------  ------       -------  ------ 
Commercial lease
   financings                 ---     0.00            2     0.00           14    0.01            68    0.05           184    0.13
                         --------   ------     --------   ------     --------  ------       -------  ------       -------  ------ 
                          171,724   100.00%     173,482   100.00%     168,463  100.00%      146,772  100.00%      142,622  100.00%
                         --------   ======     --------   ======     --------  ======       -------  ======       -------  ======
Less:
     Undisbursed loan
        proceeds          (11,312)              (12,505)              (16,651)              (10,794)              (16,508)
     Net deferred loan
        origination fees     (815)                 (834)                 (837)                 (799)                 (881)
     Allowance for
        loan losses        (1,860)               (2,009)               (1,964)               (1,836)               (1,633)
                         --------              --------              --------              --------              -------- 
Net loans receivable     $157,737              $158,134              $149,011              $133,343              $123,600
                         ========              ========              ========              ========              ========
</TABLE>
<PAGE>
         Contractual  Maturities.  The following  table sets forth the scheduled
contractual maturities of the Company's loans and mortgage-backed  securities at
June 30, 1998.  The amounts  shown for each period do not take into account loan
prepayments and normal amortization of the Company's loan portfolio.
<TABLE>
<CAPTION>
                                                      Real Estate Loans
                           ------------------------------------------------------------------
                                                                                     Land        Consumer
                                                                                  acquisition   loans and     Mortgage-
                                                                                      and        commercial     backed
                           Single-family  Multi-family  Commercial  Construction  development      loans      securities     Total
                           -------------  ------------  ----------  ------------  -----------   -----------   ----------     -----
                                                                       (Dollars in Thousands)
<S>                            <C>          <C>          <C>          <C>           <C>           <C>           <C>         <C>     
Amounts due in:
    One year or less           $  1,347     $    575     $  1,355     $  9,731      $  2,012      $  1,495      $     54    $ 16,569
    After one year through
       five years                 4,027           40          728        3,409         5,190        10,933         2,687      27,014
    After five years             99,475        3,397       18,938        4,394            31         4,402        43,573     174,210
                               --------     --------     --------     --------      --------      --------      --------    --------
                Total(1)       $104,849     $  4,012     $ 21,021     $ 17,534      $  7,233      $ 16,830      $ 46,314    $217,793
                               ========     ========     ========     ========      ========      ========      ========    ========
</TABLE>

Interest rate terms on amounts due after one year:

<TABLE>
<CAPTION>
<S>                            <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C> 
Fixed                          $ 84,631     $  1,258     $  9,737     $  1,509     $    924     $  9,523     $ 28,439     $136,021  
Adjustable                       18,871        2,179        9,929        6,294        4,297        5,812       17,821       65,203  
                               --------     --------     --------     --------     --------     --------     --------     --------  
     Total                     $103,502     $  3,437     $ 19,666     $  7,803     $  5,221     $ 15,335     $ 46,260     $201,224  
                               ========     ========     ========     ========     ========     ========     ========     ========  
</TABLE>                       
------------
(1) Does not include adjustments relating to loans in process, the allowance for
    loan losses, accrued interest, deferred fee income and unearned discounts.


         Scheduled  contractual  principal  repayments do not reflect the actual
maturities of loans. The average  maturity of loans is  substantially  less than
their  average  contractual  terms  because of  prepayments  and, in the case of
conventional  mortgage  loans,  due-on-sale  clauses,  which  generally give the
Company  the right to declare a loan  immediately  due and payable in the event,
among other things,  that the borrower  sells the real  property  subject to the
mortgage and the loan is not repaid. The average life of mortgage loans tends to
increase when current mortgage loan rates are substantially higher than rates on
existing  mortgage  loans  and,  conversely,  decrease  when  rates on  existing
mortgages  are  substantially  higher than current  mortgage  loan rates (due to
refinancings of adjustable-rate and fixed-rate loans at lower rates).

         As further  discussed  below, the Company has from time to time renewed
commercial real estate loans and speculative construction  (single-family) loans
due to slower than expected sales of the underlying collateral.  Commercial real
estate loans are generally renewed at a contract rate that is the greater of the
market  rate at the time of the renewal or the  original  contract  rate.  Loans
<PAGE>
secured  by  speculative  single-family   construction  or  developed  lots  are
generally  renewed for an  additional  six month term with  monthly  payments of
interest.  Subsequent  renewals,  if  necessary,  are  generally  granted for an
additional six month term;  principal  amortization  may also be required.  Land
acquisition and development loans are generally renewed for an additional twelve
month term with monthly payments of interest.

         At June 30, 1998, the Company had approximately $5.5 million of renewed
commercial real estate and construction loans, all of which were performing. The
$5.5 million in aggregate disbursed principal that has been renewed is comprised
of:  construction  lines of credit totaling $2.7 million;  land  acquisition and
development loans totaling $1.2 million;  single-family speculative construction
loans totaling $792 thousand;  a participation in a land development project for
upscale  residential housing totaling $446 thousand;  and developed  residential
lots totaling $343 thousand.  Management believes that the previously  discussed
whole loans will  self-liquidate  during the normal  course of business,  though
some  additional  rollovers  may be  necessary.  All of the loans that have been
rolled  over,  as  discussed  above,  are in  compliance  with all  loan  terms,
including the receipt of all required  payments,  and are considered  performing
loans. The Company had one loan scheduled to mature during fiscal 1998 which was
non-performing.  See  "-Multi-Family  Residential,  Commercial  Real  Estate and
Construction Loans" and "-Non-Performing Assets".

         Origination,  Purchase and Sale of Loans.  Applications for residential
real  estate  loans and  consumer  loans are  obtained  at all of the  Company's
offices.  Applications  for  commercial  real estate loans are taken only at the
Company's  Franklin Park office.  Residential  loan  applications  are primarily
attributable to existing  customers,  builders,  walk-in customers and referrals
from both real estate  brokers and existing  customers.  Commercial  real estate
loan  applications are obtained  primarily by referrals from former and existing
borrowers.  Consumer loans are primarily  obtained  through existing and walk-in
customers.

         All processing and underwriting of real estate and commercial  business
is performed  solely at the Company's loan division at the Franklin Park office.
The  Company  believes  this   centralized   approach  to  approving  such  loan
applications  allows it to process and approve such applications faster and with
greater  efficiency.  The Company also believes that this approach increases its
ability to service the loans. All loan  applications are required to be approved
by the  Company's  Loan  Committee,  comprised  of both  outside  directors  and
management, which meets weekly.

         Historically, the Company has originated substantially all of the loans
retained in its  portfolio.  Substantially  all of the  residential  real estate
loans  originated  by  the  Company  have  been  under  terms,   conditions  and
documentation   which  permit  their  sale  to  the  Federal  National  Mortgage
Association  ("FNMA") and other investors in the secondary market.  Although the
Company has not been a frequent  seller of loans in the  secondary  market,  the
Company is on the FNMA approved list of sellers/servicers.  The Company has held
most of the loans it  originates in its own portfolio  until  maturity,  due, in
part, to competitive  pricing  conditions in the  marketplace for origination by
nationwide lenders and portfolio  lenders.  During fiscal 1998, the Company sold
three pools of mortgages with an approximate  combined principal balance of $2.9
million.
<PAGE>
         The Company has not been an aggressive purchaser of loans. However, the
Company may purchase whole loans or loan participations in those instances where
demand for new loan originations in the Company's market area is insufficient or
to increase the yield  earned on the loan  portfolio.  Such loans are  generally
presented  to  the  Company   from   contacts   primarily  at  other   financial
institutions,  particularly  those which have  previously done business with the
Company.  At June 30, 1998,  $4.4 million or 2.6% of the  Company's  total loans
receivable  consisted  of  whole  loans  and  participation  interests  in loans
purchased  from other  financial  institutions,  of which $3.8  million or 85.9%
consisted of loans secured by commercial  real estate and $626 thousand or 14.1%
consisted of a land  development  loan.  During fiscal 1998,  purchases of whole
loans and participations  decreased by $30 thousand, to a total of $1.1 million,
as compared to fiscal 1997.

         The  Company  requires  that all  purchased  loans be  underwritten  in
accordance with its underwriting  guidelines and standards.  The Company reviews
loans, particularly scrutinizing the borrower's ability to repay the obligation,
the  appraisal  and  the  loan-to-value  ratio.   Servicing  of  loans  or  loan
participations  purchased  by the Company  generally is performed by the seller,
with a portion of the interest being paid by the borrower retained by the seller
to cover servicing costs. At June 30, 1998,  approximately  $2.5 million or 1.5%
of the Company's  total loans  receivable were being serviced for the Company by
others.
<PAGE>
         The following  table shows  origination,  purchase and sale activity of
the Company  with  respect to loans on a  consolidated  basis during the periods
indicated.
<TABLE>
<CAPTION>
                                                      At or For the Year Ended June 30,
                                                  ---------------------------------------
                                                     1998           1997           1996
                                                  ---------      ---------      ---------
                                                           (Dollars in Thousands)
<S>                                               <C>            <C>            <C>      
Net loans receivable beginning balance ......     $ 158,134      $ 149,011      $ 133,343
Real estate loan originations:
   Single-family(1) .........................         4,979         15,643         25,181
   Multi-family(2) ..........................         1,729            575          1,984
   Commercial ...............................         6,484          2,000          1,731
   Construction .............................        10,796          9,044         10,792
   Land acquisition and development .........         2,936          1,384          4,219
                                                  ---------      ---------      ---------
      Total real estate loan originations ...        26,924         28,646         43,907
                                                  ---------      ---------      ---------

Home equity .................................         4,572          3,160          2,589
Education ...................................           379            323           --
Commercial ..................................           216            533             40
Other .......................................           788            207            287
                                                  ---------      ---------      ---------
           Total loan originations ..........        32,879         32,869         46,823
                                                  ---------      ---------      ---------

Disbursements against available credit lines:
   Home equity ..............................         5,785          4,608          4,693
   Other ....................................            82             28             28
Purchase of whole loans and participations ..         1,115          1,145          2,653
                                                  ---------      ---------      ---------
      Total originations and purchases ......        39,861         38,650         54,197
                                                  ---------      ---------      ---------

Less:
   Loan principal repayments ................        37,622         33,569         32,460
   Sales of whole loans and participations ..         3,964           --             --
   Transferred to real estate owned .........          --               73             51
   Change in loans in process ...............        (1,193)        (4,147)         5,857
   Other, net(3) ............................          (135)            32            161
                                                  ---------      ---------      ---------
      Net (decrease) increase ...............     $    (397)     $   9,123      $  15,668
                                                  =========      =========      =========

Net loans receivable ending balance .........     $ 157,737      $ 158,134      $ 149,011
                                                  =========      =========      =========
</TABLE>
------------
(1)  Consists of loans secured by 1-4 family properties.
(2)  Consists of loans secured by five or more family properties.
(3)  Includes  reductions  for  net  deferred  loan  origination  fees  and  the
     allowance for losses.
<PAGE>
         Real Estate Lending Standards.  All financial institutions are required
to adopt and maintain  comprehensive  written real estate lending  policies that
are consistent  with safe and sound banking  practices.  These lending  policies
must reflect consideration of the Interagency Guidelines for Real Estate Lending
Policies   adopted  by  the  federal   banking   agencies   in   December   1992
("Guidelines").   The  Guidelines  set  forth  uniform  regulations  prescribing
standards for real estate  lending.  Real estate lending is defined as extension
of credit  secured by liens on  interests in real estate or made for the purpose
of  financing  the  construction  of a building  or other  improvements  to real
estate, regardless of whether a lien has been taken on the property.

         The policies must address certain lending  considerations  set forth in
the Guidelines,  including  loan-to-value  ("LTV") limits,  loan  administration
procedures,  underwriting standards,  portfolio  diversification  standards, and
documentation,  approval and reporting requirements. These policies must also be
appropriate  to the size of the  institution  and the  nature  and  scope of its
operations,  and must be reviewed  and  approved by the  institution's  board of
directors at least annually. The LTV ratio framework, with a LTV ratio being the
total  amount of credit to be  extended  divided by the  appraised  value of the
property  at the time the credit is  originated,  must be  established  for each
category of real estate loans.  If not a first lien, the lender must combine all
senior liens when calculating  this ratio.  The Guidelines,  among other things,
establish the following supervisory LTV limits: raw land (65%); land development
(75%);  construction  (commercial,   multi-family  and  non-residential)  (80%);
improved property (85%); and one-to-four family residential (owner-occupied) (no
maximum ratio; however any LTV ratio in excess of 75% should require appropriate
insurance or readily  marketable  collateral).  Consistent with its conservative
lending philosophy, the Company's LTV limits are generally more restrictive than
those in the Guidelines:  raw land (60%); land development  (70%);  construction
(commercial - 75%;  multi-family  - 75%;  speculative  residential  - 80%);  and
residential  properties  (95% in the case of one-to-four  family  owner-occupied
residences and 75% on larger family non-owner-occupied residences).

         Single-Family  Residential  Real Estate  Loans.  Historically,  savings
institutions such as the Company have concentrated  their lending  activities on
the  origination of loans secured  primarily by first mortgage liens on existing
single-family  residences.  At June 30,  1998,  $104.8  million  or 61.1% of the
Company's  total loan  portfolio  consisted of  single-family  residential  real
estate loans,  substantially all of which are conventional loans.  Single-family
loan  originations  totaled $5.0 million and  decreased  $10.7  million or 68.2%
during the fiscal year ended June 30, 1998,  when compared to the same period in
1997.  The decrease in  single-family  originations  is due  primarily to weaker
consumer  demand for home  purchases and the Company's  decision not to directly
match aggressive local market pricing with respect to mortgage refinancings.

         The Company  historically  has emphasized the origination of fixed-rate
loans with terms of up to 30 years.  Although such loans are originated with the
expectation  that  they  will  be  maintained  in  portfolio,  these  loans  are
originated  generally  under terms,  conditions and  documentation  which permit
their  sale  in  the  secondary   market.   The  Company  also  makes  available
single-family  residential  adjustable-rate mortgages ("ARMs") which provide for
periodic  adjustments  to the interest  rate,  but such loans have never been as
widely  accepted in the Company's  market area as the  fixed-rate  mortgage loan
products. The ARMs currently offered by the Company have up to 30-year terms and
an  interest  rate which  adjusts  in  accordance  with one of several  indices.
Consumer response to adjustable rate loans has been limited due to the continued
decline in long-term interest rates experienced during fiscal 1998.
<PAGE>
         At  June  30,  1998,  approximately  $85.6  million  or  81.7%  of  the
single-family  residential  loans in the Company's loan  portfolio  consisted of
loans which provide for fixed rates of interest.  Although these loans generally
provide for repayments of principal over a fixed period of 15 to 30 years, it is
the Company's  experience that because of prepayments  and due-on-sale  clauses,
such loans generally  remain  outstanding for a substantially  shorter period of
time.

         The Company is  permitted to lend up to 95% of the  appraised  value of
real  property  securing  a  residential  loan;  however,  if  the  amount  of a
residential  loan originated or refinanced  exceeds 95% of the appraised  value,
the Company is required by state banking  regulations to obtain private mortgage
insurance  on the  portion  of the  principal  amount  that  exceeds  75% of the
appraised value of the security  property.  Pursuant to underwriting  guidelines
adopted by the Board of  Directors,  private  mortgage  insurance  is  generally
obtained on residential loans for which loan-to-value ratios exceed 80%.

         Property  appraisals on the real estate and  improvements  securing the
Company's  single-family  residential  loans are made by independent  appraisers
approved by the Board of Directors.  Appraisals are performed in accordance with
federal  regulations and policies.  The Company obtains title insurance policies
on most first mortgage real estate loans originated by it. If title insurance is
not obtained or is  unavailable,  the Company obtains an abstract of title and a
title opinion. Borrowers also must obtain hazard insurance prior to closing and,
when required by the United States Department of Housing and Urban  Development,
flood insurance.  Borrowers may be required to advance funds,  with each monthly
payment of  principal  and  interest,  to a loan escrow  account  from which the
Company  makes  disbursements  for items such as real estate  taxes and mortgage
insurance premiums as they become due.

         Multi-Family  Residential,  Commercial  Real  Estate  and  Construction
Loans. The Company originates mortgage loans for the acquisition and refinancing
of existing multi-family  residential and commercial real estate properties.  At
June 30,  1998,  $4.0  million or 2.3% of the  Company's  total  loan  portfolio
consisted  of loans  secured by existing  multi-family  residential  real estate
properties and $21.0 million or 12.3% of such loan portfolio  consisted of loans
secured by existing commercial real estate properties.

         The  majority  of the  Company's  multi-family  residential  loans  are
secured  primarily by 5 to 20 unit apartment  buildings,  while  commercial real
estate   loans  are  secured  by  office   buildings,   hotels,   small   retail
establishments and churches.  These types of properties  constitute the majority
of  the  Company's   commercial  real  estate  loan  portfolio.   The  Company's
multi-family  residential  and commercial  real estate loan  portfolio  consists
primarily of loans secured by properties located in its primary market area.

         Although  terms vary,  multi-family  residential  and  commercial  real
estate loans  generally are amortized over a period of up to 15 years  (although
some loans amortize over a twenty year period) and mature in 5 to 15 years.  The
Company  will  originate  these loans either with fixed  interest  rates or with
interest  rates  which  adjust in  accordance  with a  designated  index,  which
generally is negotiated at the time of origination.  Loan-to-value ratios on the
Company's commercial real estate loans are currently limited to 75% or lower. As
part of the criteria for  underwriting  multi-family  residential and commercial
real estate loans,  the Company  generally  imposes a debt  coverage  ratio (the
<PAGE>
ratio of net cash from  operations  before  payment of the debt  service to debt
service)  of at least  100%.  It is also the Savings  Bank's  general  policy to
obtain personal  guarantees on its multi-family  residential and commercial real
estate  loans from the  principals  of the  borrower  and,  when this  cannot be
obtained,  to  impose  more  stringent  loan-to-value,  debt  service  and other
underwriting requirements.

         At June 30, 1998, the Company's multi-family residential and commercial
real estate loan portfolio  consisted of approximately 176 loans with an average
principal  balance of $170  thousand.  At June 30,  1998,  the  Company  had two
commercial real estate loans that were not accruing interest.

         In recent years,  the Company has been active in  originating  loans to
construct  primarily  single-family  residences,  and, to a much lesser  extent,
loans to acquire  and  develop  real  estate  for  construction  of  residential
properties.  These construction  lending activities generally are limited to the
Company's primary market area. At June 30, 1998,  construction loans amounted to
approximately  $17.8 million or 10.4% of the Company's total loan portfolio.  As
of such date, the Company's  portfolio of construction  loans consisted of $14.8
million of loans for the construction of  single-family  residential real estate
and $3.0  million  of loans for the  construction  of  commercial  real  estate.
Construction  loan  originations  totaled  $10.8  million and  increased by $1.8
million or 19.4%  during the fiscal year ended June 30, 1998,  when  compared to
the same period in 1997.

         Construction  loans are made for the purpose of constructing a personal
residence.  In such  circumstances,  the Company will underwrite such loans on a
construction/permanent  mortgage  loan basis.  At June 30,  1998,  approximately
68.1% of total  outstanding  construction  loans were made to local real  estate
builders and  developers  with whom the Company has worked for a number of years
for  the   purpose   of   constructing   primarily   single-family   residential
developments,  with the  remaining  31.9% of total  construction  loans  made to
individuals  for  the  purpose  of  constructing  a  personal  residence.   Upon
application,  credit  review and  analysis of personal and  corporate  financial
statements, the Company will grant local builders with whom it has done business
lines of credit up to designated amounts. These credit lines may be used for the
purpose of construction of speculative (or unsold)  residential  properties.  In
some  instances,  lines of credit will also be granted for purposes of acquiring
finished  residential  lots and developing  speculative  residential  properties
thereon.  Such lines generally have not exceeded $1.0 million,  with the largest
line totaling $1.5 million.  Once approved for a construction  line, a developer
must  still  submit  plans  and   specifications   and  receive  the   Company's
authorization,  including  an appraisal of the  collateral  satisfactory  to the
Company,  in order to begin utilizing the line for a particular  project.  As of
June 30,  1998,  the  Company  also had $7.2  million  or 4.2% of the total loan
portfolio  invested in land development loans, which consisted of 19 loans to 12
developers.

         Construction  loans generally have  maturities of 18 months,  including
one 6 month  extension,  with  payments  being made monthly on an  interest-only
basis.  Thereafter,  the permanent financing arrangements will generally provide
for either an adjustable or fixed interest rate,  consistent  with the Company's
policies with respect to residential and commercial real estate financing. For a
discussion  of the  Company's  policy  with  respect to  renewing a  speculative
construction  loan at the expiration of its term if the underlying  property has
not been sold, see "-Contractual Maturities".
<PAGE>
         The Company intends to maintain its involvement in construction lending
within its primary market area. Such loans afford the Company the opportunity to
increase the interest rate  sensitivity of its loan  portfolio.  Commercial real
estate and  construction  lending is  generally  considered  to involve a higher
level of risk as  compared  to  single-family  residential  lending,  due to the
concentration  of principal in a limited  number of loans and  borrowers and the
effects of general economic  conditions on real estate  developers and managers.
Moreover,  a  construction  loan can  involve  additional  risks  because of the
inherent  difficulty in estimating both a property's  value at completion of the
project and the estimated cost (including  interest) of the project.  The nature
of these loans is such that they are  generally  more  difficult to evaluate and
monitor.  In  addition,  speculative  construction  loans to a  builder  are not
necessarily  pre-sold and thus pose a greater potential risk to the Company than
construction loans to individuals on their personal residences.

         The Company has  attempted  to minimize the  foregoing  risks by, among
other  things,  limiting  the  extent  of its  commercial  real  estate  lending
generally  and by limiting its  construction  lending to  primarily  residential
properties.  In addition,  the Savings Bank has adopted underwriting  guidelines
which impose stringent  loan-to-value,  debt service and other  requirements for
loans which are believed to involve higher elements of credit risk, by generally
limiting the  geographic  area in which the Savings Bank will do business to its
primary  market area and by working with builders  with whom it has  established
relationships.

         Consumer  Loans.  The Company  offers  consumer  loans,  although  such
lending activity has not historically been a large part of its business. At June
30, 1998, $16.5 million or 9.6% of the Company's total loan portfolio  consisted
of consumer loans. The consumer loans offered by the Company include home equity
loans, home equity lines of credit,  education loans,  automobile loans, deposit
account secured loans and personal loans.  Most of the Company's  consumer loans
are secured by real  estate and are  primarily  obtained  through  existing  and
walk-in customers.

         The Company will originate either a fixed-rate,  fixed term home equity
loan,  or a home equity line of credit with a variable  rate.  At June 30, 1998,
approximately  52.8% of the Company's home equity loans were at a fixed rate for
a  fixed  term.   Although  there  have  been  a  few  exceptions  with  greater
loan-to-value  ratios,  substantially  all of such loans are  originated  with a
loan-to-value  ratio which,  when coupled with the  outstanding  first  mortgage
loan, does not exceed 80%.

         Commercial  Loans.  At June 30, 1998,  $290 thousand or less than 1% of
the Company's total loan portfolio  consisted of commercial loans, which include
loans secured by accounts  receivable,  business  inventory and  equipment,  and
similar  collateral.  The Company  intends to  selectively  develop this line of
business  in  order  to  increase   interest  income  and  to  possibly  attract
compensating  deposit account balances.  Due to the higher risks associated with
commercial loans not secured by real estate, future commercial loan originations
will be modest.

         Loan Fee Income.  In addition to interest earned on loans,  the Company
receives   income  from  fees  in  connection  with  loan   originations,   loan
modifications, late payments, prepayments and for miscellaneous services related
to its loans. Income from these activities varies from period to period with the
volume and type of loans made and competitive conditions.
<PAGE>
         The Company  charges loan  origination  fees which are  calculated as a
percentage of the amount borrowed.  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.
Discounts and premiums on loans purchased are accreted and amortized in the same
manner.  In accordance  with FASB 91, the Company has recognized  $205 thousand,
$229 thousand and $216  thousand of deferred loan fees during fiscal 1998,  1997
and 1996,  respectively,  in  connection  with loan  refinancings,  payoffs  and
ongoing  amortization of outstanding loans. The decrease in loan origination fee
income for fiscal 1998 was  principally  attributable to a lower volume of loans
originated  with loan  origination  fees. The increase in loan  origination  fee
income for fiscal 1997 was  primarily  attributable  to a higher volume of loans
originated with loan origination fees.

         Non-Performing   Loans,   Real   Estate   Owned   and   Troubled   Debt
Restructurings.  When a borrower fails to make a required payment on a loan, the
Company  attempts to cure the  deficiency by contacting the borrower and seeking
payment.  Contacts are  generally  made on the  fifteenth day after a payment is
due. In most cases,  deficiencies are cured promptly.  If a delinquency  extends
beyond 15 days, the loan and payment history is reviewed and efforts are made to
collect the loan. While the Company  generally prefers to work with borrowers to
resolve such problems, when the account becomes 90 days delinquent,  the Company
does institute foreclosure or other proceedings,  as necessary,  to minimize any
potential loss.

         Loans  are  placed on  non-accrual  status  when,  in the  judgment  of
management,   the  probability  of  collection  of  interest  is  deemed  to  be
insufficient  to warrant further  accrual.  When a loan is placed on non-accrual
status, previously accrued but unpaid interest is deducted from interest income.
The Company normally does not accrue interest on loans past due 90 days or more.
The Company will continue to accrue interest on education loans past due 90 days
or more because of the repayment  guarantee provided by the Federal  government.
The  Company  may also  continue  to  accrue  interest  if,  in the  opinion  of
management, it believes it will collect on the loan.

         Real estate  acquired by the Company as a result of  foreclosure  or by
deed-in-lieu of foreclosure is classified as real estate owned until it is sold.
When property is acquired,  it is recorded at the lower of cost or fair value at
the date of acquisition and any write-down resulting therefrom is charged to the
allowance for losses on real estate owned. All costs incurred in maintaining the
Company's  interest in the  property are  capitalized  between the date the loan
becomes  delinquent and the date of acquisition.  After the date of acquisition,
all costs incurred in  maintaining  the property are expensed and costs incurred
for the improvement or development of such property are capitalized.
<PAGE>
         The  following  table  sets forth the  amounts  and  categories  of the
Company's non-performing assets at the dates indicated.
<TABLE>
<CAPTION>
                                                                At June 30,
                                          ---------------------------------------------------------
                                           1998        1997        1996        1995        1994
                                          ------      -------     ------      ------      ------
                                                                       (Dollars in Thousands)
<S>                                       <C>         <C>            <C>         <C>         <C>   
Non-accruing loans:
Real estate:
   Single-family(1) .................     $   52      $ --        $  100      $  185      $  106
   Multi-family .....................       --          --          --           561         581
   Commercial(2) ....................        481         274         274         274         271
Consumer(3) .........................         70        --          --          --          --
Commercial loans & leases ...........       --          --             3           9        --
                                          ------      ------      ------      ------      ------
Total non-accrual loans .............        603         274         377       1,029         958
                                          ------      ------      ------      ------      ------
Accruing loans greater than
   90 days delinquent ...............       --          --          --          --             4
                                          ------      ------      ------      ------      ------
     Total non-performing loans .....     $  603      $  274      $  377      $1,029      $  962
                                          ------      ------      ------      ------      ------
Real estate owned ...................       --          --          --          --            25
                                          ------      ------      ------      ------      ------
     Total non-performing assets ....     $  603      $  274      $  377      $1,029      $  987
                                          ======      ======      ======      ======      ======
Troubled debt restructurings ........     $ --        $ --        $  603      $  930      $  944
                                          ======      ======      ======      ======      ======
Total non-performing loans and
   troubled debt restructurings as a
   percentage of net loans receivable       0.38%       0.17%       0.66%       1.47%       1.54%
                                          ======      ======      ======      ======      ======
Total non-performing assets
   to total assets ..................       0.20%       0.09%       0.15%       0.45%       0.45%
                                          ======      ======      ======      ======      ======
Total non-performing assets
   and troubled debt restructurings
   as a percentage of total assets ..       0.20%       0.09%       0.38%       0.86%       0.87%
                                          ======      ======      ======      ======      ======
</TABLE>
----------------
(1)  At June 30, 1998, non-accrual  single-family  residential real estate loans
     consisted of one loan.
(2)  At June 30, 1998,  non-accrual  commercial  real estate loans  included two
     loans of approximately $207 thousand and $274 thousand.
(3)  At June 30, 1998, non-accrual consumer loans consisted of one loan.


         The $329 thousand  increase in non-accrual  loans during fiscal 1998 is
comprised of a $207  thousand  increase in  non-accrual  commercial  real estate
loans, a $70 thousand increase in non-accrual  consumer loans and a $52 thousand
increase in non-accrual single-family real estate loans.
<PAGE>
         At  June  30,  1998,  the  Company  had  one  performing   restructured
multi-family loan with a total  outstanding  principal balance of $594 thousand.
The loan is secured by an eight unit  apartment  building and one  single-family
residence  located in Oakmont  Borough.  Though  originally  appraised  for $840
thousand in 1991, a revised  appraisal report dated September 1995 has indicated
an appraised value of  approximately  $475 thousand.  Though no charge-offs have
been recorded to date,  the loan has been  internally  classified as substandard
due to collateral value.  Partner ownership has shifted on this property and the
Company has been receiving normal  principal and interest  payments for over two
years.  The  Company  expects  the loan to remain  current  and to  possibly  be
refinanced in the future. The Company believes that it has an adequate valuation
allowance with respect to this loan.

         At June 30, 1998,  the Company had one land  development  participation
loan, with an outstanding principal balance of $368 thousand, that was granted a
third extension.  The loan, which was originated to finance the development of a
45 lot upscale  residential  subdivision,  provides for interest only  payments,
floats  monthly at a net  participant  rate of prime plus  seven-eighths  of one
percent,  and matures in March 2000. At June 30, 1998, 20 lots remained  unsold.
The third extension was granted due to the continued weak market demand for lots
within  the   subdivision.   In  exchange  for  granting  the  extension,   loan
participants,  including  the  Company,  received a renewal  fee of 0.75% of the
loan's  outstanding  principal  balance  and a lot  release  price  paid  to the
participants  of 75% with a minimum amount of $175 thousand per lot. If the loan
is paid off prior to  maturity,  a  pro-rated  refund of the renewal fee will be
issued  to  the  borrower.  Management  believes  that  the  loan  is  presently
well-secured based upon an approximate 19.5%  loan-to-value  first-lien position
and the  obligor's  strong  net-worth  and  paying  capacity.  The loan has been
internally classified substandard due to the low level of lot sale activity.

         As of June 30,  1998,  the Company had one  non-accruing  single-family
residential  real  estate  loan with an  outstanding  principal  balance  of $52
thousand that was over 90 days  delinquent.  The property was sold subsequent to
the  Company's  June 30,  1998  year-end  and  payment in full is expected to be
received.
<PAGE>
         As of June 30, 1998, the Company had two  non-accruing  commercial real
estate  loans.  The first  loan had an  outstanding  principal  balance  of $274
thousand that was over 90 days delinquent. The Company stopped accruing interest
on the loan as of September  1993.  The loan is secured by a restaurant and real
estate  which is located in Wexford,  PA. The property  was  appraised  for $395
thousand in June 1988.  Since such date, an addition to the  restaurant has been
constructed.  The obligors on this loan are the two former  principal  owners of
the  restaurant.  The  restaurant  and the two  obligors on this loan have filed
under Chapter 7 of the Federal  Bankruptcy  Code. A third party has acquired the
restaurant business and property in a Bankruptcy Court supervised  restructuring
plan by, among other things, agreeing to make certain periodic payments into the
bankruptcy  estate.  The  Bankruptcy  Court  has  not  as of  yet  approved  the
bankruptcy  plan. The Company,  however,  is presently  receiving  interest only
payments at a modified  rate of 8%, as opposed to the original  contract rate of
9%. Under terms of the pending but as of yet unapproved bankruptcy restructuring
plan, the Company has agreed, among other things, to a reduction in the contract
rate  of  interest  to  8%  and  certain  repayment  modifications.  The  second
non-accruing commercial real estate loan had an outstanding principal balance of
$207 thousand that was over 90 days  delinquent.  The Company  stopped  accruing
interest on the loan during fiscal 1998 and is not  receiving any payments.  The
loan is secured by a restaurant and real estate;  foreclosure  proceedings  have
been  instituted.  The Company believes it to be reasonable that both loans will
eventually be paid in full.

         As of June 30, 1998,  the Company had one  non-accruing  consumer  loan
with an  outstanding  principal  balance of $70  thousand  that was over 90 days
delinquent.  The Company is currently in proceedings  with the debtor's  estate,
which consists of a house and a business property.

         In addition to the foregoing,  at June 30, 1998, the Company had a 7.9%
or $893  thousand  participation  interest in a first  mortgage loan on a 12 1/2
acre  property  in  Allegheny  County,  Pennsylvania  which  includes a 194 room
Sheraton  hotel and  restaurant  and an 8,100 square foot office  building.  The
Company acquired its interest in 1984. The loan, which was originated to acquire
the property  and  construct  the hotel,  matures in March 1999 and provides for
principal  and  interest  payments  at  8.2%  based  on a  30-year  amortization
schedule.  The borrower is current in its payments but the loan  continues to be
monitored  due to the nature of the hotel  industry in general and a decrease in
the capital accounts of the general partners.

         During fiscal 1998,  1997 and 1996,  approximately  $20  thousand,  $15
thousand and $9 thousand,  respectively, of interest would have been recorded on
loans accounted for on a non-accrual  basis and troubled debt  restructurings if
such loans had been current  according to the original loan  agreements  for the
entire period.  These amounts were not included in the Company's interest income
for the respective periods. The amount of interest income on loans accounted for
on a  non-accrual  basis and troubled debt  restructurings  that was included in
income  during the same periods  amounted to  approximately  $44  thousand,  $20
thousand and $75 thousand, respectively.

         Allowances   for  Loan  Losses.   The  allowance  for  loan  losses  is
established  through  provisions for loan losses charged against  income.  Loans
deemed to be uncollectible are charged against the allowance account. Subsequent
recoveries,  if any, are credited to the allowance.  The allowance is maintained
<PAGE>
at a level believed  adequate by management to absorb  estimated  potential loan
losses.  Management's determination of the adequacy of the allowance is based on
periodic evaluations of the loan portfolio considering past experience,  current
economic  conditions,  composition  of the loan  portfolio  and  other  relevant
factors.  This  evaluation is  inherently  subjective,  as it requires  material
estimates that may be susceptible to significant change.

         Effective  December 21, 1993, the FDIC, in conjunction  with the Office
of the  Comptroller of the Currency,  the Office of Thrift  Supervision  and the
Federal Reserve Board,  adopted an Interagency Policy Statement on the Allowance
for Loan and Lease Losses  ("Policy  Statement").  The Policy  Statement,  which
effectively supersedes previous FDIC proposed guidance, includes guidance (i) on
the  responsibilities  of management for the assessment and  establishment of an
adequate allowance and (ii) for the agencies' examiners to use in evaluating the
adequacy  of  such  allowance  and  the  policies  utilized  to  determine  such
allowance.  The Policy Statement also sets forth  quantitative  measures for the
allowance with respect to assets classified substandard and doubtful,  described
below,  and with  respect  to the  remaining  portion of an  institution's  loan
portfolio.   Specifically,   the  Policy  Statement  sets  forth  the  following
quantitative measures which examiners may use to determine the reasonableness of
an allowance:  (i) 50% of the portfolio that is classified doubtful; (ii) 15% of
the portfolio that is classified substandard;  and (iii) for the portions of the
portfolio that have not been  classified  (including  loans  designated  special
mention), estimated credit losses over the upcoming twelve months based on facts
and  circumstances  available on the evaluation date. While the Policy Statement
sets forth this quantitative measure, such guidance is not intended as a "floor"
or "ceiling".

         Federal  regulations  require  that each  insured  savings  institution
classify  its  assets  on a regular  basis.  In  addition,  in  connection  with
examinations  of insured  institutions,  federal  examiners  have  authority  to
identify  problem assets and, if  appropriate,  classify  them.  There are three
classifications  for  problem  assets:  "substandard",  "doubtful"  and  "loss".
Substandard  assets have one or more defined weaknesses and are characterized by
the distinct  possibility that the insured institution will sustain some loss if
the deficiencies are not corrected. Doubtful assets have the weaknesses of those
classified as substandard with the added characteristic that the weaknesses make
collection  or  liquidation  in full on the basis of currently  existing  facts,
conditions and values questionable,  and there is a high possibility of loss. An
asset  classified as loss is considered  uncollectible  and of such little value
that  continuance  as an  asset of the  institution  is not  warranted.  Another
category  designated "asset watch" is also utilized by the Bank for assets which
do not currently expose an insured institution to a sufficient degree of risk to
warrant  classification  as substandard,  doubtful or loss. Assets classified as
substandard or doubtful require the institution to establish general  allowances
for loan  losses.  If an asset or portion  thereof is  classified  as loss,  the
insured institution must either establish specific allowances for loan losses in
the amount of 100% of the portion of the asset  classified  loss,  or charge-off
such amount.  General  loss  allowances  established  to cover  possible  losses
related  to  assets  classified  substandard  or  doubtful  may be  included  in
determining  an  institution's  regulatory  capital,  while  specific  valuation
allowances for loan losses do not qualify as regulatory capital.
<PAGE>
         The Company's general policy is to internally  classify its assets on a
regular  basis and  establish  prudent  general  valuation  allowances  that are
adequate to absorb losses that have not been identified but that are inherent in
the loan portfolio.  The Company maintains general valuation  allowances that it
believes  are  adequate  to  absorb  losses in its loan  portfolio  that are not
clearly   attributable  to  specific  loans.  The  Company's  general  valuation
allowances  are within the following  ranges:  (i) 0% to 5% of assets subject to
special mention; (ii) 5% to 25% of assets classified substandard;  and (iii) 50%
to 100% of assets  classified  doubtful.  Any loan classified as loss is charged
off.  To  further  monitor  and  assess  the  risk  characteristics  of the loan
portfolio,  loan  delinquencies are reviewed to consider any developing  problem
loans.  Based upon the  procedures  in place,  considering  the  Company's  past
charge-offs  and  recoveries  and  assessing  the current  risk  elements in the
portfolio,  management  believes the allowance for loan losses at June 30, 1998,
is adequate.

         The  allowance  for loan losses at June 30,  1998,  decreased  to $1.86
million  due to the  recovery  of  previously  established  loan  loss  reserves
attributable to the payoff of a commercial loan participation.  Previously,  the
Company had  consistently  added to the allowance for possible loan losses.  The
allowance  for loan losses  increased  from $1.96  million at June 30, 1996,  to
approximately  $2.00  million at June 30,  1997.  The  increases  in prior years
reflected a number of factors,  the most  significant  of which was the industry
trend towards  greater  emphasis on the  allowance  method of providing for loan
losses and the specific charge-off method.
<PAGE>
         The following table summarizes  changes in the Company's  allowance for
loan losses and other selected statistics for the periods indicated.
<TABLE>
<CAPTION>
                                                                                    At June 30,
                                                      ----------------------------------------------------------------------
                                                         1998            1997           1996           1995           1994
                                                      ---------       ---------      ---------      ---------      ---------
                                                                              (Dollars in Thousands)
<S>                                                   <C>             <C>            <C>            <C>            <C>      
Average net loans ...............................     $ 163,046       $ 153,726      $ 141,643      $ 133,517      $ 118,302
                                                      =========       =========      =========      =========      =========
Allowance balance (at beginning of period) ......     $   2,009       $   1,964      $   1,836      $   1,634      $   1,447
Provision for loan losses .......................          (120)             60            150            211            211
Charge-offs:
  Real estate:
     Single-family ..............................             1              15             25           --                6
     Multi-family ...............................          --              --             --             --             --   
     Commercial .................................          --              --             --             --             --   
     Construction ...............................          --              --             --             --             --   
  Land acquisition and development ..............          --              --             --             --             --   
  Consumer:
       Home equity ..............................            15            --             --             --             --   
       Education ................................          --              --             --             --             --   
       Other ....................................            23            --             --             --                4
  Commercial loans and leases ...................          --                 3              4             12             18
                                                      ---------       ---------      ---------      ---------      ---------
       Total charge-offs ........................            39              18             29             12             28
                                                      ---------       ---------      ---------      ---------      ---------
Recoveries:
  Real estate:
     Single-family ..............................             8               1           --             --             --   
     Multi-family ...............................          --              --             --             --             --   
     Commercial .................................          --              --             --             --             --   
     Construction ...............................          --              --             --             --             --   
  Land acquisition and development ..............          --              --             --             --             --   
  Consumer:
       Home equity ..............................          --              --             --             --             --   
       Education ................................          --              --             --             --             --   
       Other ....................................             1            --                1              1              3
  Commercial loans and leases ...................             1               2              6              2              1
                                                      ---------       ---------      ---------      ---------      ---------

       Total recoveries .........................            10               3              7              3              4
                                                      ---------       ---------      ---------      ---------      ---------
Net loans charged-off ...........................            29              15             22              9             24
Transfer to real estate owned loss reserve ......          --              --             --             --             --
                                                      ---------       ---------      ---------      ---------      ---------
Allowance balance (at end of period) ............     $   1,860       $   2,009      $   1,964      $   1,836      $   1,634
                                                      =========       =========      =========      =========      =========
Allowance for loan losses as a
   percent of total loans receivable ............          1.08%           1.16%          1.17%          1.25%          1.15%
                                                      =========       =========      =========      =========      =========
Net loans charged-off as a
   percentage of average net loans ..............          0.02%           0.01%          0.02%          0.01%          0.02%
                                                      =========       =========      =========      =========      =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                    At June 30,
                                                      ----------------------------------------------------------------------
                                                         1998            1997           1996           1995           1994
                                                      ---------       ---------      ---------      ---------      ---------
                                                                              (Dollars in Thousands)
<S>                                                   <C>             <C>            <C>            <C>            <C>      
Allowance for loan losses to
   non-performing loans .........................        308.46%         733.21%        520.95%        178.43%        169.85%
                                                      =========       =========      =========      =========      =========
Net loans charged-off to
   allowance for loan losses ....................          1.56%           0.75%          1.12%          0.49%          1.47%
                                                      =========       =========      =========      =========      =========
Recoveries to charge-offs .......................         25.64%          16.67%         24.14%         25.00%         14.29%
                                                      =========       =========      =========      =========      =========
</TABLE>
         The following  table presents the allocation of the allowances for loan
losses by loan category at the dates indicated.
<TABLE>
<CAPTION>
                                                                           At June 30,
                            --------------------------------------------------------------------------------------------------------
                                   1998                   1997                 1996                  1995               1994
                            -------------------   ------------------    ------------------  -------------------  -------------------
                                % of Total             % of Total            % of Total          % of Total        % of Total
                                 Loans by               Loans by              Loans by            Loans by           Loans by
                             Amount   Category     Amount   Category     Amount   Category   Amount   Category   Amount     Category
                             ------   --------     ------   --------     ------   --------   ------   --------   ------     --------
                                                                     (Dollars in Thousands)
<S>                          <C>         <C>       <C>         <C>      <C>         <C>      <C>         <C>      <C>         <C>
Real estate loans:
  Single-family ...          $  164      61.06%    $  175      67.25%   $  161      65.16%   $  146      63.17%   $  124      60.06%
  Multi-family ....             143       2.34        142       2.02       141       1.92        12       1.57        18       2.05 
  Commercial ......             423      12.24        449       8.46       469       7.77       593       8.27       546       6.37 
  Construction ....              52      10.35         58       9.78        38      11.44        49      14.38        71      19.17 
Land acquisition                                                                                                                  
  and development                59       4.21         59       4.27        69       5.35        31       3.18        36       3.23 
Unallocated ......              652        --         722        --        711         --       693         --       577         -- 
                             ------      -----     ------      -----    ------      -----    ------      -----    ------      -----
    Total real                                                                                                                      
      estate loans            1,493      90.20      1,605      91.78     1,589      91.64     1,524      90.57     1,372      90.88 
                             ------      -----     ------      -----    ------      -----    ------      -----    ------      -----
Consumer loans:                                                                                                                     
  Home equity .....             168       7.93        123       7.06       120       7.10       124       8.50       116       8.13 
  Education .......               5       0.34          5       0.30         6       0.35         4       0.27         4       0.25 
  Other ...........              17       1.36         10       0.81        10       0.88        14       0.61        15       0.61 
  Unallocated .....             167         --        258         --       215         --       127         --        83         -- 
                             ------      -----     ------      -----    ------      -----    ------      -----    ------      -----
  Total consumer                                                                                                                    
    loans .........             357       9.63        396       8.17       351       8.33       269       9.38       218       8.99 
                             ------      -----     ------      -----    ------      -----    ------      -----    ------      ----- 
Commercial loans ..              10       0.17          5       0.05         2       0.02        --         --        --         -- 
                             ------      -----     ------      -----    ------      -----    ------      -----    ------      ----- 
Commercial lease                                                                                                                    
    financings ....              --         --          3         --        22       0.01        43       0.05        44       0.13 
                             ------      -----     ------      -----    ------      -----    ------      -----    ------      -----
                             $1,860     100.00%    $2,009     100.00%   $1,964     100.00%   $1,836     100.00%   $1,634     100.00%
                             ======     ======     ======     ======    ======     ======    ======     ======    ======     ======
</TABLE>
<PAGE>
         Management  believes that the reserves it has  established are adequate
to cover  any  potential  losses in the  Company's  loan and real  estate  owned
portfolios.  However, future adjustments to these reserves may be necessary, and
the Company's results of operations could be adversely affected if circumstances
differ  substantially  from the  assumptions  used by  management  in making its
determinations in this regard.

Mortgage-Backed Securities

         Mortgage-backed   securities  ("MBS")  include  mortgage   pass-through
certificates ("PCs") and collateralized  mortgage obligations  ("CMOs").  With a
pass-through  security,  investors  own an  undivided  interest  in the  pool of
mortgages that  collateralize the PCs;  principal and interest is passed through
to the investor as it is generated by the mortgages underlying the pool. PCs may
be  insured  or  guaranteed  by  the  Federal  Home  Loan  Mortgage  Corporation
("FHLMC"), the FNMA and the Government National Mortgage Association ("GNMA") or
privately issued with varying degrees of credit enhancements.  A CMO reallocates
mortgage  pool cash flow to a series of bonds  (called  traunches)  with varying
stated  maturities,   estimated  average  lives,  coupon  rates  and  prepayment
characteristics.

         At June 30, 1998, the Company's  mortgage-backed  securities  portfolio
totaled $46.3  million as compared to $37.5  million at June 30, 1997.  The $8.8
million or 23.5%  increase in MBS balances  outstanding  during  fiscal 1998 was
primarily  attributable to increased MBS purchases 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.  At June 30, 1998,  approximately  $17.8 million or 38.5% (book value) of
the Company's  portfolio of  mortgage-backed  securities,  including  CMOs, were
comprised  of  adjustable  or floating  rate  instruments,  as compared to $18.9
million or 50.3% at June 30, 1997.  Substantially all of the Company's  floating
rate  mortgage-backed  securities  adjust  monthly based upon changes in certain
short-term market indices (e.g. LIBOR, Prime, etc.).
<PAGE>
         The following  tables set forth the amortized cost and market values of
the Company's mortgage-backed securities available for sale and held to maturity
as of the periods indicated.
<TABLE>
<CAPTION>
MBS Available for Sale at June 30,            1998          1997          1996
----------------------------------           -------       -------       -------                                       
                                                    (Dollars in Thousands)
<S>                                          <C>           <C>           <C>    
FHLMC PCs ............................       $   308       $   931       $ 2,880
GNMA PCs .............................         1,022         1,306         1,580
FNMA PCs .............................         9,178        10,708        11,359
CMOs - agency collateral .............         2,584         5,472         6,956
CMOs - other .........................         5,750          --            --
                                             -------       -------       -------
Total amortized cost .................       $18,842       $18,417       $22,775
                                             =======       =======       =======
Total market value ...................       $19,041       $18,280       $22,428
                                             =======       =======       =======
<CAPTION>

MBS Held to Maturity at June 30,              1998          1997          1996
--------------------------------             -------       -------       -------
                                                   (Dollars in Thousands)
<S>                                          <C>           <C>           <C>    

FHLMC PCs ............................       $   246       $   351       $   450
GNMA PCs .............................         1,156         1,219         1,268
FNMA PCs  ............................           151           194           269
CMOs - agency collateral .............        15,810        16,728        16,878
CMOs - other .........................         9,910           718           825
                                             -------       -------       -------
Total amortized cost .................       $27,273       $19,210       $19,690
                                             =======       =======       =======
Total market value ...................       $27,777       $19,381       $19,733
                                             =======       =======       =======
</TABLE>
         The Company believes that its present MBS available for sale allocation
of $19.0  million  or  41.1% of the  carrying  value  of the MBS  portfolio,  is
adequate to meet anticipated future liquidity requirements and to reposition its
balance sheet and asset/liability mix should it wish to do so in the future.
<PAGE>
         The  following  table  sets  forth  the  amortized  cost,   contractual
maturities  and  weighted  average  yields  of  the  Company's   mortgage-backed
securities, including CMOs, at June 30, 1998.
<TABLE>
<CAPTION>
                                                   At June 30, 1998
                           -----------------------------------------------------------------
                                           After           After
                            One Year      One to          Five to        Over
                            or Less      Five Years      Ten Years    Ten Years       Total
                            -------      ----------      ---------    ---------       -----
                                                   (Dollars in Thousands)
<S>                        <C>           <C>             <C>         <C>            <C>        
MBS available for sale     $      54     $   2,633       $  --       $   16,155     $ 18,842   
                                6.43%         6.10%       0.00%            7.08%        6.94%
                                                                                           
MBS held to maturity       $      --     $      55       $  --       $   27,218     $ 27,273 
                                0.00%         8.05%       0.00%            7.01%        7.02%
                           ---------     ---------       -----       ----------     -------- 
                                                                                           
Total                      $      54     $   2,688       $  --       $   43,373     $ 46,115 
                           =========     =========       =====       ==========     ======== 
Weighted average yield          6.43%         6.14%       0.00%            7.04%        6.98%
                           =========     =========       =====       ==========     ======== 
</TABLE>
                                                                         
Due to prepayments of the underlying  loans, and the prepayment  characteristics
of the CMO  traunches,  the actual  maturities of the Company's  mortgage-backed
securities are expected to be substantially less than the scheduled  maturities.
As a result of the decline of market  interest rates  experienced  during fiscal
1998,  the Company  shifted more  weighting  from  variable rate MBS products to
fixed rate MBS products.

         The  following  table  sets  forth  information  with  respect  to  the
mortgage-backed  securities  owned by the Company at June 30, 1998,  which had a
carrying  value greater than 10% of the Company's  stockholders'  equity at such
date,  other than securities  issued by the United States  Government and United
States  Government  agencies and  corporations.  All such  securities  have been
assigned a triple A investment grade rating.
<TABLE>
<CAPTION>
                                               Estimated Market       Weighted
  Name of Issuer            Carrying Value           Value         Average Yield
  --------------            --------------     ----------------    -------------
                                            (Dollars in Thousands)
<S>                            <C>                 <C>                 <C>  
Norwest Asset Securities
   Corp. CMO                   $  7,544            $  7,536            7.15%
Residential Funding CMO           5,087               5,104            7.00%
                               --------            --------            ----
                               $ 12,631            $ 12,640            7.09%
                               ========            ========            ====
</TABLE>
Investment Securities

         The  Company  may  invest in  various  types of  securities,  including
corporate debt and equity securities, U.S. Government and U.S. Government agency
obligations,  securities  of  various  federal,  state and  municipal  agencies,
commercial  paper,  bankers'  acceptances,  federal  funds and  interest-bearing
deposits with other financial institutions.

         The  Company's  investment  activities  are  directly  monitored by the
Company's  Investment  Committee under policy guidelines adopted by the Board of
Directors.  In recent years, the general  objective of the Company's  investment
<PAGE>
policy  has been to manage  the  Company's  interest  rate  sensitivity  gap and
generally to increase  interest-earning assets. As reflected in the table below,
the Company continued to hold a significant portion of its investment  portfolio
in U.S.  Government and agency  obligations,  which amounted to $63.7 million or
74.1% of the total  investment  portfolio at June 30, 1998, as compared to $84.1
million or 91.9% of the total  investment  portfolio at June 30, 1997. All $63.7
million or 100.0% of the Company's U.S.  Government  agencies  portfolio at June
30, 1998, was comprised of U.S.  Government  agency securities with longer-terms
to maturity and optional principal  redemption features ("callable bonds").  Due
to declining  market  interest  rates,  the Company's  invested  balance in U.S.
Government agency securities  decreased by $20.4 million or 24.2%. As previously
discussed,  the Company has begun to emphasize  the purchase of  mortgage-backed
securities.   The  Company  also   increased  its  holdings  of  corporate  debt
obligations  (comprised  primarily of  short-term  investment  grade  commercial
paper) by $13.3 million or 618.8% to increase  financial  asset  sensitivity and
liquidity. A substantial portion of the Company's investment portfolio is funded
with FHLB  advances.  Such  advances  can be repaid if all, or a portion of, the
Company's callable agency bonds are redeemed prior to maturity.

         The following  tables set forth the amortized cost and market values of
the Company's investment securities portfolio at the dates indicated.
<TABLE>
<CAPTION>
Investment Securities Available for Sale at June 30,      1998         1997         1996
----------------------------------------------------    -------      -------      -------
                                                               (Dollars in Thousands)    
                                                                                         
                                                        
Corporate debt obligations ..............               $15,419      $  --        $  --              
U.S. Government agency securities .......                  --          2,192        2,193 
                                                        -------      -------      ------- 
                                                                                          
Total amortized cost ....................                15,419        2,192        2,193 
Equity securities .......................                 2,062        1,497         --   
                                                        -------      -------      ------- 
Total amortized cost ....................               $17,481      $ 3,689      $ 2,193 
                                                        =======      =======      ======= 
Total market value ......................               $17,519      $ 3,553      $ 1,981 
                                                        =======      =======      ======= 
<CAPTION>                                               
Investment Securities Held to Maturity at June 30,        1998         1997         1996
--------------------------------------------------      -------      -------      ------- 
                                                       (Dollars in Thousands)
<S>                                                     <C>          <C>          <C>     
Corporate debt obligations ..............               $  --        $ 2,145      $ 4,956 
U.S. Government agency securities .......                63,749       81,850       51,981 
State and municipal securities ..........                  --           --            300 
                                                        -------      -------      ------- 
                                                         63,749       83,995       57,237 
FHLB stock ..............................                 4,675        3,927        1,900 
                                                        -------      -------      ------- 
Total amortized cost ....................               $68,424      $87,922      $59,137 
                                                        =======      =======      ======= 
Total market value ......................               $68,670      $87,816      $58,571 
                                                        =======      =======      ======= 
</TABLE>                                                
<PAGE>
         Information  regarding the amortized cost,  contractual  maturities and
weighted average yields of the Company's  investment portfolio at June 30, 1998,
is presented below.
<TABLE>
<CAPTION>
                                                             At June 30, 1998
                                ------------------------------------------------------------------------
                                                  After           After
Investment Securities             One Year       One to           Five to        Over
    Available for Sale            or Less      Five Years       Ten Years      Ten Years         Total
    ------------------            -------      ----------       ---------      ---------         -----
                                                         (Dollars in Thousands)

<S>                             <C>              <C>        <C>              <C>              <C>    
Corporate debt obligations      $   15,419       $   --        $     --         $     --         $15,419
                                      5.96%        0.00%           0.00%            0.00%           5.96%

U.S. Government agency
   securities ............      $       --       $   --        $     --         $     --         $    --
                                      0.00%        0.00%           0.00%            0.00%           0.00%

Total ....................      $   15,419       $   --        $     --         $     --         $15,419
                                ==========       ======        ========         ========         =======
Weighted average yield ...            5.96%        0.00%           0.00%            0.00%           5.96%
                                ==========       ======        ========         ========         ======= 

Equity securities ........      $      --        $   --        $     --         $  2,062         $ 2,062
                                ----------       ------        --------         --------         -------

Total ....................      $   15,419       $   --        $     --         $  2,062         $17,481
                                ==========       ======        ========         ========         =======

<CAPTION>
                                                             At June 30, 1998
                                ------------------------------------------------------------------------
                                                 After           After
Investment Securities            One Year       One to           Five to        Over
    Held to Maturity             or Less      Five Years       Ten Years      Ten Years         Total
    ----------------             -------      ----------       ---------      ---------         -----
                                                         (Dollars in Thousands)
<S>                             <C>              <C>        <C>              <C>              <C>    
Corporate debt obligations      $     --         $  --        $     --          $    --          $   --
                                      0.00%       0.00%            0.00%           0.00%           0.00%

U.S. Government agency
   securities ............      $     --         $  --        $   21,995        $41,754          $63,749
                                      0.00%        0.00%            7.43%          7.07%            7.19%

Total ....................      $     --         $   --        $   21,995       $41,754          $63,749
                                ==========       ======       ===========       =======          =======
Weighted average yield ...            0.00%        0.00%             7.43%         7.07%            7.19%
                                ==========       ======       ===========       =======          =======

</TABLE>
<PAGE>
         Information  regarding  the  amortized  cost,  earliest  call dates and
weighted average yield of the Company's  investment  portfolio at June 30, 1998,
is presented below. All Company investments in callable bonds were classified as
held to maturity at June 30, 1998.
<TABLE>
<CAPTION>
                                                          At June 30, 1998
                                -----------------------------------------------------------------
                                                After          After
                                One Year       One to         Five to       Over
                                or Less       Five Years     Ten Years    Ten Years       Total
                                -------       ----------     ---------    ---------       -----
                                                     (Dollars in Thousands)
<S>                             <C>           <C>             <C>         <C>             <C>    
Corporate debt obligations      $15,419       $    --         $--         $    --         $15,419
                                   5.96%           0.00%       0.00%           0.00%         5.96%

U.S. Government agency
   securities ............      $60,737       $   3,012       $--         $    --         $63,749
                                   7.20%           7.13%       0.00%           0.00%         7.19%
                                -------       ---------       -----       ---------       -------

Total ....................      $76,156       $   3,012       $--         $    --         $79,168
                                =======       =========       =====       =========       =======
Weighted average yield ...         6.95%           7.13%       0.00%           0.00%         6.96%
                                =======       =========       =====       =========       =======

Equity securities ........      $  --         $    --         $--         $   2,062       $ 2,062
                                -------       ---------       -----       ---------       -------

Total ....................      $76,156       $   3,012       $--         $   2,062       $81,230
                                =======       =========       =====       =========       =======
</TABLE>

         The Company to date has not  engaged,  and does not intend to engage in
the immediate future, in trading investment securities.

         The  following  table  sets  forth  information  with  respect  to  the
investment  securities  owned by the  Company  at June  30,  1998,  which  had a
carrying  value greater than 10% of the Company's  stockholders'  equity at such
date,  other than securities  issued by the United States  Government and United
States Government agencies and corporations.
<TABLE>
<CAPTION>
                                                Estimated Market             Weighted
  Name of Issuer            Carrying Value            Value               Average Yield
  --------------            --------------            -----               -------------
                                             (Dollars in Thousands)
<S>                              <C>                 <C>                     <C>  
Union Pacific Commercial         
  Paper                          $4,553              $4,553                  5.92%                       
TCI Commercial Paper              4,257               4,257                  5.97%
                                -------             -------                  ----
   
                                 $8,810              $8,810                  5.95%
                                 ======              ======                  ====

</TABLE>
<PAGE>
Sources of Funds

         The  Company's  principal  source of funds for use in  lending  and for
other general business  purposes has  traditionally  come from deposits obtained
through the  Company's  home and branch  offices.  Funding is also  derived from
Federal  Home  Loan  Bank  advances,  short-term  borrowings,  amortization  and
prepayments  of  outstanding  loans  and  mortgage-backed  securities  and  from
maturing investment securities.

         Deposits.  The Company's  deposits  totaled  $167.7 million at June 30,
1998, as compared to $170.9 million at June 30, 1997. The $3.2 million  decrease
was attributable to a $6.2 million decrease in certificates of deposit partially
offset by an approximate  $2.6 million  increase in core  deposits.  In order to
mitigate  the decline in time  deposits,  and to attract new and lower cost core
deposits, the Company continued to offer a no minimum balance,  "free", checking
account  product.  Current deposit  products  include regular savings  accounts,
demand accounts,  negotiable  order of withdrawal  (NOW) accounts,  money market
deposit accounts and certificates of deposit ranging in terms from 30 days to 10
years.  Included among these deposit  products are  certificates of deposit with
negotiable  interest  rates and balances of $100,000 or more,  which amounted to
$10.3  million or 6.1% of the  Company's  total  deposits at June 30,  1998,  as
compared  to $11.1  million  or 6.5% at June 30,  1997.  The  Company's  deposit
products  also  include  Individual   Retirement   Account   certificates  ("IRA
certificates").

         The  Company's  deposits  are  obtained  primarily  from  residents  of
northern Allegheny,  southern Butler and eastern Beaver counties,  Pennsylvania.
The Company  attracts  deposit  accounts by offering a wide variety of accounts,
competitive  interest rates, and convenient  office locations and service hours.
The Company utilizes traditional  marketing methods to attract new customers and
savings  deposits,  including print media  advertising and direct mailings.  The
Company  does not  advertise  for  deposits  outside of its local market area or
utilize  the  services  of deposit  brokers,  and  Management  believes  that an
insignificant   number  of  deposit  accounts  were  held  by  non-residents  of
Pennsylvania at June 30, 1998. The Company has drive-up  banking  facilities and
automated  teller  machines  ("ATMs")  at  its  McCandless,  Franklin  Park  and
Cranberry Township offices. The Company participates in the MAC(R) and CIRRUS(R)
ATM networks.

         The  Company  has been  competitive  in the  types of  accounts  and in
interest rates it has offered on its deposit products and continued to price its
savings products nearer to the market average rate as opposed to the upper range
of market offering  rates.  The Company has continued to emphasize the retention
and  growth  of  core  deposits,   particularly   demand   deposits.   Financial
institutions generally, including the Company, have experienced a certain degree
of depositor  disintermediation  to other  investment  alternatives.  Management
believes that the degree of disintermediation experienced by the Company has not
had a material impact on overall liquidity.
<PAGE>
         The  following  table sets forth the average  balance of the  Company's
deposits and the average  rates paid  thereon for the past three years.  Average
balances are derived from month-end balances.
<TABLE>
<CAPTION>
                                                                   At June 30,
                                   ------------------------------------------------------------------------
                                            1998                      1997                     1996
                                   ---------------------    -----------------------  ---------------------- 
                                    Amount          Rate     Amount          Rate     Amount          Rate
                                   --------         ----    --------         ----    --------         ---- 
                                                             (Dollars in Thousands)
<S>                                <C>              <C>     <C>              <C>     <C>              <C>  
Regular savings and club
     accounts ...............      $ 36,576         2.62%   $ 36,330         2.61%   $ 37,560         2.66%
NOW accounts ................        14,998         0.91      14,398         0.88      14,483         1.35
Money market deposit
     accounts ...............        11,711         2.64      12,045         2.63      11,438         2.64
Certificate of deposit
     accounts ...............        96,140         5.72      99,773         5.66     102,263         5.76
Escrows .....................         2,430         1.81       2,471         1.82       2,536         1.81
                                   --------                 --------                 --------  
     Total interest-bearing
       deposits and escrows .       161,855         4.29     165,017         4.29     168,280         4.42
Non-interest-bearing checking
     accounts ...............         7,073          --        6,459           --       4,559           --
                                   --------                 --------                 -------- 
     Total deposits and
       escrows ..............      $168,928         4.11%   $171,476         4.13%   $172,839         4.30%
                                   ========         ====    ========         ====    ========         ====
</TABLE>
         The  following  table sets forth the net  deposit  flows of the Company
during the periods indicated.
<TABLE>
<CAPTION>
                                                   Year Ended June 30,
                                         --------------------------------------
                                           1998            1997           1996
                                         --------       --------       --------
                                                  (Dollars in Thousands)
<S>                                      <C>            <C>            <C>      
(Decrease) before interest credited      $(10,057)      $ (7,011)      $ (5,339)
Interest credited .................         6,848          7,047          7,396
                                         --------       --------       --------
Net deposit (decrease) increase ...      $ (3,209)      $     36       $  2,057
                                         ========       ========       ========

</TABLE>
<PAGE>
         The  following  table  sets  forth  maturities  of the  Company's  time
deposits of $100,000 or more at June 30, 1998, by time remaining to maturity.
<TABLE>
<CAPTION>
                                                                 Amounts
                                                                --------
                                                          (Dollars in Thousands)
<S>                                                             <C>     
         Three months or less                                   $  2,079
         Over three months through six months                      1,956
         Over six months through twelve months                     3,651
         Over twelve months                                        2,564
                                                                -------- 
                                                                $ 10,250
                                                                ========
</TABLE>

         Borrowings. Borrowings are comprised of Federal Home Loan Bank advances
with  various  terms and  repurchase  agreements  with  securities  brokers with
original  maturities  of ninety-two  days or less. At June 30, 1998,  borrowings
totaled $89.7  million as compared to $84.6  million at June 30, 1997.  The $5.1
million or 6.0% increase was primarily  used to meet ongoing  commitments to pay
maturing certificates of deposit and savings withdrawals,  fund loan commitments
and fund the Company's  purchase of investment  and  mortgage-backed  securities
during  fiscal 1998.  The Company  believes that the judicious use of borrowings
has  allowed  it to pursue a  strategy  of  increasing  net  interest  income by
purchasing  investment  securities  with  lower  total cost  wholesale  funding.
Wholesale funding also provides the Company with a larger degree of control with
respect  to the  term  structure  of its  liabilities  than  traditional  retail
deposits.  The Company also avoids the additional  cost  associated with federal
deposit insurance premiums through the utilization of borrowings,  as opposed to
retail deposits.

Competition

         The Company faces significant  competition in attracting deposits.  Its
most direct competition for deposits has historically come from commercial banks
and other  savings  institutions  located in its market  area.  The Company also
faces  additional  significant  competition  for  investors'  funds  from  other
financial  intermediaries.  The Company  competes  for deposits  principally  by
offering depositors a variety of deposit programs,  convenient branch locations,
hours and other services. The Company does not rely upon any individual group or
entity for a material portion of its deposits.

         The Company's  competition for real estate loans comes principally from
mortgage banking  companies,  other savings  institutions,  commercial banks and
credit unions. The Company competes for loan originations  primarily through the
interest rates and loan fees it charges,  the efficiency and quality of services
it provides borrowers,  referrals from real estate brokers and builders, and the
variety of its products.  Factors which affect  competition  include the general
and local economic  conditions,  current  interest rate levels and volatility in
the mortgage markets.
<PAGE>
Employees

         The Company had 54 full-time employees and 10 part-time employees as of
June 30, 1998. None of these employees is represented by a collective bargaining
agent.  The  Company  believes  that it  enjoys  excellent  relations  with  its
personnel.

                           REGULATION AND SUPERVISION

The Company

         General.  The  Company,  as a  bank  holding  company,  is  subject  to
regulation and supervision by the Federal Reserve Board and by the  Pennsylvania
Department  of Banking  (the  "Department").  The  Company is  required  to file
annually a report of its operations  with, and is subject to examination by, the
Federal Reserve Board and the Department.

         BHCA Activities and Other Limitations.  The Bank Holding Company Act of
1956, as amended ("BHCA") prohibits a bank holding company from acquiring direct
or  indirect  ownership  or control of more than 5% of the voting  shares of any
bank,  or  increasing  such  ownership  or  control of any bank,  without  prior
approval of the Federal Reserve Board. The BHCA also generally  prohibits a bank
holding  company from  acquiring any bank located  outside of the state in which
the existing bank  subsidiaries  of the bank holding  company are located unless
specifically  authorized by applicable  state law. No approval under the BHCA is
required,  however, for a bank holding company already owning or controlling 50%
of the voting shares of a bank to acquire additional shares of such bank.

         The  BHCA  also  prohibits  a  bank  holding   company,   with  certain
exceptions, from acquiring more than 5% of the voting shares of any company that
is not a bank and from  engaging in any business  other than banking or managing
or controlling banks. Under the BHCA, the Federal Reserve Board is authorized to
approve the  ownership of shares by a bank holding  company in any company,  the
activities of which the Federal  Reserve  Board has  determined to be so closely
related  to  banking  or to  managing  or  controlling  banks  as to be a proper
incident thereto.  In making such  determinations,  the Federal Reserve Board is
required  to  weigh  the  expected  benefit  to  the  public,  such  as  greater
convenience,  increased competition or gains in efficiency, against the possible
adverse effects,  such as undue concentration of resources,  decreased or unfair
competition, conflicts of interest or unsound banking practices.

         The Federal  Reserve  Board has by regulation  determined  that certain
activities are closely related to banking within the meaning of the BHCA.  These
activities  include operating a mortgage company,  finance company,  credit card
company,  factoring company,  trust company or savings  association;  performing
certain data  processing  operations;  providing  limited  securities  brokerage
services;  acting as an investment or financial advisor;  acting as an insurance
agent for certain types of credit-related  insurance;  leasing personal property
on a full-payout,  non-operating  basis;  providing tax planning and preparation
services; operating a collection agency; and providing certain courier services.
The Federal  Reserve Board also has  determined  that certain other  activities,
including real estate  brokerage and  syndication,  land  development,  property
management   and   underwriting   of  life   insurance  not  related  to  credit
transactions, are not closely related to banking and a proper incident thereto.
<PAGE>
         Capital  Requirements.  The Federal  Reserve Board has adopted  capital
adequacy  guidelines  pursuant to which it assesses  the  adequacy of capital in
examining and supervising a bank holding  company and in analyzing  applications
to it under the BHCA.  The Federal  Reserve  Board capital  adequacy  guidelines
generally  require bank holding  companies to maintain total capital equal to 8%
of total risk-adjusted  assets, with at least one-half of that amount consisting
of Tier I or core capital and up to one-half of that amount  consisting  of Tier
II or supplementary capital. Tier I capital for bank holding companies generally
consists of the sum of common stockholders' equity and perpetual preferred stock
(subject in the case of the latter to limitations on the kind and amount of such
stocks which may be included as Tier I capital),  less goodwill. Tier II capital
generally  consists of hybrid capital  instruments;  perpetual  preferred  stock
which is not eligible to be included as Tier I capital;  term  subordinated debt
and  intermediate-term  preferred stock;  and,  subject to limitations,  general
allowances for loan losses.  Assets are adjusted under the risk-based guidelines
to take into account different risk characteristics, with the categories ranging
from 0% (requiring  no  additional  capital) for assets such as cash to 100% for
the bulk of assets which are typically held by a bank holding company, including
multi-family  residential and commercial real estate loans,  commercial business
loans and consumer loans.  Single-family  residential first mortgage loans which
are not (90 days or more) past-due or non-performing and which have been made in
accordance with prudent  underwriting  standards are assigned a 50% level in the
risk-weighing system, as are certain privately-issued mortgage-backed securities
representing indirect ownership of such loans.  Off-balance sheet items also are
adjusted to take into account certain risk characteristics.

         In addition to the risk-based capital requirements, the Federal Reserve
Board  requires bank holding  companies to maintain a minimum  leverage  capital
ratio of Tier I capital to total  assets of 3.0%.  Total assets for this purpose
does not include goodwill and any other  intangible  assets and investments that
the Federal Reserve Board determines should be deducted from Tier I capital. The
Federal Reserve Board has announced that the 3.0% Tier I leverage  capital ratio
requirement is the minimum for the top-rated bank holding  companies without any
supervisory,  financial or operational weaknesses or deficiencies or those which
are not  experiencing or  anticipating  significant  growth.  Other bank holding
companies  will be  expected to maintain  Tier I leverage  capital  ratios of at
least 4.0% to 5.0% or more, depending on their overall condition.

         The Company is in compliance with the  above-described  Federal Reserve
Board regulatory capital requirements.

         Commitments  to Affiliated  Institutions.  Under Federal  Reserve Board
policy,  the Company is expected to act as a source of financial strength to the
Savings   Bank  and  to  commit   resources  to  support  the  Savings  Bank  in
circumstances  when it might not do so absent  such  policy.  The  legality  and
precise scope of this policy is unclear,  however,  in light of recent  judicial
precedent.

The Savings Bank

         General.  The  Savings  Bank is subject  to  extensive  regulation  and
examination by the Department and by the FDIC, which insures its deposits to the
maximum  extent  permitted  by  law,  and is  subject  to  certain  requirements
established  by the  Federal  Reserve  Board.  The  federal  and state  laws and
regulations  which are  applicable to banks  regulate,  among other things,  the
scope of their business, their investments, their reserves against deposits, the
timing of the  availability  of deposited funds and the nature and amount of and
collateral for certain  loans.  The laws and  regulations  governing the Savings
Bank  generally  have been  promulgated  to protect  depositors  and not for the
purpose of protecting stockholders.
<PAGE>
         FDIC  Insurance  Premiums.  The Savings  Bank  currently  pays  deposit
insurance  premiums  to  the  FDIC  based  on  a  risk-based  assessment  system
established  by the  FDIC for all  SAIF-member  institutions.  Under  applicable
regulations,  institutions  are assigned to one of three capital groups which is
based  solely on the  level of an  institution's  capital - "well  capitalized",
"adequately  capitalized" and  "undercapitalized"-  which is defined in the same
manner as the regulations establishing the prompt corrective action system under
Section 38 of the Federal Deposit  Insurance Act ("FDIA"),  as discussed  below.
These three groups are then divided into three  subgroups  which reflect varying
levels of supervisory concern,  from those which are considered to be healthy to
those which are considered to be of substantial  supervisory concern. The matrix
so created results in nine assessment risk  classifications,  with rates ranging
from   0.00%  for  well   capitalized,   healthy   institutions   to  0.27%  for
undercapitalized institutions with substantial supervisory concerns. The Savings
Bank is a "well-capitalized" institution as of June 30, 1998.

         On September 30, 1996, the President signed the Deposit Insurance Funds
Act of 1996 (the  "Funds  Act")  into law.  The Funds Act  called  for a Special
Assessment on  SAIF-assessable  deposits as of March 31, 1995, to capitalize the
SAIF to its designated  reserve ratio of 1.25%.  The Company  recorded a pre-tax
charge of  approximately  $1.1 million  during the quarter  ended  September 30,
1996,  using an FDIC  estimated  assessment  rate of $0.657  for  every  $100 of
assessable  deposits.  During the quarter ended  December 31, 1996,  the Company
accrued a $102 thousand refund of prepaid federal deposit insurance  premiums as
a result of the  capitalization  of the SAIF.  The Funds Act also provides for a
Financing  Corporation  ("FICO") debt service assessment.  The current FICO debt
service  assessment  annual  rate for SAIF  members is 6.3 basis  points (or 6.3
cents per $100 of assessable deposits).

         Capital Requirements.  The FDIC has promulgated regulations and adopted
a statement of policy  regarding the capital adequacy of  state-chartered  banks
which,  like the Savings Bank,  are not members of the Federal  Reserve  System.
These  requirements  are  substantially  similar to those adopted by the Federal
Reserve Board regarding bank holding companies, as described above.

         The FDIC's capital regulations establish a minimum 3.0% Tier I leverage
capital requirement for the most highly-rated state-chartered, non-member banks,
with an  additional  cushion  of at least 100 to 200 basis  points for all other
state-chartered,  non-member banks,  which effectively will increase the minimum
Tier I leverage  ratio for such other  banks to 4.0% to 5.0% or more.  Under the
FDIC's  regulation,  highest-rated  banks are those that the FDIC determines are
not  anticipating or experiencing  significant  growth and have well diversified
risk,  including no undue interest rate risk exposure,  excellent asset quality,
high  liquidity,  good earnings and, in general,  which are  considered a strong
banking organization, rated composite 1 under the Uniform Financial Institutions
Rating System.

         A bank which has less than the  minimum  leverage  capital  requirement
shall,  within  60 days of the date as of which it  fails to  comply  with  such
requirement,  submit to its FDIC regional  director for review and  approval,  a
reasonable  plan describing the means and timing by which the bank shall achieve
its minimum leverage capital  requirement.  A bank which fails to file such plan
with the FDIC is deemed to be  operating  in an unsafe and unsound  manner,  and
could  subject the bank to a  cease-and-desist  order from the FDIC.  The FDIC's
regulation also provides that any insured depository institution with a ratio of
Tier I capital to total  assets that is less than 2.0% is deemed to be operating
in an unsafe or unsound  condition  pursuant to Section  8(a) of the FDIA and is
<PAGE>
subject  to  potential  termination  of  deposit  insurance.  However,  such  an
institution will not be subject to an enforcement  proceeding  thereunder solely
on account of its  capital  ratios if it has entered  into and is in  compliance
with a written  agreement with the FDIC to increase its Tier I leverage  capital
ratio to such level as the FDIC deems  appropriate and to take such other action
as may be  necessary  for the  institution  to be  operated  in a safe and sound
manner. The FDIC capital  regulation also provides,  among other things, for the
issuance by the FDIC or its designee(s) of a capital directive, which is a final
order  issued to a bank that fails to  maintain  minimum  capital to restore its
capital to the minimum  leverage  capital  requirement  within a specified  time
period.   Such   directive  is  enforceable  in  the  same  manner  as  a  final
cease-and-desist order.

Miscellaneous

         The  Savings  Bank is subject to certain  restrictions  on loans to the
Company,  on  investments in the stock or securities  thereof,  on the taking of
such stock or  securities as  collateral  for loans to any borrower,  and on the
issuance  of a  guarantee  or letter of  credit  on behalf of the  Company.  The
Savings  Bank  is  also  subject  to  certain  restrictions  on  most  types  of
transactions with the Company,  requiring that the terms of such transactions be
substantially  equivalent to terms of similar  transactions with  non-affiliated
firms.  In  addition,  there are  various  limitations  on the  distribution  of
dividends to the Company by the Savings Bank.

         The foregoing  references to laws and regulations  which are applicable
to the Company and the Savings  Bank are brief  summaries  thereof  which do not
purport to be complete and which are qualified in their entirety by reference to
such laws and regulations.

                           FEDERAL AND STATE TAXATION

         General.  The Company and the Savings Bank are subject to the generally
applicable  corporate tax  provisions of the Internal  Revenue Code of 1986 (the
"Code"),  as well as certain  additional  provisions  of the Code which apply to
thrift and other types of financial  institutions.  The following  discussion of
tax  matters  is  intended  only as a  summary  and  does  not  purport  to be a
comprehensive  description  of the tax rules  applicable  to the Company and the
Savings Bank.

         Fiscal Year. The Company currently files a consolidated  federal income
tax return on the basis of the calendar year ending on December 31.

         Method of Accounting.  The Company  maintains its books and records for
federal income tax purposes using the accrual method of accounting.  The accrual
method of accounting  generally requires that items of income be recognized when
all events have occurred that  establish the right to receive the income and the
amount of income can be determined  with  reasonable  accuracy and that items of
expense be deducted  at the later of (i) the time when all events have  occurred
that establish the liability to pay the expense and the amount of such liability
can be  determined  with  reasonable  accuracy  or (ii) the time  when  economic
performance with respect to the item of expense has occurred.

         Bad Debt Reserves.  Under Section 593 of the Code, thrift  institutions
such as the  Savings  Bank,  which meet  certain  definitional  tests  primarily
relating to their  assets and the nature of their  business,  are  permitted  to
<PAGE>
establish  a tax reserve  for bad debts and to make  annual  additions  thereto,
which additions may, within  specified  limitations,  be deducted in arriving at
their taxable income.  The Savings Bank's  deduction with respect to "qualifying
loans", which are generally loans secured by certain interests in real property,
may  currently be computed  using an amount based on the Savings  Bank's  actual
loss experience (the "experience  method"), or a percentage equal to 8.0% of the
Savings  Bank's taxable  income (the  "percentage  of taxable  income  method"),
computed without regard to this deduction and with additional  modifications and
reduced by the amount of any permitted addition to the  non-qualifying  reserve.
The Savings Bank has generally  used the  percentage of taxable income method in
the past.

         The Small Business Jobs Protection Act of 1996, adopted in August 1996,
generally  (i) repeals the  provision  of the Code which  authorizes  use of the
percentage  of taxable  income  method by  qualifying  savings  institutions  to
determine deductions for bad debts,  effective for taxable years beginning after
1995,  and (ii) requires that a savings  institution  recapture for tax purposes
(i.e. take into income) over a six-year period its applicable  excess  reserves,
which for a savings  institution  such as West View which is a "small bank",  as
defined  in the Code,  generally  is the  excess of the  balance of its bad debt
reserves as of the close of its last taxable year  beginning  before  January 1,
1996, over the balance of such reserves as of the close of its last taxable year
beginning before January 1, 1988, which recapture would be suspended for any tax
year that begins after  December 31,  1995,  and before  January 1, 1998 (thus a
maximum of two years),  in which a savings  institution  originates an amount of
residential  loans which is not less than the average of the principal amount of
such loans made by a savings  institution  during  its six most  recent  taxable
years beginning  before January 1, 1996. As an institution with less than $500.0
million  in assets,  the  Savings  Bank can elect to either  use the  experience
method  available to commercial  banks of this size or it can adopt the specific
charge-off method applicable to "large banks" (banks with total assets in excess
of $500.0 million).  The amount of tax bad debt reserves subject to recapture is
approximately  $1.2 million.  In accordance  with FASB No. 109,  deferred income
taxes have  previously  been  provided on this  amount,  therefore  no financial
statement  expense  should  be  recorded  as a  result  of this  recapture.  The
Company's  supplemented  bad debt reserve of  approximately  $3.8 million is not
subject to recapture.  The Company does not believe that these  provisions  will
have  a  material  adverse  effect  on  the  Company's  financial  condition  or
operations.

         The above-referenced legislation also repeals certain provisions of the
Code that only apply to thrift  institutions  to which Section 593 applies:  (i)
the denial of a portion of certain tax credits to a thrift institution; (ii) the
special rules with respect to the  foreclosure  of property  securing loans of a
thrift institution; (iii) the reduction in the dividends received deduction of a
thrift  institution;  and (iv) the ability of a thrift  institution to use a net
operating  loss to offset its income  from a residual  interest in a real estate
mortgage  investment  conduit.  It is not  anticipated  that the repeal of these
provisions  will  have a  material  adverse  effect on the  Company's  financial
condition or operations.

         Audit by IRS. The Company's consolidated federal income tax returns for
taxable  years  through  December 31, 1994,  have been closed for the purpose of
examination by the Internal Revenue Service.
<PAGE>
         State Taxation.  The Company is subject to the  Pennsylvania  Corporate
Net Income Tax and Capital Stock and Franchise Tax. The  Pennsylvania  Corporate
Net Income Tax rate was reduced from 10.99% to 9.99% effective  January 1, 1995,
and is imposed  on the  Company's  unconsolidated  taxable  income  for  federal
purposes  with  certain  adjustments.  In general,  the  Capital  Stock Tax is a
property  tax  imposed at the rate of 12.75% of a  corporation's  capital  stock
value, which is determined in accordance with a fixed formula based upon average
net income and net worth.

         The  Savings  Bank  is  taxed  under  the  Pennsylvania  Mutual  Thrift
Institutions  Tax Act (enacted on December  13, 1988,  and amended in July 1989)
(the "MTIT"),  as amended to include thrift  institutions  having capital stock.
Pursuant to the MTIT,  the Savings  Bank's  current tax rate is 11.5%.  The MTIT
exempts the Savings  Bank from all other taxes  imposed by the  Commonwealth  of
Pennsylvania  for state income tax purposes and from all local taxation  imposed
by  political  subdivisions,  except  taxes  on  real  estate  and  real  estate
transfers.  The MTIT is a tax upon net earnings,  determined in accordance  with
generally accepted accounting principles ("GAAP") with certain adjustments.  The
MTIT, in computing GAAP income,  allows for the deduction of interest  earned on
state and federal  securities,  while  disallowing  a  percentage  of a thrift's
interest expense  deduction in the proportion of those securities to the overall
investment  portfolio.  Net operating losses, if any,  thereafter can be carried
forward three years for MTIT purposes.
<PAGE>
Item 2.  Properties.

         The following table sets forth certain  information with respect to the
offices and other properties of the Company at June 30, 1998.
<TABLE>
<CAPTION>
                                                                                                 Net Book
                                                                                                 Value of
         Description/Address                          Leased/Owned                               Property
         -------------------                          ------------                               --------
                                                                                         (Dollars in Thousands)

<S>                                                      <C>                                        <C> 
         McCandless Office                               Owned                                      $155
            9001 Perry Highway
            Pittsburgh, PA  15237

         West View Boro Office                           Owned                                        10
            456 Perry Highway
            Pittsburgh, PA  15229

         Cranberry Township Office                       Owned                                       272
            20531 Perry Highway
            Cranberry Township, PA  16066

         Sherwood Oaks Office                            Leased(1)                                   ---
            100 Norman Drive
            Cranberry Township, PA  16066

         Bellevue Boro Office                            Leased(2)                                    17
            572 Lincoln Avenue
            Pittsburgh, PA  15202

         Franklin Park Boro Office                       Owned                                       586
            2566 Brandt School Road
            Wexford, PA  15090
</TABLE>
--------
(1)  The Company operates this office out of a retirement  community.  The lease
     expires in June 2000.

(2)  The lease is for a period  of 15 years  ending  in  September  2006 with an
     option for the Company to renew the lease for an additional five years.

Item 3.  Legal Proceedings.

         The information  required herein is incorporated by reference from page
45 of the  Company's  1998  Annual  Report,  Note 14 of  Notes  to  Consolidated
Financial Statements, "Litigation".


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

         Not applicable.
<PAGE>
PART II.

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

         The information  required herein is incorporated by reference from page
62 of the Company's 1998 Annual Report.

Item 6.    Selected Financial Data.

         The information required herein is incorporated by reference from pages
2 to 3 of the Company's 1998 Annual Report.

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

         The information required herein is incorporated by reference from pages
4 to 26 of the Company's 1998 Annual Report.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

         The information required herein is incorporated by reference from pages
11 to 13 of the Company's 1998 Annual Report.


Item 8.    Financial Statements and Supplementary Data.

         The information required herein is incorporated by reference from pages
27 to 61 of the Company's 1998 Annual Report.

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

         Not applicable.


PART III.

Item 10. Directors and Executive Officers of the Registrant.

         The information required herein is incorporated by reference from pages
3 to 6 of  the  Company's  Proxy  Statement  for  the  1998  Annual  Meeting  of
Stockholders dated September 24, 1998 ("Proxy Statement").

Item 11. Executive Compensation.

         The information required herein is incorporated by reference from pages
10 to 15 of the Company's Proxy Statement.

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

         The information required herein is incorporated by reference from pages
7 to 9 of the Company's Proxy Statement.

Item 13. Certain Relationships and Related Transactions.

         The information  required herein is incorporated by reference from page
16 of the Company's Proxy Statement.
<PAGE>
PART IV.

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

         (a)  Documents filed as part of this report.

         (1) The  following  documents  are filed as part of this report and are
incorporated herein by reference from the Company's 1998 Annual Report.

         Report of Independent Auditors.

         Consolidated  Statements  of  Financial  Condition at June 30, 1998 and
         1997.

         Consolidated  Statements  of Income for the Years Ended June 30,  1998,
         1997 and 1996.

         Consolidated  Statements  of  Changes in  Stockholders'  Equity for the
         Years Ended June 30, 1998, 1997 and 1996.

         Consolidated  Statements  of Cash  Flows for the Years  Ended  June 30,
         1998, 1997 and 1996.

         Notes to the Consolidated Financial Statements.

         (2) All  schedules  for  which  provision  is  made  in the  applicable
accounting  regulation of the  Securities  and Exchange  Commission  ("SEC") are
omitted because they are not applicable or the required  information is included
in the Consolidated Financial Statements or notes thereto.
<PAGE>
         (3)(a)The  following  exhibits are filed as part of this Form 10-K, and
this list includes the Exhibit Index.

      No.                 Description                                 Page
      ---                 -----------                                 ----
      3.1         Articles of Incorporation                             *
      3.2         By-Laws                                               *
      4           Stock Certificate of WVS Financial Corp.              *
     10.1         WVS Financial Corp. Recognition Plans and
                      Trusts for Executive Officers,
                      Directors and Key Employees**                     *
     10.2         WVS Financial Corp. 1993 Stock Incentive Plan**       *
     10.3         WVS Financial Corp. 1993 Directors' Stock
                      Option Plan**                                     *
     10.4         WVS Financial Corp. Employee Stock Ownership
                      Plan and Trust**                                  *
     10.5         Amended West View Savings Bank Employee
                      Profit Sharing Plan**                             *
     10.6         Employment Agreements between WVS Financial
                      Corp. and David Bursic, Margaret
                      VonDerau and Edward Wielgus**                   ***
     10.7         Directors Deferred Compensation Program**             *
     11           Statement Re Computation of Per Share Earnings      E-1
     13           1998 Annual Report to Stockholders                  E-2
     21           Subsidiaries of the Registrant - Reference is
                      made to Item 1. "Business" for the
                      required information
     23           Consent of Independent Auditors                    E-65
     27           Financial Data Schedule                            E-66


*    Incorporated  by  reference  from the  Registration  Statement  on Form S-1
     (Registration No. 33-67506) filed by the Company with the SEC on August 16,
     1993, as amended.

**   Management contract or compensatory plan or arrangement.

***  Incorporated by reference from the 1997 Form 10-K filed by the Company with
     the SEC on September 26, 1997.
 
         (3)(b) The Company filed a Current  Report on Form 8-K,  dated June 19,
1998,  announcing  the  appointment of David J. Bursic,  and the  resignation of
Robert C. Sinewe,  as President  and Chief  Executive  Officer of WVS  Financial
Corp. and West View Savings Bank.


         
<PAGE>

                                   SIGNATURES


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

                                           WVS FINANCIAL CORP.



September 24, 1998                      By:/s/ David J. Bursic
                                           -------------------
                                           David J. Bursic
                                           President and Chief Executive Officer

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



/s/ David J. Bursic                                           September 24, 1998
-------------------- 
David J. Bursic, Director, President and
Chief Executive Officer (Principal
Executive and Principal Financial Officer)



/s/ James S. McKain Jr.                                       September 24, 1998
---------------------- 
James S. McKain, Jr., Chairman of the Board



/s/ Margaret VonDerau                                         September 24, 1998
---------------------
Margaret VonDerau, Director, Senior Vice
President, Treasurer and Corporate Secretary
<PAGE>

/s/ David L. Aeberli                                          September 24, 1998
-------------------- 
David L. Aeberli, Director



/s/ Arthur H. Brandt                                          September 24, 1998
-------------------- 
Arthur H. Brandt, Director



/s/ William J. Hoegel                                         September 24, 1998
--------------------- 
William J. Hoegel, Director



/s/ Donald E. Hook                                            September 24, 1998
------------------
Donald E. Hook, Director



/s/ James H. Ritchie                                          September 24, 1998
--------------------
James H. Ritchie, Director



/s/ John M. Seifarth                                          September 24, 1998
---------------------
John M. Seifarth, Director