1




                                    FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


[ X ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                    For the fiscal year ended: June 30, 2001

                                       OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

           For the transition period from __________ to __________

                          Commission File 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 ]

As of September 20, 2001, the aggregate value of the 2,258,222 shares of Common
Stock of the Registrant issued and outstanding on such date, which excludes
489,862 shares held by all directors and officers of the Registrant as a group,
was approximately $37.0 million. This figure is based on the last known trade
price of $16.40 per share of the Registrant's Common Stock on September 20,
2001.

Number of shares of Common Stock outstanding as of September 20, 2001: 2,748,084



<PAGE>


                       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, 2001 are incorporated into Parts I, II and IV.
(2) Portions of the  definitive  proxy  statement for the 2001 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. The Savings Bank converted to the stock form of ownership in
November 1993. The Savings Bank had no subsidiaries at June 30, 2001.


Lending Activities

               General. At June 30, 2001, the Company's net portfolio of loans
receivable totaled $185.2 million, as compared to $183.3 million at June 30,
2000. Net loans receivable comprised 46.7% of Company total assets and 102.1% of
total deposits at June 30, 2001, as compared to 44.8% and 106.0%, respectively,
at June 30, 2000. 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, consumer loans and land acquisition and
development 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.

        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, 2001, the Savings Bank's limit on
loans-to-one borrower was approximately $3.6 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, 2001, 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 $3.3 million, and are secured primarily by real estate
located in the Company's primary market area.

                                       2
<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.


<PAGE>

<TABLE>
<CAPTION>
                                                                        At June 30,
                     --------------------------------------------------------------------------------------------------------------
                             2001                     2000                 1999                 1998                     1997
                     -------------------    ------------------      ---------------     ------------------        -----------------
                       Amount       %         Amount       %         Amount      %       Amount        %           Amount       %
                       ------      ---        -----       ---        ------     ---      ------       ---          ------      ---
                                                                 (Dollars in Thousands)
<S>                   <C>         <C>        <C>         <C>        <C>        <C>       <C>        <C>          <C>         <C>
Real estate loans:
Single-family         $105,623    51.50%     $105,964    52.49%     $103,035   54.43%    $104,849   61.06%       $116,663    67.25%
Multi-family             6,920     3.37         6,077     3.01         5,925    3.12        4,012    2.34           3,499     2.02
Commercial              34,955    17.05        32,847    16.27        28,546   15.08       21,021   12.24          14,669     8.46
Construction            28,157    13.73        26,935    13.34        23,810   12.58       17,779   10.35          16,969     9.78
Land acquisition
 and development         6,343     3.09         7,510     3.72         7,646    4.04        7,233    4.21           7,412     4.27
                         -----   ------         -----   ------         -----  ------     --------  ------        --------   ------
Total real estate
  loans                181,998    88.74       179,333    88.83       168,962   89.25      154,894   90.20         159,212    91.78
                       -------    -----       -------    -----       -------   -----      -------   -----         -------    -----
Consumer loans:
Home equity             19,142     9.33        18,558     9.19        16,467    8.70       13,613    7.93          12,258     7.06
Education                   31     0.02            57     0.03            11    0.01          591    0.34             516     0.30
Other                    2,092     1.02         2,062     1.02         2,153    1.14        2,336    1.36           1,403     0.81
                      --------   ------      --------   ------      --------  ------     --------  ------        --------   ------
Total consumer
  loans                 21,265    10.37        20,677    10.24        18,631    9.85       16,540    9.63          14,177     8.17
                       -------    -----       -------    -----       -------  ------      -------  ------         -------   ------
Commercial loans         1,819     0.89         1,879     0.93         1,720    0.90          290    0.17              91     0.05
                      --------   ------      --------   ------      --------  ------     --------  ------        --------   ------
Commercial lease
  financings               ---     0.00           ---     0.00           ---    0.00          ---    0.00               2     0.00
                      --------   ------      --------   ------      --------  ------     --------  ------        --------   ------
                       205,082   100.00%      201,889   100.00%      189,313  100.00%     171,724  100.00%        173,482   100.00%
                       -------   ======       -------   ======       -------  ======      -------  ======         -------   ======
Less:
Undisbursed loan
  proceeds             (16,481)               (15,820)               (16,327)             (11,312)                (12,505)
Net deferred loan
  origination fees        (659)                  (801)                  (817)                (815)                   (834)
Allowance for loan
  losses                (2,763)                (1,973)                (1,842)              (1,860)                 (2,009)
                      --------               --------               --------             --------                --------
Net loans
  receivable          $185,179               $183,295               $170,327             $157,737                $158,134
                      ========               ========               ========             ========                ========
</TABLE>



               Contractual Maturities. The following table sets forth the
scheduled contractual maturities of the Company's loans and mortgage-backed
securities at June 30, 2001. The amounts shown for each period do not take into
account loan prepayments and normal amortization of the Company's loan
portfolio.



<PAGE>

<TABLE>
<CAPTION>
                                                     Real Estate Loans
                               -------------------------------------------------------------
                                                                                    Land       Consumer
                                                                                 acquisition  loans and     Mortgage
                               Single-     Multi-                                    and      commercial    -backed
                               family      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           $    235     $      1     $    239     $ 10,576     $  2,701     $    894     $      7     $ 14,653
  After one year through
     five years                 1,139          709        1,780        3,200        2,130        6,551          927       16,436
  After five years            104,249        6,210       32,936       14,381        1,512       15,639       63,198      238,125
                             --------     --------     --------     --------     --------     --------     --------     --------
     Total(1)                $105,623     $  6,920     $ 34,955     $ 28,157     $  6,343     $ 23,084     $ 64,132     $269,214
                             ========     ========     ========     ========     ========     ========     ========     ========

Interest rate terms on amounts due after one year:
  Fixed                      $ 94,647     $  4,226     $ 17,519     $ 11,175     $     90     $ 16,025     $ 48,170     $191,852
  Adjustable                   10,741        2,693       17,197        6,406        3,552        6,165       15,955       62,709
                             --------     --------     --------     --------     --------     --------     --------     --------
     Total                   $105,388     $  6,919     $ 34,716     $ 17,581     $  3,642     $ 22,190     $ 64,125     $254,561
                             ========     ========     ========     ========     ========     ========     ========     ========
</TABLE>

---------------
(1) Does not include adjustments relating to loans in process, the allowance for
    loan losses, accrued interest, deferred fee income and unearned discounts.

                                       3
<PAGE>


               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 due-on-sale
clauses. 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 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, 2001, the Company had approximately $8.3 million of
renewed commercial real estate and construction loans. The $8.3 million in
aggregate disbursed principal that has been renewed is comprised of:
construction and business lines of credit totaling $5.1 million and land
acquisition and single-family speculative construction loans totaling $3.2
million. 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.

               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. Loan applications are primarily
attributable to existing customers, builders, walk-in customers and referrals
from both real estate brokers and existing 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 at least monthly.

               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 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 Federal National Mortgage Association 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 2001, the
Company sold education loans with an approximate combined principal balance of
$313 thousand.

               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, 2001, $4.7 million or 2.5% of the



                                       4
<PAGE>

Company's total loans receivable consisted of whole loans and participation
interests in loans purchased from other financial institutions which consisted
of single-family mortgage pools.

               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, 2001, $4.7 million or 2.5% of the
Company's total loans receivable were being serviced for the Company by others.

               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,
                                                  ---------------------------------------
                                                     2001           2000           1999
                                                     ----           ----           ----
                                                            (Dollars in Thousands)

<S>                                               <C>           <C>            <C>
Net loans receivable beginning balance            $ 183,295     $ 170,327      $ 157,737
Real estate loan originations
   Single-family(1)                                   7,918        13,396         13,638
   Multi-family(2)                                      412            --          2,715
   Commercial                                         3,268         5,989         10,723
   Construction                                      22,255        17,157         14,230
   Land acquisition and development                   1,954         2,451          3,100
                                                  ---------     ---------      ---------
      Total real estate loan originations            35,807        38,993         44,406
                                                  ---------     ---------      ---------

Home equity                                           5,358         6,387          7,293
Education                                               342           348            373
Commercial                                              295           621            864
Other                                                   979           873            890
                                                  ---------     ---------      ---------
          Total loan originations                    42,781        47,222         53,826
                                                  ---------     ---------      ---------
Disbursements against available credit lines:
   Home equity                                        4,491         4,348          4,663
   Other                                                776           998            893
Purchase of whole loans and participations            2,848            --          3,479
                                                  ---------     ---------      ---------
     Total originations and purchases                50,896        52,568         62,861
                                                  ---------     ---------      ---------
Less:
   Loan principal repayments                         47,398        38,861         43,597
   Sales of whole loans and participations              313         1,093          1,469
   Transferred to real estate owned                      --            20            207
   Change in loans in process                           661          (508)         5,015
   Other, net(3)                                        640           134            (17)
                                                  ---------     ---------      ---------
     Net increase (decrease)                      $   1,884     $  12,968      $  12,590
                                                  ---------     ---------      ---------

Net loans receivable ending balance               $ 185,179     $ 183,295      $ 170,327
                                                  =========     =========      =========
</TABLE>

---------------
(1) Consists of loans secured by one-to-four 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 loan losses.


                                       5
<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 ("Guidelines") adopted by the federal banking
agencies in December 1992. The Guidelines set forth uniform regulations
prescribing standards for real estate lending. Real estate lending is defined as
an 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 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 - 70%; multi-family - 75%; speculative residential - 80%); and
residential properties (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, 2001, $105.6 million or 51.5%
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 $7.9 million and decreased $5.5 million
or 41.0% during the fiscal year ended June 30, 2001, when compared to the same
period in 2000. The decrease in single-family originations was primarily due to
lower cyclical mortgage refinancing activity.

               The Company historically has originated fixed-rate loans with
terms of up to 30 years. Although such loans are originated with the expectation
that they will be maintained in the portfolio, these loans are originated
generally under terms, conditions and documentation that 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.

               At June 30, 2001, approximately $94.6 million or 89.6% 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 100% 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 obtained on
residential loans for which loan-to-value ratios exceed 80% according to the
following schedule: loans exceeding 80% but less than 90% - 25% coverage; loans
exceeding 90% but less than 95% - 30% coverage; and loans exceeding 95% through
100% - 35% coverage. No loans are made in excess of 95% of appraised value.

                                       6
<PAGE>


               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 of the first mortgage real estate loans originated. 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 and Commercial Real Estate Loans. The
Company originates mortgage loans for the acquisition and refinancing of
existing multi-family residential and commercial real estate properties. At June
30, 2001, $6.9 million or 3.4% of the Company's total loan portfolio consisted
of loans secured by existing multi-family residential real estate properties,
which represented an increase of $843 thousand or 13.9% from fiscal 2000. At
June 30, 2001, $35.0 million or 17.1% of the loan portfolio consisted of loans
secured by existing commercial real estate properties, which represented an
increase of $2.1 million or 6.4% from fiscal 2000. During fiscal 2001, the
Company chose to emphasize originations of commercial real estate loans in order
to earn returns greater than those offered in the single-family residential
mortgage market.

               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 or adjustable interest
rates 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 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, 2001, the Company's multi-family residential and
commercial real estate loan portfolio consisted of approximately 115 loans with
an average principal balance of $364 thousand. At June 30, 2001, the Company had
four commercial real estate loans to four borrowers, totaling $3.3 million, that
were not accruing interest.

               Construction Loans. 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, 2001, construction
loans amounted to approximately $28.2 million or 13.7% of the Company's total
loan portfolio, which represented an increase of $1.2 million or 4.5% from
fiscal 2000. The increase was principally due to increased levels of new home
construction and in order to earn a higher rate of return than was available in
the single-family residential mortgage market. As of June 30, 2001, the
Company's portfolio of construction loans consisted of $25.3 million of loans


                                       7
<PAGE>

for the construction of single-family residential real estate, $2.5 million of
loans for the construction of commercial real estate, and $486 thousand of loans
for the construction of multi-family residential real estate. Construction loan
originations totaled $22.3 million and increased by $5.1 million or 29.7% during
the fiscal year ended June 30, 2001, when compared to the same period in 2000.

               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, 2001,
approximately 31.1% 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 68.9% 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 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 approximately $1.2 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, 2001, the Company also had $6.3 million or 3.1% of the total loan
portfolio invested in land development loans, which consisted of 26 loans to 23
developers.

               Speculative 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.

               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, 2001, $21.3 million or 10.4% of the Company's total loan portfolio consisted
of consumer loans, which represented an increase of $588 thousand or 2.8% from
fiscal 2000. 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.

                                       8
<PAGE>


               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,
2001, approximately 71.4% 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, 2001, $1.8 million 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 $60 thousand or 3.2% decrease from fiscal 2000 was
principally due to principal repayments. The Company is selectively developing
this line of business in order to increase interest income and to attract
compensating deposit account balances.

               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.

               The Company charges loan origination fees that 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 $202 thousand,
$212 thousand and $341 thousand of deferred loan fees during fiscal 2001, 2000
and 1999, respectively, in connection with loan refinancings, payoffs and
ongoing amortization of outstanding loans. The decreases in loan origination fee
income for fiscal years 2001 and 2000 were principally attributable to a lower
volume of loan refinancings and an increasing amount of no-fee loan
originations. A higher volume of loan refinancings will permit the acceleration
of associated deferred fee balances.

               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.

                                       9
<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,
                                               ----------------------------------------------------------
                                                 2001        2000         1999       1998        1997
                                                 ----        ----         ----       ----        ----
                                                                 (Dollars in Thousands)
<S>                                             <C>         <C>         <C>         <C>         <C>
Non-accruing loans:
Real estate:
   Single-family(1)                             $  201      $   67      $  189      $   52      $   --
   Commercial(2)                                 3,326       2,344         274         481         274
   Construction(3)                               1,355       1,520          --          --          --
Consumer(4)                                        134         113          77          70          --
Commercial loans and leases                         --           6           7          --          --
                                                ------      ------      ------      ------      ------
Total non-accrual loans                          5,016       4,050         547         603         274
                                                ------      ------      ------      ------      ------
Accruing loans greater than 90 days
   delinquent                                       --          --          --          --          --
                                                ------      ------      ------      ------      ------
     Total non-performing loans                 $5,016      $4,050      $  547      $  603      $  274
                                                ------      ------      ------      ------      ------
Real estate owned                                   --          --         218          --          --
                                                ------      ------      ------      ------      ------
     Total non-performing assets                $5,016      $4,050      $  765      $  603      $  274
                                                ======      ======      ======      ======      ======
Troubled debt restructurings                    $   --      $   --      $   --      $   --      $   --
                                                ======      ======      ======      ======      ======
Total non-performing loans and troubled
 debt restructurings as a percentage of
 net loans receivable                             2.71%       2.21%       0.32%       0.38%       0.17%
                                                ======      ======      ======      ======      ======
Total non-performing assets to total assets       1.27%       1.00%       0.22%       0.20%       0.09%
                                                ======      ======      ======      ======      ======
Total non-performing assets and troubled
   debt restructurings as a percentage of
    total assets                                  1.27%       1.00%       0.22%       0.20%       0.09%
                                                ======      ======      ======      ======      ======
</TABLE>


---------------
(1) At June 30, 2001, non-accrual single-family residential real estate loans
    consisted of three loans.
(2) At June 30, 2001, non-accrual commercial real estate loans consisted of four
    loans.
(3) At June 30, 2001, non-accrual construction loans consisted of three loans.
(4) At June 30, 2001, non-accrual consumer loans consisted of four loans.

               The $966 thousand increase in non-accrual loans during fiscal
2001 is comprised of a $982 thousand increase in non-accrual commercial real
estate loans, a $134 thousand increase in non-accrual single-family real estate
loans and a $21 thousand increase in non-accrual consumer loans, partially
offset by a $165 thousand decrease in non-accrual construction loans and a $6
thousand decrease in non-accrual commercial loans and leases.

               As of June 30, 2001, the Company had four commercial real estate
and three commercial construction loans classified as non-accrual loans. One of
the commercial real estate loans is secured by a restaurant and real estate
located in Wexford, PA. The outstanding principal on this loan totals $231
thousand and all payments due under the loan's restructuring plan have been
received to date. Two commercial real estate loans to a retirement village and
one construction loan to a personal care home located within the North Hills
area, became delinquent during fiscal 2000. The outstanding balances total $4.77
million of which $3.60 million is owned by the Company and the remaining $1.17
million serviced by the Company for four participating lenders. The loan to the
personal care home totals approximately $996 thousand and payments are being
collected in accordance with a written loan work-out agreement. One of the two
loans to the retirement village totaling $520 thousand is currently receiving
contractual interest-only payments pursuant to an informal work-out arrangement
with the borrower. No payments are presently being collected on the second
retirement village loan whose present principal balance is $2.1 million. Two
construction loans, secured by land developed and two speculative construction
homes, also became delinquent during fiscal 2001 due to the death of the
builder. The outstanding principal on these two loans


                                       10
<PAGE>

totals $835 thousand. The construction company has filed a Chapter 7 bankruptcy
petition with the Bankruptcy Court. The Savings Bank has retained legal counsel
to encourage an orderly sale of the underlying collateral which is expected to
occur during the second quarter of fiscal 2002. The Savings Bank does not expect
to incur a material loss during the Chapter Seven proceedings due to its senior
lien positions. The Company works with all delinquent borrowers in an attempt to
cure the defaults. The Company is also pursuing various legal avenues in order
to collect on the loans and has increased its loan loss provision during fiscal
2001.

               During fiscal 2001, 2000 and 1999, approximately $422 thousand,
$357 thousand and $42 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 $296 thousand, $180 thousand and $41 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
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
(1) on the responsibilities of management for the assessment and establishment
of an adequate allowance and (2) 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: (1) 50% of the portfolio that is classified doubtful; (2) 15% of
the portfolio that is classified substandard; and (3) 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

                                       11
<PAGE>

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.

               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: (1) 0% to 5% of assets subject to
special mention; (2) 5% to 25% of assets classified substandard; and (3) 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, 2001, is adequate.

               The allowance for loan losses at June 30, 2001 increased $790
thousand to $2.76 million due to additional provisions of $788 thousand and
recoveries of $19 thousand, which were offset by charge-offs of $17 thousand.
The provision made during fiscal 2001 was recorded to increase the Company's
general loan loss reserves due to a reappraisal of the collateral underlying a
non-performing commercial loan relationship. The Company believes that the
additional loan loss reserves are prudent and warranted at this time due to the
weakening of the national economy and the current work-out of this particular
credit. The increases in prior years reflected a number of factors, the most
significant of which were the industry trend towards greater emphasis on the
allowance method of providing for loan losses and the specific charge-off method
and the increase in non-accrual loans.

                                       12

<PAGE>



               The following table summarizes changes in the Company's allowance
for loan losses and other selected statistics for the periods indicated.


<PAGE>

<TABLE>
<CAPTION>
                                                                                At June 30,
                                                 ------------------------------------------------------------------------
                                                     2001           2000           1999          1998             1997
                                                     ----           ----           ----          ----             ----
                                                                          (Dollars in Thousands)

<S>                                              <C>             <C>            <C>            <C>             <C>
Average net loans                                $ 185,895       $ 177,557      $ 158,651      $ 163,046       $ 153,726
                                                 =========       =========      =========      =========       =========
Allowance balance (at beginning of period)       $   1,973       $   1,842      $   1,860      $   2,009       $   1,964
Provision for loan losses                              788             150             --           (120)             60
Charge-offs:
   Real estate:
     Single-family                                      --              --              5              1              15
     Multi-family                                       --              --             --             --              --
     Commercial                                         10              --             --             --              --
     Construction                                       --              --             --             --              --
   Land acquisition and development                     --              --             --             --              --
   Consumer:
     Home equity                                        --              --             15             15              --
     Education                                          --              --             --             --              --
     Other                                              --              19             --             23              --
   Commercial loans and leases                           7              --             --             --               3
                                                 ---------       ---------      ---------      ---------       ---------
     Total charge-offs                                  17              19             20             39              18
                                                 ---------       ---------      ---------      ---------       ---------
Recoveries:
   Real estate:
     Single-family                                      --              --              1              8               1
     Multi-family                                       --              --             --             --              --
     Commercial                                         --              --             --             --              --
     Construction                                       --              --             --             --              --
   Land acquisition and development                     --              --             --             --              --
   Consumer:
     Home equity                                        --              --              1             --              --
     Education                                          --              --             --             --              --
     Other                                              19              --             --              1              --
   Commercial loans and leases                          --              --             --              1               2
                                                 ---------       ---------      ---------      ---------       ---------
     Total recoveries                                   19              --              2             10               3
                                                 ---------       ---------      ---------      ---------       ---------
Net loans charged-off                                   (2)             19             18             29              15
Transfer to real estate owned loss reserve              --              --             --             --              --
                                                 ---------       ---------      ---------      ---------       ---------
Allowance balance (at end of period)             $   2,763       $   1,973      $   1,842      $   1,860       $   2,009
                                                 =========       =========      =========      =========       =========
Allowance for loan losses as a percentage of
  total loans receivable                              1.47%           1.06%          1.07%          1.08%           1.16%
                                                 =========       =========      =========      =========       =========
Net loans charged-off as a percentage of
  average net loans                                   0.00%           0.01%          0.02%          0.02%           0.01%
                                                 =========       =========      =========      =========       =========
Allowance for loan losses to non-performing
  loans                                              55.08%          48.72%        336.75%        308.46%         733.21%
                                                 =========       =========      =========      =========       =========
Net loans charged-off to allowance for loan
  losses                                             (0.07)%          0.96%          0.98%          1.56%           0.75%
                                                 =========       =========      =========      =========       =========
Recoveries to charge-offs                           111.76%           0.00%         11.12%         25.64%          16.67%
                                                 =========       =========      =========      =========       =========
</TABLE>


                                       13
<PAGE>




               The following table presents the allocation of the allowances for
loan losses by loan category at the dates indicated.

<TABLE>
<CAPTION>
                                                                          At June 30,
                           ---------------------------------------------------------------------------------------------------------
                                  2001                 2000                   1999                1998                   1997
                                  ----                 ----                   ----                ----                   ----
                          % of Total Loans by   % of Total Loans by   % of Total Loans by  % of Total Loans by   % of Total 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           $  180     51.50%     $  167      52.49%     $  174      54.43%    $  164     61.06%    $  175      67.25%
  Multi-family                35      3.37          30       3.01         152       3.12        143      2.34        142       2.02
  Commercial               1,721     17.05         704      16.27         283      15.08        423     12.24        449       8.46
  Construction               407     13.73         287      13.34          85      12.58         52     10.35         58       9.78
  Land acquisition
   and development            41      3.09          57       3.72          57       4.04         59      4.21         59       4.27
  Unallocated                 --      0.00         363       0.00         695       0.00        652      0.00        722       0.00
                          ------    ------      ------     ------      ------     ------      -----    ------      -----     ------
    Total real estate
      loans                2,384     88.74       1,608      88.83       1,446      89.25      1,493     90.20      1,605      91.78
                          ------    ------      ------     ------      ------     ------      -----    ------      -----     ------
Consumer loans:
  Home equity                231      9.33         184       9.19         202       8.70        168      7.93        123       7.06
  Education                   --      0.02           1       0.03           0       0.01          5      0.34          5       0.30
  Other                       73      1.02          80       1.02          24       1.14         17      1.36         10       0.81
  Unallocated                 --      0.00          --       0.00          77       0.00        167      0.00        258       0.00
                          ------    ------      ------     ------      ------     ------      -----    ------      -----     ------
    Total consumer
      loans                  304     10.37         265      10.24         303       9.85        357      9.63        396       8.17
                          ------    ------      ------     ------      ------     ------      -----    ------      -----     ------
Commercial loans:
  Commercial loans            75      0.89         100       0.93          86       0.90         10      0.17          5       0.05
  Unallocated                 --      0.00          --       0.00           7       0.00         --      0.00         --       0.00
                          ------    ------      ------     ------      ------     ------      -----    ------      -----     ------
    Total commercial
      loans                   75      0.89         100       0.93          93       0.90         10      0.17          5       0.05
                          ------    ------      ------     ------      ------     ------      -----    ------      -----     ------
Commercial lease
  financings                  --      0.00          --       0.00          --       0.00         --      0.00          3       0.00
                          ------    ------      ------     ------      ------     ------      -----    ------      -----     ------
                          $2,763    100.00%     $1,973     100.00%     $1,842     100.00%    $1,860    100.00%    $2,009     100.00%
                          ======    ======      ======     ======      ======     ======     ======    ======     ======     ======
</TABLE>


               Management believes that the reserves it has established are
adequate to cover 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 Federal National Mortgage Association ("FNMA") and the Government
National Mortgage Association ("GNMA"). CMOs may also be 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. All of the
Company's CMOs are rated in the highest category by at least two national rating
services.

               At June 30, 2001, the Company's MBS portfolio totaled $64.1
million as compared to $73.7 million at June 30, 2000. The $9.6 million or
13.03% decrease in MBS balances outstanding during fiscal 2001 was primarily
attributable to increased MBS principal repayments. At June 30, 2001,
approximately $16.0 million or 25.0% (book value) of the Company's portfolio of
MBS, including CMOs, were comprised of adjustable or floating rate instruments,
as compared to $16.1 million or 21.8% at June 30, 2000. Substantially all of the
Company's floating rate MBS adjust monthly based upon changes in certain
short-term market indices (e.g. LIBOR, Prime, etc.).

                                       14
<PAGE>


               The following tables set forth the amortized cost and estimated
market values of the Company's MBSs available for sale and held to maturity as
of the periods indicated.

<TABLE>
<CAPTION>
                                                 2001          2000          1999
                                                 ----          ----          ----
MBS Available for Sale at June 30,                  (Dollars in Thousands)
----------------------------------

<S>                                            <C>           <C>          <C>
FHLMC PCs                                         $ 49         $ 100        $ 214
GNMA PCs                                         2,777         2,924          766
FNMA PCs                                         4,840         6,010        6,632
CMOs - agency collateral                           472           595          878
CMOs - single-family whole loan collateral         248           521          852
                                                   ---           ---          ---
Total amortized cost                            $8,386       $10,150      $ 9,342
                                                ======       =======      =======
Total estimated market value                    $8,551        $9,936      $ 9,273
                                                ======        ======      =======

MBS Held to Maturity at June 30,
--------------------------------

FHLMC PCs                                        $  74         $ 107        $ 146
GNMA PCs                                         7,413         9,217        1,107
FNMA PCs                                            27            45          103
CMOs - agency collateral                        17,590        17,792       18,847
CMOs - single-family whole loan collateral      30,477        36,576       42,904
                                                ------        ------       ------
Total amortized cost                           $55,581       $63,737      $63,107
                                               =======       =======      =======
Total estimated market value                   $56,082       $61,943      $62,167
                                               =======       =======      =======
</TABLE>


               The Company believes that its present MBS available for sale
allocation of $8.4 million or 13.1% 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.

               The following table sets forth the amortized cost, contractual
maturities and weighted average yields of the Company's MBSs, including CMOs, at
June 30, 2001.

<TABLE>
<CAPTION>
                         One Year       After One to    After 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  $      1        $   927        $    44         $    7,414      $ 8,386
                            8.00%          6.02%          9.05%              7.26%     7.13%

MBS held to maturity    $      7        $    --        $    81         $   55,493      $55,581
                            8.00%          0.00%          9.09%              6.37%     6.37%
                           -----        -------        -------         ----------      -------

Total                   $      8        $   927        $   125         $   62,907      $63,967
                           =====        =======        =======         ==========      =======
Weighted average yield      8.00%          6.02%          9.08%              6.47%     6.47%
                           =====        =======        =======         ==========      =======
</TABLE>


               Due to prepayments of the underlying loans, and the prepayment
characteristics of the CMO traunches, the actual maturities of the Company's MBS
are expected to be substantially less than the scheduled maturities.



                                       15
<PAGE>



               The following table sets forth information with respect to the
MBS owned by the Company at June 30, 2001, 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
                 Name of Issuer                         Carrying Value        Market Value
                 --------------                         --------------        ------------
                                                               (Dollars in Thousands)

                 <S>                                         <C>                <C>
                 Norwest Asset Securities Corp. CMO          $  6,248           $  6,241
                 Countrywide Home Loan CMO                      4,119              4,113
                 Structured Asset Mortgage
                    Investment Inc. CMO                         2,919              2,927
                 Citicorp Mortgage Security CMO                 3,260              3,305
                                                            ---------          ---------
                                                             $ 16,546           $ 16,586
                                                             ========           ========
</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, FHLB
stock, 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
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 $87.9 million or
67.8% of the total investment portfolio at June 30, 2001, as compared to $116.1
million or 84.4% of the total investment portfolio at June 30, 2000. All $87.9
million or 100.0% of the Company's U.S. Government agencies portfolio at June
30, 2001 was comprised of U.S. Government agency securities with longer-terms to
maturity and optional principal redemption features ("callable bonds").

               The following tables set forth the amortized cost and estimated
market values of the Company's investment securities portfolio at the dates
indicated.

<TABLE>
<CAPTION>
                                                               2001             2000           1999
                                                               ----             ----           ----
Investment Securities Available for Sale at June 30,                  (Dollars in Thousands)
----------------------------------------------------
<S>                                                          <C>               <C>            <C>

Corporate debt obligations                                     $ 161            $  ---         $  ---
U.S. Government agency securities                                ---               ---            ---
                                                                 ---               ---            ---
Total amortized cost                                             161               ---            ---
Equity securities                                              1,219             1,380          1,380
                                                               -----             -----          -----
Total amortized cost                                         $ 1,380           $ 1,380        $ 1,380
                                                             =======           =======        =======
Total estimated market value                                 $ 1,380           $ 1,296        $ 1,402
                                                             =======           =======        =======

Investment Securities Held to Maturity at June 30,
--------------------------------------------------

Corporate debt obligations                                   $10,520           $   ---         $  ---
U.S. Government agency securities                             87,927           116,052         88,714
State and municipal securities                                29,766            20,154          2,050
                                                              ------            ------          -----
                                                             128,213           136,206         90,764
FHLB stock                                                     8,150             5,225          6,195
                                                               -----             -----          -----
Total amortized cost                                        $136,363          $141,431        $96,959
                                                            ========          ========        =======
Total estimated market value                                $137,341          $134,497        $94,045
                                                            ========          ========        =======
</TABLE>

                                       16
<PAGE>

               Information regarding the amortized cost, contractual maturities
and weighted average yields of the Company's investment portfolio at June 30,
2001 is presented below.

<TABLE>
<CAPTION>

Investment Securities           One Year   After One to   After 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        $  --         $  --         $  --         $     161         $  161
                                   0.00%         0.00%         0.00%             8.59%          8.59%

Equity securities                 $  --         $  --         $  --         $   1,219         $1,219
                                   0.00%         0.00%         0.00%             7.10%          7.10%

Total                             $  --         $  --         $  --         $   1,380         $1,380
                                  =====         =====         =====         =========         ======
Weighted average yield             0.00%         0.00%         0.00%             7.27%          7.27%
                                  =====         =====         =====         =========         ======
</TABLE>

<TABLE>
<CAPTION>

Investment Securities              One Year      After One to    After Five to      Over
Held to Maturity                   or Less        Five Years      Ten Years       Ten Years          Total
----------------                   -------        ----------      ---------       ---------          -----
<S>                               <C>                <C>           <C>           <C>                <C>
Corporate debt obligations        $   10,520         $  --         $  --         $       --         $ 10,520
                                        4.11%         0.00%         0.00%              0.00%            4.11%

U.S. Government agency
   securities(1)                  $   17,841         $  --         $  --         $   70,086         $ 87,927
                                        7.06%         0.00%         0.00%              7.21%           7.18%

State and municipal
   securities (2)                 $    1,350         $  --         $  --         $   28,416         $ 29,766
                                        6.21%         0.00%         0.00%              8.04%            7.95%
                                     -------        ------       -------          ---------         --------

Total                             $   29,711         $  --         $  --         $   98,502         $128,213
                                     =======       =======       =======            =======         ========
Weighted average yield                  5.98%         0.00%         0.00%              7.45%            7.11%
                                     =======       =======       =======            =======         ========
</TABLE>

---------------
(1) Includes approximately $17.8 million of U.S. Government agency securities
    called (i.e. redeemed by the issuer prior to contractual maturity) through
    August 17, 2001.

(2) State and municipal security yields are calculated on a taxable equivalent
    basis.

                                       17
<PAGE>


               Information regarding the amortized cost, earliest call dates and
weighted average yield of the Company's investment portfolio at June 30, 2001,
is presented below. All Company investments in callable bonds were classified as
held to maturity at June 30, 2001.


<TABLE>
<CAPTION>
                                  One Year    After One to    After Five to      Over
                                  or Less      Five Years      Ten Years       Ten Years         Total
                                  -------      ----------      ---------       ---------         -----
<S>                            <C>            <C>              <C>               <C>            <C>
Corporate debt obligations     $ 10,520       $       --       $      --         $    161       $ 10,681
                                   4.11%            0.00%           0.00%            8.59%          4.18%

U.S. Government agency
   securities                  $ 72,238       $   12,813       $      --         $  2,876       $ 87,927
                                   7.06%            8.16%           0.00%            5.63%          7.18%

State and municipal
   securities (1)              $  1,350       $   18,596       $   7,179         $  2,641       $ 29,766
                                   6.21%            8.13%           8.04%            7.35%          7.95%
                               --------        ---------         -------          -------       --------

Total debt obligations         $ 84,108       $   31,409       $   7,179         $  5,678       $128,374
                                =======          =======          ======           ======       ========
Weighted average yield             6.68%            8.14%           8.04%            6.51%          7.11%
                                   ====             ====            ====             ====           ====

Equity securities              $     --       $       --       $      --         $  1,219       $  1,219
                               --------       ----------       ---------           ------       --------

Total                          $ 84,108       $   31,409       $   7,179         $  6,897       $129,593
                                =======          =======          ======           ======       ========
</TABLE>


--------------
(1) State and municipal security yields are calculated on a taxable equivalent
    basis.

               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, 2001, 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.

                                                                    Estimated
               Name of Issuer                    Carrying Value    Market Value
               --------------                    --------------    ------------
                                                    (Dollars in Thousands)
               Pittston Area School District
                  General Obligation                $3,388           $3,556
               New Castle PA School District
                  General Obligation                 2,976            3,106
               American Water Capital Corp
                  Commercial Paper                   3,009            3,008
               Allete Inc. Commercial Paper          3,007            3,008
                                                     -----            -----
                                                   $12,380          $12,678
                                                   =======          =======


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 FHLB advances, short-term borrowings, amortization and prepayments of
outstanding loans and MBS and from maturing investment securities.

                                       18
<PAGE>


               Deposits. The Company's deposits totaled $181.3 million at June
30, 2001, as compared to $172.9 million at June 30, 2000. The $8.4 million
increase was primarily attributable to an approximate $8.2 million increase in
certificates of deposit and a $249 thousand increase in core deposits. In order
to attract new and lower cost core deposits, the Company continued to promote 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 $16.4 million or 9.0% of the Company's
total deposits at June 30, 2001, as compared to $12.1 million or 7.0% at June
30, 2000. 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 utilizes various 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, 2001. The Company has drive-up banking facilities and
automated teller machines ("ATMs") at its McCandless, Franklin Park, Bellevue
and Cranberry Township offices. The Company participates in the MAC(R) and
CIRRUS(R) ATM networks. The Company also participates in a new ATM program
called the Freedom ATM AllianceSM. The Freedom ATM AllianceSM allows West View
Savings Bank customers to use other Pittsburgh area Freedom ATM AllianceSM
affiliates' ATMs without being surcharged and vice versa. The Freedom ATM
AllianceSM was organized to help smaller local banks compete with larger
national banks that have large 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.

               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 were derived from daily average balances.


<TABLE>
<CAPTION>
                                                                          At June 30,
                                       -----------------------------------------------------------------------------------
                                                   2001                       2000                          1999
                                                   ----                       ----                          ----
                                         Amount           Rate       Amount            Rate        Amount           Rate
                                         ------           ----       ------            ----        ------           ----
                                                                     (Dollars in Thousands)
<S>                                    <C>                <C>       <C>                <C>       <C>                <C>
Regular savings and club
   accounts                            $ 35,623           2.51%     $ 37,085           2.53%     $ 36,882           2.54%
NOW accounts                             17,543           0.54        17,356           0.56        15,921           0.63
Money market deposit
   accounts                              12,409           2.65        12,717           2.67        11,927           2.64
Certificate of deposit accounts          93,879           5.82        92,206           5.38        94,197           5.46
Escrows                                   2,367           1.69         2,363           1.74         2,262           1.81
                                          -----           ----         -----           ----         -----           ----
     Total interest-bearing
        deposits and escrows            161,821           4.22       161,727           3.94       161,189           4.05
Non-interest-bearing checking
   accounts                              11,616           0.00        10,281           0.00         8,306           0.00
                                         ------           ----        ------           ----         -----           ----
     Total deposits and escrows        $173,437           3.93%     $172,008           3.70%     $169,495           3.86%
                                       ========           ====      ========           ====      ========           ====
</TABLE>

                                       19
<PAGE>



               The following table sets forth the net deposit flows of the
Company during the periods indicated.

                                                Year Ended June 30,
                                       ----------------------------------------
                                         2001           2000            1999
                                         ----           ----            ----
                                               (Dollars in Thousands)
Increase(decrease) before interest
   credited                            $ 1,975        $(7,653)        $(3,331)
Interest credited                        6,506          6,268           6,592
                                      --------       --------        --------
Net deposit increase (decrease)        $ 8,481        $(1,385)        $ 3,261
                                        ======       ========         =======

               The following table sets forth maturities of the Company's
certificates of deposit of $100,000 or more at June 30, 2001, by time remaining
to maturity.

                                                                 Amounts
                                                                 -------
                                                          (Dollars in Thousands)
                    Three months or less                         $ 8,427
                    Over three months through six months           3,094
                    Over six months through twelve months          3,681
                    Over twelve months                             1,162
                                                               ---------
                                                                 $16,364
                                                               =========

               Borrowings. Borrowings are comprised of FHLB advances with
various terms and repurchase agreements with securities brokers with original
maturities of ninety-two days or less. At June 30, 2001, borrowings totaled
$182.2 million as compared to $205.5 million at June 30, 2000. The $23.3 million
or 11.3% decrease was primarily due to a structured reduction in the Company's
investment growth program. For a detailed discussion of the Company's asset and
liability management activities, please see the "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Asset and Liability
Management" section of the Company's fiscal year 2001 Annual Report. 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. By
utilizing borrowings, as opposed to retail certificates of deposit, the Company
also avoids the additional operating costs associated with increasing its branch
network and associated federal deposit insurance premiums.


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, competitive interest rates,
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.

Employees

               The Company had 42 full-time employees and 13 part-time employees
as of June 30, 2001. None of these employees is represented by a collective
bargaining agent. The Company believes that it enjoys excellent relations with
its personnel.

                                       20
<PAGE>

                           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
Board of Governors of the Federal Reserve System ("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.

               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-weighting system, as
are certain privately-issued MBS representing indirect ownership of such loans.
Off-balance sheet items also are adjusted to take into account certain risk
characteristics.

                                       21
<PAGE>

               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%. 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% 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% to 5% 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.

               FDIC Insurance Premiums. The Savings Bank currently pays deposit
insurance premiums to the FDIC 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, 2001.

               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% 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% to 5% 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 and rated composite 1 under the Uniform
Financial Institutions Rating System.

                                       22
<PAGE>


               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% is deemed to be
operating in an unsafe or unsound condition pursuant to Section 8(a) of the FDIA
and is 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 be restored 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.



                                       23
<PAGE>




                           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 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 (1) 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 (2) the time when
economic performance with respect to the item of expense has occurred.

               Bad Debt Reserves. Historically under Section 593 of the Code,
thrift institutions such as the Savings Bank, which met certain definitional
tests primarily relating to their assets and the nature of their business, were
permitted to establish a tax reserve for bad debts and to make annual additions
within specified limitations which may have been 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").

               The Small Business Job Protection Act of 1996, adopted in August
1996, generally (1) repealed the provision of the Code which authorized 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 (2) required that a savings institution recapture for tax purposes
(i.e. take into income) over a six-year period its applicable excess reserves.
For a savings institution such as West View which is a "small bank", as defined
in the Code, generally this 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. Any recapture would be suspended for any tax
year that began after December 31, 1995, and before January 1, 1998 (thus a
maximum of two years), in which a savings institution originated an amount of
residential loans which was 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. The amount of tax bad debt reserves
subject to recapture is approximately $1.2 million, which is being recaptured
ratably over a six-year period ending December 31, 2003. In accordance with FASB
No. 109, deferred income taxes have previously been provided on this amount,
therefore no financial statement expense has been recorded as a result of this
recapture. The Company's supplemental bad debt reserve of approximately $3.8
million is not subject to recapture.

               The above-referenced legislation also repealed certain provisions
of the Code that only apply to thrift institutions to which Section 593 applies:
(1) the denial of a portion of certain tax credits to a thrift institution; (2)
the special rules with respect to the foreclosure of property securing loans of
a thrift institution; (3) the reduction in the dividends received deduction of a
thrift institution; and (4) 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. The repeal of these provisions did not 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, 1997, have been closed for the
purpose of examination by the Internal Revenue Service.

                                       24
<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 is 9.99% 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 0.749%
of a corporation's capital stock value, which is determined in accordance with a
fixed formula based upon average net income and consolidated 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.



                                       25
<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, 2001.

               Description/Address                            Leased/Owned
               -------------------                            ------------

               McCandless Office                                 Owned
                   9001 Perry Highway
                   Pittsburgh, PA  15237

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

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

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

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

               Franklin Park Boro Office                         Owned
                   2566 Brandt School Road
                   Wexford, PA  15090

---------------
(1) The Company operates this office out of a retirement community. The lease
    expires in June 2003.
(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 36 of the Company's 2001 Annual Report, Note 13 of Notes to
               Consolidated Financial Statements, "Litigation".


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

               Not applicable.


PART II.

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

               The information required herein is incorporated by reference
               from page 49 of the Company's 2001 Annual Report.


                                       26
<PAGE>



Item 6. Selected Financial Data.
-------- -----------------------

               The information required herein is incorporated by reference from
               pages 2 to 3 of the Company's 2001 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 17 of the Company's 2001 Annual Report.

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

               The information required herein is incorporated by reference from
               pages 11 to 15 of the Company's 2001 Annual Report.

Item 8. Financial Statements and Supplementary Data.
------- --------------------------------------------

               The information required herein is incorporated by reference from
               pages 18 to 48 of the Company's 2001 Annual Report.

PART III.

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

               Not applicable.

Item 10. Directors and Executive Officers of the Registrant.
-------- --------------------------------------------------

               The information required herein is incorporated by reference from
               pages 2 to 6 of the Company's Proxy Statement for the 2001 Annual
               Meeting of Stockholders dated September 28, 2001 ("Proxy
               Statement").

Item 11. Executive Compensation.
-------- -----------------------

               The information required herein is incorporated by reference from
               pages 9 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
               pages 15 to 16 of the Company's Proxy Statement.


                                       27
<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 2001
                   Annual Report.

               Report of Independent Auditors.

                   Consolidated Statements of Financial Condition at June 30,
                   2001 and 2000.

                   Consolidated Statements of Income for the Years Ended June
                   30, 2001, 2000 and 1999.

                   Consolidated Statements of Changes in Stockholders' Equity
                   for the Years Ended June 30, 2001, 2000 and 1999.

                   Consolidated Statements of Cash Flows for the Years Ended
                   June 30, 2001, 2000 and 1999.

                   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.

               (3)(a) The following exhibits are filed as part of this Form
                      10-K, and this list includes the Exhibit Index.
<TABLE>
<CAPTION>
                     No.                          Description                                       Page
                   -------         --------------------------------------------                   -------
                    <S>            <C>                                                               <C>
                     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**                            *
                    13             2001 Annual Report to Stockholders                                 E-1
                    21             Subsidiaries of the Registrant - Reference is made to
                                          Item 1. "Business" for the required information               2
                    23             Consent of Independent Auditors                                   E-57
</TABLE>


*     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 Form 10-Q for the quarter ended
      September 30, 1998 filed by the Company with the SEC on November 13, 1998.

               (3)(b) Not applicable.


                                       28
<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 28, 2001                  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
-----------------------------------------
David J. Bursic, Director, President and               September 28, 2001
(Principal Executive Officer)


/s/ William J. Hoegel
-----------------------------------------
William J. Hoegel,                                     September 28, 2001
Chairman of the Board


/s/ Margaret VonDerau
-----------------------------------------
Margaret VonDerau, Director,                           September 28, 2001
Senior Vice President, Treasurer
and Corporate Secretary


/s/ Keith A. Simpson
-----------------------------------------
Keith A. Simpson, Controller                           September 28, 2001


/s/ David L. Aeberli
-----------------------------------------
David L. Aeberli, Director                             September 28, 2001


/s/ Arthur H. Brandt
-----------------------------------------
Arthur H. Brandt, Director                             September 28, 2001


/s/ Donald E. Hook
-----------------------------------------
Donald E. Hook, Director                               September 28, 2001


/s/ John M. Seifarth
-----------------------------------------
John M. Seifarth, Director                             September 28, 2001


                                       29