W
     V
      S

FINANCIAL
---------
   CORP.


THE HOLDING COMPANY OF WEST VIEW SAVINGS BANK







                                                                         2002
                                                                        Annual
                                                                        Report
<PAGE>


                                TABLE OF CONTENTS
                                                                           Page
                                                                          Number
                                                                          ------


         Report of Independent Auditors                                       18

         Consolidated Balance Sheets                                          19

         Consolidated Statements of Income                                    20

         Consolidated Statements of Changes in Stockholders' Equity           21

         Consolidated Statements of Cash Flows                                22

         Notes to the Consolidated Financial Statements                       23

         Common Stock Market Price and Dividend Information                   47

         Corporate Information                                                48



<PAGE>


To Our Stockholders:

     We are pleased to report another strong year of financial success.  Company
net income during  fiscal 2002 totaled $4.4 million or $1.63 per diluted  share-
the second best year in our Company's  history.  Return on average  stockholders
equity was 14.85% while book value per share grew by 8.65% and totaled $11.30 on
June 30,  2002.  Our  Company's  stock price began the fiscal year at $14.00 and
closed at $15.82 on June 30, 2002.  The resulting  $1.82  appreciation  in stock
price,  coupled  with cash  dividends  paid of $0.64 per share,  resulted  in an
impressive total return of approximately  17.6%. This was achieved during a year
of high market  volatility,  and  substantial  losses  experienced by the equity
markets.

     As we look forward to fiscal 2003, a continuing  challenge  will be dealing
with  markedly low interest  rates and the related  compression  of net interest
margins.  Since our last  annual  report to you,  the  Federal  Reserve  further
reduced  interest  rates four times for a total of one hundred and  seventy-five
basis points. These actions were taken by the Federal Reserve in response to the
terrorist  attacks of September 11, 2001 and continued  weakness in the national
economy.  Lower market  interest rates impact the amount of interest income that
we earn on our  assets,  and the  rates  that we can  offer  our  borrowers  and
depositors.  Before the end of calendar  year 2002,  we also  anticipate a total
replacement of the Bank's  technology  platform.  Our goal is to continue to use
technology to better serve customers and improve our "back office" processing.

     We also  recognize  that we must manage  today for an eventual  increase in
interest rates in order to protect our balance sheet and ongoing  profitability.
During fiscal 2002 we  significantly  improved the Company's  interest rate risk
posture. Our capital structure was strengthened by increasing retained earnings.
We also  continued to enhance the liquidity of your  investment by continuing to
repurchase  about 96,700 shares of our common  stock.  Capital  management  will
continue to be our focus in order to deliver continuing shareholder value.

     The Company's Board of Directors  continues to be actively  involved in the
Company's strategic planning. Bill Hoegel, our previous Chairman, retired during
the fiscal year and moved to Florida. Bill served with distinction as a director
since 1984 and as  Chairman  since 1999.  Bill's  seventeen  years of  dedicated
service,  marketing focus, and good cheer will be missed but not forgotten.  Don
Hook was elected as Chairman in October  2001.  The Board of Directors  believes
that Don's extensive  business and non-profit board  leadership  background will
help to further  strengthen  the Company  and the Bank.  We also  welcome  Larry
Lehman to the Board.  Larry was elected to the Board  effective  March 2002, has
over twenty-seven years of insurance sales and service  experience,  and holds a
number  of  insurance  professional  designations.  Larry's  business  contacts,
insurance  background  and  community  involvement  will  enhance  our  business
opportunities.

     On behalf of the Board of Directors and  employees,  we would like to thank
you for your ongoing interest in the Company,  and in many cases, your continued
patronage of West View Savings Bank. Our Bank is a full service bank. We offer a
variety of  business,  consumer  and  mortgage  loans to meet all of your needs.
Please continue to recommend West View Savings Bank to your family,  friends and
neighbors.

/s/ David J. Bursic                                       /s/ Donald E. Hook
-----------------------                                   ----------------------
DAVID J. BURSIC                                           DONALD E. HOOK
President and                                             Chairman of the Board
Chief Executive Officer



<PAGE>


<TABLE>
<CAPTION>

                   FIVE YEAR SUMMARY OF SELECTED CONSOLIDATED
                            FINANCIAL AND OTHER DATA

                                                                 As of or For the Year Ended June 30,
                                              ---------------------------------------------------------------------------
                                                  2002           2001            2000           1999           1998
                                              -------------- -------------- --------------- -------------- --------------
                                                            (Dollars in Thousands, except per share data)

<S>                                           <C>            <C>           <C>            <C>            <C>
Selected Financial Data:
Total assets                                  $   404,911    $   396,440    $   409,618    $   348,408    $   297,054
Net loans receivable                              152,905        185,179        183,295        170,327        157,737
Mortgage-backed securities                         82,543         64,132         73,673         72,380         46,314
Investment securities                             151,384        129,593        137,502         92,166         81,268
Savings deposit accounts                          174,659        178,029        169,508        171,114        167,670
FHLB advances                                     159,937        161,494        104,500        116,900         88,857
Other borrowings                                   33,731         20,660        101,025         25,820            889
Stockholders' equity                               30,253         28,645         26,911         27,938         32,978
Non-performing assets and troubled
  debt restructurings(1)                            5,279          5,016          4,050            765            603

Selected Operating Data:
Interest income                               $    23,760    $    29,185    $    27,987    $    23,031    $    22,178
Interest expense                                   14,025         18,561         16,933         12,739         11,781
Net interest income                                 9,735         10,624         11,054         10,292         10,397
Provision for loan losses                              57            788            150             --           (120)
                                              -----------    -----------    -----------    -----------    -----------
Net interest income after provision
  for loan losses                                   9,678          9,836         10,904         10,292         10,517
Non-interest income                                   687            669            570            458            506
Non-interest expense                                4,104          3,787          4,626          4,285          5,422
                                              -----------    -----------    -----------    -----------    -----------
Income before income tax expense                    6,261          6,718          6,848          6,465          5,601
Income tax expense                                  1,813          1,956          2,469          2,434          2,109
                                              -----------    -----------    -----------    -----------    -----------
Net income                                    $     4,448    $     4,762    $     4,379    $     4,031    $     3,492
                                              ===========    ===========    ===========    ===========    ===========

Per Share Information:
Basic earnings                                $      1.63    $      1.70    $      1.48    $      1.18    $      1.01
Diluted earnings                              $      1.63    $      1.69    $      1.47    $      1.17    $      0.98
Dividends per share(2)                        $      0.64    $      0.64    $      0.64    $      0.63    $      1.50
Dividend payout ratio(2)                            39.26%         37.65%         43.24%         53.39%        148.51%
Book value per share at period end            $     11.30    $     10.40    $      9.35    $      8.81    $      9.12
Average shares outstanding:
      Basic                                     2,723,891      2,804,125      2,953,720      3,405,662      3,470,479
      Diluted                                   2,732,491      2,815,867      2,977,089      3,435,738      3,574,043


</TABLE>


                                        2
<PAGE>

<TABLE>
<CAPTION>
                                                            As of or For the Year Ended June 30,
                                           ------------------------------------------------------------------------
                                               2002          2001           2000           1999           1998
                                               ----          ----           ----           ----           ----

<S>                                          <C>            <C>            <C>            <C>             <C>
Selected Operating Ratios(3):
Average yield earned on interest-
  earning assets(4)                             6.41%          7.51%          7.41%          7.32%          7.71%
Average rate paid on interest-
  bearing liabilities                           4.13           5.21           4.91           4.64           4.77
Average interest rate spread(5)                 2.28           2.30           2.50           2.68           2.94
Net interest margin(5)                          2.74           2.83           2.97           3.27           3.61
Ratio of interest-earning assets to
  interest-bearing liabilities                112.34         111.33         110.57         114.54         116.65
Non-interest expense as a percent of
  average assets                                1.07           0.94           1.20           1.35           1.86
Return on average assets                        1.16           1.19           1.14           1.27           1.20
Return on average equity                       14.85          17.17          16.27          13.01          10.45
Ratio of average equity to average
  Assets                                        7.78           6.92           6.99           9.76          11.48
Full-service offices at end of period           5              5              5              5              5

Asset Quality Ratios(3):
Non-performing loans and troubled
  debt restructurings as a percent of
  net total loans(1)                            3.30%          2.71%          2.21%          0.32%          0.38%
Non-performing assets as a percent
  of total assets(1)                            1.30           1.27           0.99           0.22           0.20
Non-performing assets and troubled
  debt restructurings as a percent of
  total assets                                  1.30           1.27           0.99           0.22           0.20
Allowance for loan losses as a
  percent of total loans receivable             1.77           1.47           1.06           1.07           1.08
Allowance for loan losses as a
  percent of non-performing loans              54.68          55.08          48.72         336.75         308.46
Charge-offs to average loans
  receivable outstanding during the
  period                                        0.04           0.01           0.01           0.02           0.02

Capital Ratios(3):
Tier 1 risk-based capital ratio                13.42%         14.15%         14.05%         15.85%         20.90%
Total risk-based capital ratio                 14.66          15.40          15.11          16.90          22.09
Tier 1 leverage capital ratio                   7.69           7.35           6.69           8.29          10.98

</TABLE>

______________________________________
(1)  Non-performing assets consist of non-performing loans and real estate owned
     ("REO").  Non- performing  loans consist of non-accrual  loans and accruing
     loans  greater than 90 days  delinquent,  while REO consists of real estate
     acquired  through  foreclosure  and real estate acquired by acceptance of a
     deed in lieu of foreclosure.
(2)  Dividends  per share and  dividend  payout  ratios  include a special  cash
     dividend of $0.95 per share, paid during fiscal 1998.
(3)  Consolidated  asset  quality  ratios and  capital  ratios are end of period
     ratios,  except for charge-offs to average net loans. With the exception of
     end of period  ratios,  all ratios are based on  average  monthly  balances
     during the indicated periods.
(4)  Interest and yields on  tax-exempt  loans and  securities  (tax-exempt  for
     federal income tax purposes) are shown on a fully taxable equivalent basis.
(5)  Interest rate spread represents the difference between the weighted average
     yield  on  interest-earning   assets  and  the  weighted  average  cost  of
     interest-bearing  liabilities,  and  net  interest  margin  represents  net
     interest income as a percent of average interest-earning assets.


                                        3
<PAGE>


                       WVS FINANCIAL CORP. AND SUBSIDIARY
                       ----------------------------------


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


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

West View Savings Bank is a  Pennsylvania-chartered,  SAIF-insured stock savings
bank  conducting  business  from six  offices  in the  North  Hills  suburbs  of
Pittsburgh.  The  Savings  Bank  converted  to the stock  form of  ownership  in
November 1993. The Savings Bank had no subsidiaries at June 30, 2002.

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

The Company's strategic focus includes:

Steady Income in Market Price and Book Value - During fiscal 2002, the Company's
market price outperformed such broad market indexes as the Standard & Poor's 500
and the Total NASDAQ (US).  Book value has grown at a compounded  annual rate of
8.65% from $8.81 in fiscal 1999 to $11.30 in fiscal 2002.

Commitment  to Capital  Management  - The  Company is  committed  to  maximizing
long-term  shareholder value.  Specific components of this strategy include: (1)
the  repurchase of 96,728 shares of Company common stock during fiscal 2002; (2)
and paying an  above-average  dividend yield in excess of 4.00% on the Company's
common stock during fiscal 2002.

Substantial  Net Income - During fiscal 2002, the Company earned $4.4 million or
$1.63 per share (basic and diluted). Fiscal 2002 return on average stockholders'
equity was 14.85% while return on average assets totaled 1.16%.

Growth of Core  Deposits - As of June 30, 2002,  $89.9  million or 51.5% of West
View's total  deposits  consisted of regular  savings and club  accounts,  money
market deposit accounts,  and checking accounts.  Approximately $41.6 million or
46.3% of core deposits consisted of regular savings and club accounts.  Checking
account balances grew $3.4 million or 11.5% during fiscal 2002 and totaled $33.5
million or 37.3% of core  deposits at June 30,  2002.  The  continued  growth in
checking  account  deposits  was  primarily  due  to  increased   marketing  and
promotional  efforts by the  Company to gain market  share.  Core  deposits  are
considered to be more stable and lower cost funds than  certificates  of deposit
and other borrowings.

Community-based  Lending  - West  View  has  consistently  focused  its  lending
activities  on  generating  loans in its market  area.  Typical  loan  offerings
include  home  mortgages,  construction  loans,  and  consumer  loans  for  home
improvement,  automobile loans and home equity loans. West View's small business
lending  program  includes term loans,  business  inventory  loans and loans for
business equipment and machinery.


                                       4
<PAGE>


Strong  Non-interest  Expense Ratios - For the fiscal years ended June 30, 2002,
2001 and 2000, the Company's  ratios of  non-interest  expense to average assets
were  1.07%,  0.94% and  1.20%,  respectively.  The  Company  believes  that the
judicious use of FHLB long-term  borrowings to fund  approximately  39.5% of its
total assets significantly reduces operating costs. The Company will continue to
invest in  technology to help  streamline  operations  and to increase  customer
satisfaction and loyalty.

<TABLE>
<CAPTION>

CHANGES IN FINANCIAL CONDITION

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

                                                June 30,        June 30,                  Change
                                                                             ---------------------------------
                                                  2002            2001          Dollars        Percentage
                                                  ----            ----          -------        ----------
                                                        (Dollars in Thousands)

         <S>                                <C>             <C>               <C>                  <C>
         Cash and interest-earning
              Deposits                       $    3,177      $    2,993        $    184              6.1%

         Investment securities(1)               159,665         137,743          21,922             15.9

         Mortgage-backed securities              82,543          64,132          18,411             28.7

         Net loans receivable                   152,905         185,179         (32,274)           -17.4

         Total assets                           404,911         396,440           8,471              2.1

         Deposits                               177,672         181,339          (3,667)            -2.0

         FHLB and other borrowings              193,668         182,154          11,514              6.3

         Total liabilities                      374,658         367,795           6,863              1.9

         Total equity                            30,253          28,645           1,608              5.6

</TABLE>
_______________
(1) Includes Federal Home Loan Bank stock.

General.  The $8.5  million  or 2.1%  increase  in total  assets  was  primarily
comprised of a $21.9 million increase in investment  securities and Federal Home
Loan Bank  ("FHLB")  stock,  and a $18.4  million  increase  in  mortgage-backed
securities,  which was partially offset by a $32.3 million decrease in net loans
receivable.

The $6.9 million or 1.9% increase in total  liabilities was primarily  comprised
of a $11.5  million  increase in FHLB advances and other  borrowings,  which was
partially  offset by a $3.7  million  decrease in deposits  and a $743  thousand
decrease in accrued interest payable.

Total stockholders'  equity increased $1.6 million or 5.6% primarily due to $4.4
million  of  Company  net  income,  and a  $388  thousand  increase  in  capital
attributable  to stock option  exercises  and  Recognition  and  Retention  Plan
("RRP") equity  contributions,  which were partially offset by the repurchase of
$1.5  million  of the  Company's  own  common  stock,  and $1.7  million of cash
dividends paid to stockholders.  The Company believes that the repurchase of its
common stock  represented  an attractive  investment  opportunity  and favorably
added to secondary market liquidity.

Cash on Hand and  Interest-earning  Deposits.  Cash on hand and interest-earning
deposits represent cash equivalents. Cash equivalents increased $184 thousand or
6.1% to $3.2  million  at June 30,  2002


                                        5
<PAGE>


from $3.0 million at June 30, 2001.  Increases in these accounts are usually the
result of a combination of customer  deposits,  loan and investment  repayments,
and proceeds from borrowings. Decreases in these accounts are primarily due to a
combination of new loan originations, customer withdrawals, investment purchases
and repayments of borrowings.

Investments.  The Company's overall investment portfolio increased $40.3 million
or 20.0% to $242.2  million  at June 30,  2002 from  $201.9  million at June 30,
2001.  Investment  securities increased $21.9 million or 15.9% to $159.7 million
at June 30,  2002.  This  increase  was due to  purchases  of  investment  grade
corporate bonds with maturities  generally less than 18 months.  Mortgage-backed
securities  increased  $18.4 million or 28.7% to $82.5 million at June 30, 2002.
This increase was due  primarily to purchases of floating  rate  mortgage-backed
securities which were partially offset by principal repayments on the portfolio.

Net Loans Receivable.  Net loans receivable  decreased $32.3 million or 17.4% to
$152.9  million  at  June  30,  2002.  The  decrease  in  loans  receivable  was
principally the result of increased  principal  repayments on the loan portfolio
due to higher levels of refinancing activity.

Deposits.  Total  deposits  decreased  $3.7 million or 2.0% to $177.7 million at
June 30, 2002.  Certificates of deposit decreased approximately $14.6 million or
14.7%.  Savings  accounts  increased  $5.0  million  or 13.8% and  money  market
accounts  increased $2.7 million or 22.7%.  The Savings Bank believes that these
changes in depositor  liquidity  preferences are due to the relatively low level
of  market  interest  rates  and due to stock  market  declines  and  associated
volatility.

Borrowed Funds. Borrowed funds increased $11.5 million or 6.3% to $193.7 million
at June 30, 2002.  The increase is  principally  the result of borrowing to fund
investment  purchases.  Other short-term  borrowings  increased $13.1 million or
63.3% to $33.7  million  at June 30,  2002,  and FHLB  advances  decreased  $1.6
million or 1.0% to $159.9 million at June 30, 2002.

Stockholders'  Equity. Total stockholders' equity increased $1.6 million or 5.6%
to $30.3 million at June 30, 2002.  The increase was  principally  the result of
$4.4  million of Company  net income  and a $338  thousand  increase  in capital
attributable to stock option exercises, and RRP equity contributions, which were
partially  offset by the  repurchase of $1.5 million of the Company's own common
stock and $1.7 million of cash dividends paid to stockholders.


                                        6
<PAGE>


<TABLE>
<CAPTION>

RESULTS OF OPERATIONS

                                      Condensed Statements of Income
                                      ------------------------------

                                     June 30,                      June 30,                    June 30,
                                       2002         Change           2001         Change         2000
                                       ----         ------           ----         ------         ----
                                                            (Dollars in Thousands)

<S>                                  <C>          <C>               <C>           <C>         <C>
Interest income                     $ 23,760      $ (5,425)       $  29,185       $ 1,198       $  27,987
                                                     -18.6%                           4.3%

Interest expense                    $ 14,025      $ (4,536)       $  18,561       $ 1,628       $  16,933
                                                     -24.4%                           9.6%

Net interest income                 $  9,735      $   (889)         $10,624       $  (430)      $  11,054
                                                      -8.4%                          -3.9%

Provision for loan losses           $     57      $   (731)       $     788       $   638       $     150
                                                     -92.8%                         425.3%

Non-interest income                 $    687      $     18        $     669       $    99       $     570
                                                       2.7%                          17.4%

Non-interest expense                $  4,104      $    317        $   3,787       $  (839)      $   4,626
                                                       8.4%                         -18.1%

Income tax expense                  $  1,813      $   (143)       $   1,956       $  (513)      $   2,469
                                                      -7.3%                         -20.8%

Net income                          $  4,448      $  ( 314)       $   4,762       $   383       $   4,379
                                                      -6.6%                           8.7%

</TABLE>

General. WVS reported net income of $4.4 million,  $4.8 million and $4.4 million
for the fiscal years ended June 30, 2002, 2001 and 2000, respectively.  The $314
thousand or 6.6%  decrease in net income  during  fiscal 2002 was  primarily the
result of a $889 thousand  decrease in net interest income,  and a $317 thousand
increase in non-interest expense,  which was partially offset by a $731 thousand
decrease in the  provision for loan losses,  a $143 thousand  decrease in income
tax expense,  and a $18 thousand increase in non-interest  income.  Earnings per
share  totaled  $1.63  (basic and  diluted) for fiscal 2002 as compared to $1.70
(basic) and $1.69  (diluted) for fiscal 2001. The decrease in earnings per share
was due to a decrease in net income,  which was partially  offset by a reduction
in the weighted average number of shares  outstanding due to the Company's stock
repurchases during fiscal 2002.


                                        7
<PAGE>


Average  Balances,  Net Interest  Income and Yields  Earned and Rates Paid.  The
following  average  balance  sheet  table  sets  forth  at and for  the  periods
indicated, information on the Company regarding: (1) the total dollar amounts of
interest income on interest-earning assets and the resulting average yields; (2)
the total dollar amounts of interest expense on interest-bearing liabilities and
the resulting average costs; (3) net interest income;  (4) interest rate spread;
(5) net  interest-earning  assets  (interest-bearing  liabilities);  (6) the net
yield  earned  on   interest-earning   assets;   and  (7)  the  ratio  of  total
interest-earning assets to total interest-bearing liabilities.

<TABLE>
<CAPTION>

                                                                        For the Years Ended June 30,
                                         ------------------------------------------------------------------------------------------
                                                    2002                            2001                            2000
                                         ----------------------------  -----------------------------   -----------------------------
                                         Average             Average   Average               Average   Average             Average
                                         Balance  Interest Yield/Rate  Balance    Interest Yield/Rate  Balance   Interest Yield/Rate
                                         -------  -------- ----------  -------    -------- ----------  -------   -------- ----------
                                                                           (Dollars in Thousands)
<S>                                     <C>        <C>       <C>       <C>        <C>        <C>      <C>         <C>       <C>
Interest-earning assets:
 Net loans receivable(1)                $172,824   $13,224    7.65%    $185,203    $14,656    7.91%    $176,851    $13,840    7.83%
 Net tax-free loans receivable(2)            199        26   13.28          692         69    9.97          706         71   10.01
 Mortgage-backed securities               65,372     3,341    5.11       70,403      4,835    6.87       75,312      5,170    6.86
 Investments - taxable                   112,948     5,553    4.92      114,000      8,205    7.20      116,500      8,352    7.17
 Investments - tax-free(2)                28,543     2,323    8.14       24,785      1,993    8.04        9,901        768    7.76
 Interest-bearing deposits                 1,766        10    0.57        1,871         38    2.03        1,710         36    2.11
                                         -------    ------              -------     ------              -------     ------
 Total interest-earning assets           381,652    24,477    6.41%     396,954     29,796    7.51%     380,980     28,237    7.41%
                                                    ------    ====                  ------    ====                  ------    ====
 Non-interest-earning assets               3,386                          4,148                           4,385
                                        --------                       --------                        --------
       Total assets                     $385,038                       $401,102                        $385,365
                                        ========                       ========                        ========
Interest-bearing liabilities:

 Interest-bearing deposits and escrows  $163,338    $5,082    3.11%    $161,821     $6,820    4.21%    $161,727     $6,375    3.94%

 Borrowings                              176,383     8,943    5.07      194,749     11,741    6.03      182,818     10,558    5.78
                                        --------    ------             --------     ------             --------     ------
 Total interest-bearing liabilities      339,721    14,025    4.13%     356,570     18,561    5.21%     344,545     16,933    4.91%
                                                    -----     ====                  -----     ====                  ------    =====
 Non-interest-bearing accounts            11,814                         11,616                          10,281
                                        --------                       --------                        --------

 Total interest-bearing
  liabilities and
    non-interest-bearing accounts        351,535                        368,186                         354,826
 Non-interest-bearing liabilities          3,547                          5,179                           3,618
                                        --------                       --------                        --------
       Total liabilities                 355,082                        373,365                         358,444
Retained income                           29,956                         27,737                          26,921
                                        --------                       --------                        --------
Total liabilities and retained
 income                                 $385,038                       $401,102                        $385,365
                                        ========                       ========                        ========
Net interest income                                $10,452                         $11,235                         $11,304
                                                   =======                         =======                         =======
Interest rate spread                                          2.28%                           2.30%                           2.50%
                                                              ====                            ====                            ====
Net yield on interest-earning
assets(3)                                                     2.74%                           2.83%                           2.97%
      ==                                                      ====                            ====                            ====
Ratio of interest-earning assets to
   interest-bearing liabilities                             112.34%                         111.33%                         110.57%
                                                            ======                          ======                          ======

</TABLE>
________________
(1)  Includes non-accrual loans.
(2)  Interest and yields on  tax-exempt  loans and  securities  (tax-exempt  for
     federal income tax purposes) are shown on a fully taxable equivalent basis.
(3)  Net interest income divided by average interest-earning assets.


                                        8
<PAGE>


Rate/Volume Analysis.  The following table describes the extent to which changes
in  interest  rates  and  changes  in  volume  of  interest-related  assets  and
liabilities  have affected the Company's  interest income and expense during the
periods   indicated.   For  each   category  of   interest-earning   assets  and
interest-bearing  liabilities,  information is provided on changes  attributable
to: (1) changes in volume (change in volume  multiplied by prior year rate), (2)
changes in rate (change in rate multiplied by prior year volume),  and (3) total
change in rate and  volume.  The  combined  effect of  changes  in both rate and
volume  has been  allocated  proportionately  to the  change due to rate and the
change due to volume.

<TABLE>
<CAPTION>
                                                                     Year Ended June 30,
                                           ---------------------------------------------------------------------------
                                                       2002 vs. 2001                         2001 vs. 2000
                                           -------------------------------------  ------------------------------------
                                            Increase (Decrease)        Total        Increase (Decrease)      Total
                                                   Due to            Increase             Due to           Increase
                                           --------------------                    -------------------
                                             Volume       Rate      (Decrease)      Volume        Rate     (Decrease)
                                             ------       ----      ----------      ------        ----     ----------
                                                                     (Dollars in Thousands)

<S>                                         <C>         <C>           <C>         <C>          <C>           <C>
Interest-earning assets:
      Net loans receivable                  $(1,008)     $  (454)     $(1,462)     $   673      $   142      $   815
      Mortgage-backed securities               (325)      (1,169)      (1,494)        (343)           8         (335)
      Investments - taxable                     (76)      (2,576)      (2,652)        (182)          35         (147)
      Investments - tax-free                    186           25          211          834           29          863
      Interest-bearing deposits                   3          (25)         (28)           3           (1)           2
                                            -------      -------      -------      -------      -------      -------
            Total interest-earning assets    (1,226)      (4,199)      (5,425)         985          213        1,198
Interest-bearing liabilities:
      Interest-bearing deposits and
         Escrows                               (121)      (1,617)      (1,738)          47          398          445
      Other borrowings                       (1,039)      (1,759)      (2,798)         714          469        1,183
                                            -------      -------      -------      -------      -------      -------
            Total interest-bearing
             liabilities                     (1,160)      (3,376)      (4,536)         761          867        1,628
Increase (decrease) in net interest
   Income                                   $   (66)     $  (823)     $  (889)     $   224      $  (654)     $  (430)
                                            =======      =======      =======      =======      =======      =======
</TABLE>

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

Interest Income. Total interest income decreased by $5.4 million or 18.6% during
fiscal 2002 and  increased  by $1.2  million or 4.3%  during  fiscal  2001.  The
decrease in fiscal  2002 was  primarily a result of  decreases  in the  weighted
average   yield   earned   and  the   average   balances   of  the   investment,
mortgage-backed,  and loan portfolios during the period. Increase in fiscal 2001
was  primarily a result of volume  growth in the  Company's  investment  and net
loans receivable.

Interest  income on investment  securities and FHLB stock decreased $2.4 million
or 25.4% during  fiscal 2002 and  increased  $716 thousand or 8.1% during fiscal
2001.  The  decrease in fiscal 2002 was  primarily  attributable  to a 178 basis
point  decrease  in the  weighted  average  yield  on the  Company's  investment
securities  which was partially offset by a $2.7 million increase in the average
balance of the investment  securities  outstanding.  The increase in fiscal 2001
was primarily attributable to a $14.9 million increase in the average balance of
tax-free investment securities  outstanding and a 13 basis point increase in the
weighted average yield on the Company's investment securities.

Interest income on  mortgage-backed  securities  decreased $1.5 million or 30.9%
during fiscal 2002 and decreased  $335 thousand or 6.5% during fiscal 2001.  The
decrease in fiscal 2002 was  attributable  to a 176 basis point  decrease in the
weighted average yield on the  mortgage-backed  securities  portfolio and a $5.0
million  decrease  in  the  average   outstanding   balance  of  mortgage-backed
securities.  The decrease during fiscal 2001 was  attributable to an increase in
the average outstanding  balance of mortgage-backed  securities of $4.9 million,
and an increase in the weighted average interest rate yield of 1 basis point.


                                        9
<PAGE>


Interest  income on net loans  receivable  decreased $1.5 million or 9.9% during
fiscal 2002 and increased $815 thousand or 5.9% during fiscal 2001. The decrease
in fiscal  2002 was  attributable  to a $12.9  million  decrease  in the average
balance of net loans  outstanding  and a 26 basis point decrease in the weighted
average yield on the Company's loan  portfolio.  The increase in fiscal 2001 was
attributable  to a $8.3  million  increase in the  average  balance of net loans
outstanding  and a 8 basis point  increase in the weighted  average yield on the
Company's loan portfolio.

Interest Expense.  Total interest expense decreased $4.5 million or 24.4% during
fiscal 2002 and  increased  by $1.6  million or 9.6%  during  fiscal  2001.  The
decrease  during fiscal 2002 was  attributable  to a decrease of $2.8 million of
interest  expense on borrowings and a $1.7 million  decrease of interest expense
on deposits.  The increase during fiscal 2001 was attributable to an increase of
$1.2 million of interest  expense on borrowings and a $445 thousand  decrease of
interest expense on deposits.

Interest  expense on  borrowings  decreased  $2.8 million or 23.8% during fiscal
2002 and  increased  $1.2 million or 11.2% during  fiscal 2001.  The decrease in
fiscal  2002 was  attributable  to a 96 basis  point  decrease  in the  weighted
average yield on the Company's  borrowings  and a $18.4 million  decrease in the
average  balance of  borrowings  outstanding.  The  increase for fiscal 2001 was
primarily  attributable  to  increases  in the  average  balance  of  borrowings
outstanding totaling $11.9 million and a 25 basis point increase in the weighted
average  yield on the  Company's  borrowings.  The Company  took  advantage of a
decline in market  interest  rates during the second half of fiscal year 2001 to
reposition the maturity profile of its balance sheet.

Interest expense on interest-bearing deposits and escrows decreased $1.7 million
or 25.5% in fiscal 2002 and increased  $445 thousand or 7.0% in fiscal 2001. The
decrease in fiscal 2002 was primarily attributable to a 110 basis point decrease
in the weighted  average rate paid on the Company's  deposits and a $3.9 million
increase in the average balance of interest bearing time deposits.  The increase
in fiscal 2001 was  primarily  attributable  to a decrease of 27 basis points in
the  weighted  average  rate paid on the  Company's  deposits and a $94 thousand
increase in the average balance of interest bearing deposits and escrows.

Provision for Loan Losses. A provision for loan losses is charged to earnings to
bring the total allowance to a level considered adequate by management to absorb
potential losses in the portfolio. Management's determination of the adequacy of
the allowance is based on periodic evaluations of the loan portfolio considering
past experience, current economic conditions, volume, growth, composition of the
loan portfolio and other  relevant  factors.  A $57 thousand  provision for loan
loss was recorded in fiscal 2002,  and a $788  thousand  provision for loan loss
was  recorded  in  fiscal  2001 to  increase  the  Company's  general  loan loss
reserves.  The Company's provision of $57 thousand in fiscal 2002 was comparable
to its net charge-offs which totaled $62 thousand. The increase in the provision
for loan losses during fiscal 2001 was attributable to a reappraisal of the real
estate 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.

Non-interest Income. Total non-interest income increased by $18 thousand or 2.7%
in fiscal  2002 and  increased  by $99  thousand  or 17.4% in fiscal  2001.  The
increase in fiscal  2002 was  primarily  attributable  to an increase in service
charges  on  deposits.  The  increase  in fiscal  2001 was  primarily  due to an
increase in service  charges and ATM fee income.  The increase in service charge
and ATM fee income for both periods was directly  attributable  to the Company's
checking account promotion marketing strategies.

Non-interest Expense. Total non-interest expense increased $317 thousand or 8.4%
and decreased $839 thousand or 18.1% during fiscal 2002 and 2001,  respectively.
The increase in fiscal 2002 was primarily  attributable  to increases in accrued
legal fees, charitable  contributions for local educational programs, PA Capital
Stock Franchise  taxes and other payroll costs.  The decrease in fiscal 2001 was
principally   attributable  to  the  absence  of  discretionary  employee  stock
ownership plan amortization,  and decreases in accrued legal fees and PA Capital
Sock Franchise taxes.


                                       10
<PAGE>


Income Taxes.  Income taxes  decreased  $143 thousand or 7.3% during fiscal 2002
and decreased $513 thousand or 20.8% during fiscal 2001. Fiscal year 2002 income
tax  expense  was  favorably  impacted  by the higher  levels of  tax-free  bank
qualified municipal  securities in the Company's investment portfolio and a $100
thousand Pennsylvania tax credit for charitable contributions made in support of
local educational  programs.  The Company's effective tax rate was 29.0% at June
30, 2002 and 29.1% at June 30, 2001.


QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

Financial institutions derive their income primarily from the excess of interest
collected over interest paid. The rates of interest an institution  earns on its
assets and owes on its liabilities generally are established contractually for a
period of time.  Since market interest rates change over time, an institution is
exposed to lower profit margins (or losses) if it cannot adapt to  interest-rate
changes. For example, assume that an institution's assets carry intermediate- or
long-term  fixed  rates  and that  those  assets  were  funded  with  short-term
liabilities.   If  market  interest  rates  rise  by  the  time  the  short-term
liabilities  must be  refinanced,  the  increase in the  institution's  interest
expense on its liabilities may not be sufficiently  offset if assets continue to
earn at the long-term fixed rates.  Accordingly,  an institution's profits could
decrease on existing assets because the  institution  will either have lower net
interest income or,  possibly,  net interest  expense.  Similar risks exist when
assets are subject to  contractual  interest-rate  ceilings,  or rate  sensitive
assets are funded by longer-term,  fixed-rate  liabilities in a  decreasing-rate
environment.

During fiscal 2002 the level of market  interest rates declined  dramatically in
response to the weakening national economy and the Federal Reserve Boards easing
of interest rates. Additionally,  the marked decline in equity market prices and
corporate earnings have caused a considerable disinter mediation from the equity
to the fixed income markets,  further compounding the decline in market interest
rates across the yield curve.

Due to  the  rapid  decline  in  market  interest  rates,  the  Company's  loan,
investment and  mortgage-backed  securities  portfolios  experienced much higher
then anticipated levels of prepayments.  Beginning with the terrorist attacks of
September 11, 2001 the Federal Reserve further reduced the Federal Funds rate an


                                       11
<PAGE>


additional four times for a total of 175 basis points.  Principal  repayments on
the Company's loan, investment and mortgage-backed securities portfolios totaled
$66.1  million,  $267.3 million and $35.3 million  respectively.  In response to
higher levels of liquidity  the Company began to rebalance its loan,  investment
and  mortgage-backed  securities  portfolios.  Due to the low  level  of  market
interest rates,  the Company began to reduce its originations of long-term fixed
rate mortgages while  continuing to offer consumer home equity and  construction
loans. The Company's commercial loan exposure was also reduced in recognition of
the  weaknesses  in the  national  and local  economies.  The  Company  began to
purchase  investment grade commercial paper and corporate bonds in order to earn
a higher  return with a shorter  maturity  profile and to reduce the  prepayment
risk within the portfolio.  Within the mortgage-backed securities portfolio, the
Company  aggressively  purchased  floating  rate  securities in order to provide
current income and protection against an eventual rise in market interest rates.
Each of the  aforementioned  strategies also helped to better the  interest-rate
and liquidity  risks  associated  with the Savings  Bank's  customers  liquidity
preference for shorter term deposit products.

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

As of June 30, 2002, the implementation of these asset and liability  management
initiatives resulted in the following:

     1)   the  Company's   liquidity   profile  has  improved  by  reducing  the
          investment portfolio's stated final maturities as follows: less than 1
          year:  $55.4 million or 23.7%;  1-3 years:  $9.9 million or 4.2%;  3-5
          years: $0 million or 0.0%; over 5 years: $168.3 million or 72.1%;

     2)   $58.5 million or 70.9% of the Company's  portfolio of  mortgage-backed
          securities  (including  collateralized  mortgage obligations - "CMOs")
          were secured by floating rate securities;

     3)   the maturity  distribution of the Company's  borrowings is as follows:
          less than 1 year: $44.7 million or 23.1%; 1-3 years:  $279 thousand or
          0.1%; 3-5 years: $4.2 million or 2.2%; over 5 years: $144.5 million or
          74.6%; and

     4)   an  aggregate  of $43.0  million  or 28.1% of the  Company's  net loan
          portfolio had adjustable  interest rates or maturities of less than 12
          months.

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


                                       12
<PAGE>


The  following  table  sets forth  certain  information  at the dates  indicated
relating  to  the  Company's   interest-earning   assets  and   interest-bearing
liabilities which are estimated to mature or are scheduled to reprice within one
year.

<TABLE>
<CAPTION>

                                                                                   June 30,
                                                            ---------------------------------------------------
                                                                2002               2001              2000
                                                            -------------  -------------------  ---------------
                                                                             (Dollars in Thousands)

<S>                                                         <C>                 <C>               <C>
Interest-earning assets maturing or
   repricing within one year                                 $  252,467           $ 155,928         $   86,215
Interest-bearing liabilities maturing or
   repricing within one year                                    142,823             137,232            275,814
                                                            -------------  -------------------  ---------------
Interest sensitivity gap                                     $  109,644           $  18,696          $(189,599)
                                                            =============  ===================  ===============
Interest sensitivity gap as a percentage of
   total assets                                                    27.1%                4.7%             (46.3)%
Ratio of assets to liabilities
   maturing or repricing within one year                          176.8%              113.6%              31.3%

</TABLE>

During  fiscal  2002,  the  Company  markedly  improved  its one  year  interest
sensitivity  gap by:  (1)  limiting  the  origination  of  long-term  fixed rate
mortgages;  (2) emphasizing  loans with shorter terms or repricing  frequencies;
(3) purchasing  investments  with shorter terms to maturity;  and (4) purchasing
floating rate mortgage-backed securities.


                                       13
<PAGE>


The following table  illustrates  the Company's  estimated  stressed  cumulative
repricing gap - the difference between the amount of interest-earning assets and
interest-bearing  liabilities  expected to reprice at a given point in time - at
June 30, 2002. The table estimates the impact of an upward or downward change in
market interest rates of 100 and 200 basis points.

<TABLE>
<CAPTION>

                                                  Cummulative Stressed Repricing Gap
                                                  ----------------------------------

                         Month 3       Month 6       Month 12      Month 24      Month 36      Month 60       Long Term
                         -------       -------      --------       --------      --------      --------       ---------
                                                          (Dollars in Thousands)

<S>                     <C>           <C>         <C>            <C>            <C>            <C>            <C>
Base Case Up 200 bp
-------------------
Cummulative
 Gap($'s)                55,334        45,136       50,337          51,837        34,024        36,445          25,014
% of Total
  Assets                   13.6%         11.1%        12.4%           12.7%          8.4%          8.9%            6.1%
Base Case Up 100 bp
-------------------
Cummulative
  Gap($'s)               59,181        49,919       92,975          95,865        88,311        75,492          25,014
% of Total
  Assets                   14.5%         12.3%        22.8%           23.5%         21.7%         18.5%            6.1%
Base Case No Change
-------------------
Cummulative
  Gap($'s)               65,760        64,073      109,644         108,765       103,645        99,876          27,735
% of Total
  Assets                   16.1%         15.7%        27.1%           26.7%         25.4%         24.5%            6.8%
Base Case Down 100 bp
---------------------
Cummulative
  Gap($'s)               67,066        66,243      110,807         108,477       103,715        98,406          25,014
% of Total
  Assets                   16.5%         16.3%        27.2%           26.6%         25.5%         24.2%            6.1%
Base Case Down 200 bp
---------------------
Cummulative
  Gap($'s)               68,970        67,812      112,095         109,970       104,954        99,254          25,014
% of Total
  Assets                   16.9%         16.6%        27.5%           27.0%         25.8%         24.4%            6.1%

</TABLE>

Beginning in the third  quarter of fiscal 2001,  the Company began to utilize an
income  simulation  model to measure  interest rate risk and to manage  interest
rate  sensitivity.  The Company  believes  that income  simulation  modeling may
enable the  Company to better  estimate  the  possible  effects on net  interest
income  due to  changing  market  interest  rates.  Other key  model  parameters
include:  estimated  prepayment  rates on the  Company's  loan,  mortgage-backed
securities and investment  portfolios;  savings decay rate assumptions;  and the
repayment terms and embedded options of the Company's borrowings.


                                       14
<PAGE>


The following  table presents the simulated  impact of a 100 and 200 basis point
upward or downward shift in market  interest  rates and the estimated  impact on
net interest income,  return on average equity, return on average assets and the
market value of portfolio equity at June 30, 2002 and June 30, 2001.

<TABLE>
<CAPTION>

                                      Analysis of Sensitivity to Changes in Market Interest Rates
                                      -----------------------------------------------------------

                                                                Modeled Change in Market Interest Rates
                          ----------------------------------------------------------------------------------------------------------

                                               June 30, 2002                                               June 30, 2001
                          ------------------------------------------------------   -------------------------------------------------

<S>                         <C>        <C>        <C>        <C>         <C>      <C>         <C>       <C>      <C>        <C>
Estimated impact on:        -200       -100           0       +100        +200     -200        -100       0        +100       +200
--------------------        ----       ----         ---       ----        ----     ----        ----       --       ----       ----
Change in net              -18.7%     -10.1%      0.00%       8.5%       24.2%   -29.9%       -8.4%     0.0%      0.6%        1.4%
interest income

Return on average           8.70%     10.37%     12.32%     13.94%      16.83%   10.24%      15.45%   17.43%     17.5%      17.76%
equity
Return on average           0.66%      0.79%      0.95%      1.08%       1.32%    0.76%       1.17%    1.33%     1.34%       1.35%
assets
Market value of equity   $21,523    $25,461    $28,182    $28,529     $28,793  $24,416     $37,962  $44,330   $40,681     $36,178
(in thousands)

</TABLE>

The  table  below   provides   information   about  the  Company's   anticipated
transactions comprised of firm loan commitments and other commitments, including
undisbursed  letters  and  lines  of  credit.  The  Company  used no  derivative
financial  instruments  to hedge such  anticipated  transactions  as of June 30,
2002.

                    Anticipated Transactions
   ------------------------------------------------------------------
                                            (Dollars in Thousands)

Undisbursed construction and
    land development loans
      Fixed rate                                    $  5,585
                                                        7.08%

      Adjustable rate                               $  5,726
                                                        5.97%

Undisbursed lines of credit
      Adjustable rate                               $  7,065
                                                        5.52%

Loan origination commitments
      Fixed rate                                    $    947
                                                        6.84%

      Adjustable rate                               $    112
                                                        7.50%

Letters of credit
      Adjustable rate                               $    107
                                                        7.75%
                                                     -------
                                                     $19,542
                                                     =======


                                       15
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

Liquidity is often analyzed by reviewing the cash flow statement.  Cash and cash
equivalents  increased by $184 thousand during fiscal 2002 primarily due to $4.8
million of net cash  provided by  financing  activities  and $4.5 million of net
cash  provided by  operating  activities.  These  increases  were offset by $9.1
million of net cash used for investing activities.

Funds provided by operating  activities  totaled $4.5 million during fiscal 2002
as compared to $6.0 million  during fiscal 2001.  Net cash provided by operating
activities was primarily comprised of $4.4 million of net income.

Funds used for investing  activities  totaled $9.1 million during fiscal 2002 as
compared to $12.5 million provided by investing  activities  during fiscal 2001.
Primary uses of funds during fiscal 2002 include  $326.3 million in purchases of
investment and mortgage-backed securities, which were partially offset by $285.8
million in repayments of investment and mortgage-backed  securities, and a $31.5
million decrease in net loans receivable.

Funds provided by financing  activities  totaled $4.8 million for fiscal 2002 as
compared to $18.4 million used for financing  activities in fiscal 2001. Primary
sources of funds for fiscal 2002 were a $11.5 million increase in FHLB and other
borrowings used to fund investment and mortgage-backed security purchases, which
was  partially  offset by a $3.7 million  decrease in deposits,  $1.7 million of
cash dividends and $1.5 million in common stock repurchases. During fiscal 2002,
the Company  purchased  96,728  shares of common  stock for  approximately  $1.5
million.  Management  has determined  that it currently is maintaining  adequate
liquidity  and  continues  to better  match  funding  sources  with  lending and
investment opportunities.

The Company's primary sources of funds are deposits,  amortization,  prepayments
and  maturities of existing  loans,  mortgage-backed  securities  and investment
securities,  funds from operations, and funds obtained through FHLB advances and
other  borrowings.  At June  30,  2002,  the  total  approved  loan  commitments
outstanding amounted to $1.1 million. At the same date, commitments under unused
letters and lines of credit amounted to $7.2 million and the unadvanced  portion
of  construction  loans  approximated  $11.3  million.  Certificates  of deposit
scheduled to mature in one year or less at June 30, 2002, totaled $53.5 million.
Management  believes that a significant portion of maturing deposits will remain
with the Company.

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

On July 29, 2002, the Company's  Board of Directors  declared a cash dividend of
$0.16 per share  payable on August  15,  2002 to  shareholders  of record at the
close of business on August 5, 2002.  Dividends are subject to determination and
declaration  by the Board of  Directors,  which take into account the  Company's
financial  condition,  statutory and regulatory  restrictions,  general economic
conditions and other  factors.  There can be no assurance that dividends will in
fact be paid on the common stock in the future or that, if paid,  such dividends
will not be reduced or eliminated in future periods.

As of June 30,  2002,  WVS  Financial  Corp.  exceeded  all  regulatory  capital
requirements and maintained Tier I and total  risk-based  capital equal to $30.1
million  or  13.4%  and  $32.8   million  or  14.7%,   respectively,   of  total
risk-weighted  assets,  and Tier I leverage  capital of $30.1 million or 7.7% of
average total assets.


                                       16
<PAGE>


Non-performing assets consist of non-accrual loans and real estate owned. A loan
is placed on  non-accrual  status  when,  in the  judgment  of  management,  the
probability of collection of interest is deemed  insufficient to warrant further
accrual.  When a loan is placed on non-accrual  status,  previously  accrued but
uncollected  interest is deducted from interest  income.  Non-performing  assets
increased  $263  thousand or 5.2% to $5.3 million,  or 1.3% of total assets,  at
June 30, 2002. The increase was primarily the result of a $235 thousand increase
in real estate owned.

FORWARD LOOKING STATEMENTS

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

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


                                       17
<PAGE>


                         REPORT OF INDEPENDENT AUDITORS
                         ------------------------------


Board of Directors and Stockholders
WVS Financial Corp.

We have audited the  accompanying  consolidated  balance  sheet of WVS Financial
Corp. and subsidiary as of June 30, 2002 and 2001, and the related  consolidated
statements of income,  stockholders' equity and cash flows for each of the years
in the three-year period ended June 30, 2002. These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of WVS Financial Corp.
and subsidiary as of June 30, 2002 and 2001, and the results of their operations
and their cash flows for each of the years in the  three-year  period ended June
30, 2002, in conformity with  accounting  principles  generally  accepted in the
United States of America.




/s/ S.R. Snodgrass A.C.
----------------------
Wexford, PA
July 26, 2002


                                       18
<PAGE>


<TABLE>
<CAPTION>

                               WVS FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET
                      (In thousands, except per share data)

                                                                             June 30,
                                                                       2002            2001
                                                                     ---------      ---------

<S>                                                                  <C>            <C>
ASSETS
     Cash and due from banks                                         $     879      $     696
     Interest-earning demand deposits                                    2,298          2,297
     Investment securities available for sale (amortized
        cost of $8,375 and $1,380) (Note 3)                              8,426          1,380
     Investment securities held to maturity (market value
        of $146,146 and $129,191) (Note 3)                             142,958        128,213
     Mortgage-backed securities available for sale
        (amortized cost of $6,196 and $8,386) (Note 4)                   6,450          8,551
     Mortgage-backed securities held to maturity
        (market value of $76,819 and $56,082) (Note 4)                  76,093         55,581
      Net loans receivable (allowance for loan losses of
        $2,758 and $2,763) (Note 5)                                    152,905        185,179
     Accrued interest receivable (Note 7)                                3,903          3,837
     Federal Home Loan Bank stock, at cost (Note 8)                      8,281          8,150
     Premises and equipment  (Note 9)                                      996          1,001
     Deferred taxes and other assets                                     1,722          1,555
                                                                     ---------      ---------
             TOTAL ASSETS                                            $ 404,911      $ 396,440
                                                                     =========      =========

LIABILITIES
     Deposits (Note 10)                                              $ 177,672      $ 181,339
     Federal Home Loan Bank advances (Note 11)                         159,937        161,494
     Other borrowings (Note 12)                                         33,731         20,660
     Accrued interest payable                                            1,698          2,441
     Other liabilities                                                   1,620          1,861
                                                                     ---------      ---------
TOTAL LIABILITIES                                                      374,658        367,795
                                                                     ---------      ---------

STOCKHOLDERS' EQUITY (Notes 14 and 15)
     Preferred stock, no par value; 5,000,000 shares authorized;
        none outstanding                                                     -              -

     Common stock, par value $.01; 10,000,000 shares authorized;
        3,729,858 and 3,708,590 shares issued                               37             37
     Additional paid-in capital                                         20,037         19,742
     Treasury stock (1,051,872 and 955,144 shares at cost)             (15,133)       (13,589)
     Retained earnings - substantially restricted                       25,183         22,478
     Accumulated other comprehensive income                                201            108
     Unallocated shares - Recognition and Retention Plans                  (72)          (131)
                                                                     ---------      ---------
TOTAL STOCKHOLDERS' EQUITY                                              30,253         28,645
                                                                     ---------      ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           $ 404,911      $ 396,440
                                                                     =========      =========
</TABLE>

See accompanying notes to the consolidated financial statements.


                                       19
<PAGE>


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



                                                                         Year Ended June 30,
                                                              2002              2001             2000
                                                         ---------------  ----------------  ----------------

<S>                                                    <C>                 <C>                <C>
INTEREST AND DIVIDEND INCOME
     Loans                                              $        13,242    $      14,704       $     13,889
     Investment securities                                        6,735             9,075             8,428
     Mortgage-backed securities                                   3,341             4,835             5,170
     Interest-earning demand deposits                                10                38                36
     Federal Home Loan Bank stock                                   432               533               464
                                                        ---------------  ----------------  ----------------
         Total interest and dividend income                      23,760            29,185            27,987
                                                         --------------  ----------------  ----------------

INTEREST EXPENSE
     Deposits (Note 10)                                           5,082             6,820             6,375
     Borrowings                                                   8,943            11,741            10,558
         Total interest expense                                  14,025            18,561            16,933
                                                        ---------------  ----------------  ----------------

NET INTEREST INCOME                                               9,735            10,624            11,054
Provision for loan losses (Note 6)                                   57               788               150
                                                        ---------------  ----------------  ----------------
NET INTEREST INCOME AFTER PROVISION
     FOR LOAN LOSSES                                              9,678            9,836             10,904
                                                        ---------------  ----------------  ----------------
NONINTEREST INCOME
     Service charges on deposits                                    403               348               312
     Other                                                          284               321               258
                                                        ---------------  ----------------  ----------------
         Total noninterest income                                   687               669               570
                                                        ---------------  ----------------  ----------------
NONINTEREST EXPENSE
     Salaries and employee benefits                               2,448             2,415             3,095
     Occupancy and equipment                                        375               367               354
     Deposit insurance premium                                       33                35                69
     Data processing                                                190               186               179
     Correspondent bank charges                                     163               153               144
     Other                                                          895               631               785
                                                         ---------------  ----------------  ----------------
       Total noninterest expense                                  4,104             3,787             4,626
                                                         ---------------  ----------------  ----------------
Income before income taxes                                        6,261             6,718             6,848
Income taxes (Note 17)                                            1,813             1,956             2,469
                                                         ---------------  ----------------  ----------------
NET INCOME                                               $        4,448        $    4,762        $    4,379
                                                         ===============  ================  ================
EARNINGS PER SHARE:
     Basic                                               $         1.63        $     1.70        $     1.48
     Diluted
                                                                   1.63              1.69              1.47
AVERAGE SHARES OUTSTANDING (Note 2):
     Basic                                                    2,723,891         2,804,125         2,953,720
     Diluted                                                  2,732,491         2,815,867         2,977,089

</TABLE>

See accompanying notes to the consolidated financial statements.


                                       20
<PAGE>


<TABLE>
<CAPTION>

                                                                          WVS FINANCIAL CORP.
                                                            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                                  (In thousands, except per share data)


                                                                                    Retained
                                                            Additional              Earnings-    Unallocated   Unallocated
                                                  Common     Paid-in    Treasury  Substantially  Shares Held   Shares Held
                                                  Stock      Capital     Stock     Restricted      by ESOP       by RRP
                                                ---------  ----------  ---------  ------------  ------------  ------------

<S>                                                <C>      <C>         <C>         <C>          <C>           <C>
Balance, June 30, 1999                             $ 37     $ 19,062    $ (7,596)   $ 17,024     $   (232)     $    (326)

Comprehensive income:
    Net income                                                                         4,379
    Unrealized loss on available
      for sale securities, net of tax benefit
      of $86
    Total comprehensive income

Release of earned ESOP shares                                    345                                  232
Tax benefit from stock grants issued
   under RRPs                                                     50
Accrued compensation expense for RRPs                                                                               106
Exercise of stock options                                         91
Purchase of treasury stock                                                (4,174)
Cash dividends declared ($0.64 per share)                                             (1,890)
                                               --------    ---------   ---------  ----------     --------     ---------
Balance June 30, 2000                                37       19,548     (11,770)     19,513            -           (220)

Comprehensive income:
    Net income                                                                         4,762
    Unrealized gain on available
      for sale securities, net of taxes of $157

    Total comprehensive income
Tax benefit from stock grants issued
    under RRPs                                                    39
Accrued compensation expense for RRPs                                                                                89
Exercise of stock options                                        119
Tax benefit from exercise of stock options                        36
Purchase of treasury stock                                                (1,819)
Cash dividends declared ($0.64 per share)                                             (1,797)
                                               --------    ---------   ---------  ----------     --------     ---------
Balance June 30, 2001                                37       19,742     (13,589)     22,478            -           (131)


Comprehensive income:
    Net income                                                                         4,448
    Unrealized gain on available
      for sale securities, net of taxes of $48

    Total comprehensive income
Tax benefit from stock grants issued
    under RRPs                                                    54
Accrued compensation expense for RRPs                                                                                59
Exercise of stock options                                        212
Tax benefit from exercise of stock options                        29
Purchase of treasury stock                                                (1,544)
Cash dividends declared ($0.64 per share)                                             (1,743)
                                               --------    ---------   ---------  ----------     --------     ---------
Balance June 30, 2002                              $ 37     $ 20,037    $(15,133)   $25,183             -           $(72)
                                              =========    =========   =========  ==========     ========     =========
</TABLE>

<TABLE>
<CAPTION>

                               WVS FINANCIAL CORP.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                      (In thousands, except per share data)


                                                    Accumulated
                                                       Other
                                                   Comprehensive
                                                   Income (Loss)   Total
                                                  -------------- --------

<S>                                               <C>            <C>
Balance, June 30, 1999                            $   (31)       $ 27,938

Comprehensive income:
    Net income                                                      4,379
    Unrealized loss on available
      for sale securities, net of tax benefit        (166)           (166)
      of $86                                                         -----
    Total comprehensive income                                       4,213

Release of earned ESOP shares                                         577
Tax benefit from stock grants issued
   under RRPs                                                          50
Accrued compensation expense for RRPs                                 106
Exercise of stock options                                              91
Purchase of treasury stock                                         (4,174)
Cash dividends declared ($0.64 per share)                          (1,890)
                                                 --------        --------
Balance June 30, 2000                                (197)         26,911

Comprehensive income:
    Net income                                                      4,762
    Unrealized gain on available
      for sale securities, net of taxes of $157       305             305
                                                                 --------
    Total comprehensive income                                      5,067
Tax benefit from stock grants issued
    under RRPs                                                         39
Accrued compensation expense for RRPs                                  89
Exercise of stock options                                             119
Tax benefit from exercise of stock options                             36
Purchase of treasury stock                                         (1,819)
Cash dividends declared ($0.64 per share)                          (1,797)
                                                 --------        --------
Balance June 30, 2001                                 108          28,645


Comprehensive income:
    Net income                                                      4,448
    Unrealized gain on available
      for sale securities, net of taxes of $48         93              93
                                                                 --------
    Total comprehensive income                                      4,541
Tax benefit from stock grants issued
    under RRPs                                                         54
Accrued compensation expense for RRPs                                  59
Exercise of stock options                                             212
Tax benefit from exercise of stock options                             29
Purchase of treasury stock                                         (1,544)
Cash dividends declared ($0.64 per share)                          (1,743)
                                                 --------        --------
Balance June 30, 2002                             $   201         $30,253
                                                 ========        ========
</TABLE>


    See accompanying notes to the consolidated financial statements.


                                     21
<PAGE>


<TABLE>
<CAPTION>
                                                 WVS FINANCIAL CORP.
                                         CONSOLIDATED STATEMENT OF CASH FLOWS
                                                    (In thousands)

                                                                                       Year Ended June 30,
                                                                             2002              2001             2000
                                                                          ---------         ---------         ---------
<S>                                                                       <C>               <C>               <C>
OPERATING ACTIVITIES
     Net income                                                           $   4,448         $   4,762         $   4,379
     Adjustments to reconcile net income to net cash
       provided by operating activities:
          Provision for loan losses                                              57               788               150
          Depreciation and amortization, net                                    123               111               115
          Amortization of discounts, premiums, and
            deferred loan fees                                                  766              (225)             (120)
          Amortization of ESOP and RRP deferred
            compensation                                                         59                89               683
          Deferred income taxes                                                 (93)             (370)             (121)
          Decrease (increase) in accrued interest receivable                    (66)              538            (1,270)
          Increase (decrease) in accrued interest payable                      (743)             (263)              774
          Other, net                                                            (48)              555              (328)
                                                                          ---------         ---------         ---------

            Net cash provided by operating activities                         4,503             5,985             4,262
                                                                          ---------         ---------         ---------
INVESTING ACTIVITIES
     Available for sale:
          Purchase of investment and mortgage-backed
            securities                                                      (29,454)                -            (2,932)
          Proceeds from repayments of investment and
            mortgage-backed securities                                       24,793             1,767             2,114
     Held to maturity:
          Purchase of investment and mortgage-backed
            securities                                                     (296,854)          (36,865)          (58,774)

          Proceeds from repayments of investment and
            mortgage-backed securities                                      260,973            53,438            13,045

     Net decrease (increase) in net loans receivable                         31,520            (2,873)          (13,353)
     Decrease (increase) in Federal Home Loan Bank stock                       (131)           (2,925)              970
     Acquisition of premises and equipment                                     (118)              (62)              (10)
     Other, net                                                                 180                 -               253
                                                                          ---------         ---------         ---------
            Net cash provided by (used for) investing activities             (9,091)           12,480           (58,687)
                                                                          ---------         ---------         ---------
FINANCING ACTIVITIES
     Net increase (decrease) in deposits                                     (3,667)            8,481            (1,385)
     Net decrease in Federal Home Loan Bank short-term advances             (14,836)           (1,663)          (23,500)
     Net increase (decrease) in other borrowings                             13,071           (80,365)           86,305
     Proceeds from Federal Home Loan Bank long-term advances                 23,279           108,657                 -
     Repayments of Federal Home Loan Bank long-term advances                (10,000)          (50,000)                -
     Net proceeds from issuance of common stock                                 212               119                91
     Cash dividends paid                                                     (1,743)           (1,797)           (1,890)
     Purchase of treasury stock                                              (1,544)           (1,819)           (4,174)
                                                                          ---------         ---------         ---------
            Net cash provided by (used for) financing activities              4,772           (18,387)           55,447
                                                                          ---------         ---------         ---------
Increase in cash and cash equivalents                                           184                78             1,022
CASH AND CASH EQUIVALENTS AT BEGINNING
     OF YEAR                                                                  2,993             2,915             1,893
                                                                          ---------         ---------         ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                  $   3,177         $   2,993         $   2,915
                                                                          =========         =========         =========

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
     Interest                                                             $  14,768         $  18,823         $  16,159
     Taxes                                                                    1,735             2,140             2,668

</TABLE>

See accompanying notes to the consolidated financial statements.


                                       22
<PAGE>


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

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

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

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

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

Investment  securities are classified at the time of purchase as securities held
to maturity or securities  available for sale based on management's  ability and
intent. Debt and mortgage-backed securities acquired with the ability and intent
to hold to maturity are stated at cost adjusted for  amortization of premium and
accretion  of  discount,  which are computed  using the  level-yield  method and
recognized  as  adjustments   of  interest   income.   Amortization   rates  for
mortgage-backed  securities are periodically  adjusted to reflect changes in the
prepayment speeds of the underlying  mortgages.  Certain other debt, equity, and
mortgage-backed  securities  have been classified as available for sale to serve
principally  as a source of liquidity.  Unrealized  holding gains and losses for
available  for  sale  securities  are  reported  as  a  separate   component  of
stockholders' equity, net of tax, until realized.  Realized securities gains and
losses are  computed  using the  specific  identification  method.  Interest and
dividends on investment and mortgage-backed  securities are recognized as income
when earned.

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


                                       23
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

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

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

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

The allowance for loan losses  represents the amount which management  estimates
is adequate to provide for probable losses  inherent in its loan portfolio.  The
allowance  method is used in providing  for loan losses.  Accordingly,  all loan
losses are charged to the allowance,  and all recoveries are credited to it. The
allowance  for loan losses is  established  through a provision  for loan losses
charged to  operations.  The provision for loan losses is based on  management's
periodic  evaluation  of  individual  loans,  economic  factors,  past loan loss
experience,  changes in the composition  and volume of the portfolio,  and other
relevant  factors.  The  estimates  used  in  determining  the  adequacy  of the
allowance for loan losses, including the amounts and timing of future cash flows
expected on impaired loans, are particularly  susceptible to changes in the near
term.

Impaired loans are  commercial and commercial  real estate loans for which it is
probable  the Company  will not be able to collect all amounts due  according to
the contractual terms of the loan agreement.  The Company individually evaluates
such  loans  for  impairment  and  does  not  aggregate   loans  by  major  risk
classifications.  The  definition  of  "impaired  loans"  is not the same as the
definition of  "nonaccrual  loans,"  although the two  categories  overlap.  The
Company  may  choose  to  place  a loan  on  nonaccrual  status  due to  payment
delinquency  or  uncertain  collectibility,  while not  classifying  the loan as
impaired if the loan is not a commercial or commercial real estate loan. Factors
considered by management in determining  impairment  include  payment status and
collateral  value. The amount of impairment for these types of impaired loans is
determined  by the  difference  between the present  value of the expected  cash
flows related to the loan,  using the original  interest  rate, and its recorded
value,  or as a practical  expedient in the case of  collateralized  loans,  the
difference  between the fair value of the collateral and the recorded  amount of
the loans.  When  foreclosure  is probable,  impairment is measured based on the
fair value of the collateral.

Mortgage loans on one-to-four family properties and all consumer loans are large
groups of  smaller-balance  homogeneous  loans and are measured  for  impairment
collectively.  Loans that experience  insignificant  payment  delays,  which are
defined as 90 days or less, generally are not classified as impaired. Management
determines the  significance  of payment  delays on a case-by-case  basis taking
into  consideration  all  circumstances  surrounding  the loan and the  borrower
including the length of the delay, the borrower's prior payment record,  and the
amount of shortfall in relation to the principal and interest owed.


                                       24
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Real Estate Owned
-----------------

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

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

Premises  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Depreciation  is  principally  computed  on the  straight-line  method  over the
estimated  useful  lives of the  related  assets,  which range from three to ten
years for  furniture  and  equipment  and 25 to 50 years for building  premises.
Leasehold  improvements are amortized over the shorter of their estimated useful
lives or their respective lease terms,  which range from seven to fifteen years.
Expenditures for maintenance and repairs are charged against income as incurred.
Costs of major additions and improvements are capitalized.

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

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

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

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

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

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

The Company is required to present  comprehensive income and its components in a
full set of general  purpose  financial  statements  for all periods  presented.
Other  comprehensive  income is comprised  exclusively of net unrealized holding
gains (losses) on its available for sale securities  portfolio.  The Company has
elected to report the effects of its other  comprehensive  income as part of the
Consolidated Statement of Stockholders' Equity.

Cash Flow Information
---------------------

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


                                       25
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

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

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

In July 2001, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial  Accounting  Standards  (FAS)  No.  141,  Business   Combinations,
effective for all business  combinations  initiated after June 30, 2001, as well
as all  business  combinations  accounted  for by the  purchase  method that are
completed  after June 30, 2001.  The new  statement  requires  that the purchase
method of accounting be used for all business combinations and prohibits the use
of the pooling-of-interests  method. The adoption of FAS No. 141 is not expected
to have a material  effect on the  Company's  financial  position  or results of
operations.

In July 2001, the FASB issued FAS No. 142, Goodwill and Other Intangible Assets,
effective for fiscal years  beginning  after  December 15, 2001.  This statement
changes  the  accounting  for  goodwill  from  an  amortization   method  to  an
impairment-only  approach.  Thus,  amortization of goodwill,  including goodwill
recorded  in past  business  combinations,  will  cease  upon  adoption  of this
statement.  However, this new statement did not amend FAS No. 72, Accounting for
Certain  Acquisitions  of  Banking  or  Thrift   Institutions,   which  requires
recognition and amortization of unidentified  intangible  assets relating to the
acquisition  of  financial  institutions  or  branches  thereof.  The  FASB  has
undertaken a limited scope project to reconsider the provisions of FAS No. 72 in
2002 and has issued an exposure draft of a proposed  statement,  Acquisitions of
Certain  Financial  Statements,  that would  remove  acquisitions  of  financial
institutions  from  the  scope  of FAS No.  72.  The  adoption  of the  proposed
statement would require all goodwill originating from acquisitions that meet the
definition of a business  combination  as defined in Emerging  Issues Task Force
Issue ("EITF") No. 98-3 to be  discontinued.  The adoption of FAS No. 142 is not
expected to have any effect on the  Company's  financial  position or results of
operations,  as the  Company  does not  currently  have  goodwill  or any  other
intangible assets.

In August 2001,  the FASB issued FAS No. 143,  Accounting  for Asset  Retirement
Obligations,  which  requires  that the fair value of a liability be  recognized
when  incurred for the  retirement  of a  long-lived  asset and the value of the
asset  be  increased  by that  amount.  The  statement  also  requires  that the
liability be maintained at its present value in subsequent  periods and outlines
certain  disclosures  for such  obligations.  The new statement takes effect for
fiscal  years  beginning  after June 15, 2002.  The adoption of this  statement,
which is effective  July 1, 2002,  is not expected to have a material  effect on
the Company `s financial statements.

In October 2001,  the FASB issued FAS No. 144,  Accounting for the Impairment or
Disposal of Long-Lived Assets. FAS No. 144 supercedes FAS No. 121 and applies to
all long-lived  assets  (including  discontinued  operations)  and  consequently
amends  Accounting  Principles  Bulletin  Opinion No. 30,  Reporting  Results of
Operations - Reporting  the Effects of Disposal of a Segment of a Business.  FAS
No. 144 requires  that  long-lived  assets that are to be disposed of by sale be
measured  at the lower of book value or fair  value less costs to sell.  FAS No.
144 is effective  for  financial  statements  issued for fiscal years  beginning
after  December  15,  2001 and,  generally,  its  provisions  are to be  applied
prospectively. The adoption of this statement is not expected to have a material
effect on the Company's financial statements.


                                       26
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (Continued)
--------------------------------------------

In April 2002, the FASB issued FAS No. 145, "Rescission of FASB Statement No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections".  FAS
No.  145  rescinds  FAS  No.  4,  which  required  all  gains  and  losses  from
extinguishment  of debt to be  aggregated  and, if  material,  classified  as an
extraordinary  item, net of related income tax effect. As a result, the criteria
in  Opinion  30 will  now be used to  classify  those  gains  and  losses.  This
statement  also amends FAS No. 13 to require  that certain  lease  modifications
that have economic effects similar to  sale-leaseback  transactions be accounted
for in the same manner as sale-leaseback transactions. This statement also makes
technical corrections to existing pronouncements,  which are not substantive but
in some cases may change  accounting  practice.  FAS No.  145 is  effective  for
transactions  occurring  after May 15, 2002. The adoption of FAS No. 145 did not
have a  material  effect on the  Company's  financial  position  or  results  of
operations.

In July 2002, the FASB issue FAS No. 146,  Accounting for Costs  Associated with
Exit or  Disposal  Activities,  which  requires  companies  to  recognize  costs
associated  with exit or disposal  activities when they are incurred rather that
at the date of a commitment to an exit or disposal plan. This statement replaces
EITF Issue No. 94-3,  Liability  Recognition  for Certain  Employee  Termination
Benefits and Other Costs to Exit an Activity  (Including  Certain Costs Incurred
in a  Restructuring).  The new statement  will be effective for exit or disposal
activities  initiated  after  December  31,  2002,  the adoption of which is not
expected to have a material effect on the Company's financial statements.

2.   EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share.

<TABLE>
<CAPTION>

                                                           2002              2001              2000
                                                    ----------------  ----------------  ----------------
<S>                                                       <C>               <C>              <C>
Weighted-average common shares
     outstanding                                          3,718,640         3,695,294         3,672,506

Average treasury stock shares                              (994,749)         (891,169)         (684,957)

Average unearned ESOP shares                                      -                 -           (33,829)
                                                    ----------------  ----------------  ----------------

Weighted-average common shares and
     common stock equivalents used to
     calculate basic earnings per share                   2,723,891         2,804,125         2,953,720

Additional common stock equivalents
     (stock options) used to calculate
     diluted earnings per share                               8,600            11,742            23,369

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

Weighted-average common shares and
     common stock equivalents used
     to calculate diluted earnings per share              2,732,491         2,815,867         2,977,089
                                                    ================  ================  ================

</TABLE>

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

Options to  purchase  76,600  shares of common  stock at prices  from  $14.00 to
$15.625 were  outstanding  during 2001 and 93,746 shares at price from $11.59 to
$15.625 were  outstanding  during 2000, but were not included in the computation
of diluted EPS because to do so would have been anti-dilutive.


                                       27
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

3.INVESTMENT SECURITIES

The amortized cost and estimated market values of investments are as follows:

<TABLE>
<CAPTION>

                                                  ---------------------------------------------------------------------
                                                                       Gross               Gross            Estimated
                                                  Amortized         Unrealized           Unrealized           Market
                                                    Cost               Gains               Losses              Value
                                                  ---------           ---------          ---------           ---------
<S>                                               <C>                 <C>                <C>                 <C>
2002
----
AVAILABLE FOR SALE
Preferred trust securities                        $     860           $      17          $      (3)          $     874
Commercial paper                                      6,495                   -                  -               6,495
Equity securities                                     1,020                  38                 (1)              1,057
                                                  ---------           ---------          ---------           ---------
           Total                                  $   8,375           $      55          $      (4)          $   8,426
                                                  =========           =========          =========           =========
HELD TO MATURITY
U.S. Government agency securities                 $  55,216           $   1,016          $     (22)          $  56,210
Corporate debt securities                            58,415                 193                (51)             58,557

Obligations of states and political
  subdivisions                                       29,327               2,052                  -              31,379
                                                  ---------           ---------          ---------           ---------
           Total                                  $ 142,958           $   3,261          $     (73)          $ 146,146
                                                  =========           =========          =========           =========
2001
----
AVAILABLE FOR SALE
Preferred trust securities                        $     161           $       -          $     (13)          $     148
Equity securities                                     1,219                  27                (14)              1,232
                                                  ---------           ---------          ---------           ---------
           Total                                  $   1,380           $      27          $     (27)          $   1,380
                                                  =========           =========          =========           =========
HELD TO MATURITY
U.S. Government agency securities                 $  87,927           $     593          $    (928)          $  87,592
Corporate debt securities                            10,520                   -                 (1)             10,519
Obligations of states and political
  subdivisions                                       29,766               1,367                (53)             31,080
                                                  ---------           ---------          ---------           ---------
           Total                                  $ 128,213           $   1,960          $    (982)          $ 129,191
                                                  =========           =========          =========           =========
</TABLE>

The amortized  cost and estimated  market values of debt  securities at June 30,
2002, by contractual  maturity,  are shown below. Expected maturities may differ
from the  contractual  maturities  because  issuers  may have the  right to call
securities prior to their final maturities.

<TABLE>
<CAPTION>

                                Due in          Due after         Due after
                               one year        one through      five through        Due after
                               or less          five years        ten years         ten years           Total
                             --------------   ---------------  ----------------  ----------------  ----------------
<S>                          <C>                 <C>               <C>               <C>               <C>
AVAILABLE FOR SALE
   Amortized cost                $ 6,495          $     -          $       -          $    860          $   7,355
   Estimated market value          6,495                -                  -               874              7,369

HELD TO MATURITY
   Amortized cost                $48,479           $9.936          $   1,461          $ 83,082          $ 142,958

   Estimated market value         48,606            9,951              1,583            86,006            146,146

</TABLE>

                                       28
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

3.   INVESTMENT SECURITIES (Continued)

Investment  securities  with amortized cost of $41,219 and $35,228 and estimated
market  values of $41,956 and  $34,954 at June 30, 2002 and 2001,  respectively,
were pledged to secure public  deposits,  repurchase  agreements,  and for other
purposes as required by law.

4.   MORTGAGE-BACKED SECURITIES

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

<TABLE>
<CAPTION>

                                               --------------------------------------------------------------------
                                                                     Gross              Gross            Estimated
                                                Amortized         Unrealized         Unrealized           Market
                                                  Cost               Gains             Losses              Value
                                                --------           --------           --------            --------
<S>                                             <C>                <C>                <C>                 <C>
2002
----
AVAILABLE FOR SALE
Federal National Mortgage
  Association certificates                      $  3,228           $    106           $      -            $  3,334
Government National Mortgage
  Association certificates                         2,627                128                  -               2,755
Federal Home Loan Mortgage
  Corporation certificates                            48                  1                  -                  49
Collateralized mortgage obligations                  293                 19                  -                 312
                                                --------           --------           --------            --------
     Total                                      $  6,196           $    254           $      -            $  6,450
                                                ========           ========           ========            ========
HELD TO MATURITY
Federal National Mortgage
  Association certificates                      $     35           $      3           $      -            $     38
Government National Mortgage
  Association certificates                         4,069                190                  -               4,259
Federal Home Loan Mortgage
  Corporation certificates                            60                  5                  -                  65
Collateralized mortgage obligations               71,929                615                (87)             72,457
                                                --------           --------           --------            --------
     Total                                      $ 76,093           $    813           $    (87)           $ 76,819
                                                ========           ========           ========            ========
2001
----
AVAILABLE FOR SALE
Federal National Mortgage
  Association certificates                      $  4,840           $     25           $     (8)           $  4,857
Government National Mortgage
  Association certificates                         2,777                130                  -               2,907
Federal Home Loan Mortgage
  Corporation certificates                            49                  1                  -                  50
Collateralized mortgage obligations                  720                 18                 (1)                737
                                                --------           --------           --------            --------
     Total                                      $  8,386           $    174           $     (9)           $  8,551
                                                ========           ========           ========            ========
HELD TO MATURITY
Federal National Mortgage
  Association certificates                      $     27           $      1           $      -            $     28
Government National Mortgage
  Association certificates                         7,413                171                 (9)             (7,575)
Federal Home Loan Mortgage
  Corporation certificates                            74                  5                  -                  79
Collateralized mortgage obligations               48,067                456               (123)             48,400
                                                --------           --------           --------            --------
     Total                                      $ 55,581           $    633           $   (132)           $ 56,082
                                                ========           ========           ========            ========
</TABLE>


                                       29
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

4.   MORTGAGE-BACKED SECURITIES (Continued)

The amortized cost and estimated market values of mortgage-backed  securities at
June 30, 2002, by contractual maturity, are shown below. Expected maturities may
differ from the contractual  maturities  because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                            Due in      Due after      Due after
                           one year    one through   five through    Due after
                            or less    five years      ten years     ten years    Total
                           --------    -----------   ------------    ---------   -------

<S>                           <C>           <C>            <C>       <C>         <C>
AVAILABLE FOR SALE
   Amortized cost           $ 433           $   -      $   35       $ 5,728     $ 6,196
   Estimated market value     443               -          37         5,970       6,450

HELD TO MATURITY
   Amortized cost           $   -           $   -      $   58       $76,035     $76,093
   Estimated market value       -               -          62        76,757      76,819

</TABLE>

At June 30, 2002 and 2001,  mortgage-backed securities with an amortized cost of
$48,161 and $42,669 and  estimated  market  values of $49,099 and $43,062,  were
pledged to secure borrowings with the Federal Home Loan Bank.

5.   NET LOANS RECEIVABLE

Major classifications of loans are summarized as follows:

<TABLE>
<CAPTION>

                                                          2002          2001
                                                        --------      --------
<S>                                                     <C>           <C>
First mortgage loans:
     1 - 4 family dwellings                             $ 89,889      $105,623
     Construction                                         19,965        28,157
     Land acquisition and development                      6,691         6,343
     Multi-family dwellings                                6,173         6,920
     Commercial                                           25,439        34,269
                                                        --------      --------
                                                         148,157       181,312
                                                        --------      --------
Consumer loans:
     Home equity                                          11,352        13,660
     Home equity lines of credit                           4,967         5,482
     Education loans                                           1            31
     Other                                                 1,514         2,092
                                                        --------      --------
                                                          17,834        21,265
                                                        --------      --------
Commercial loans                                           1,447         1,819
                                                        --------      --------
Obligations of state and political subdivisions                -           686
                                                        --------      --------
Less:
     Undisbursed construction and land development        11,311        16,481
     Net deferred loan fees                                  464           659
     Allowance for loan losses                             2,758         2,763
                                                        --------      --------
                                                          14,533        19,903
                                                        --------      --------
Net loans receivable                                 $   152,905   $   185,179
                                                        ========      ========
</TABLE>


                                       30

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

5.   NET LOANS RECEIVABLE (Continued)

The Company's  primary  business  activity is with customers  located within its
local trade area of Northern Allegheny and Southern Butler counties. The Company
has  concentrated  its lending efforts by granting  residential and construction
mortgage  loans to customers  throughout  its immediate  trade area. The Company
also selectively  funds and participates in commercial and residential  mortgage
loans  outside  of its  immediate  trade  area,  provided  such  loans  meet the
Company's  credit policy  guidelines.  In general,  the Company's loan portfolio
performance  at June 30, 2002 and 2001,  is  dependent  upon the local  economic
conditions.

Total nonaccrual loans and troubled debt restructurings and the related interest
income recognized for the years ended June 30, are as follows:



                                 2002        2001        2000
                                ------      ------      ------
Principal outstanding           $5,044      $5,016      $4,050
                                ------      ------      ------
Interest income that would
  have been recognized          $  408      $  422      $  357

Interest income recognized         162         296         180
                                ------      ------      ------
Interest income foregone        $  246      $  126      $  177
                                ======      ======      ======


Included in total nonaccrual loans are impaired loans of approximately $3,600 at
June 30, 2002 and 2001. A related allowance for loan losses of $1,764 and $1,624
has been reserved for these impaired loans, respectively.  During the years, the
Company had an average  balance of $3,586 and $3,600,  and  recognized  $116 and
$181 in interest income on these loans, respectively.

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

                             2002       2001
                            -----       -----
Balance, July 1             $ 894       $ 881

     Additions                370         207

     Amounts collected       (442)       (194)
                            -----       -----
Balance, June 30            $ 822       $ 894
                            =====       =====



6.   ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses are as follows:

<TABLE>
<CAPTION>

                                           2002        2001        2000
                                          ------      ------      ------
<S>                                        <C>        <C>        <C>
Balance, July 1                            $2,763     $1,973      $1,842

Add:
     Provision charged to operations          57         788         150
     Recoveries                                6          19           -
Less loans charged off                        68          17          19
                                          ------      ------      ------
Balance, June 30                          $2,758      $2,763      $1,973
                                          ======      ======      ======
</TABLE>

                                       31


<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

7.   ACCRUED INTEREST RECEIVABLE

Accrued interest receivable consists of the following:

<TABLE>
<CAPTION>
                                                2002       2001
                                               -----      -----
<S>                                            <C>        <C>
Investment and mortgage-backed securities     $2,996     $2,696
Loans receivable                                 907      1,141
                                             -------      -----
     Total                                    $3,903      $3,837
                                             =======     ======
</TABLE>

8.   FEDERAL HOME LOAN BANK STOCK

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

9.   PREMISES AND EQUIPMENT

Major classifications of premises and equipment are summarized as follows:

                                         2002        2001
                                        ------      ------
Land and improvements                   $  264      $  264
Buildings and improvements               1,996       1,906
Furniture, fixtures, and equipment       1,035       1,007
                                        ------      ------
                                         3,295       3,177

Less accumulated depreciation            2,299       2,176
                                        ------      ------
     Total                              $  996      $1,001
                                        ======      ======

Depreciation charged to operations was $123, $111, and $115, for the years ended
June 30, 2002, 2001, and 2000, respectively.

10.  DEPOSITS

Deposit accounts are summarized as follows:

<TABLE>
<CAPTION>

                                              2002                               2001
                                   ---------------------------      -------------------------------
                                                   Percent of                           Percent of
                                    Amount         Portfolio           Amount            Portfolio
                                   --------        ----------        ----------         -----------

<S>                                <C>                 <C>             <C>                <C>
Noninterest-earning checking       $ 12,615             7.0%         $  11,634               6.4%
Interest-earning checking            20,872            11.8             18,411              10.2
Savings accounts                     41,620            23.4             36,589              20.2
Money market accounts                14,843             8.4             12,095               6.7
Advance payments by borrowers
   for taxes and insurance            3,013             1.7              3,310               1.8
                                   --------        --------         ----------           -------
                                     92,963            52.3             82,039              45.3
                                   --------        --------         ----------           -------

Savings certificates:
     2.00% or less                    7,726             4.3                  -                 -
     2.01 - 4.00%                    49,500            27.9             12,938               7.1
     4.01 - 6.00%                    23,955            13.5             54,919              30.3
     6.01 - 8.00%                     3,528             2.0             31,443              17.3
                                   --------        --------         ----------           -------
                                     84,709            47.7             99,300              54.7
                                   --------        --------         ----------           -------
     Total                         $177,672           100.0%        $  181,339             100.0%
                                   ========        ========         ==========           =======

</TABLE>

                                       32

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

10.  DEPOSITS (Continued)

The  maturities  of savings  certificates  at June 30, 2002,  are  summarized as
follows:

Within one year                                               $     53,547
Beyond one year but within two years                                19,672
Beyond two years but within three years                              5,076
Beyond three years                                                   6,414
                                                                -----------
     Total                                                    $     84,709
                                                                ===========

Savings  certificates  with balances of $100,000 or more amounted to $12,277 and
$16,364 on June 30, 2002 and 2001,  respectively.  The Company does not have any
brokered deposits.

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

<TABLE>
<CAPTION>

                               2002          2001          2000
                              -----         -----         -----
<S>                           <C>           <C>          <C>
Checking accounts            $   94        $  135        $  139
Savings accounts                735           893           915
Money market accounts           257           329           340
Savings certificates          3,996         5,463         4,981
                              -----         -----         -----
     Total                   $5,082        $6,820        $6,375
                              =====         =====         =====

</TABLE>

11.  FEDERAL HOME LOAN BANK ADVANCES

The following table presents  contractual  maturities of FHLB long-term advances
as of June 30:

<TABLE>
<CAPTION>
                                                    Weighted-                     Weighted-
            Maturing During                         average                       average
           Fiscal Year Ended                        Interest                      Interest
                June 30:              2002            Rate            2001          Rate
         ---------------------     -----------    -----------      ----------    ----------
          <S>                      <C>              <C>            <C>             <C>
                  2002             $      -            -%           $  10,000       6.17%

                  2003               11,000         2.47                    -          -

                  2004                  280         3.36                    -          -

                  2005                    -            -                    -          -

                  2006                4,157         5.42                4,157       5.42

                  2007                    -            -                    -          -

          2008 and thereafter       144,500         5.35              132,500      5.49
                                   --------                        ----------
                 Total             $159,937         5.15%          $  146,657      5.53%
                                   ========                        ==========

</TABLE>

The advances  maturing in 2008 and thereafter  are  convertible to variable rate
advances  on  specific  dates at the  discretion  of the FHLB.  Should  the FHLB
convert these  advances,  the Bank has the option of accepting the variable rate
or repaying the advance without penalty.


                                       33

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

11.  FEDERAL HOME LOAN BANK ADVANCES (Continued)

WVS also utilized  revolving  and  short-term  FHLB  advances.  Short-term  FHLB
advances  generally  mature within 90 days, while revolving FHLB advances may be
repaid by the Company without penalty.  The following table presents information
regarding such advances as of June 30:

<TABLE>
<CAPTION>

                                                       2002              2001
                                                   ------------      -------------
<S>                                                  <C>             <C>
FHLB revolving and short-term advances:
     Ending balance                                  $      -        $   14,837
     Average balance during the year                    5,814            52,350
     Maximum month-end balance during the year         13,850            19,264
     Average interest rate during the year               2.92%            6.02%
     Weighted-average rate at year-end                      -%            3.92%


</TABLE>

At June 30, 2002, WVS had an unused borrowing capacity of approximately $34,930.

The FHLB advances are secured by the  Company's  FHLB stock and  investment  and
mortgage-backed  securities  held in safekeeping at the FHLB, and are subject to
substantial prepayment penalties.

12.  OTHER BORROWINGS

Other  borrowings  include  securities sold under  agreements to repurchase with
securities  brokers.  The outstanding  repurchase  agreements  generally  mature
within one to ninety days from the  transaction  date and qualifying  collateral
has been delivered.  The Company pledged  investment  securities with a carrying
value of  $33,075  and  $19,693  at June 30,  2002 and  2001,  respectively,  as
collateral  for the  repurchase  agreements  as  explained in Notes 3 and 4. The
following table presents information regarding other borrowings as of June 30:

                                                    2002         2001
                                                  --------     --------
Ending balance                                   $33,731       $20,660
Average balance during the year                   13,179        96,457
Maximum month-end balance during the year         33,731        46,589
Average interest rate during the year               2.34%         6.47%
Weighted-average rate at year-end                   1.84%         4.27%


13.  COMMITMENTS AND CONTINGENT LIABILITIES

Loan commitments

In the normal course of business,  there are various outstanding commitments and
certain  contingent  liabilities  that  are not  reflected  in the  accompanying
consolidated  balance  sheet.  Various  loan  commitments  totaling  $19,542 and
$25,294 at June 30, 2002 and 2001, respectively, represent financial instruments
with off-balance sheet risk.

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

                                       34

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

13.  COMMITMENTS AND CONTINGENT LIABILITIES (Continued)

Loan commitments (Continued)

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the loan agreement.  These
commitments are comprised  primarily of the undisbursed  portion of construction
and land development loans (Note 5),  residential,  commercial real estate,  and
consumer loan originations.

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

Litigation

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

14.  REGULATORY CAPITAL

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

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

As of June 30, 2002 and 2001,  the FDIC  categorized  the  Savings  Bank as well
capitalized under the regulatory  framework for prompt corrective  action. To be
classified as a well capitalized financial institution, Total Risk-based, Tier 1
Risk-based, and Tier 1 Leverage Capital Ratios must be at least ten percent, six
percent, and five percent, respectively.

                                       35

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

14.  REGULATORY CAPITAL (Continued)

The Company's  and Savings  Bank's  actual  capital  ratios are presented in the
following tables, which show that both met all regulatory capital requirements.

<TABLE>
<CAPTION>

                                                                          June 30, 2002
                                              -------------------------------------------------------------------------
                                                            WVS                               West View
                                              --------------------------------     ------------------------------------
                                                  Amount            Ratio              Amount            Ratio
                                              ----------------  --------------     ----------------  ------------------
<S>                                        <C>                         <C>                 <C>                <C>
Total Capital (to Risk-weighted Assets)
---------------------------------------

Actual                                      $      32,826           14.66 %        $   27,119            12.25 %
To Be Well Capitalized                             22,400           10.00              22,144            10.00
For Capital Adequacy Purposes
                                                   17,920            8.00              17,715             8.00
Tier I Capital (to Risk-weighted Assets)
----------------------------------------

Actual                                      $      30,052           13.42 %        $   24,360            11.00 %
To Be Well Capitalized                             13,440            6.00              13,286             6.00
For Capital Adequacy Purposes                       8,960            4.00               8,857             4.00

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

Actual                                      $      30,052            7.69 %        $   24,360             6.29 %
To Be Well Capitalized                             19,519            5.00              19,361             5.00
For Capital Adequacy Purposes                      15,615            4.00              15,489             4.00

</TABLE>

<TABLE>
<CAPTION>

                                                                          June 30, 2001
                                              -------------------------------------------------------------------------
                                                            WVS                               West View
                                              --------------------------------     ------------------------------------
                                                  Amount            Ratio              Amount            Ratio
                                              ----------------  --------------     ----------------  ------------------

<S>                                        <C>                         <C>                <C>               <C>
Total Capital (to Risk-weighted Assets)
---------------------------------------

Actual                                      $          31,066           15.40 % $           26,284            13.27 %
To Be Well Capitalized                                 20,171           10.00               19,813            10.00
For Capital Adequacy Purposes                          16,137            8.00               15,850             8.00

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

Actual                                      $          28,537           14.15 % $           23,803            12.01 %
To Be Well Capitalized                                 12,103            6.00               11,888             6.00
For Capital Adequacy Purposes                           8,068            4.00                7,925             4.00

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

Actual                                      $          28,537            7.35 % $           23,803             6.15 %
To Be Well Capitalized                                 19,408            5.00               15,476             5.00
For Capital Adequacy Purposes                          15,526            4.00               19,345             4.00

</TABLE>


                                       36

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

15.  STOCK BENEFIT PLANS

Stock Option Plan

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

The following table presents information related to the outstanding options:

<TABLE>
<CAPTION>

                                                  Officers' and                         Weighted-
                                                   Employees'         Directors'         average
                                                      Stock             Stock           Exercise
                                                     Options           Options            Price
                                                 ----------------  ----------------  ----------------
<S>                                                     <C>             <C>           <C>
Outstanding, June 30, 2000                               110,866        16,400        $  11.56

     Granted                                               4,000         2,000           12.73
     Exercised                                           (16,310)       (7,000)            5.1
     Forfeited                                              (160)            -            5.00
                                                 ----------------  -------------

Outstanding, June 30, 2001                                98,396        11,400           13.89

     Granted                                                   -         1,214           15.77

     Exercised                                           (15,068)       (6,200)           9.96

     Forfeited                                            (4,916)            -           15.63

                                                 ----------------  -------------
Outstanding, June 30, 2002                                78,412         6,414           14.80
                                                 ================  =============

Exercisable at year-end                                   70,878         6,414           14.29
                                                 ================  =============

Available for future grant                                 5,174             -
                                                 ================  =============

</TABLE>

At June  30,  2002,  for  officers  and  employees  there  were  78,412  options
outstanding,  of which 70,878 were  exercisable at a  weighted-average  exercise
price of  $14.85,  and a  weighted-average  remaining  contractual  life of 5.76
years.

There were also 6,414 options  outstanding for directors with a weighted-average
exercise price of $14.07, and a weighted-average  remaining  contractual life of
7.05 years. All of these options are exercisable.


                                       37

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

15.  STOCK BENEFIT PLANS (Continued)

Stock Option Plan (Continued)

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

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

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

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

As of June 30, 2002,  6,510 RRP shares were available for future  issuance.  RRP
costs are accrued to operations,  and added back to stockholders' equity, over a
four to ten-year vesting period. Net compensation expense attributed to the RRPs
amounted to $59,  $89,  and $106 for the years ended June 30,  2002,  2001,  and
2000.

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

WVS maintains an ESOP for the benefit of officers and Savings Bank employees who
have met certain eligibility  requirements related to age and length of service.
An ESOP Trust was created,  and acquired 161,000 shares of common stock in WVS's
initial public offering.

The Savings  Bank makes  discretionary  contributions  to the Trust to allow the
Trust to purchase additional shares to be allocated to eligible  employees.  The
Company  reports  compensation  expense  based upon the amounts  contributed  or
committed to be  contributed  each year and the shares  become  outstanding  for
earnings per share  computations.  Dividends  paid on allocated  ESOP shares are
recorded as a reduction of retained earnings.  Compensation expense for the ESOP
was $200,  $200,  and $627,  for the years ended June 30, 2002,  2001, and 2000,
respectively.  Total ESOP shares as of June 30,  2002 and 2001 were  220,806 and
212,553, respectively.

                                       38

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

16.  DIRECTOR, OFFICER, AND EMPLOYEE BENEFITS

Profit Sharing Plan

The Company maintains a non-contributory profit sharing 401(k) plan (the "Plan")
for its  officers  and  employees  who have met the age and  length  of  service
requirements.  The Plan is a defined  contribution  plan with the  contributions
based on a  percentage  of  salaries  of the Plan  participants.  The  Company's
contributions to the Plan, which were charged to expense,  was $200 for the year
ended June 30, 2000.

Directors' Deferred Compensation Plan

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

The Plan allows for the deferred amounts to be paid in shares of common stock at
the prevailing market price on the date of distribution.  For fiscal years ended
June 30, 2002, 2001, and 2000; 48,311,  46,961, and 44,318 shares  respectively,
were held by the Plan.

17.  INCOME TAXES

The provision for income taxes consists of:


                        2002          2001         2000
                      --------      --------     --------
Currently payable:
     Federal           $ 1,667       $ 2,086      $ 2,364
     State                 239           240          226
                      --------      --------     --------
                         1,906         2,326        2,590
Deferred                   (93)         (370)        (121)
                      --------      --------     --------
     Total             $ 1,813       $ 1,956      $ 2,469
                      ========      ========     ========


The following temporary  differences gave rise to the net deferred tax assets at
June 30:
                                                           2002          2001
                                                          ------        ------
Deferred tax assets:
     Allowance for loan losses                            $  937        $  956
     Deferred compensation                                   297           288
     Other                                                   228           160
                                                          ------        ------
   Total gross deferred tax assets                         1,462         1,404
                                                          ------        ------
Deferred tax liabilities:
     Bad debt reserve for tax reporting purposes              85           151
     Net unrealized gain on securities available for sale    104            56
     Deferred origination fees, net                          176           146
     Other                                                    56            55
                                                          ------       -------
             Total gross deferred tax liabilities            421           408
                                                          ------       -------
     Net deferred tax assets                              $1,041        $  996
                                                          ======       =======


No valuation  allowance  was  established  at June 30, 2002 and 2001, in view of
WVS's ability to carryback to taxes paid in previous years,  future  anticipated
taxable income, which is evidenced by WVS's earnings potential, and deferred tax
liabilities at June 30.


                                       39
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

17.  INCOME TAXES (Continued)

The following is a reconciliation  between the actual provision for income taxes
and the  amount of income  taxes  which  would  have been  provided  at  federal
statutory rates for the years ended June 30:

<TABLE>
<CAPTION>
                                            2002                      2001                       2000
                                    ---------------------     ----------------------     ----------------------

                                                  % of                       % of                       % of
                                                Pre-tax                    Pre-tax                    Pre-tax
                                     Amount      Income         Amount      Income        Amount       Income
                                    ---------------------     ----------------------     ----------------------
<S>                                  <C>            <C>        <C>           <C>         <C>             <C>
Provision at statutory rate          $ 2,129        34.0%      $ 2,284       34.0%       $ 2,328         34.0%
State income tax, net of federal
  tax benefit                            158         2.5           158        2.4            149          2.2

Tax exempt income                       (555)       (8.9)         (493)      (7.3)          (201)        (2.9)
Other, net                                81         1.4             7          -            193          2.8
                                    --------     -------      --------    -------        -------       ------
Actual tax expense and
  effective rate                     $ 1,813        29.0%      $ 1,956       29.1%       $ 2,469         36.1%
                                    ========     =======      ========     =======       =======        ======
</TABLE>

18.  REGULATORY MATTERS

Cash and Due from Banks

The Federal  Reserve  requires  the Savings  Bank to  maintain  certain  reserve
balances.  The required  reserves are computed by applying  prescribed ratios to
the Savings Bank's average deposit transaction account balances.  As of June 30,
2002  and  2001,  the  Savings  Bank had  required  reserves  of $809 and  $717,
respectively.  The  required  reserves  are held in the form of vault cash and a
noninterest-bearing  depository  balance  maintained  directly  with the Federal
Reserve.

Loans

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

Dividend Restrictions

The Savings Bank is subject to the Pennsylvania  Banking Code that restricts the
availability of surplus for dividend  purposes.  At June 30, 2002, surplus funds
of $3,363 were not available for dividends.

19.  CONVERSION AND REORGANIZATION

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

                                       40

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

20.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values at June 30, are as follows:

<TABLE>
<CAPTION>

                                                        2002                      2001
                                              -----------------------  -----------------------
                                               Carrying       Fair      Carrying       Fair
                                                Amount        Value      Amount        Value
                                              ----------    ---------  ----------    ---------
<S>                                            <C>          <C>          <C>          <C>
FINANCIAL ASSETS
Cash, due from banks, and interest-
   earning demand deposits                     $  3,177     $  3,177     $  2,993     $  2,993
Investment securities                           151,384      154,572      129,593      130,571
Mortgage-backed securities                       82,543       83,269       64,132       64,633
Net loans receivable                            152,905      160,517      185,179      193,374
Accrued interest receivable                       3,903        3,903        3,837        3,837
FHLB stock                                        8,281        8,281        8,150        8,150
                                              ---------    ---------    ---------    ---------
     Total financial assets                    $402,193     $413,719     $393,884     $403,558
                                              =========    =========    =========    =========
FINANCIAL LIABILITIES
Deposits                                       $177,672     $178,357     $181,339     $182,047
FHLB advances                                   159,937      162,928      161,494      161,024
Other borrowings                                 33,731       33,731       20,660       20,660
Accrued interest payable                          1,698        1,698        2,441        2,441
                                              ---------    ---------    ---------    ---------
     Total financial liabilities               $373,038     $376,714     $365,934     $366,172
                                              =========    =========    =========    =========
</TABLE>

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

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

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

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

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

                                       41
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

20.  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

The fair value approximates the current book value.

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

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

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

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

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

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

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

FHLB Advances and Other Borrowings
----------------------------------

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

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

These financial instruments are generally not subject to sale and estimated fair
values are not readily  available.  The carrying  value,  represented by the net
deferred  fee  arising  from the  unrecognized  commitment,  and the fair  value
determined by  discounting  the remaining  contractual  fee over the term of the
commitment  using fees currently  charged to enter into similar  agreements with
similar credit risk, are not considered material for disclosure. The contractual
amounts of unfunded  commitments  are  presented  in Note 13 to these  financial
statements.


                                       42

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

21.  PARENT COMPANY

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

<TABLE>
<CAPTION>

                                    CONDENSED BALANCE SHEET
                                                                                  June 30,
                                                                            2002            2001
                                                                         ----------      ----------
<S>                                                                         <C>             <C>
ASSETS
    Interest-earning deposits with subsidiary bank                          $ 3,065         $ 1,127
    Investment securities available for sale                                  2,179           1,128
    Investment and mortgage-backed securities held to maturity                    -           2,503
    Investment in subsidiary bank                                            24,457          23,781
    Loan Receivable                                                             463               -
    Accrued interest receivable and other assets                                125             111
                                                                         ----------      ----------
TOTAL ASSETS                                                                $30,289         $28,650
                                                                         ==========      ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
    Other liabilities                                                       $    36         $     5
    Stockholders' equity                                                     30,253          28,645
                                                                         ----------      ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $30,289         $28,650
                                                                         ==========      ==========
</TABLE>

<TABLE>
<CAPTION>

                               CONDENSED STATEMENT OF INCOME
                                                                               Year Ended June 30,
                                                                    2002               2001                 2000
                                                                 ----------         -----------          ----------
<S>                                                                 <C>                 <C>                 <C>
INCOME
    Loans                                                           $    45             $    -              $    16
    Investment and mortgage-backed securities                           118                  84                  83
    Dividend from subsidiary                                          3,800               4,549               7,429
    Interest-earning deposits with subsidiary bank                       50                  76                  32

                                                                 ----------         -----------          ----------
Total income                                                          4,013               4,709               7,560
                                                                 ----------         -----------          ----------
OTHER OPERATING EXPENSE                                                  96                  51                 104
                                                                 ----------         -----------          ----------
    Income before equity in undistributed
      earnings of subsidiary                                          3,917               4,658               7,456
    Equity in undistributed earnings of subsidiary                      558                 136              (3,081)
                                                                 ----------         -----------          ----------
    Income before income taxes                                        4,475               4,794               4,375
    Income taxes                                                         27                  32                  (4)
                                                                 ----------         -----------          ----------
NET INCOME                                                          $ 4,448             $ 4,762             $ 4,379
                                                                 ==========         ===========          ==========
</TABLE>


                                       43

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

21.  PARENT COMPANY (Continued)

<TABLE>
<CAPTION>

                                   CONDENSED STATEMENT OF CASH FLOWS

                                                                          Year Ended June 30,
                                                                 2002              2001         2000
                                                              ----------       -----------   ----------
<S>                                                             <C>             <C>            <C>
OPERATING ACTIVITIES
    Net income                                                  $  4,448        $ 4,762        $ 4,379
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Undistributed net income of subsidiary                      (558)          (136)         3,081
        Amortization of investment discounts and premiums            (23)             -              -
        Amortization of ESOP and RRP deferred
          compensation                                                59             75            345
        Other                                                         20            143           (124)
                                                              ----------    -----------     ----------
    Net cash provided by operating activities                      3,946          4,844          7,681
                                                              ----------    -----------     ----------
INVESTING ACTIVITIES
    Available for sale:
        Purchase of investment and
          mortgage-backed securities                              (9,148)        (2,503)             -
        Proceeds from repayments of investment and
          mortgage-backed securities                               8,159              -              -
    Held to maturity:
        Purchases of investment and mortgage-backed
          securities                                              (7,789)             -              -
        Proceeds from repayments of investment and
          mortgage-backed securities                              10,304              -             18
        Net increase in loans                                       (469)             -              -
        ESOP loan                                                      -              -            232
                                                              ----------    -----------     ----------
    Net cash provided by (used for) investing activities           1,057         (2,503)           250
                                                              ----------    -----------     ----------
FINANCING ACTIVITIES
    Net proceeds from issuance of common stock                       212            119             91
    Cash dividends paid                                           (1,743)        (1,797)        (1,890)
    Purchases of treasury stock                                   (1,544)        (1,819)        (4,174)
                                                              ----------    -----------     ----------
    Net cash used for financing activities                        (3,075)        (3,497)        (5,973)
                                                              ----------    -----------     ----------
    Increase (decrease) in cash and cash equivalents               1,928         (1,156)         1,958

CASH AND CASH EQUIVALENTS
  BEGINNING OF YEAR                                                1,127          2,283            325
                                                              ----------    -----------     ----------
CASH AND CASH EQUIVALENTS
  END OF YEAR                                                   $  3,055        $ 1,127        $ 2,283
                                                              ==========    ===========     ==========
</TABLE>


                                       44

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

22.  SELECTED QUARTERLY FINANCIAL DATA (unaudited)

<TABLE>
<CAPTION>

                                                             Three Months Ended
                                         -------------------------------------------------------------
                                         September         December          March            June
                                            2001             2001             2002             2002
                                         ----------       ----------       ----------       ----------
<S>                                      <C>              <C>              <C>              <C>
Total interest and dividend income       $    6,551       $    6,091       $    5,574       $    5,544
Total interest expense                        3,859            3,637            3,321            3,208
                                         ----------       ----------       ----------       ----------
Net interest income                           2,692            2,454            2,253            2,336
Provision for loan losses                        37               20                -               -
                                         ----------       ----------       ----------       ----------
Net interest income after
  provision for loan losses                   2,655            2,434            2,253            2,336

Total noninterest income                        173              181              166              167
Total noninterest expense                       976            1,109              978            1,041
                                         ----------       ----------       ----------       ----------
Income before income taxes                    1,852            1,506            1,441            1,462
Income taxes                                    611              397              476              329
                                         ----------       ----------       ----------       ----------
Net income                               $    1,241       $    1,109       $      965       $    1,133
                                         ==========       ==========       ==========       ==========
Per share data:
Net income
     Basic                               $     0.45       $     0.40       $     0.36       $     0.42
     Diluted                                   0.45             0.40             0.35             0.42
Average shares outstanding
     Basic                                2,753,358        2,740,451        2,714,480        2,686,663
     Diluted                              2,763,744        2,752,157        2,720,976        2,692,474

</TABLE>

                                       45

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except per share data)

22 . SELECTED QUARTERLY FINANCIAL DATA (unaudited) (Continued)


<TABLE>
<CAPTION>
                                                             Three Months Ended
                                         -------------------------------------------------------------
                                          September        December           March            June
                                            2000             2000             2001             2001
                                         ----------       ----------       ----------       ----------
<S>                                      <C>              <C>              <C>              <C>
Total interest and dividend income       $    7,526       $    7,534       $    7,234       $    6,891
Total interest expense                        4,988            5,005            4,463            4,105
                                         ----------       ----------       ----------       ----------
Net interest income                           2,538            2,529            2,771            2,786
Provision for loan losses                         -               -              150              638
                                         ----------       ----------       ----------       ----------
Net interest income after
  provision for loan losses                   2,538            2,529            2,621            2,148


Total noninterest income                        164              169              155              181
Total noninterest expense                       956            1,006              989              836
                                         ----------       ----------       ----------       ----------
Income before income taxes                    1,746            1,692            1,787            1,493
Income taxes                                    646              591              643               76
                                         ----------       ----------       ----------       ----------
Net income                               $    1,100       $    1,101       $    1,144       $    1,417
                                         ==========       ==========       ==========       ==========
Per share data:
Net income
     Basic                               $     0.39       $     0.39       $     0.41       $     0.51
     Diluted                                   0.38             0.39             0.41             0.51
Average shares outstanding
     Basic                                2,858,302        2,814,033        2,778,839        2,764,345
     Diluted                              2,873,787        2,829,455        2,787,946        2,771,297

</TABLE>

                                       46

<PAGE>


COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION

WVS Financial Corp.'s common stock is traded on the over-the-counter  market and
quoted on the Nasdaq  Stock  MarketSM  National  Market  System under the symbol
"WVFC".

The  following  table sets  forth the high and low  market  prices of a share of
common stock, and cash dividends declared per share, for the periods indicated.

                                      Market Price                Cash Dividends
                                      ------------
        Quarter Ended            High           Low                   Declared
        -------------            ----           ---                   --------
June 02                        $16.200        $13.990                  $0.16
March 02                        16.250         14.130                   0.16
December 01                     16.250         15.700                   0.16
September 01                    17.450         13.750                   0.16

June 01                        $14.000        $12.550                  $0.16
March 01                        12.938         12.188                   0.16
December 00                     12.500         12.000                   0.16
September 00                    13.000         11.563                   0.16

There were five Nasdaq Market  Makers in the  Company's  common stock as of June
30, 2002: F. J. Morrissey & Co., Inc.; Herzog,  Heine, Geduld, Inc.; Ryan Beck &
Co., Inc.; Spear, Leeds & Kellogg and Knight Securities L.P.

According  to  the  records  of  the  Company's   transfer  agent,   there  were
approximately  868  shareholders  of record at September 11, 2002. This does not
include any persons or entities who hold their stock in nominee or "street name"
through various brokerage firms.

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


                                       47

<PAGE>


                               WVS FINANCIAL CORP.
                              CORPORATE INFORMATION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

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


<S>                                                         <C>
            COMMON STOCK                                          BOARD OF DIRECTORS
The common stock of WVS Financial  Corp.
is traded on The Nasdaq Stock MarketSM
under the symbol "WVFC".                                         David L. Aeberli
                                                                    President
     TRANSFER AGENT & REGISTRAR                              McDonald-Aeberli Funeral Home, Inc.
   Registrar and Transfer Company
          10 Commerce Drive                                            Arthur H. Brandt
         Cranford, NJ 07016                                 Retired - Former President and CEO
           1-800-368-5948                                        Brandt Excavating, Inc. and
                                                              Retired - Former President and CEO
         INVESTOR RELATIONS                                         Brandt Paving, Inc.
           Pamela M. Tracy
            412-364-1911                                              David J. Bursic
                                                           President and Chief Executive Officer
               COUNSEL                                            WVS Financial Corp. and
          Bruggeman & Linn                                        West View Savings Bank

           SPECIAL COUNSEL                                            Donald E. Hook
Elias, Matz, Tiernan & Herrick L.L.P.                                    Chairman
         Washington, DC                                          Pittsburgh Cut Flower Co.

       WEST VIEW SAVINGS BANK                                         Lawrence M. Lehman
         9001 Perry Highway                                           Sole Proprietor
        Pittsburgh, PA  15237                                 Newton-Lehman Insurance Agency
          412-364-1911
                                                                     John M. Seifarth
          WEST VIEW OFFICE                                     Senior Engineer - Consultant
          456 Perry Highway                                 Nichols & Slagle Engineering, Inc.
            412-931-2171
                                                                     Margaret VonDerau
          CRANBERRY OFFICE                            Senior Vice President, Treasurer and Secretary
         20531 Perry Highway                                      WVS Financial Corp. and
      412-931-6080/724-776-3480                                   West View Savings Bank

        FRANKLIN PARK OFFICE                                        EXECUTIVE OFFICERS
       2566 Brandt School Road
            724-935-7100                                              Donald E. Hook
                                                                         Chairman
           BELLEVUE OFFICE
         572 Lincoln Avenue                                           David J. Bursic
            412-761-5595                                               President and
                                                                  Chief Executive Officer
        SHERWOOD OAKS OFFICE
        Serving Sherwood Oaks                                        Margaret VonDerau
           Cranberry Twp.                                  Senior Vice President, Treasurer and
                                                                    Corporate Secretary
          LENDING DIVISION
       2566 Brandt School Road                                       Edward M. Wielgus
            724-935-7400                                        Senior Vice President and
                                                                   Chief Lending Officer
</TABLE>


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

                                       48

<PAGE>






                         A Tradition of Quality Banking