EXHIBIT 13




                                TABLE OF CONTENTS
                                                                           Page
                                                                          Number
                                                                          ------

Stockholders' Letter                                                           1

Selected Financial and Other Data                                              2

Management's Discussion and Analysis                                           4

Report of Independent Registered Public Accounting Firm                       18

Consolidated Balance Sheet                                                    19

Consolidated Statement of Income                                              20

Consolidated Statement of Changes in Stockholders' Equity                     21

Consolidated Statement of Cash Flows                                          22

Notes to the Consolidated Financial Statements                                23

Common Stock Market Price and Dividend Information                            51

Corporate Information                                                         52


<PAGE>

To Our Stockholders:

      During  Fiscal  2005,  WVS  Financial  Corp.  achieved  solid gains in net
income,  diluted earnings per share and return on stockholders'  equity.  We are
pleased to report  that net income  increased  $607  thousand,  or 26%,  to $2.9
million;  diluted  earnings  per share  increased  32% to $1.19 from $0.90;  and
return on stockholders' equity increased to 10.03% from 7.64%.

      In response to a firming  national  economy,  the Federal  Reserve Board's
Open Market  Committee  increased its targeted federal funds rate by one-quarter
of a percent  eight times  during  fiscal  2005,  from 1.25% at June 30, 2004 to
3.25% at June 30, 2005. These changes have benefited depositors by enabling West
View Savings Bank to increase the rates paid on our money market and certificate
accounts.  However,  the intermediate and long-term market rates used to set our
loan  offerings  have  remained  stubbornly  low  with  a  downward  bias.  This
combination of rising short-term and low long-term rates causes us to cautiously
approach the first half of fiscal 2006.

      While earning a competitive rate of return for our stockholders,  the Bank
continues to serve its communities and invest for the future.  In both September
2004 and 2005,  Bank  employees  accepted  donations,  and provided other needed
support to local charities, for flood relief during Hurricanes Ivan and Katrina.
During the  second  half of fiscal  2006,  the Bank will be  upgrading  its core
processing capabilities.  These upgrades will support our customers' demands for
around the clock and secure banking access from home, office or while traveling.

      We would like to thank retiring  Director John M. Seifarth for 14 years of
dedicated service.  John joined the Bank's board in 1991 following the merger of
Home Savings Association of Bellevue.  As Chairman of the Audit Committee,  John
has worked  tirelessly  with other board  members,  auditors and  management  to
seamlessly  integrate the numerous  accounting and financial  reporting  changes
over the years.

      The Company also extends its thanks to each stockholder for your continued
support and trust.  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,
                                      --------------------------------------------------------------------------
                                          2005            2004            2003            2002           2001
                                      -----------     -----------     -----------     -----------    -----------
<S>                                   <C>             <C>             <C>             <C>            <C>
                                                     (Dollars in Thousands, except per share data)
Selected Financial Data:
Total assets                          $   421,044     $   433,624     $   367,188     $   404,911    $   396,440
Net loans receivable                       60,151          67,968          91,669         152,905        185,179
Mortgage-backed securities                162,151          75,590         111,879          82,543         64,132
Investment securities                     183,066         273,589         147,482         151,384        129,593
Savings deposit accounts                  163,589         159,318         169,316         174,659        178,029
FHLB advances                             155,036         149,736         153,390         159,937        161,494
Other borrowings                           69,680          91,639           9,453          33,731         20,660
Stockholders' equity                       29,201          29,199          30,618          30,253         28,645
Non-performing assets and troubled
  debt restructurings(1)                    2,171           2,171           3,481           5,279          5,016

Selected Operating Data:
Interest income                       $    17,874     $    16,006     $    19,231     $    23,760    $    29,185
Interest expense                           11,844          10,987          11,810          14,025         18,561
                                      -----------     -----------     -----------     -----------    -----------
Net interest income                         6,030           5,019           7,421           9,735         10,624
Provision for loan losses                     (46)           (794)           (228)             57            788
                                      -----------     -----------     -----------     -----------    -----------
Net interest income after provision
  for loan losses                           6,076           5,813           7,649           9,678          9,836
Non-interest income                           992             715             725             687            669
Non-interest expense                        3,532           3,607           3,956           4,104          3,787
                                      -----------     -----------     -----------     -----------    -----------
Income before income tax expense            3,536           2,921           4,418           6,261          6,718
Income tax expense                            627             619           1,070           1,813          1,956
                                      -----------     -----------     -----------     -----------    -----------
Net income                            $     2,909     $     2,302     $     3,348     $     4,448    $     4,762
                                      ===========     ===========     ===========     ===========    ===========

Per Share Information:
Basic earnings                        $      1.20     $      0.91     $      1.28     $      1.63    $      1.70
Diluted earnings                      $      1.19     $      0.90     $      1.28     $      1.63    $      1.69
Dividends per share                   $      0.64     $      0.64     $      0.64     $      0.64    $      0.64
Dividend payout ratio                       53.33%          70.33%          50.00%          39.26%         37.65%
Book value per share at period end    $     12.20     $     11.84     $     11.86     $     11.30    $     10.40
Average shares outstanding:
      Basic                             2,432,267       2,535,796       2,617,576       2,723,891      2,804,125
      Diluted                           2,437,647       2,544,404       2,624,395       2,732,491      2,815,867

</TABLE>

                                                           2
<PAGE>
<TABLE>
<CAPTION>
                                              As of or For the Year Ended June 30,
                                        ----------------------------------------------
                                         2005      2004      2003      2002      2001
                                        ------    ------    ------    ------    ------
<S>                                      <C>       <C>       <C>       <C>       <C>

Selected Operating Ratios(2):
Average yield earned on interest-
  earning assets(3)                       4.61%     4.27%     5.36%     6.41%     7.51%
Average rate paid on interest-
  bearing liabilities                     3.27      3.13      3.57      4.13      5.21
Average interest rate spread(4)           1.34      1.14      1.79      2.28      2.30
Net interest margin(4)                    1.68      1.47      2.19      2.74      2.83
Ratio of interest-earning assets to
  interest-bearing liabilities          111.45    111.76    112.56    112.34    111.33
Non-interest expense as a percent of
  average assets                          0.87      0.91      1.05      1.07      0.94
Return on average assets                  0.71      0.58      0.89      1.16      1.19
Return on average equity                 10.03      7.64     10.97     14.85     17.17
Ratio of average equity to average
  assets                                  7.10      7.02      8.10      7.78      6.92
Full-service offices at end of period        5         5         5         5         5

Asset Quality Ratios(2):
Non-performing loans and troubled
  debt restructurings as a percent of
  net total loans(1)                      3.49%     3.19%     3.80%     3.30%     2.71%
Non-performing assets as a percent
  of total assets(1)                      0.25      0.19      0.95      1.30      1.27
Non-performing assets and troubled
  debt restructurings as a percent of
  total assets                            0.52      0.50      0.95      1.30      1.27
Allowance for loan losses as a
  percent of total loans receivable       1.83      1.97      2.68      1.77      1.47
Allowance for loan losses as a
  percent of non-performing loans       113.58    163.48     72.68     54.68     55.08
Charge-offs to average loans
  receivable outstanding during the
  period                                  0.37      0.68      0.00      0.04      0.01

Capital Ratios(2):
Tier 1 risk-based capital ratio          20.99%    18.65%    14.30%    13.42%    14.15%
Total risk-based capital ratio           21.80     19.62     15.57     14.66     15.40
Tier 1 leverage capital ratio             7.14      6.92      8.42      7.69      7.35

</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)   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.
(3)   Interest and yields on tax-exempt  loans and  securities  (tax-exempt  for
      federal  income  tax  purposes)  are shown on a fully  taxable  equivalent
      basis.
(4)   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

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.

GENERAL

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, 2005.

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:

Strong Net Income - During  fiscal 2005,  Company net income  increased  26% and
totaled $2.9 million. Diluted earnings per share increased 32% to $1.19.

Enhancing Stockholder Value - During fiscal 2005, the Company returned over $2.7
million to stockholders via cash dividends and stock repurchases.


                                       4
<PAGE>

Commitment  to  Capital  Management  - Return on  average  stockholders'  equity
increased  to 10.03%  from  7.64%.  The  Company  has  returned in excess of $20
million through the repurchase of 1,368,508 shares or  approximately  36% of our
issued shares.

Interest Rate Risk Management - During the past fiscal year, the Federal Reserve
has increased its targeted federal funds rate eight times - from 1.25% to 3.25%.
Intermediate and long-term rates remain stubbornly low with a downward bias. The
Company has positioned itself well for this rise in short-term rates by actively
managing its asset/liability mix.

Substantial  Core Deposits - As of June 30, 2005, $95.3 million or 58.2% of West
View's total savings  deposits  consisted of regular  savings and club accounts,
money market  deposit  accounts,  and  checking  accounts.  Approximately  $44.3
million  or  46.5%  of core  deposits  consisted  of  regular  savings  and club
accounts.  Core  deposits are  considered to be more stable and lower cost funds
than certificates of deposit and other borrowings.

Community  Based  Lending  - Due to low  market  interest  rates,  West View has
limited  origination  of thirty year mortgage loans to be held in the portfolio.
Thirty year mortgage loans continue to be originated on a  correspondent  basis.
Portfolio loan  originations  have focused on  multi-family  and commercial real
estate loans,  construction  loans,  consumer loans and small business loans for
business equipment and inventory.

Strong  Non-interest  Expense Ratios - For the fiscal years ended June 30, 2005,
2004 and 2003, the Company's  ratios of  non-interest  expense to average assets
were  0.87%,  0.91%  and  1.05%,  respectively.  In  fiscal  2004,  the  Company
introduced  Internet  banking  and  online  bill  paying  to  increase  customer
satisfaction and loyalty.


CHANGES IN FINANCIAL CONDITION

<TABLE>
<CAPTION>
      Condensed Balance Sheet
      -----------------------

                                                                      Change
                                        June 30,    June 30,   -----------------------
                                          2005        2004     Dollars      Percentage
                                          ----        ----     -------      ----------
<S>                                     <C>        <C>        <C>             <C>
                                             (Dollars in Thousands)

      Cash and interest-earning
        deposits                        $  3,566   $  3,054   $    512        16.8%

      Investments (1)                    352,986    357,704     (4,718)       -1.3

      Net loans receivable                60,151     67,968     (7,817)      -11.5

      Total assets                       421,044    433,624    (12,580)       -2.9

      Deposits                           164,706    160,563      4,143         2.6

      Borrowed funds                     224,716    241,375    (16,659)       -6.9

      Total liabilities                  391,843    404,425    (12,582)       -3.1

      Stockholders' equity                29,201     29,199          2         0.0

</TABLE>

---------------
(1) Includes Federal Home Loan Bank stock and trading securities.


                                       5
<PAGE>

Cash and Interest-Earning  Deposits. Cash on hand and interest-earning  deposits
represent cash equivalents. Cash equivalents increased $512 thousand or 16.8% to
$3.6 million at June 30, 2005 from $3.1  million at June 30, 2004.  Increases in
these accounts were primarily due to increases in customer transaction accounts.

Investments.  The Company's investment and mortgage-backed  portfolios decreased
$4.7 million or 1.3% to $353.0  million at June 30, 2005 from $357.7  million at
June 30, 2004.  Investment securities decreased $90.3 million or 32.1% to $190.8
million at June 30,  2005.  This  decrease  was due  primarily  to calls of U.S.
Government  Agency  securities,  caused by  changes in short,  intermediate  and
long-term  market interest rates, the flattening of the Treasury Yield curve and
continued high levels of interest rate  volatility.  Mortgage-backed  securities
increased  $86.6  million  or 114.5% to $162.2  million at June 30,  2005.  This
increase  was due  primarily  to  purchases  of  floating  rate  mortgage-backed
securities,  in response to increases in short-term  market interest rates.  See
"Quantitative  and Qualitative  Disclosures about Market Risk" beginning on page
13.

Net Loans  Receivable.  Net loans receivable  decreased $7.8 million or 11.5% to
$60.2 million at June 30, 2005. The decrease in loans receivable was principally
the result of  principal  repayments  on the loan  portfolio  and high levels of
refinancing activity due to historically low mortgage interest rates. As part of
its   asset/liability   management   strategy,   the  Company  chose  to  invest
substantially  all of these proceeds into short-term  corporate  investments and
adjustable rate mortgage-backed securities.

Deposits.  Total  deposits  increased  $4.1 million or 2.6% to $164.7 million at
June 30, 2005.  Transaction  accounts  increased  approximately  $3.4 million or
10.0%.  Certificates of deposit increased approximately $3.0 million or 4.6% due
primarily  to  higher  levels  of  municipal  time  deposits.  Savings  accounts
decreased $1.5 million or 3.3% and money market accounts decreased $601 thousand
or 4.2%.

Borrowed Funds. Borrowed funds decreased $16.7 million or 6.9% to $224.7 million
at June 30, 2005. Other short-term  borrowings  decreased $22.0 million or 24.0%
to $69.7  million,  FHLB  long-term  advances  decreased $7.0 million or 4.7% to
$142.7 million and FHLB short-term  advances increased $12.3 million or 100.00%.
The Company repositioned  borrowings as part of its assets/liability  management
program.

Stockholders'  Equity.  Total  stockholders'  equity remained unchanged at $29.2
million.  Company earnings of $2.9 million were partially offset by $1.6 million
of cash dividends  paid on the Company's  common stock and $1.2 million was used
to repurchase  71,964 shares of the Company's common stock. The Company believes
that the  repurchase of its common stock  represented  an attractive  investment
opportunity and favorably added to secondary market liquidity.


                                       6
<PAGE>

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                               Condensed Statements of Income
                               ------------------------------

                                  June 30,              June 30,               June 30,
                                    2005     Change       2004      Change       2003
                                  -------    ------     -------    -------     -------
                                                  (Dollars in Thousands)
<S>                               <C>        <C>        <C>        <C>         <C>
Interest income                   $17,874    $1,868     $16,006    ($3,225)    $19,231
                                               11.7%                 -16.8%

Interest expense                  $11,844      $857     $10,987      ($823)    $11,810
                                                7.8%                  -7.0%

Net interest income                $6,030    $1,011      $5,019    ($2,402)     $7,421
                                               20.1%                 -32.4%

Provision for loan losses            ($46)     $748       ($794)     ($566)      ($228)
                                              -94.2%                 248.2%

Non-interest income                  $992      $277        $715       ($10)       $725
                                               38.7%                  -1.4%

Non-interest expense               $3,532      ($75)     $3,607      ($349)     $3,956
                                               -2.1%                  -8.8%

Income tax expense                   $627        $8        $619      ($451)     $1,070
                                                1.3%                 -42.1%

Net income                         $2,909      $607      $2,302    ($1,046)     $3,348
                                               26.4%                 -31.2%
</TABLE>

General. WVS reported net income of $2.9 million,  $2.3 million and $3.3 million
for the fiscal years ended June 30, 2005, 2004 and 2003, respectively.  The $607
thousand or 26.4%  increase in net income  during  fiscal 2005 was primarily the
result of a $1.0  million  increase  in net  interest  income,  a $277  thousand
increase in  non-interest  income and a $75  thousand  decrease in  non-interest
expense  which  were  partially  offset by a $748  thousand  decrease  in credit
provisions for loan losses,  and an $8 thousand  increase in income tax expense.
Earnings per share totaled $1.20 (basic) and $1.19  (diluted) for fiscal 2005 as
compared to $0.91 (basic) and $0.90  (diluted) for fiscal 2004.  The increase in
earnings  per share was due to an increase in net income and a reduction  in the
weighted  average  number  of  shares  outstanding  due to the  Company's  stock
repurchases during fiscal 2005.


                                       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,
                                                      2005                         2004                          2003
                                          ----------------------------- ----------------------------- -----------------------------
                                          Average             Average   Average             Average   Average             Average
                                          Balance   Interest Yield/Rate Balance  Interest  Yield/Rate Balance  Interest  Yield/Rate
                                          --------  -------- ---------- -------  --------  ---------- -------  --------  ----------
<S>                                      <C>       <C>         <C>    <C>       <C>          <C>    <C>       <C>          <C>
                                                                          (Dollars in Thousands)
Interest-earning assets:
      Net loans receivable(1)             $ 63,725  $  4,206    6.60%  $ 76,513  $  5,180     6.77%  $127,970  $  9,524     7.44%
      Mortgage-backed securities           103,307     3,981    3.85     84,770     2,347     2.77     82,427     2,854     3.46
      Investments - taxable                208,282     8,051    3.87    199,341     6,829     3.43    131,193     5,228     3.98
      Investments - tax-free(2)             27,142     2,372    8.74     29,588     2,391     8.08     28,610     2,340     8.18
      Interest-bearing deposits              1,818        10    0.55      2,079         9     0.43      2,362        11     0.47
                                          --------  --------           --------  --------            --------  --------
      Total interest-earning assets        404,274    18,620    4.61%   392,291    16,756     4.27%   372,562    19,957     5.36%
                                                    --------  ======             --------   ======             --------   ======
      Non-interest-earning assets            3,849                        3,949                         4,113
                                          --------                     --------                      --------
            Total assets                  $408,123                     $396,240                      $376,675
                                          ========                     ========                      ========

Interest-bearing liabilities:
      Interest-bearing deposits and
        escrows                           $146,366  $  2,238    1.53%  $151,577  $  2,321     1.53%  $157,771  $  3,312     2.10%
      Borrowings                           216,380     9,606    4.44    199,439     8,666     4.35    173,226     8,498     4.91
                                          --------  --------           --------  --------            --------  --------
      Total interest-bearing liabilities   362,746    11,844    3.27%   351,016    10,987     3.13%   330,997    11,810     3.57%
                                                    --------  ======             --------   ======             --------   ======
      Non-interest-bearing accounts         12,774                       12,542                        12,149
                                          --------                     --------                      --------
      Total interest-bearing liabilities
        and non-interest-bearing accounts  375,520                      363,558                       343,146
      Non-interest-bearing liabilities       3,609                        2,563                         3,020
                                          --------                     --------                      --------
            Total liabilities              379,129                      366,121                       346,166
Retained income                             28,994                       30,119                        30,509
                                          --------                     --------                      --------
Total liabilities and retained income     $408,123                     $396,240                      $376,675
                                          ========                     ========                      ========
Net interest income                                 $  6,776                     $  5,769                      $  8,147
                                                    ========                     ========                      ========
Interest rate spread                                            1.34%                         1.14%                         1.79%
                                                              ======                        ======                        ======
Net yield on interest-earning assets(3)                         1.68%                         1.47%                         2.19%
                                                              ======                        ======                        ======
Ratio of interest-earning assets to
   interest-bearing liabilities                               111.45%                       111.76%                       112.56%
                                                              ======                        ======                        ======
</TABLE>

----------------
(1)   Includes non-accrual loans.
(2)   Interest  and yields on  tax-exempt  securities  (tax-exempt  for  federal
      income  tax  purposes)  are  shown  on a fully  taxable  equivalent  basis
      utilizing a federal tax rate of 34%.
(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.  Changes in interest  income on  securities  reflects  the
changes in interest income on a fully tax equivalent basis.

<TABLE>
<CAPTION>
                                                                    Year Ended June 30,
                                            --------------------------------------------------------------------
                                                       2005 vs. 2004                     2004 vs. 2003
                                            --------------------------------    --------------------------------
                                             Increase (Decrease)                Increase (Decrease)
                                                   Due to             Total            Due to            Total
                                            --------------------    Increase    --------------------    Increase
                                             Volume       Rate     (Decrease)    Volume        Rate    (Decrease)
                                            --------    --------    --------    --------    --------    --------
<S>                                         <C>         <C>         <C>         <C>         <C>         <C>
                                                                    (Dollars in Thousands)
Interest-earning assets:
      Net loans receivable                  $   (847)   $   (127)   $   (974)   $ (3,550)   $   (794)   $ (4,344)
      Mortgage-backed securities                 590       1,044       1,634          76        (583)       (507)
      Investments - taxable                      316         906       1,222       2,402        (801)      1,601
      Investments - tax-free                    (206)        187         (19)         80         (29)         51
      Interest-bearing deposits                   (1)          2           1          (1)         (1)         (2)
                                            --------    --------    --------    --------    --------    --------
            Total interest-earning assets       (148)      2,012       1,864        (993)     (2,208)     (3,201)
Interest-bearing liabilities:
      Interest-bearing deposits and
         Escrows                                (200)        117         (83)       (222)       (769)       (991)
      Borrowings                                 758         182         940       1,201      (1,033)        168
                                            --------    --------    --------    --------    --------    --------
            Total interest-bearing
              liabilities                        558         299         857         979      (1,802)       (823)
                                            --------    --------    --------    --------    --------    --------
Change in net interest income               $   (706)   $  1,713    $  1,007    $ (1,972)   $   (406)   $ (2,378)
                                            ========    ========    ========    ========    ========    ========
</TABLE>

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

Interest Income. Total interest income increased by $1.9 million or 11.7% during
fiscal 2005 and  decreased  by $3.2 million or 16.8%  during  fiscal  2004.  The
increase in fiscal 2005 was  primarily a result of increased  yields and average
balances on the investment and mortgage-backed  securities portfolios which were
partially offset by a decrease in the average balance and weighted average yield
earned on the loan portfolio. The decrease in fiscal 2004 was primarily a result
of decreases in the average  balance of the loan  portfolio  and lower yields on
Company  assets caused by declining  market  interest rates which were partially
offset by  increased  average  balances of the  investment  and  mortgage-backed
securities portfolios.

Interest  income on investment  securities and FHLB stock increased $1.2 million
or 14.3% during  fiscal 2005 and  increased  $1.6 million or 23.7% during fiscal
2004. The increase in fiscal 2005 was primarily attributable to a 40 basis point
increase in the weighted  average yield on the Company's  investment  securities
and a $6.5 million increase in the average balance of the investment  securities
outstanding.  The increase in fiscal 2004 was primarily  attributable to a $69.1
million   increase  in  the  average   balance  of  the  investment   securities
outstanding,  which was  partially  offset by a 58 basis  point  decrease in the
weighted average yield on the Company's investment securities.

Interest income on  mortgage-backed  securities  increased $1.6 million or 69.6%
during fiscal 2005 and decreased  $507 thousand or 17.8% during fiscal 2004. The
increase in fiscal 2005 was primarily attributable to a 108 basis point increase
in the  weighted  average  yield  on the  Company's  mortgage-backed  securities
portfolio  and  a  $18.5  million   increase  in  the  average  balance  of  the
mortgage-backed  securities portfolio. The decrease in fiscal 2004 was primarily
attributable  to a 69 basis point decrease in the weighted  average yield on the
Company's mortgage-backed  securities portfolio, which was partially offset by a
$2.3 million increase in the average balance of the  mortgage-backed  securities
portfolio.


                                       9
<PAGE>

Interest income on net loans receivable  decreased $974 thousand or 18.8% during
fiscal 2005 and decreased $4.3 million or 45.6% during fiscal 2004. The decrease
in fiscal 2005 was primarily  attributable  to a $12.8  million  decrease in the
average  balance of net loans  outstanding  and a 17 basis point decrease in the
weighted  average yield on the Company's loan portfolio.  The decrease in fiscal
2004 was  primarily  attributable  to a $51.5  million  decrease  in the average
balance of net loans  outstanding  and a 67 basis point decrease in the weighted
average yield on the Company's loan  portfolio.  As part of its  asset/liability
management   strategy,   the  Company  previously  limited  its  origination  of
longer-term  fixed  rate  loans to  mitigate  its  exposure  to a rise in market
interest rates. The Company continued to offer longer-term fixed rate loans on a
correspondent basis during fiscal 2005 and 2004.

Interest Expense.  Total interest expense increased $857 thousand or 7.8% during
fiscal 2005 and  decreased  by $823  thousand or 7.0% during  fiscal  2004.  The
increase  in  fiscal  2005  was   attributable   to  higher  average  levels  of
interest-bearing  liabilities  and higher rates paid on such  liabilities due to
the Federal Reserve's tightening of monetary policy. The decrease in fiscal 2004
was  attributable  to  a  lower  interest   expense  paid  on   interest-bearing
liabilities  due to the Federal  Reserve's  easing of monetary  policy which was
partially   offset  by  an  increase  in  average  levels  of   interest-bearing
liabilities.

Interest  expense on borrowings  increased  $940 thousand or 10.8% during fiscal
2005 and increased  $168  thousand or 2.0% during  fiscal 2004.  The increase in
fiscal  2005 was  primarily  attributable  to a $16.9  million  increase  in the
average  balance of borrowings  outstanding  and a 9 basis point increase in the
weighted average yield on the Company's borrowings.  The increase in the average
balances  outstanding was due to a $16.7 million increase in the average balance
of other  short-term  borrowings  and a $2.4  million  increase  in the  average
balance of  short-term  FHLB  advances,  which were  partially  offset by a $2.2
million decrease in the average balance of long-term FHLB advances. The increase
in fiscal  2004 was  attributable  to a $26.2  million  increase  in the average
balance of borrowings outstanding which was partially offset by a 56 basis point
decrease in the weighted average yield on the Company's borrowings. The increase
in the  average  balance  of  borrowings  outstanding  was due to $31.0  million
increase  in the  average  balance  of other  short-term  borrowings  and a $507
thousand  increase in long-term FHLB advances,  which were partially offset by a
$4.3 million  decrease in short-term FHLB advances.  During both fiscal 2005 and
2004, the Company's  borrowings were primarily  longer-term  with fixed rates of
interest.

Interest expense on interest-bearing deposits and escrows decreased $83 thousand
or 3.6% in fiscal 2005 and decreased  $991 thousand or 29.9% in fiscal 2004. The
decrease in fiscal 2005 was primarily attributable to a $5.2 million decrease in
the average balance of interest  bearing  deposits.  The decrease in fiscal 2004
was  attributable to a 57 basis point decrease in the weighted  average yield on
the  Company's  deposits  and a $6.2  million  decrease  in  average  balance of
interest-bearing deposits.

Provision for Loan Losses. A provision for loan losses is charged to earnings to
bring the total allowance to a level considered adequate by management to absorb
potential losses in the portfolio. Management's determination of the adequacy of
the allowance is based on periodic evaluations of the loan portfolio considering
past experience, current economic conditions, volume, growth, composition of the
loan  portfolio  and other  relevant  factors.  The  Company  recorded  a credit
provision  for loan losses of $46 thousand in fiscal 2005,  compared to a credit
provision of $794 thousand in fiscal 2004. The decrease in the credit  provision
for fiscal 2005 was primarily  attributable to reduced levels of  non-performing
loans and net loans receivable.  The increase in the credit provision for fiscal
2004 was primarily  attributable  to the work-out of  non-performing  assets and
paydowns on the Company's loan portfolio.

Non-interest  Income.  Total  non-interest  income increased by $277 thousand or
38.7% in fiscal 2005 and  decreased by $10 thousand or 1.4% in fiscal 2004.  The
increase  in fiscal  2005 was  primarily  attributable  to an  increase  of $316
thousand in pre-tax  securities  gains,  which was partially offset by decreased
deposit  account  fee  income.   The  decrease  in  fiscal  2004  was  primarily
attributable  to a decrease  in pre-tax  securities  gains  which was  partially
offset by an increase in deposit account fee income.


                                       10
<PAGE>

Non-interest Expense.  Total non-interest expense decreased $75 thousand or 2.1%
and decreased  $349 thousand or 8.8% during fiscal 2005 and 2004,  respectively.
The  decrease in fiscal 2005 was  primarily  attributable  to decreases in legal
expenses  and costs  associated  with the  work-out  of  non-performing  assets,
payroll and benefit  related  costs,  real estate owned expenses and ATM network
expenses,  which were partially offset by increases in data processing  expenses
and fixed asset costs. The decrease in fiscal 2004 was primarily attributable to
decreases  in  payroll  and  benefit  related  costs,  charitable  contributions
eligible for  Pennsylvania  tax credits and legal expenses and costs  associated
with the work-out of non-performing assets.

Income Taxes.  Income taxes increased $8 thousand or 1.3% during fiscal 2005 and
decreased $451 thousand or 42.1% during fiscal 2004. The increase in fiscal 2005
was  primarily  attributable  to higher  levels  of  taxable  income,  which was
partially offset by higher levels of interest on FHLB obligations  which are not
taxable for Pennsylvania Mutual Thrift Tax purposes. The decrease in fiscal 2004
was  primarily  attributable  to lower levels of taxable  income.  The Company's
effective tax rate was 17.7% at June 30, 2005 and 21.2% at June 30, 2004.


LIQUIDITY AND CAPITAL RESOURCES

Liquidity is often analyzed by reviewing the cash flow statement.  Cash and cash
equivalents increased by $512 thousand during fiscal 2005 primarily due to $12.0
million of net cash  provided by  investing  activities  and $3.8 million of net
cash  provided by operating  activities,  which were  partially  offset by $15.3
million of net cash used for financing activities.

Funds provided by operating  activities  totaled $3.8 million during fiscal 2005
as compared to $2.1 million  during fiscal 2004.  Net cash provided by operating
activities  was  primarily  comprised  of $2.9  million  of net  income and $1.0
million in sales of trading securities.

Funds provided by investing  activities totaled $12.0 million during fiscal 2005
as compared to $66.3 million used for investing  activities  during fiscal 2004.
Primary sources of funds during fiscal 2005 include $407.3 million in repayments
and sales of investment and mortgage-backed  securities  (including FHLB stock),
and a $7.7 million decrease in net loans receivable, which were partially offset
by $403.0 million in purchases of  investments  and  mortgage-backed  securities
(including  FHLB stock).  The investment  purchases were primarily  comprised of
callable  U.S.  Government  agency  bonds that  reprice  within  two years.  The
mortgage-backed   securities  purchases  were  floating  rate  instruments  that
generally reprice on a monthly basis.

Funds used for  financing  activities  totaled  $15.3 million for fiscal 2005 as
compared to $64.4  million  provided by  financing  activities  in fiscal  2004.
Primary  uses of funds for fiscal  2005 were a $22.0  million  decrease in other
short-term  borrowings,  a $7.0 million  decrease in FHLB long-term  borrowings,
$1.6 million in cash  dividends  and $1.2  million in common stock  repurchases,
which were  partially  offset by a $12.3  million  increase  in FHLB  short-term
advances and a $4.1 million increase in deposits. During fiscal 2005 the Company
purchased  71,964  shares  of  common  stock  for  approximately  $1.2  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,  2005,  the  total  approved  loan  commitments
outstanding  amounted  to $833  thousand.  At the same date,  commitments  under
unused  letters and lines of credit  amounted to $7.3 million and the unadvanced
portion of  construction  loans  approximated  $12.3  million.  Certificates  of
deposit scheduled to mature in one year or less at June 30, 2005,  totaled $43.8
million.  Management  believes that a significant  portion of maturing  deposits
will remain with the Company.


                                       11
<PAGE>

The Company's contractual obligations at June 30, 2005 were as follows:

<TABLE>
<CAPTION>
                                                                Contractual Obligations
                                                                 (Dollars in Thousands)
                                                       Less than                                       More than
                                        Total           1 year          1-3 years       3-5 years       5 years
                                      -----------    --------------    -----------    ------------    ------------
<S>                                      <C>                 <C>            <C>            <C>            <C>
Long-term debt                           142,736             4,157          3,000          31,079         104,500
Operating lease obligations                   72                63              9               -               -
                                      -----------    --------------    -----------    ------------    ------------
                                         142,808             4,220          3,009          31,079         104,500
                                      ===========    ==============    ===========    ============    ============
</TABLE>

See also Note 13 of the Company's consolidated financial statements.

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 Primary  Credit
Program.  Management  believes that the Company currently has adequate liquidity
available to respond to liquidity demands.

On July 26, 2005, the Company's  Board of Directors  declared a cash dividend of
$0.16 per share  payable on August  18,  2005 to  shareholders  of record at the
close of business on August 8, 2005.  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,  2005,  WVS  Financial  Corp.  exceeded  all  regulatory  capital
requirements and maintained Tier I and total  risk-based  capital equal to $29.1
million  or  21.0%  and  $30.2   million  or  21.8%,   respectively,   of  total
risk-weighted  assets;  and Tier I leverage  capital of $29.1 million or 7.1% of
average total assets.

Non-performing assets consist of non-accrual loans and real estate owned. A loan
is placed on  non-accrual  status  when,  in the  judgment  of  management,  the
probability of collection of interest is deemed  insufficient to warrant further
accrual.  When a loan is placed on non-accrual  status,  previously  accrued but
uncollected  interest is deducted from interest  income.  Non-performing  assets
increased  $229 thousand or 27.7% to $1.1 million or 0.25% of total  assets,  at
June 30, 2005.  The increase was  primarily the result of $542 thousand in loans
reclassified as  non-performing  which were partially  offset by $30 thousand in
repayments,  $58 thousand in loans  reclassified  as performing  due to improved
economic performance and $237 thousand in charged off loans.

Impact of Inflation and Changing Prices. The consolidated  financial  statements
of the  Company  and  related  notes  presented  herein  have been  prepared  in
accordance with U.S. generally accepted accounting  principles which require the
measurement of financial  condition and operating results in terms of historical
dollars,  without  considering changes in the relative purchasing power of money
over time due to inflation.

Unlike  most  industrial   companies,   substantially  all  of  the  assets  and
liabilities  of a financial  institution  are  monetary in nature.  As a result,
interest  rates  have a more  significant  impact on a  financial  institution's
performance  than the effects of general levels of inflation.  Interest rates do
not  necessarily  move in the same  direction  or in the same  magnitude  as the
prices of goods and  services  since such prices are  affected by inflation to a
larger degree than interest  rates.  In the current  interest rate  environment,
liquidity and the maturity structure of the Company's assets and liabilities are
critical to the maintenance of acceptable performance levels.

Recent  Accounting and Regulatory  Pronouncements.  The Company's  discussion of
recent  accounting and regulatory  pronouncements  can be found in Note 1 of the
Company's Consolidated Financial Statements.


                                       12
<PAGE>

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 2005,  the Federal  Open-Market  Committee  increased its intended
federal funds rate by twenty-five  basis points eight times,  from 1.25% at June
30, 2004 to 3.25% at June 30, 2005. As economic  conditions continue to improve,
we  anticipate   continued   increases  in  short-term  market  interest  rates.
Longer-term yields fell, however, due to well contained inflationary  pressures,
strong foreign demand for intermediate and long-term Treasury's  associated with
the U.S.  trade  deficit  with other  nations and stronger  domestic  demand for
longer-dated  Treasury's  from domestic  pension funds with limited new treasury
issues of longer-term  bonds. The benchmark ten year treasury yield continued to
experience market volatility and declined sixty-eight basis points from 4.62% at
June 30, 2004 to 3.94% at June 30, 2005.  The Benchmark two year treasury  yield
also experienced  market  volatility and increased  ninety-six basis points from
2.70% at June  30,  2004 to 3.66% at June 30,  2005.  These  changes  in  short,
intermediate and long-term market interest rates, the flattening of the Treasury
yield  curve  and  continued  high  levels  on  interest  rate  volatility  have
precipitated  continued  prepayments  in  the  Company's  loan,  investment  and
mortgage-backed securities portfolios.


                                       13
<PAGE>

During fiscal 2005, principal  repayments on the Company's loan,  investment and
mortgage-backed  securities portfolios totaled $28.4 million, $304.0 million and
$94.8  million  respectively.  In response  to higher  levels of  liquidity  the
Company  continued  to  rebalance  its  loan,   investment  and  mortgage-backed
securities portfolios. Due to the low level of intermediate and long-term market
interest rates, the Company continued to reduce its portfolio of long-term fixed
rate mortgages while  continuing to offer consumer home equity and  construction
loans. The Company purchased  callable U. S. Government Agency bonds in order to
earn a higher return while  limiting  interest  rate 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 rising  short-term 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 has  continued  to offer  multi-family,  commercial  real  estate,  land
acquisition and development and shorter-term  construction  loans,  primarily on
residential properties, to increase interest income while limiting interest rate
risk.  The Company has also  emphasized  higher  yielding  home equity and small
business loans to existing customers and seasoned prospective customers.

As of June 30, 2005, the implementation of these asset and liability  management
initiatives resulted in the following:

      1)    the Company's  liquidity  profile remains strong with $158.0 million
            callable  within 3 months,  $2.0 million being  callable with 3 to 6
            months and $ 1.4 million being  callable with 6 to 12 months.  Based
            upon  current  market  conditions,  management  anticipates  that  a
            substantial  portion of the  investments  will be called  within the
            next twelve months;

      2)    $117.9  million  or  61.8%  of the  Company's  investment  portfolio
            (including FHLB stock) was comprised of fixed-to-floating rate bonds
            which will reprice as follows: 3 months or less - $15.0 million; 3-6
            months - $87.9 million; and over 1 year - $15.0 million;

      3)    $30.1  million  or  15.8%  of  the  Company's  investment  portfolio
            (including  FHLB  stock) was  comprised  of U.S.  Government  Agency
            Step-up bonds which will reprice as follows:  1 year or less - $14.9
            million from 4.00% to 7.00%; 1-2 years - $10.5 million from 4.00% to
            7.00% and over two years - $4.7 million from 4.70% to 6.00%;

      4)    $8.7  million  or  4.6%  of  the  Company's   investment   portfolio
            (including  FHLB stock) was  comprised  of  corporate  demand  notes
            issued by Ford Motor Credit and General Motors Acceptance Corp.;

      5)    $158.2   million   or   97.5%   of  the   Company's   portfolio   of
            mortgage-backed   securities  (including   collateralized   mortgage
            obligations - "CMOs") were  comprised of floating  rate  instruments
            that reprice on a monthly basis;

      6)    the maturity distribution of the Company's borrowings is as follows:
            1 month or less - $80.0 million or 35.6%;  1-6 months - $2.0 million
            or 0.9%;  6-12  months - $4.2  million  or  1.9%;  1-3  years - $3.0
            million or 1.3%; 3-5 years - $31.1 million or 13.8%;  over 5 years -
            $104.5 million or 46.5%; and

      7)    an aggregate  of $33.3  million or 55.3% of the  Company's  net loan
            portfolio had  adjustable  interest rates or maturities of less than
            12 months.


                                       14
<PAGE>

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.

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.

                                                          June 30,
                                              --------------------------------
                                                2005        2004         2003
                                              --------    --------    --------
                                                    (Dollars in Thousands)
Interest-earning assets maturing or
   repricing within one year                  $318,015    $288,451    $262,782
Interest-bearing liabilities maturing or
   repricing within one year                   181,085     171,655     133,418
                                              --------    --------    --------

Interest sensitivity gap                      $136,930    $116,796    $129,364
                                              ========    ========    ========
Interest sensitivity gap as a percentage of
   total assets                                   32.5%       26.9%       35.2%
Ratio of assets to liabilities
   maturing or repricing within one year         175.6%      168.0%      197.0%

During fiscal 2005, the Company managed its one year interest sensitivity gap
by: (1) limiting the portfolio origination of long-term fixed rate mortgages;
(2) emphasizing loans with shorter terms or repricing frequencies; (3)
purchasing investments with maturities/repricing dates within 2 years; and (4)
purchasing floating rate CMO's which reprice on a monthly basis.


                                       15
<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, 2005. 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
                         -------     -------    --------     --------    --------   --------     ---------
<S>                      <C>        <C>         <C>         <C>         <C>         <C>          <C>
                                                      (Dollars in Thousands)
Base Case Up 200 bp
-------------------
Cummulative
 Gap ($'s)                96,612     106,218     123,258     163,624     162,320     145,766      27,358
% of Total
  Assets                    22.9%       25.2%       29.3%       38.9%       38.6%       34.6%        6.5%
Base Case Up 100 bp
-------------------
Cummulative
 Gap ($'s)                97,747     107,707     132,806     170,347     167,071     154,009      27,358
% of Total
  Assets                    23.2%       25.6%       31.5%       40.5%       39.7%       36.6%        6.5%
Base Case No Change
-------------------
Cummulative
 Gap ($'s)                99,022     110,218     136,930     176,119     173,538     158,987      27,358
% of Total
  Assets                    23.5%       26.2%       32.5%       41.8%       41.2%       37.8%        6.5%
Base Case Down 100 bp
---------------------
Cummulative
 Gap ($'s)               120,155     129,839     148,278     186,207     181,557     161,853      27,358
% of Total
  Assets                    28.5%       30.8%       35.2%       44.2%       43.1%       38.4%        6.5%
Base Case Down 200 bp
---------------------
Cummulative
 Gap ($'s)               199,239     205,156     193,703     191,019     183,388     161,950      27,358
% of Total
  Assets                    47.3%       48.7%       46.0%       45.4%       43.6%       38.5%        6.5%

</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.


                                       16
<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, 2005 and June 30, 2004.

<TABLE>
<CAPTION>
                                Analysis of Sensitivity to Changes in Market Interest Rates
                                -----------------------------------------------------------

                                                              Modeled Change in Market Interest Rates
                               -------------------------------------------------------------------------------------------------
                                                  June 30, 2005                                     June 30, 2004
                               ----------------------------------------------   ------------------------------------------------
Estimated impact on:              -200     -100         0      +100      +200      -200      -100         0      +100      +200
--------------------              ----     ----         -      ----      ----      ----      ----         -      ----      ----
<S>                              <C>      <C>        <C>       <C>       <C>      <C>       <C>        <C>       <C>       <C>
Change in net interest income   -88.1%   -26.6%      0.00%     17.6%     38.0%   -44.9%    -20.6%      0.00%     38.8%     64.4%

Return on average equity        -5.26%     4.42%     8.33%    10.83%    13.69%     0.33%     4.01%     7.00%    12.39%    15.78%

Return on average assets        -0.34%     0.30%     0.58%     0.76%     0.97%     0.02%     0.29%     0.51%     0.92%     1.19%

Market value of equity (in
thousands)                     $11,310  $18,758   $24,370   $23,484   $15,770   $16,255   $21,386   $27,424   $26,957   $20,079

</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,
2005.

                            Anticipated Transactions
--------------------------------------------------------------------------------
                                                          (Dollars in Thousands)
Undisbursed construction and development loans
      Fixed rate                                               $    6,990
                                                                     6.48%

      Adjustable rate                                          $    5,349
                                                                     6.80%

Undisbursed lines of credit
      Adjustable rate                                          $    6,378
                                                                     6.28%

Loan origination commitments
      Fixed rate                                               $      533
                                                                     6.62%

      Adjustable rate                                          $      300
                                                                     6.52%

Letters of credit
      Adjustable rate                                          $      923
                                                                     7.26%
                                                               ----------


                                                               $   20,473
                                                               ==========


                                       17
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------


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, 2005 and 2004, 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, 2005. 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 the standards of the Public  Company
Accounting Oversight Board (United States). 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, 2005 and 2004, and the results of their operations
and their cash flows for each of the years in the  three-year  period ended June
30, 2005, in conformity with U.S. generally accepted accounting principles.


/s/ S.R. Snodgrass A.C.
Wexford, PA
July 28, 2005


                                       18
<PAGE>

                               WVS FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                                          June 30,
                                                                      2005         2004
                                                                   ---------    ---------
<S>                                                                <C>          <C>
ASSETS
     Cash and due from banks                                       $     900    $     769
     Interest-earning demand deposits                                  2,666        2,285
                                                                   ---------    ---------
     Total cash and cash equivalents                                   3,566        3,054
     Trading securities                                                   --          993
     Investment securities available for sale (amortized
        cost of $9,155 and $4,113)                                     9,155        4,416
     Investment securities held to maturity (market value
        of $174,323 and $271,103)                                    173,911      269,173
     Mortgage-backed securities available for sale
        (amortized cost of $2,893 and $3,234)                          3,120        3,357
     Mortgage-backed securities held to maturity
        (market value of $159,566 and $72,099)                       159,031       72,233
     Net loans receivable (allowance for loan losses of
        $1,121 and $1,370)                                            60,151       67,968
     Accrued interest receivable                                       2,057        2,456
     Federal Home Loan Bank stock, at cost                             7,769        7,532
     Premises and equipment                                              939        1,077
     Other assets                                                      1,345        1,365
                                                                   ---------    ---------

             TOTAL ASSETS                                          $ 421,044    $ 433,624
                                                                   =========    =========

LIABILITIES
     Deposits                                                      $ 164,706    $ 160,563
     Federal Home Loan Bank advances                                 155,036      149,736
     Other borrowings                                                 69,680       91,639
     Accrued interest payable                                          1,260        1,197
     Other liabilities                                                 1,161        1,290
                                                                   ---------    ---------
TOTAL LIABILITIES                                                    391,843      404,425
                                                                   ---------    ---------

STOCKHOLDERS' EQUITY
     Preferred stock, no par value; 5,000,000 shares authorized;
        none outstanding                                                  --           --
     Common stock, par value $.01; 10,000,000 shares authorized;
        3,762,618 and 3,762,968 shares issued                             38           38
     Additional paid-in capital                                       20,726       20,727
     Treasury stock (1,368,508 and 1,296,544 shares at cost)         (20,594)     (19,377)
     Retained earnings - substantially restricted                     28,885       27,535
     Accumulated other comprehensive income                              149          281
     Unallocated shares - Recognition and Retention Plans                 (3)          (5)
                                                                   ---------    ---------
TOTAL STOCKHOLDERS' EQUITY                                            29,201       29,199
                                                                   ---------    ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 421,044    $ 433,624
                                                                   =========    =========
</TABLE>

See accompanying notes to the consolidated financial statements.


                                       19
<PAGE>

                               WVS FINANCIAL CORP.
                        CONSOLIDATED STATEMENT OF INCOME
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                         Year Ended June 30,
                                                 2005           2004            2003
                                              -----------    -----------    -----------
<S>                                           <C>            <C>            <C>
INTEREST AND DIVIDEND INCOME
     Loans                                    $     4,206    $     5,180    $     9,524
     Investment securities                          9,499          8,350          6,590
     Mortgage-backed securities                     3,981          2,347          2,854
     Interest-earning demand deposits                  10              9             11
     Federal Home Loan Bank stock                     178            120            252
                                              -----------    -----------    -----------
         Total interest and dividend income        17,874         16,006         19,231
                                              -----------    -----------    -----------

INTEREST EXPENSE
     Deposits                                       2,238          2,321          3,312
     Federal Home Loan Bank advances                8,119          8,120          8,224
     Other borrowings                               1,487            546            274
                                              -----------    -----------    -----------
         Total interest expense                    11,844         10,987         11,810
                                              -----------    -----------    -----------

NET INTEREST INCOME                                 6,030          5,019          7,421
Recovery for loan losses                              (46)          (794)          (228)
                                              -----------    -----------    -----------
NET INTEREST INCOME AFTER
     RECOVERY FOR LOAN LOSSES                       6,076          5,813          7,649
                                              -----------    -----------    -----------

NONINTEREST INCOME
     Service charges on deposits                      361            385            361
     Investment securities gains                      336             20             64
     Other                                            295            310            300
                                              -----------    -----------    -----------
         Total noninterest income                     992            715            725
                                              -----------    -----------    -----------

NONINTEREST EXPENSE
     Salaries and employee benefits                 1,971          1,992          2,240
     Occupancy and equipment                          438            433            398
     Data processing                                  267            231            221
     Correspondent bank charges                       134            142            152
     Other                                            722            809            945
                                              -----------    -----------    -----------
         Total noninterest expense                  3,532          3,607          3,956
                                              -----------    -----------    -----------

Income before income taxes                          3,536          2,921          4,418

Income taxes                                          627            619          1,070
                                              -----------    -----------    -----------

NET INCOME                                    $     2,909    $     2,302    $     3,348
                                              ===========    ===========    ===========

EARNINGS PER SHARE:
     Basic                                    $      1.20    $      0.91    $      1.28
     Diluted                                         1.19           0.90           1.28

AVERAGE SHARES OUTSTANDING:
     Basic                                      2,432,267      2,535,796      2,617,576
     Diluted                                    2,437,647      2,544,404      2,624,395
</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)

                                                                                                         Accumulated
                                                                                   Retained   Unallocated   Other
                                                          Additional               Earnings-    Shares      Compre-
                                                 Common    Paid-in     Treasury  Substantially   Held      hensive
                                                 Stock     Capital      Stock     Restricted    by RRP   Income (Loss)  Total
                                                --------   --------    --------   ----------   --------  ------------  --------
<S>                                            <C>        <C>         <C>           <C>       <C>         <C>         <C>
Balance June 30, 2002                           $     37   $ 20,037    $(15,133)     25,183    $    (72)   $    201    $ 30,253

Comprehensive income:
   Net income                                                                         3,348                               3,348
   Unrealized gain on available-
     for-sale securities, net of taxes of $66                                                                   128         128
Tax benefit from stock grants issued
   under RRPs                                                   104                                                         104
Accrued compensation expense for RRPs                                                                22                      22
Exercise of stock options                                        71                                                          71
Purchase of treasury stock                                               (1,634)                                         (1,634)
Cash dividends declared ($0.64 per share)                                            (1,674)                             (1,674)
                                                --------   --------    --------    --------    --------    --------    --------

Balance June 30, 2003                                 37     20,212     (16,767)     26,857         (50)        329      30,618

Comprehensive income:
   Net income                                                                         2,302                               2,302
   Unrealized loss on available-
     for-sale securities, net of taxes of $25                                                                   (48)        (48)
Tax benefit from stock grants issued
   under RRPs                                                    27                                                          27
Accrued compensation expense for RRPs                                                                 5                       5
Cancellation of unallocated RRP shares                                                               40                      40
Exercise of stock options                              1        488                                                         489
Purchase of treasury stock                                               (2,610)                                         (2,610)
Cash dividends declared ($0.64 per share)                                            (1,624)                             (1,624)
                                                --------   --------    --------    --------    --------    --------    --------

Balance June 30, 2004                                 38     20,727     (19,377)     27,535          (5)        281      29,199

Comprehensive income:
   Net income                                                                         2,909                               2,909
   Unrealized loss on available
     for sale securities, net of taxes of $68                                                                  (132)       (132)
Purchase of treasury stock                                               (1,217)                                         (1,217)
Cash dividends declared ($0.64 per share)                                            (1,559)                             (1,559)
Other, net                                                       (1)                                  2                       1
                                                --------   --------    --------    --------    --------    --------    --------

Balance June 30, 2005                           $     38   $ 20,726    $(20,594)   $ 28,885    $     (3)   $    149    $ 29,201
                                                ========   ========    ========    ========    ========    ========    ========
</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,
                                                                                2005         2004        2003
                                                                             ---------    ---------    ---------
<S>                                                                          <C>          <C>          <C>
OPERATING ACTIVITIES
     Net income                                                              $   2,909    $   2,302    $   3,348
     Adjustments to reconcile net income to net cash
       provided by operating activities:
          Recovery for loan losses                                                 (46)        (794)        (228)
          Depreciation                                                             193          188          156
          Investment securities gains                                             (336)         (20)         (64)
          Amortization of discounts, premiums, and
            deferred loan fees                                                    (415)       1,166        3,205
          Purchase of trading securities                                            --         (999)          --
          Sale of trading securities                                             1,000           --           --
          Deferred income taxes                                                     73          171           43
          Decrease in accrued interest receivable                                  399          344        1,103
          Increase (decrease) in accrued interest payable                           63         (252)        (249)
          Other, net                                                               (43)          20         (263)
                                                                             ---------    ---------    ---------
            Net cash provided by operating activities                            3,797        2,126        7,051
                                                                             ---------    ---------    ---------

INVESTING ACTIVITIES
     Available for sale:
          Purchase of investment and mortgage-backed
            securities                                                         (26,145)     (23,890)     (25,836)
          Proceeds from repayments of investment and
            mortgage-backed securities                                          20,364       45,852       10,313
        Proceeds from sales of investment and
          mortgage-backed securities                                             1,409          251          639
     Held to maturity:
          Purchase of investment and mortgage-backed
            securities                                                        (368,064)    (401,567)    (259,234)
          Proceeds from repayments of investment and
            mortgage-backed securities                                         377,002      288,489      246,069
     Net decrease in net loans receivable                                        7,733       23,751       61,131
     Purchase of Federal Home Loan Bank stock                                   (8,761)      (1,584)      (1,021)
     Redemption of Federal Home Loan Bank stock                                  8,524        1,849        1,505
     Acquisition of premises and equipment                                         (55)         (34)        (391)
     Other, net                                                                     --          572          220
                                                                             ---------    ---------    ---------
            Net cash provided by (used for) investing activities                12,007      (66,311)      33,395
                                                                             ---------    ---------    ---------

FINANCING ACTIVITIES
     Net Increase (decrease) in deposits                                         4,143      (10,363)      (6,746)
     Net increase (decrease) in Federal Home Loan Bank short-term advances      12,300       (3,875)       3,875
     Net increase (decrease) in other borrowings                               (21,959)      82,186      (24,278)
     Proceeds from Federal Home Loan Bank long-term advances                        --          500          578
     Repayments of Federal Home Loan Bank long-term advances                    (7,000)        (279)     (11,000)
     Net proceeds from exercise of stock options                                    --          489           71
     Cash dividends paid                                                        (1,559)      (1,624)      (1,674)
     Purchase of treasury stock                                                 (1,217)      (2,610)      (1,634)
                                                                             ---------    ---------    ---------
            Net cash provided by (used for) financing activities               (15,292)      64,424      (40,808)
                                                                             ---------    ---------    ---------

Increase (decrease) in cash and cash equivalents                                   512          239         (362)

CASH AND CASH EQUIVALENTS AT BEGINNING
     OF YEAR                                                                     3,054        2,815        3,177
                                                                             ---------    ---------    ---------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                     $   3,566    $   3,054    $   2,815
                                                                             =========    =========    =========

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
     Interest                                                                $  11,782    $  11,238    $  12,059
     Taxes                                                                         655          363        1,049
</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  to  U.S.  generally   accepted   accounting
      principles.  The Company's fiscal year end for financial reporting is June
      30. For  regulatory  and income tax reporting  purposes,  WVS reports on a
      December 31 calendar year basis.

      In preparing the consolidated financial statements, management is required
      to make  estimates  and  assumptions  that affect 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)

      Trading Securities
      ------------------

      Trading  securities  are held for  resale in  anticipation  of  short-term
      (generally  90  days or  less)  fluctuations  in  market  prices.  Trading
      securities  are stated at fair value.  Realized and  unrealized  gains and
      losses are included in noninterest income as investment securities gains.

      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 3 to 10
      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 7
      to 15 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 are  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 are
      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.

      Stock Options
      -------------

      The Company maintains stock option plans for key officers,  employees, and
      nonemployee directors.

      As permitted under Statement of Financial Accounting Standards ("FAS") 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 FAS 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.


                                       25
<PAGE>

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

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      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  composed  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.

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

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

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

      In March 2004, the Financial  Accounting  Standards Board ("FASB") reached
      consensus  on the  guidance  provided by Emerging  Issues Task Force Issue
      03-1 ("EITF 03-1"), The Meaning of Other-Than-Temporary Impairment and Its
      Application to Certain Investments. The guidance is applicable to debt and
      equity securities that are within the scope of FASB Statement of Financial
      Accounting  Standard ("SFAS") No. 115,  Accounting for Certain Investments
      In Debt and Equity  Securities  and certain other  investments.  EITF 03-1
      specifies  that an  impairment  would be considered  other than  temporary
      unless:  (a) the investor has the ability and intent to hold an investment
      for a reasonable  period of time  sufficient  for the recovery of the fair
      value up to (or  beyond)  the  cost of the  investment,  and (b)  evidence
      indicating the cost of the  investment is recoverable  within a reasonable
      period of time outweighs  evidence to the contrary.  EITF 03-1 cost method
      investment and disclosure  provisions were effective for reporting periods
      ending after June 15, 2004. The  measurement  and  recognition  provisions
      relating to debt and equity  securities  have been delayed  until the FASB
      issues additional guidance. The Company adopted cost method investment and
      disclosure  provisions of EITF 03-1 on June 30, 2004. The adoption did not
      have a material impact on the consolidated  financial statements,  results
      of operations or liquidity of the Company.

      This statement is effective for loans  acquired in fiscal years  beginning
      after December 31, 2004. SOP 03-3 applies to a loan that is acquired where
      it is  probable,  at  acquisition,  that a  transferee  will be  unable to
      collect all contractually required payments receivable.  SOP 03-3 requires
      the  recognition,  as  accretable  yield,  of the excess of all cash flows
      expected at acquisition over the investor's initial investment in the loan
      as interest  income on a level-yield  basis over the life of the loan. The
      amount by which the  loan's  contractually  required  payments  exceed the
      amount of its expected cash flows at acquisition  may not be recognized as
      an  adjustment  to yield,  a loss  accrual,  or a valuation  allowance for
      credit risk.


                                       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 December 2004, the Financial Accounting Standards Board ("FASB") issued
      Statement  of  Financial  Accounting  Standards  No. 123  (revised  2004),
      Share-Based  Payment  (FAS No.  123R).  FAS No. 123R  revised FAS No. 123,
      Accounting for  Stock-Based  Compensation,  and supersedes APB Opinion No.
      25,   Accounting   for  Stock  Issued  to   Employees,   and  its  related
      implementation  guidance.  FAS No. 123R will  require  compensation  costs
      related  to  share-based  payment  transactions  to be  recognized  in the
      financial statement (with limited exceptions).  The amount of compensation
      cost will be measured based on the grant-date  fair value of the equity or
      liability  instruments  issued.  Compensation cost will be recognized over
      the period that an employee provides service in exchange for the award.

      In April, the Securities and Exchange  Commission  adopted a new rule that
      amends the compliance dates for FAS No. 123R. The Statement  requires that
      compensation  cost  relating  to  share-based   payment   transactions  be
      recognized in financial statements and that this cost be measured based on
      the fair value of the equity or liability instruments issued. FAS No. 123R
      covers a wide range of  share-based  compensation  arrangements  including
      share options,  restricted share plans,  performance-based  awards,  share
      appreciation  rights,  and employee share purchase plans. The Company will
      adopt FAS No. 123R on July 1, 2005.  Management has determined that unless
      additional options are granted, there will be no impact on future earnings
      as a result of the adoption.

      In March 2005, the Securities and Exchange Commission ("SEC") issued Staff
      Accounting  Bulletin  No.  107  ("SAB  No.  107"),   Share-Based  Payment,
      providing guidance on option valuation methods,  the accounting for income
      tax effects of share-based  payment  arrangements upon adoption of FAS No.
      123R, and the disclosures in MD&A subsequent to the adoption.  The Company
      will provide SAB No. 107  required  disclosures  upon  adoption of FAS No.
      123R on July 1, 2005.  Management  has determined  that unless  additional
      options are granted,  there will be no impact on the  Company's  financial
      statements as a result of the adoption.

      In December 2004, FASB issued FAS No. 153, Exchanges of Nonmonetary Assets
      - An  Amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29,
      Accounting for  Nonmonetary  Transactions,  is based on the principle that
      exchanges of nonmonetary assets should be measured based on the fair value
      of the assets exchanged. The guidance in that Opinion,  however,  included
      certain exceptions to that principle. FAS No. 153 amends Opinion No. 29 to
      eliminate the exception for  nonmonetary  exchanges of similar  productive
      assets  and  replaces  it  with  a  general  exception  for  exchanges  of
      nonmonetary  assets that do not have commercial  substance.  A nonmonetary
      exchange has  commercial  substance if the future cash flows of the entity
      are  expected to change  significantly  as a result of the  exchange.  The
      provisions of FAS No. 153 are effective for  nonmonetary  asset  exchanges
      occurring  in  fiscal  periods   beginning  after  June  15,  2005.  Early
      application   is  permitted,   and  companies   must  apply  the  standard
      prospectively.  The  adoption of this  standard is not  expected to have a
      material  effect on the  Company's  results  of  operations  or  financial
      position.

      In June 2005, the FASB issued FAS No. 154,  Accounting  Changes and Errors
      Corrections,  a  replacement  of APB  Opinion  No.  20 and FAS No.  3. The
      Statement  applies to all voluntary changes in accounting  principle,  and
      changes the  requirements  for accounting for and reporting of a change in
      accounting principle.  FAS No. 154 requires  retrospective  application to
      prior periods'  financial  statements of a voluntary  change in accounting
      principle unless it is impractical. APB Opinion No. 20 previously required
      that most  voluntary  changes in  accounting  principle be  recognized  by
      including in net income of the period of the change the cumulative  effect
      of changing to the new  accounting  principle.  FAS No. 154  improves  the
      financial  reporting  because its requirements  enhance the consistency of
      financial reporting between periods.


                                       27
<PAGE>

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

2.    EARNINGS PER SHARE

      The following  table sets forth the  computation  of the  weighted-average
      common shares used to calculate basic and diluted earnings per share.

<TABLE>
<CAPTION>
                                                      2005        2004        2003
                                                   ----------  ----------  ----------
<S>                                                 <C>         <C>         <C>

      Weighted-average common shares
           issued                                   3,762,892   3,747,821   3,731,949

      Average treasury stock shares                (1,330,625) (1,212,025) (1,114,373)
                                                   ----------  ----------  ----------

      Weighted-average common shares and
           common stock equivalents used to
           calculate basic earnings per share       2,432,267   2,535,796   2,617,576

      Additional common stock equivalents
           (stock options) used to calculate
           diluted earnings per share                   5,380       8,608       6,819
                                                   ----------  ----------  ----------

      Weighted-average common shares and
           common stock equivalents used
           to calculate diluted earnings per share  2,437,647   2,544,404   2,624,395
                                                   ==========  ==========  ==========
</TABLE>

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

3.    COMPREHENSIVE INCOME

      Other  comprehensive  income primarily  reflects changes in net unrealized
      gains  (losses)  on  available-for-sale  securities.  Total  comprehensive
      income for the years ended June 30 is summarized as follows:

<TABLE>
<CAPTION>
                                                                     2005       2004       2003
                                                                   -------    -------    -------
<S>                                                                <C>        <C>        <C>
Net Income                                                         $ 2,909    $ 2,302    $ 3,348
Other comprehensive income:
      Unrealized gains (losses) on available-for-sale securities      (536)       (93)       258
      Less: Reclassification adjustment for gain included
               in net income                                           336         20         64
                                                                   -------    -------    -------
Other comprehensive income (loss) before tax                          (200)       (73)       194
Income tax expense (benefit) related to other
      comprehensive income (loss)                                      (68)       (25)        66
                                                                   -------    -------    -------
Other comprehensive income (loss), net of tax                         (132)       (48)       128
                                                                   -------    -------    -------
Comprehensive income                                               $ 2,777    $ 2,254    $ 3,476
                                                                   =======    =======    =======
</TABLE>


                                       28
<PAGE>

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

4.    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>
2005
----
AVAILABLE FOR SALE
Corporate debt securities             $      9,155   $         --   $         --    $      9,155
                                      ------------   ------------   ------------    ------------

     Total                            $      9,155   $         --   $         --    $      9,155
                                      ============   ============   ============    ============

HELD TO MATURITY
U.S. Government agency securities     $    149,360   $         77   $       (493)   $    148,944
Obligations of states and political
  subdivisions                              24,551            848            (20)         25,379
                                      ------------   ------------   ------------    ------------

     Total                            $    173,911   $        925   $       (513)   $    174,323
                                      ============   ============   ============    ============
<CAPTION>
                                                         Gross         Gross         Estimated
                                       Amortized      Unrealized     Unrealized        Market
                                          Cost           Gains         Losses          Value
                                      ------------   ------------   ------------    ------------
<S>                                   <C>            <C>            <C>             <C>
2004
----
AVAILABLE FOR SALE
Corporate debt securities             $      2,532   $         18   $         --    $      2,550
Equity securities                            1,581            313            (28)          1,866
                                      ------------   ------------   ------------    ------------

     Total                            $      4,113   $        331   $        (28)   $      4,416
                                      ============   ============   ============    ============

HELD TO MATURITY
U.S. Government agency securities     $    223,808   $      1,176   $       (864)   $    224,120
Corporate debt securities                   13,772             16             --          13,788
Obligations of states and political
  subdivisions                              31,593          1,641            (39)         33,195
                                      ------------   ------------   ------------    ------------

     Total                            $    269,173   $      2,833   $       (903)   $    271,103
                                      ============   ============   ============    ============
</TABLE>

      In 2005, 2004, and 2003, the Company recorded realized investment security
      gains, and unrealized holding gains and losses for trading securities,  of
      $336, $20, and $64.  Proceeds from sales of investment  securities  during
      2005, 2004, and 2003, were $1,409, $251, and $639.


                                       29
<PAGE>

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

4.    INVESTMENT SECURITIES (Continued)

      The amortized cost and estimated  market values of debt securities at June
      30, 2005, 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           $      9,155   $         --   $         --   $         --   $      9,155
   Estimated market value          9,155             --             --             --          9,155

HELD TO MATURITY
   Amortized cost           $         --   $         --   $      6,261   $    167,650   $    173,911
   Estimated market value             --             --          6,478        167,845        174,323

</TABLE>

      Investment  securities  with amortized  costs of $101,208 and $138,899 and
      estimated  market  values of  $100,951  and  $139,411 at June 30, 2005 and
      2004,  respectively,  were pledged to secure public  deposits,  repurchase
      agreements, and for other purposes as required by law.

5.    MORTGAGE-BACKED SECURITIES

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

<TABLE>
<CAPTION>

                                                        Gross          Gross         Estimated
                                       Amortized      Unrealized     Unrealized        Market
                                          Cost          Gains          Losses          Value
                                      ------------   ------------   ------------    ------------
<S>                                   <C>            <C>            <C>             <C>
2005
----
AVAILABLE FOR SALE

Fannie Mae                            $        449   $         25   $         --    $        474
Government National Mortgage
  Association certificates                   2,333            196             --           2,529
Freddie Mac                                     44              1             --              45
Collateralized mortgage obligations             67              5             --              72
                                      ------------   ------------   ------------    ------------

     Total                            $      2,893   $        227   $         --    $      3,120
                                      ============   ============   ============    ============


HELD TO MATURITY

Fannie Mae                            $         16   $          1   $         --    $         17
Government National Mortgage
  Association certificates                     370             25             --             395
Freddie Mac                                      9              1             --              10
Collateralized mortgage obligations        158,636            525            (17)        159,144
                                      ------------   ------------   ------------    ------------

     Total                            $    159,031   $        552   $        (17)   $    159,566
                                      ============   ============   ============    ============
</TABLE>


                                       30
<PAGE>

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

5.    MORTGAGE-BACKED SECURITIES (Continued)

<TABLE>
<CAPTION>
                                                        Gross          Gross         Estimated
                                       Amortized      Unrealized     Unrealized        Market
                                          Cost          Gains          Losses          Value
                                      ------------   ------------   ------------    ------------
<S>                                   <C>            <C>            <C>             <C>
2004
----
AVAILABLE FOR SALE

Fannie Mae                            $        686   $         37   $         --    $        723
Government National Mortgage
  Association certificates                   2,411             80             (1)          2,490
Freddie Mac                                     45              1             --              46
Collateralized mortgage obligations             92              6             --              98
                                      ------------   ------------   ------------    ------------

     Total                            $      3,234   $        124   $         (1)   $      3,357
                                      ============   ============   ============    ============


HELD TO MATURITY

Fannie Mae                            $         19   $         --   $         --    $         19
Government National Mortgage
  Association certificates                     591             42             --             633
Freddie Mac                                     17             --             --              17
Collateralized mortgage obligations         71,606            117           (293)         71,430
                                      ------------   ------------   ------------    ------------

     Total                            $     72,233   $        159   $       (293)   $     72,099
                                      ============   ============   ============    ============
</TABLE>

      The  amortized  cost  and  estimated   market  value  of   mortgage-backed
      securities at June 30, 2005,  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           $         --   $         13   $         --   $      2,880   $      2,893
   Estimated market value             --             13             --          3,107          3,120

HELD TO MATURITY
   Amortized cost           $         --   $         18   $         13   $    159,000   $    159,031
   Estimated market value             --             18             13        159,535        159,566

</TABLE>

      At June 30, 2005 and 2004,  mortgage-backed  securities  with an amortized
      cost of $112,047 and $65,496 and  estimated  market values of $112,730 and
      $65,486,  were  pledged to secure  borrowings  with the Federal  Home Loan
      Bank.


                                       31
<PAGE>

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

6.    UNREALIZED LOSSES ON SECURITIES

      The following table shows the Company's gross  unrealized  losses and fair
      value,  aggregated  by  category  and  length of time that the  individual
      securities have been in a continuous unrealized loss position, at June 30,
      2005.

<TABLE>
<CAPTION>
                              Less than Twelve Months       Twelve Months or Greater                Total
                            ---------------------------    ---------------------------    ---------------------------
                             Estimated        Gross         Estimated        Gross         Estimated       Gross
                               Market       Unrealized        Market       Unrealized        Market      Unrealized
                               Value          Losses          Value          Losses          Value         Losses
                            ------------   ------------    ------------   ------------    ------------   ------------
<S>                         <C>            <C>             <C>            <C>             <C>            <C>
U.S. government agencies
  securities                $    113,715   $       (493)   $         --   $         --    $    113,715   $       (493)
Obligations of states and
  political subdivisions              --             --           1,316            (20)          1,316            (20)
Collateralized mortgage
  obligations                     43,107            (16)            277             (1)         43,384            (17)
                            ------------   ------------    ------------   ------------    ------------   ------------

     Total                  $    156,822   $       (509)   $      1,593   $        (21)   $    158,415   $       (530)
                            ============   ============    ============   ============    ============   ============
</TABLE>

      The  policy  of  the  Company  is  to  recognize  an  other-than-temporary
      impairment   of  equity   securities   where  the  fair   value  has  been
      significantly  below  cost  for  three  consecutive  quarters.  For  fixed
      maturity  investments  with unrealized  losses due to interest rates where
      the Company has the positive intent and ability to hold the investment for
      a period of time sufficient to allow a market recovery,  declines in value
      below cost are not assumed to be other than temporary. The Company reviews
      its  position  quarterly  and has  asserted  that at June  30,  2005,  the
      declines outlined in the above table represent  temporary declines and the
      Company does have the intent and ability  either to hold those  securities
      to maturity or to allow a market recovery.

      The Company has concluded that any impairment of its investment securities
      portfolio is not other than  temporary  but is the result of interest rate
      changes,  sector credit changes, or  Company-specific  rating changes that
      are not expected to result in the  noncollection of principal and interest
      during the period.


                                       32
<PAGE>

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

7.    NET LOANS RECEIVABLE

      Major classifications of loans are summarized as follows:


                                                               2005       2004
                                                             --------   --------
First mortgage loans:
     1 - 4 family dwellings                                  $ 20,680   $ 25,825
     Construction                                              22,065     18,070
     Land acquisition and development                           5,884      7,947
     Multi-family dwellings                                     4,960      4,761
     Commercial                                                 8,561      9,950
                                                             --------   --------
                                                               62,150     66,553
                                                             --------   --------
Consumer loans:
     Home equity                                                6,504      7,086
     Home equity lines of credit                                3,578      3,932
     Other                                                      1,089        870
                                                             --------   --------
                                                               11,171     11,888
                                                             --------   --------

Commercial loans                                                  915        968
                                                             --------   --------

Less:
     Undisbursed construction and land development             12,882      9,956
     Net deferred loan fees                                        82        115
     Allowance for loan losses                                  1,121      1,370
                                                             --------   --------
                                                               14,085     11,441
                                                             --------   --------

Net loans receivable                                         $ 60,151   $ 67,968
                                                             ========   ========

      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.  At
      June 30, 2005 and 2004, the Company had  approximately $14 million and $15
      million,  respectively,  of  outstanding  loans for land  development  and
      construction  in  the  local  trade  area.  Although  the  Company  had  a
      diversified loan portfolio at June 30, 2005 and 2004, loans outstanding to
      individuals   and   businesses  are  dependent  upon  the  local  economic
      conditions in its immediate trade area.


                                       33
<PAGE>

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

7.    NET LOANS RECEIVABLE (Continued)

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


                                                       2005      2004      2003
                                                      ------    ------    ------

Principal outstanding                                 $2,101    $2,181    $3,481
                                                      ------    ------    ------
Interest income that would
  have been recognized                                   150       123       256
Interest income recognized                                99        94        26
                                                      ------    ------    ------

Interest income foregone                              $   51    $   29    $  230
                                                      ======    ======    ======

      The following table is a summary of the loans considered to be impaired as
      of June 30:

                                                       2005      2004      2003
                                                      ------    ------    ------

Impaired loans with an allocated allowance            $   --    $1,900    $3,423
Impaired loans without an allocated allowance             --        --        --
                                                      ------    ------    ------
     Total impaired loans                             $   --    $1,900    $3,423
                                                      ======    ======    ======
Allocated allowance on impaired loans                 $   --    $  762    $1,816
Average impaired loans                                    --     1,836     3,441
Income recognized on impaired loans                       --        89        23

      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:

                                                           2005          2004
                                                         --------      --------

Balance, July 1                                          $    316      $    535
     Additions                                                631           101
     Amounts collected                                       (435)         (320)
                                                         --------      --------

Balance, June 30                                         $    512      $    316
                                                         ========      ========

8.    ALLOWANCE FOR LOAN LOSSES

      Changes in the allowance for loan losses are as follows:

                                                 2005        2004        2003
                                               --------    --------    --------

Balance, July 1                                $  1,370    $  2,530    $  2,758
Add:
     Recovery for loan losses                       (46)       (794)       (228)
     Recoveries                                      34         158          --
Less:
     Loans charged off                              237         524          --
                                               --------    --------    --------

Balance, June 30                               $  1,121    $  1,370    $  2,530
                                               ========    ========    ========


                                       34
<PAGE>

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

9.    ACCRUED INTEREST RECEIVABLE

      Accrued interest receivable consists of the following:

                                                               2005       2004
                                                             --------   --------

Investment and mortgage-backed securities                    $  1,758   $  2,135
Loans receivable                                                  299        321
                                                             --------   --------

     Total                                                   $  2,057   $  2,456
                                                             ========   ========

10.   FEDERAL HOME LOAN BANK STOCK

      The Savings  Bank is a member of the FHLB System.  As a member,  West View
      maintains an  investment in the capital stock of the FHLB of Pittsburgh in
      an amount not less than 60 basis  points of the  outstanding  unused  FHLB
      borrowing capacity and 4.75 percent of its outstanding FHLB borrowings, as
      calculated throughout the year.

11.   PREMISES AND EQUIPMENT

      Major classifications of premises and equipment are summarized as follows:

                                                              2005        2004
                                                            --------    --------

Land and improvements                                       $    246    $    264
Buildings and improvements                                     1,992       2,024
Furniture, fixtures, and equipment                               851       1,069
                                                            --------    --------
                                                               3,089       3,357
Less accumulated depreciation                                  2,150       2,280
                                                            --------    --------
     Total                                                  $    939    $  1,077
                                                            ========    ========

      Depreciation charged to operations was $193, $188, and $156, for the years
      ended June 30, 2005, 2004, and 2003, respectively.


                                       35
<PAGE>

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

12.   DEPOSITS

      Deposit accounts are summarized as follows:

<TABLE>
<CAPTION>
                                                   2005                          2004
                                       ---------------------------    ---------------------------
                                                       Percent of                     Percent of
                                          Amount       Portfolio         Amount       Portfolio
                                       ------------   ------------    ------------   ------------
<S>                                    <C>              <C>           <C>              <C>
Noninterest-earning checking           $     11,926            7.2%   $     10,996            6.8%
Interest-earning checking                    25,396           15.4          22,897           14.3
Savings accounts                             44,323           26.9          45,837           28.5
Money market accounts                        13,625            8.3          14,226            8.9
Advance payments by borrowers
   for taxes and insurance                    1,117            0.7           1,245            0.7
                                       ------------   ------------    ------------   ------------
                                             96,387           58.5          95,201           59.2
                                       ------------   ------------    ------------   ------------
Savings certificates:
     2.00% or less                           16,044            9.7          38,528           24.0
     2.01 - 4.00%                            44,895           27.3          16,875           10.5
     4.01 - 6.00%                             6,605            4.0           8,604            5.4
     6.01 - 6.95%                               775            0.5           1,355            0.9
                                       ------------   ------------    ------------   ------------
                                             68,319           41.5          65,362           40.8
                                       ------------   ------------    ------------   ------------
     Total                             $    164,706          100.0%   $    160,563          100.0%
                                       ============   ============    ============   ============
</TABLE>

      The maturities of savings certificates at June 30, 2005, are summarized as
      follows:

Within one year                                                     $     43,811
Beyond one year but within two years                                      11,826
Beyond two years but within three years                                    4,859
Beyond three years                                                         7,823
                                                                    ------------

     Total                                                          $     68,319
                                                                    ============

      Savings certificates with balances of $100,000 or more amounted to $13,513
      and $6,944 on June 30, 2005 and 2004, respectively.

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

<TABLE>
<CAPTION>
                                                      2005           2004           2003
                                                  ------------   ------------   ------------
<S>                                               <C>            <C>            <C>
Interest-earning checking accounts                $         14   $         32   $         42
Savings accounts                                           311            334            509
Money market accounts                                      166            109            183
Savings certificates                                     1,734          1,831          2,554
Advance payments by borrowers for taxes
  and insurance                                             13             15             24
                                                  ------------   ------------   ------------

     Total                                        $      2,238   $      2,321   $      3,312
                                                  ============   ============   ============
</TABLE>


                                       36
<PAGE>

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

13.   FEDERAL HOME LOAN BANK ADVANCES

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

<TABLE>
<CAPTION>
                                      Weighted-     Stated interest
                 Maturity range        average         rate range
Description     from        to      interest rate   from         to       2005        2004
-----------   --------   --------   -------------  ------      ------   --------   --------
<S>           <C>       <C>            <C>         <C>         <C>     <C>        <C>
Convertible   02/20/08   06/22/16       5.47%       4.96%       6.10%   $137,500   $144,500
Fixed rate    03/16/06   05/03/10       4.97        2.91        5.43       5,236      5,236
                                                                        --------   --------

                                                                        $142,736   $149,736
                                                                        ========   ========
</TABLE>

      Maturities of FHLB long-term  advances at June 30, 2005, are summarized as
      follows:

                                              Weighted-
        Maturing During                        Average
       Fiscal Year Ended                      Interest
            June 30:            Amount          Rate
      --------------------   ------------   ------------

              2006           $      4,157       5.42%
              2008                  3,000       5.48
              2009                 10,500       4.99
              2010                 20,579       5.86
      2011 and thereafter         104,500       5.42
                             ------------

             Total           $    142,736       5.45%
                             ============

      The terms of the  convertible  advances  reset to the  three-month  London
      Interbank  Offered Rate ("LIBOR") and have various  spreads and call dates
      ranging  from  three  months  to seven  years.  The FHLB has the  right to
      convert  from  a  fixed  rate  to a  predetermined  floating  rate  on its
      conversion date or quarterly thereafter.  Should the advance be converted,
      the Company has the right to pay off the advance without penalty. The FHLB
      advances are secured by the Company's FHLB stock and investment securities
      and are subject to substantial prepayment penalties.

      The  Company  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:

                                                             2005        2004
                                                           --------    --------

FHLB revolving and short-term advances:
     Ending balance                                        $ 12,300    $     --
     Average balance during the year                          3,021         336
     Maximum month-end balance during the year               35,400       2,250
     Average interest rate during the year                     2.63%       2.24%
     Weighted-average rate at year end                         3.31%         --%

      At June 30, 2005,  the Company had remaining  intermediate  term (maturing
      within five years) borrowing  capacity with the FHLB of approximately $115
      million.

      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.


                                       37
<PAGE>

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

14.   OTHER BORROWINGS

      Other  borrowings  include  securities sold under agreements to repurchase
      with securities brokers. The outstanding  repurchase  agreements generally
      mature  within 1 to 90 days  from  the  transaction  date  and  qualifying
      collateral has been delivered.  The Company pledged investment  securities
      with a carrying  value of $69,775  and  $91,866 at June 30, 2005 and 2004,
      respectively,  as collateral for the repurchase agreements as explained in
      Note  4.  The  following  table  presents   information   regarding  other
      borrowings as of June 30:

                                                        2005           2004
                                                    ------------   ------------

Ending balance                                      $     69,680   $     91,639
Average balance during the year                           65,578         48,749
Maximum month-end balance during the year                117,976         93,639
Average interest rate during the year                       2.27%          1.12%
Weighted-average rate at year end                           3.29%          1.28%

15.   COMMITMENTS AND CONTINGENT LIABILITIES

      Loan Commitments

      In the normal course of business,  there are various  commitments that are
      not  reflected  in the  Bank's  financial  statements.  These  instruments
      involve, to varying degrees,  elements of credit and interest rate risk in
      excess of the amount  recognized in the  consolidated  balance sheet.  The
      Bank's exposure to credit loss in the event of nonperformance by the other
      parties to the financial  instruments is  represented  by the  contractual
      amounts as  disclosed.  Losses,  if any, are charged to the  allowance for
      loan losses.  Management minimizes its exposure to credit loss under these
      commitments by subjecting them to credit approval, review procedures,  and
      collateral  requirements  as deemed  necessary.  Various loan  commitments
      totaling  $20,473  and  $20,213 at June 30,  2005 and 2004,  respectively,
      represent   financial   instruments  with  off-balance   sheet  risk.  The
      commitments  outstanding  at June 30, 2005,  contractually  mature in less
      than one year.

      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.

      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 composed  primarily of the undisbursed
      portion of construction and land development loans (Note 7),  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 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.


                                       38
<PAGE>

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

16.   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, 2005 and 2004,  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 10 percent, 6 percent, and 5 percent, respectively.

      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, 2005
                                           ------------------------------------------
                                                   WVS                 West View
                                           -------------------    -------------------
                                            Amount     Ratio       Amount      Ratio
                                           --------   --------    --------   --------
<S>                                        <C>           <C>      <C>           <C>

Total Capital (to Risk-Weighted Assets)
---------------------------------------

Actual                                     $ 30,172      21.80%   $ 28,417      20.74%
To Be Well Capitalized                       13,838      10.00      13,702      10.00
For Capital Adequacy Purposes                11,070       8.00      10,961       8.00

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

Actual                                     $ 29,051      20.99%   $ 27,296      19.92%
To Be Well Capitalized                        8,303       6.00       8,221       6.00
For Capital Adequacy Purposes                 5,535       4.00       5,481       4.00

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

Actual                                     $ 29,051       7.14%   $ 27,296       6.73%
To Be Well Capitalized                       20,357       5.00      20,283       5.00
For Capital Adequacy Purposes                16,285       4.00      16,227       4.00

</TABLE>


                                       39
<PAGE>

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

16.   REGULATORY CAPITAL (Continued)

<TABLE>
<CAPTION>
                                                        June 30, 2004
                                           ------------------------------------------
                                                   WVS                 West View
                                           -------------------    -------------------
                                            Amount     Ratio       Amount      Ratio
                                           --------   --------    --------   --------
<S>                                        <C>           <C>      <C>           <C>
Total Capital (to Risk-Weighted Assets)
---------------------------------------

Actual                                     $ 30,416      19.62%   $ 27,524      17.98%
To Be Well Capitalized                       15,507      10.00      15,306      10.00
For Capital Adequacy Purposes                12,405       8.00      12,245       8.00

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

Actual                                     $ 28,918      18.65%   $ 26,155      17.09%
To Be Well Capitalized                        9,304       6.00       9,184       6.00
For Capital Adequacy Purposes                 6,203       4.00       6,123       4.00

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

Actual                                     $ 28,918       6.92%   $ 26,155       6.30%
To Be Well Capitalized                       20,860       5.00      20,743       5.00
For Capital Adequacy Purposes                16,688       4.00      16,594       4.00

</TABLE>

      Prior to the  enactment  of the Small  Business  Job  Protection  Act, the
      Company accumulated approximately $3.9 million of retained earnings, which
      represent  allocations  of income to bad debt  deductions for tax purposes
      only.  Since there is no amount that  represents the  accumulated bad debt
      reserves  subsequent to 1987, no provision for federal income tax has been
      made for such amount.  If any portion of this amount is used other than to
      absorb loan losses (which is not anticipated),  the amount will be subject
      to federal income tax at the current corporate rate.

17.   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 was 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.


                                       40
<PAGE>

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

17.   STOCK BENEFIT PLANS (Continued)

      Stock Option Plan (Continued)
      -----------------

      The  following  table  presents  information  related  to the  outstanding
      options:

                                  Officers' and                     Weighted-
                                   Employees'      Directors'        Average
                                     Stock           Stock          Exercise
                                    Options         Options           Price
                                  ------------    ------------    ------------

Outstanding, June 30, 2002              78,412           6,414    $      14.80

     Granted                                --              --
     Exercised                          (4,992)         (1,200)          11.40
     Forfeited                              --              --
                                  ------------    ------------

Outstanding, June 30, 2003              73,420           5,214    $      15.07

     Granted                                --              --
     Exercised                         (34,028)           (800)          15.19
     Foreited                              (80)             --            5.00
                                  ------------    ------------

Outstanding, June 30, 2004              39,312           4,414    $      14.99

     Granted                                --              --
     Exercised                              --              --
     Forfeited                              --              --
                                  ------------    ------------

Outstanding, June 30, 2005              39,312           4,414    $      14.99
                                  ============    ============
Exercisable at year end                 39,312           4,414    $      14.99
                                  ============    ============

Available for future grant                  --              --
                                  ============    ============

      At June 30, 2005,  for officers and  employees  there were 39,312  options
      outstanding,  exercisable at a weighted-average  exercise price of $15.03,
      and a weighted-average remaining contractual life of 2.84 years.

      There were also 4,414 options  outstanding  and  exercisable for directors
      with a  weighted-average  exercise price of $14.70, and a weighted-average
      remaining contractual life of 4.33 years.


                                       41
<PAGE>

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

17.   STOCK BENEFIT PLANS (Continued)

      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.

      The RRP expired  during 2004 and all  unissued  shares were  retired.  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 $1, $5, and $23 for the years  ended
      June 30, 2005, 2004, and 2003.

      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.  Compensation  expense for the ESOP was $100, $100, and
      $100 for the years  ended June 30,  2005,  2004,  and 2003,  respectively.
      Total ESOP shares as of June 30, 2005 and 2004,  were 232,031 and 225,565,
      respectively.

18.   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  made no  contributions  to the Plan for the three years ended
      June 30, 2005, 2004, and 2003.

      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, 2005,  2004,  and 2003,  29,979,  39,539,  and
      37,939 shares, respectively, were held by the Plan.


                                       42
<PAGE>

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

19.   INCOME TAXES

      The provision for income taxes consists of:

                                               2005         2004         2003
                                            ----------   ----------   ----------
Currently payable:
     Federal                                $      475   $      366   $      794
     State                                          79           82          233
                                            ----------   ----------   ----------
                                                   554          448        1,027
Deferred                                            73          171           43
                                            ----------   ----------   ----------

     Total                                  $      627   $      619   $    1,070
                                            ==========   ==========   ==========

      The  following  temporary  differences  gave rise to the net  deferred tax
      assets at June 30:

                                                               2005       2004
                                                             --------   --------
Deferred tax assets:
     Allowance for loan losses                               $    381   $    466
     Deferred compensation                                        294        270
     Accrued interest receivable on loans                         233        225
     Net operating loss carryforward                               --         72
     Alternative minimum tax credit                               206        174
                                                             --------   --------
             Total gross deferred tax assets                    1,114      1,207
                                                             --------   --------

Deferred tax liabilities:
     Net unrealized gain on securities available for sale          77        145
     Deferred origination fees, net                               200        209
     Premises and equipment                                        56         67
                                                             --------   --------
             Total gross deferred tax liabilities                 333        421
                                                             --------   --------

     Net deferred tax assets                                 $    781   $    786
                                                             ========   ========

      No valuation  allowance was established at June 30, 2005 and 2004, in view
      of the  Company's  ability to carryback  to taxes paid in previous  years,
      future  anticipated  taxable  income,  which is evidenced by the Company's
      earnings potential, and deferred tax liabilities at June 30.


                                       43
<PAGE>

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

19.   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>
                                           2005                     2004                    2003
                                   --------------------     --------------------     --------------------
                                                 % of                     % of                     % of
                                                Pretax                   Pretax                   Pretax
                                    Amount      Income       Amount      Income       Amount      Income
                                   --------------------     --------------------     --------------------
<S>                                <C>             <C>      <C>             <C>      <C>             <C>
Provision at statutory rate        $  1,202        34.0%    $    993        34.0%    $  1,502        34.0%
State income tax, net of federal
  tax benefit                            52         1.5           54         1.9          154         3.5
Tax exempt income                      (553)      (15.6)        (558)      (19.1)        (549)      (12.4)
Other, net                              (74)       (2.2)         130         4.4          (37)       (0.9)
                                   --------    --------     --------    --------     --------    --------

Actual tax expense and
  effective rate                   $    627        17.7%    $    619        21.2%    $  1,070        24.2%
                                   ========    ========     ========    ========     ========    ========
</TABLE>

      The Bank is subject to the Pennsylvania  Mutual Thrift  Institutions  Tax,
      which is calculated at 11.5 percent of earnings.

20.   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, 2005 and 2004, the Savings Bank had required reserves of $923 and
      $808,  respectively.  The required  reserves are held in the form of vault
      cash and a  non-interest-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 10 percent of the  Savings  Bank's
      capital surplus.

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

      The  Savings  Bank is  subject to the  Pennsylvania  Banking  Code,  which
      restricts the availability of surplus for dividend  purposes.  At June 30,
      2005, surplus funds of $3,363 were not available for dividends.


                                       44
<PAGE>

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

21.   FAIR VALUE OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
                                          2005                         2004
                              ---------------------------   ---------------------------
                                Carrying         Fair         Carrying         Fair
                                 Amount          Value         Amount          Value
                              ------------   ------------   ------------   ------------
<S>                           <C>            <C>            <C>            <C>
FINANCIAL ASSETS
Cash and cash equivalents     $      3,566   $      3,566   $      3,054   $      3,054
Trading securities                      --             --            993            993
Investment securities              183,066        183,478        273,589        275,519
Mortgage-backed securities         162,151        162,686         75,590         75,456
Net loans receivable                60,151         62,297         67,968         70,170
Accrued interest receivable          2,057          2,057          2,456          2,456
FHLB stock                           7,769          7,769          7,532          7,532

FINANCIAL LIABILITIES
Deposits                      $    164,706   $    164,593   $    160,563   $    160,657
FHLB advances                      155,036        159,511        149,736        153,944
Other borrowings                    69,680         69,680         91,639         91,639
Accrued interest payable             1,260          1,260          1,197          1,197

</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:


                                       45
<PAGE>

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

21.   FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

      Cash and  Cash  Equivalents,  Interest-Earning  Demand  Deposits,  Trading
      --------------------------------------------------------------------------
      Securities, 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 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
      -------------

      The fair values 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 15 to these financial statements.


                                       46
<PAGE>

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

22.   PARENT COMPANY

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

                             CONDENSED BALANCE SHEET

                                                                 June 30,
                                                             2005         2004
                                                         ----------   ----------
ASSETS
  Interest-earning deposits with subsidiary bank         $      402   $      868
  Investment securities available for sale                    1,333        2,120
  Investment in subsidiary bank                              27,446       26,257
  Accrued interest receivable and other assets                   28           64
                                                         ----------   ----------

TOTAL ASSETS                                             $   29,209   $   29,309
                                                         ==========   ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Other liabilities                                      $        8   $      110
  Stockholders' equity                                       29,201       29,199
                                                         ----------   ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $   29,209   $   29,309
                                                         ==========   ==========


                                                          Year Ended June 30,
                                                      2005      2004      2003
                                                    --------  --------  --------
INCOME
  Loans                                             $     --  $      2  $     27
  Investment and mortgage-backed securities               52        89       111
  Dividend from subsidiary                             1,600     1,300     2,400
  Investment securities gains, net                       332        20        64
  Interest-earning deposits with subsidiary bank           3        10        33
                                                    --------  --------  --------

Total income                                           1,987     1,421     2,635
                                                    --------  --------  --------


OTHER OPERATING EXPENSE                                  101       104       111
                                                    --------  --------  --------

  Income before equity in undistributed
    earnings of subsidiary                             1,886     1,317     2,524
  Equity in undistributed earnings of subsidiary       1,114       983       840
                                                    --------  --------  --------

  Income before income taxes                           3,000     2,300     3,364
  Income tax expense (benefit)                            91        (2)       16
                                                    --------  --------  --------

NET INCOME                                          $  2,909  $  2,302  $  3,348
                                                    ========  ========  ========


                                       47
<PAGE>

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

22.   PARENT COMPANY (Continued)

<TABLE>
<CAPTION>
                                                                 Year Ended June 30,
                                                             2005        2004        2003
                                                           --------    --------    --------
<S>                                                        <C>         <C>         <C>
OPERATING ACTIVITIES
    Net income                                             $  2,909    $  2,302    $  3,348
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Undistributed net income of subsidiary               (1,114)       (983)       (840)
         Investment securities gains                           (332)        (20)        (64)
        Amortization (accretion) of investment discounts
         and premiums, net                                       --          (3)         22
        Other, net                                               62         119          45
                                                           --------    --------    --------
    Net cash provided by operating activities                 1,525       1,415       2,511
                                                           --------    --------    --------

INVESTING ACTIVITIES
    Available for sale:
        Purchase of investment and
          mortgage-backed securities                         (1,550)     (3,321)     (4,934)
        Proceeds from repayments of investment and
          mortgage-backed securities                          1,422       5,183       2,582
        Proceeds from sales of investment securities            913         251         639
    Held to maturity:
        Purchases of investment and mortgage-backed
          securities                                             --      (3,199)     (1,817)
        Proceeds from repayments of investment and
          mortgage-backed securities                             --       3,451       1,555
        Net decrease in loans receivable                         --         115         354
                                                           --------    --------    --------
    Net cash provided by (used for) investing activities        785       2,480      (1,621)
                                                           --------    --------    --------

FINANCING ACTIVITIES
    Net proceeds from exercise of stock options                  --         489          71
    Cash dividends paid                                      (1,559)     (1,624)     (1,674)
    Purchases of treasury stock                              (1,217)     (2,610)     (1,634)
                                                           --------    --------    --------
    Net cash used for financing activities                   (2,776)     (3,745)     (3,237)
                                                           --------    --------    --------

    Increase (decrease) in cash and cash equivalents           (466)        150      (2,347)

CASH AND CASH EQUIVALENTS
  BEGINNING OF YEAR                                             868         718       3,065
                                                           --------    --------    --------

CASH AND CASH EQUIVALENTS
  END OF YEAR                                              $    402    $    868    $    718
                                                           ========    ========    ========
</TABLE>


                                       48
<PAGE>

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

23.   SELECTED QUARTERLY FINANCIAL DATA (unaudited)

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                       ------------------------------------------------------------
                                        September        December          March           June
                                           2004            2004            2005            2005
                                       ------------    ------------    ------------    ------------
<S>                                    <C>             <C>             <C>             <C>
Total interest and dividend income     $      4,430    $      4,405    $      4,509    $      4,530
Total interest expense                        2,752           2,977           3,018           3,097
                                       ------------    ------------    ------------    ------------

Net interest income                           1,678           1,428           1,491           1,433
Provision (recovery) for loan losses             78              (7)             (5)           (112)
                                       ------------    ------------    ------------    ------------

Net interest income after
  provision for loan losses                   1,600           1,435           1,496           1,545

Total noninterest income                        408             266             159             159
Total noninterest expense                       878             903             891             860
                                       ------------    ------------    ------------    ------------

Income before income taxes                    1,130             798             764             844
Income taxes                                    296             209             200             (78)
                                       ------------    ------------    ------------    ------------

Net income                             $        834    $        589    $        564    $        922
                                       ============    ============    ============    ============

Per share data:
Net income
     Basic                             $       0.34    $       0.24    $       0.23    $       0.38
     Diluted                                   0.34            0.24            0.23            0.38
Average shares outstanding
     Basic                                2,453,189       2,445,349       2,430,679       2,399,463
     Diluted                              2,458,926       2,451,242       2,435,935       2,404,097

</TABLE>


                                       49
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                       ------------------------------------------------------------
                                        September        December          March           June
                                           2003            2003            2004            2004
                                       ------------    ------------    ------------    ------------
<S>                                    <C>             <C>             <C>             <C>
Total interest and dividend income     $      3,811    $      3,956    $      4,067    $      4,172
Total interest expense                        2,769           2,760           2,716           2,742
                                       ------------    ------------    ------------    ------------

Net interest income                           1,042           1,196           1,351           1,430
Provision (recovery) for loan losses           (133)           (624)            (14)            (23)
                                       ------------    ------------    ------------    ------------

Net interest income after
  provision for loan losses                   1,175           1,820           1,365           1,453

Total noninterest income                        194             161             163             197
Total noninterest expense                       892             938             899             878
                                       ------------    ------------    ------------    ------------

Income before income taxes                      477           1,043             629             772
Income taxes                                    125             273             165              56
                                       ------------    ------------    ------------    ------------

Net income                             $        352    $        770    $        464    $        716
                                       ============    ============    ============    ============

Per share data:
Net income
     Basic                             $       0.14    $       0.30    $       0.18    $       0.29
     Diluted                                   0.14            0.30            0.18            0.29
Average shares outstanding
     Basic                                2,575,242       2,560,420       2,525,612       2,481,206
     Diluted                              2,585,081       2,569,578       2,533,697       2,488,556

</TABLE>


                                       50
<PAGE>

      COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION

      WVS Financial  Corp.'s common stock is traded 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 2005                      $ 17.250       $ 16.600             $0.16
March 2005                       18.140         16.250              0.16
December 2004                    18.100         16.000              0.16
September 2004                   18.000         16.000              0.16

June 2004                      $ 19.400       $ 17.110             $0.16
March 2004                       19.980         17.350              0.16
December 2003                    18.400         16.810              0.16
September 2003                   18.650         16.500              0.16

      There were eight Nasdaq Market Makers in the Company's  common stock as of
      June 30, 2005:  Boenning & Scattergood  Inc.;  Sandler O'Neill & Partners;
      Boston Stock Exchange;  Ryan Beck & Co., Inc.;  Morgan Stanley & Co., Inc;
      UBS  Securities  LLC;  Hill,  Thompson,  Magid and Co. and  Knight  Equity
      Markets, L.P.

      According  to the  records of the  Company's  transfer  agent,  there were
      approximately  750  shareholders of record at September 7, 2005. 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.


                                       51
<PAGE>

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

<S>                                                     <C>
              COMMON STOCK                                      BOARD OF DIRECTORS
 The common stock of WVS Financial  Corp.
  is traded on The Nasdaq Stock Market
      SM under the symbol "WVFC".                                David L. Aeberli
                                                                 Funeral Director
      TRANSFER AGENT & REGISTRAR                        McDonald-Aeberli Funeral Home, Inc.
   Registrar and Transfer Company
          10 Commerce Drive                                      Arthur H. Brandt
         Cranford, NJ 07016                                  Former President and CEO
           1-800-368-5948                                    Brandt Excavating, Inc. and
                                                                  Brandt Paving, Inc.
       CORPORATE SECRETARY AND
         INVESTOR RELATIONS                                       David J. Bursic
           Pamela M. Tracy                             President and Chief Executive Officer
            412-364-1911                                      WVS Financial Corp. and
                                                              West View Savings Bank
              COUNSEL
          Bruggeman & Linn                                        Donald E. Hook
                                                                     Chairman
           SPECIAL COUNSEL                                   Pittsburgh Cut Flower Co.
Elias, Matz, Tiernan & Herrick L.L.P.
            Washington, DC                                      Lawrence M. Lehman
                                                                  Sole Proprietor
                                                          Newton-Lehman Insurance Agency

                                                                 John M. Seifarth
       WEST VIEW SAVINGS BANK                              Senior Engineer - Consultant
         9001 Perry Highway                             Nichols & Slagle Engineering, Inc.
        Pittsburgh, PA  15237
            412-364-1911                                         Margaret VonDerau
                                                           Former Senior Vice President
          WEST VIEW OFFICE                                    and Corporate Secretary
          456 Perry Highway                                   WVS Financial Corp. and
            412-931-2171                                      West View Savings Bank

          CRANBERRY OFFICE
         20531 Perry Highway                                    EXECUTIVE OFFICERS
      412-931-6080/724-776-3480
                                                                  Donald E. Hook
        FRANKLIN PARK OFFICE                                         Chairman
       2566 Brandt School Road
            724-935-7100                                          David J. Bursic
                                                                   President and
           BELLEVUE OFFICE                                    Chief Executive Officer
         572 Lincoln Avenue
            412-761-5595                                        Jonathan D. Hoover
                                                         Vice President of Bank Operations
        SHERWOOD OAKS OFFICE
        Serving Sherwood Oaks                                    Bernard P. Lefke
           Cranberry Twp.                                    Vice President of Savings

          LENDING DIVISION                                       Keith A. Simpson
       2566 Brandt School Road                            Vice President, Treasurer and
            724-935-7400                                     Chief Accounting Officer

</TABLE>

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