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

                                    FORM 10-K

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

                    For the fiscal year ended: June 30, 2004

                                       OR

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

             For the transition period from __________ to __________

                          Commission File No.: 0-22444

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

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

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes |X| No |_|

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).

Yes |_| No |X|

As of December 31, 2003, the aggregate  value of the 2,067,977  shares of Common
Stock of the  registrant  issued and  outstanding  on such date,  which excludes
477,928  shares held by all directors and officers of the registrant as a group,
was  approximately  $36.2 million.  This figure is based on the last known trade
price of $17.50 per share of the registrant's Common Stock on December 31, 2003.

Number of shares of Common Stock outstanding as of September 22, 2004: 2,446,624

                       DOCUMENTS INCORPORATED BY REFERENCE

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

(1)   Portions of the Annual  Report to  Stockholders  for the fiscal year ended
      June 30, 2004 are incorporated into Parts II and IV.

(2)   Portions of the definitive  proxy statement for the 2004 Annual Meeting of
      Stockholders are incorporated into Part III.


<PAGE>

PART I.

Item 1.  Business.
-------  ---------

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

      West View Savings  Bank is a  Pennsylvania-chartered,  SAIF-insured  stock
savings bank conducting  business from six offices in the North Hills suburbs of
Pittsburgh.  The  Savings  Bank  converted  to the stock  form of  ownership  in
November 1993. The Savings Bank had no subsidiaries at June 30, 2004.

Lending Activities

      General. At June 30, 2004, the Company's net portfolio of loans receivable
totaled $68.0 million,  as compared to $91.7 million at June 30, 2003. Net loans
receivable  comprised  15.7% of Company total assets and 42.3% of total deposits
at June 30,  2004,  as  compared to 25.0% and 53.6%,  respectively,  at June 30,
2003.  The  principal  categories  of  loans  in  the  Company's  portfolio  are
single-family  and multi-family  residential real estate loans,  commercial real
estate  loans,   construction  loans,   consumer  loans,  land  acquisition  and
development  loans and  commercial  loans.  Substantially  all of the  Company's
mortgage loan portfolio consists of conventional mortgage loans, which are loans
that are  neither  insured by the  Federal  Housing  Administration  ("FHA") nor
partially guaranteed by the Department of Veterans Affairs ("VA"). Historically,
the  Company's  lending  activities  have  been  concentrated  in  single-family
residential  loans secured by properties  located in its primary  market area of
northern  Allegheny  County,  southern  Butler County and eastern Beaver County,
Pennsylvania.

      On  occasion,  the  Company  has  also  purchased  whole  loans  and  loan
participations  secured by properties located outside of its primary market area
but predominantly in Pennsylvania.  The Company believes that  substantially all
of its  mortgage  loans are  secured  by  properties  located  in  Pennsylvania.
Moreover,  substantially  all  of  the  Company's  non-mortgage  loan  portfolio
consists of loans made to  residents  and  businesses  located in the  Company's
primary market area.

      Federal  regulations  impose  limitations on the aggregate amount of loans
that a  savings  institution  can make to any one  borrower,  including  related
entities.  The permissible amount of loans-to-one  borrower follows the national
bank standard for all loans made by savings  institutions,  which generally does
not  permit  loans-to-one  borrower  to exceed  15% of  unimpaired  capital  and
surplus. Loans in an amount equal to an additional 10% of unimpaired capital and
surplus also may be made to a borrower if the loans are fully secured by readily
marketable   securities.   At  June  30,  2004,  the  Savings  Bank's  limit  on
loans-to-one  borrower was  approximately  $3.9 million.  The Company's  general
policy has been to limit loans-to-one  borrower,  including related entities, to
$2.0 million although this general limit may be exceeded based on the merit of a
particular  credit. At June 30, 2004, the Company's five largest loans or groups
of loans-to-one borrower,  including related entities,  ranged from an aggregate
of $1.8  million to $3.1  million,  and are  secured  primarily  by real  estate
located in the Company's primary market area.


                                       2
<PAGE>

      Loan Portfolio Composition. The following table sets forth the composition
of the  Company's  net loans  receivable  portfolio by type of loan at the dates
indicated.

<TABLE>
<CAPTION>
                                                                      At June 30,
                     --------------------------------------------------------------------------------------------------------------
                            2004                   2003                   2002                  2001                   2000
                     -------------------    -------------------    -------------------    -------------------    -------------------
                      Amount        %        Amount        %        Amount        %        Amount        %        Amount        %
                      ------       ---       ------       ---       ------       ---       ------       ---       ------       ---
                                                                 (Dollars in Thousands)
<S>                  <C>         <C>        <C>         <C>        <C>         <C>        <C>         <C>        <C>         <C>
Real estate loans:
Single-family        $ 25,825     32.52%    $ 43,255     40.91%    $ 89,889     53.69%    $105,623     51.50%    $105,964     52.49%
Multi-family            4,761      5.99        5,196      4.92        6,173      3.69        6,920      3.37        6,077      3.01
Commercial              9,950     12.53       17,949     16.98       25,439     15.19       34,955     17.05       32,847     16.27
Construction           18,070     22.76       16,942     16.03       19,965     11.92       28,157     13.73       26,935     13.34
Land acquisition
 and development        7,947     10.01        7,437      7.03        6,691      4.00        6,343      3.09        7,510      3.72
                     --------    ------     --------    ------     --------    ------     --------    ------     --------    ------
Total real estate
  Loans                66,553     83.81       90,779     85.87      148,157     88.49      181,998     88.74      179,333     88.83
                     --------    ------     --------    ------     --------    ------     --------    ------     --------    ------
Consumer loans:
Home equity            11,018     13.88       12,374     11.70       16,319      9.75       19,142      9.33       18,558      9.19
Education                  --      0.00           --      0.00            1      0.00           31      0.02           57      0.03
Other                     870      1.09        1,069      1.01        1,514      0.90        2,092      1.02        2,062      1.02
                     --------    ------     --------    ------     --------    ------     --------    ------     --------    ------
Total consumer
  Loans                11,888     14.97       13,443     12.71       17,834     10.65       21,265     10.37       20,677     10.24
                     --------    ------     --------    ------     --------    ------     --------    ------     --------    ------
Commercial loans          968      1.22        1,499      1.42        1,447      0.86        1,819      0.89        1,879      0.93
                     --------    ------     --------    ------     --------    ------     --------    ------     --------    ------
Commercial lease
  Financings               --      0.00           --      0.00           --      0.00           --      0.00           --      0.00
                     --------    ------     --------    ------     --------    ------     --------    ------     --------    ------
                       79,409    100.00%     105,721    100.00%     167,438    100.00%     205,082    100.00%     201,889    100.00%
                     --------    ======     --------    ======     --------    ======     --------    ======     --------    ======
Less:
Undisbursed loan
  Proceeds             (9,956)               (11,348)               (11,311)               (16,481)               (15,820)
Net deferred loan
  Origination fees       (115)                  (174)                  (464)                  (659)                  (801)
Allowance for loan
  Losses               (1,370)                (2,530)                (2,758)                (2,763)                (1,973)
                     --------               --------               --------               --------               --------
Net loans
  Receivable         $ 67,968               $ 91,669               $152,905               $185,179               $183,295
                     ========               ========               ========               ========               ========
</TABLE>

      Contractual  Maturities.  The  following  table sets  forth the  scheduled
contractual maturities of the Company's loans and mortgage-backed  securities at
June 30, 2004.  The amounts  shown for each period do not take into account loan
prepayments and normal amortization of the Company's loan portfolio.

<TABLE>
<CAPTION>
                                                   Real Estate Loans
                               --------------------------------------------------------------
                                                                                     Land         Consumer
                                                                                  acquisition    loans and     Mortgage-
                                Single-     Multi-                                    and        commercial     backed
                                family      family      Commercial  Construction  development      loans      securities      Total
                                ------      ------      ----------  ------------  -----------      -----      ----------      -----
                                                                     (Dollars in Thousands)
<S>                            <C>          <C>          <C>          <C>           <C>           <C>          <C>          <C>
Amounts due in:
  One year or less             $  1,637     $     --     $  1,026     $ 15,941      $  3,247      $    778     $     --     $ 22,629
  After one year through
     Five years                   2,159           17        2,256        1,917         4,661         2,791           44       13,845
  After five years               22,029        4,744        6,668          212            39         9,287       75,546      118,525
                               --------     --------     --------     --------      --------      --------     --------     --------
     Total(1)                  $ 25,825     $  4,761     $  9,950     $ 18,070      $  7,947      $ 12,856     $ 75,590     $154,999
                               ========     ========     ========     ========      ========      ========     ========     ========

Interest rate terms on amounts due after one year:
  Fixed                        $ 20,740     $    483     $  5,850     $  1,804      $    466      $  7,349     $  6,047     $ 42,739
  Adjustable                      3,448        4,278        3,074          325         4,234         4,729       69,543       89,631
                               --------     --------     --------     --------      --------      --------     --------     --------
     Total                     $ 24,188     $  4,761     $  8,924     $  2,129      $  4,700      $ 12,078     $ 75,590     $132,370
                               ========     ========     ========     ========      ========      ========     ========     ========
</TABLE>

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


                                       3
<PAGE>

      Scheduled  contractual  principal  repayments  do not  reflect  the actual
maturities of loans. The average  maturity of loans is  substantially  less than
their average contractual terms because of prepayments and due-on-sale  clauses.
The average life of mortgage loans tends to increase when current  mortgage loan
rates are  substantially  higher  than  rates on  existing  mortgage  loans and,
conversely,  decrease when rates on existing mortgages are substantially  higher
than current  mortgage loan rates (due to  refinancings of  adjustable-rate  and
fixed-rate loans at lower rates).

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

      At June 30, 2004,  the Company had  approximately  $4.7 million of renewed
commercial  real estate and  construction  loans.  The $4.7 million in aggregate
disbursed  principal  that has been renewed is comprised  of:  construction  and
business  lines  of  credit  totaling  $2.7  million  and land  acquisition  and
single-family  speculative construction loans totaling $2.0 million.  Management
believes that the previously  discussed whole loans will  self-liquidate  during
the  normal  course  of  business,  though  some  additional  rollovers  may  be
necessary.  All of the loans that have been rolled over, as discussed above, are
in  compliance  with all loan  terms,  including  the  receipt  of all  required
payments, and are considered performing loans.

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

      All processing  and  underwriting  of real estate and commercial  business
loans is performed  solely at the  Company's  loan division at the Franklin Park
office.  The Company believes this  centralized  approach to approving such loan
applications  allows it to process and approve such applications faster and with
greater  efficiency.  The Company also believes that this approach increases its
ability to service the loans. The Savings Bank's Director of Retail Lending, and
its Manager of Commercial  Lending,  have individual lending authorities ranging
from $5 thousand  (unsecured  loans) to $300  thousand  (loans  secured by first
mortgage liens). On a joint basis, the  aforementioned  individuals would have a
combined  lending  authority  ranging  from $7.5  thousand  (unsecured)  to $500
thousand (loans secured by a first  mortgage).  With the approval of the Savings
Bank's  President,  the individual  lending  authorities range from $25 thousand
(unsecured),  $500 thousand (loans secured by non-real estate collateral),  $750
thousand (first and second mortgages) and $2 million on secured builder lines of
credit.  All loan applications are required to be ratified by the Company's Loan
Committee,  comprised of both outside  directors and management,  which meets at
least monthly.

      Historically,  the Company has originated  substantially  all of the loans
retained in its  portfolio.  Substantially  all of the  residential  real estate
loans  originated  by  the  Company  have  been  under  terms,   conditions  and
documentation   which  permit  their  sale  to  the  Federal  National  Mortgage
Association and other investors in the secondary market.  Although West View has
not been a frequent seller of loans in the secondary market, the Savings Bank is
on the Federal National Mortgage Association approved list of sellers/servicers.
The Company has held most of the loans it originates in its own portfolio  until
maturity, due, in part, to competitive pricing conditions in the marketplace for
origination by nationwide lenders and portfolio lenders. During fiscal 2004, the
Company sold a $979 thousand  participation interest in a commercial real estate
loan and a $17  thousand  home  equity  line of  credit.  The  Company  retained
servicing  rights with respect to the commercial real estate loan  participation
sold.


                                       4
<PAGE>

      The Company has not been an aggressive  purchaser of loans.  However,  the
Company may purchase whole loans or loan participations in those instances where
demand for new loan originations in the Company's market area is insufficient or
to increase the yield  earned on the loan  portfolio.  Such loans are  generally
presented  to  the  Company   from   contacts   primarily  at  other   financial
institutions,  particularly  those which have  previously done business with the
Company.  At June 30,  2004,  $1.2  million or 1.8% of the  Company's  net loans
receivable  consisted  of  single-family  mortgage  whole loans  purchased  from
another financial institution.

      The  Company   requires  that  all  purchased  loans  be  underwritten  in
accordance with its underwriting  guidelines and standards.  The Company reviews
loans, particularly scrutinizing the borrower's ability to repay the obligation,
the  appraisal  and  the  loan-to-value  ratio.   Servicing  of  loans  or  loan
participations  purchased  by the Company  generally is performed by the seller,
with a portion of the interest being paid by the borrower retained by the seller
to  cover  servicing  costs.  At June  30,  2004,  $1.1  million  or 1.6% of the
Company's total loans receivable were being serviced for the Company by others.

      The following table shows  origination,  purchase and sale activity of the
Company  with  respect  to loans on a  consolidated  basis  during  the  periods
indicated.

<TABLE>
<CAPTION>
                                                   At or For the Year Ended June 30,
                                                --------------------------------------
                                                   2004          2003           2002
                                                   ----          ----           ----
                                                         (Dollars in Thousands)
<S>                                              <C>           <C>           <C>
Net loans receivable beginning balance           $  91,669     $ 152,905     $ 185,179
Real estate loan originations
   Single-family(1)                                  2,202         1,220         5,313
   Multi-family(2)                                   1,319            --            40
   Commercial                                        1,433         1,209           578
   Construction                                     10,730         8,971        13,634
   Land acquisition and development                    982         2,471         3,695
                                                 ---------     ---------     ---------
      Total real estate loan originations           16,666        13,871        23,260
                                                 ---------     ---------     ---------

Home equity                                          3,186         2,833         3,950
Education                                               --             2           333
Commercial                                              --           250           215
Other                                                  258           189           370
                                                 ---------     ---------     ---------
          Total loan originations                   20,110        17,145        28,128
                                                 ---------     ---------     ---------
Disbursements against available credit lines:
   Home equity                                       3,215         3,242         3,472
   Other                                               466           685           250
Purchase of whole loans and participations             388           302            --
                                                 ---------     ---------     ---------
     Total originations and purchases               24,179        21,374        31,850
                                                 ---------     ---------     ---------
Less:
   Loan principal repayments                        47,376        83,087        66,054
   Sales of whole loans (3)                             17             3         2,988
   Sales of participation interests (4)                979            --            --
   Transferred to real estate owned                    550            --           500
   Change in loans in process                          179            37        (5,170)
   Other, net(5)                                    (1,221)         (517)         (248)
                                                 ---------     ---------     ---------
     Net decrease                                $ (23,701)    $ (61,236)    $ (32,274)
                                                 ---------     ---------     ---------

Net loans receivable ending balance              $  67,968     $  91,669     $ 152,905
                                                 =========     =========     =========
</TABLE>

----------
(1)   Consists of loans secured by one-to-four family properties.

(2)   Consists of loans secured by five or more family properties.

(3)   Loans sold included servicing rights.

(4)   As of June 30, 2004, loans serviced for others totaled approximately $1.0
      million.

(5)   Includes  reductions  for  net  deferred  loan  origination  fees  and the
      allowance for loan losses.


                                       5
<PAGE>

      Real Estate Lending Standards.  All financial institutions are required to
adopt and maintain  comprehensive  written real estate lending policies that are
consistent with safe and sound banking  practices.  These lending  policies must
reflect  consideration  of the  Interagency  Guidelines  for Real Estate Lending
Policies  ("Guidelines")  adopted by the  federal  banking  agencies in December
1992.  The Guidelines set forth uniform  regulations  prescribing  standards for
real estate  lending.  Real estate  lending is defined as an extension of credit
secured  by  liens on  interests  in real  estate  or made  for the  purpose  of
financing the  construction of a building or other  improvements to real estate,
regardless of whether a lien has been taken on the property.

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

      Single-Family  Residential  Real  Estate  Loans.   Historically,   savings
institutions such as the Company have concentrated  their lending  activities on
the  origination of loans secured  primarily by first mortgage liens on existing
single-family  residences.  At June  30,  2004,  $25.8  million  or 32.5% of the
Company's  total loan  portfolio  consisted of  single-family  residential  real
estate loans,  substantially all of which are conventional loans.  Single-family
loan  originations  totaled  $2.2  million and  increased  $1.0 million or 83.3%
during the fiscal year ended June 30, 2004,  when compared to the same period in
2003.  Due to low levels of market  interest  rates,  the Company  continued  to
reduce its  portfolio  originations  of long-term  fixed rate  mortgages,  while
continuing to offer consumer home equity and construction loans.

      The Company historically has originated  fixed-rate loans with terms of up
to 30 years.  Although such loans are originated with the expectation  that they
will be maintained in the portfolio,  these loans are originated generally under
terms,  conditions  and  documentation  that permit their sale in the  secondary
market.   The   Company   also   makes   available   single-family   residential
adjustable-rate  mortgages ("ARMs"),  which provide for periodic  adjustments to
the  interest  rate,  but such loans have never been as widely  accepted  in the
Company's  market  area as the  fixed-rate  mortgage  loan  products.  The  ARMs
currently  offered by the Company have up to 30-year terms and an interest rate,
which adjusts in accordance with one of several indices.

      At  June  30,  2004,   approximately   $22.4   million  or  86.6%  of  the
single-family  residential  loans in the Company's loan  portfolio  consisted of
loans which provide for fixed rates of interest.  Although these loans generally
provide for repayments of principal over a fixed period of 15 to 30 years, it is
the Company's  experience that because of prepayments  and due-on-sale  clauses,
such loans generally  remain  outstanding for a substantially  shorter period of
time.

      The Company is permitted to lend up to 100% of the appraised value of real
property  securing a residential loan;  however,  if the amount of a residential
loan originated or refinanced exceeds 95% of the appraised value, the Company is
required by state banking  regulations to obtain private  mortgage  insurance on
the portion of the principal  amount that exceeds 75% of the appraised  value of
the security property.  Pursuant to underwriting guidelines adopted by the Board
of Directors,  private mortgage  insurance is obtained on residential  loans for
which loan-to-value ratios exceed 80% according to the following schedule: loans
exceeding  80% but less than 90% - 25%  coverage;  loans  exceeding 90% but less
than 95% - 30% coverage; and loans exceeding 95% through 100% - 35% coverage. No
loans are made in excess of 100% of appraised value.


                                       6
<PAGE>

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

      Multi-Family  Residential  and Commercial  Real Estate Loans.  The Company
originates  mortgage  loans for the  acquisition  and  refinancing  of  existing
multi-family  residential  and commercial  real estate  properties.  At June 30,
2004,  $4.8 million or 6.0% of the Company's  total loan portfolio  consisted of
loans secured by existing multi-family residential real estate properties, which
represented  a decrease of $435  thousand or 8.4% from fiscal 2003.  Of the $4.8
million,  approximately  $4.3 million or 89.6% provide for an adjustable rate of
interest, while approximately $482 thousand or 10.4% are fixed rate loans.

      At June 30, 2004,  $10.0 million or 12.5% of the loan portfolio  consisted
of  loans  secured  by  existing   commercial  real  estate  properties,   which
represented  a decrease of $8.0 million or 44.6% from fiscal 2003.  Of the $10.0
million,  approximately  $3.9 million or 39.0% provide for an adjustable rate of
interest, while approximately $6.1 million or 61.0% are fixed rate loans. During
fiscal 2004, the Company chose not to emphasize  originations of commercial real
estate  loans to reduce  credit  risk  associated  with the  national  and local
economic weaknesses.

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

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

      At June 30, 2004, the Company's  multi-family  residential  and commercial
real estate loan portfolio  consisted of  approximately 53 loans with an average
principal  balance of $278  thousand.  At June 30,  2004,  the  Company  had two
commercial real estate loans to two borrowers,  totaling $1.3 million, that were
not accruing  interest.  During the year ended June 30,  2004,  $88 thousand was
collected and recognized on a cash basis.

      Construction  Loans.  In recent  years,  the  Company  has been  active in
originating loans to construct  primarily  single-family  residences,  and, to a
much lesser extent, loans to acquire and develop real estate for construction of
residential  properties.  These construction  lending  activities  generally are
limited to the Company's  primary  market area.  At June 30, 2004,  construction
loans amounted to  approximately  $18.1 million or 22.8% of the Company's  total
loan portfolio, which represented a increase of $1.2 million or 6.7% from fiscal
2003.  The  increase  was  principally  due to  increased  levels  of  new  home
construction. As of June 30, 2004, the Company's portfolio of construction loans
consisted  of $17.2  million  of loans  for the  construction  of  single-family
residential  real  estate and $890  thousand  of loans for the  construction  of
multi-family  residential real estate.  Construction loan  originations  totaled
$10.7  million and  increased  by $1.8  million or 19.6%  during the fiscal year
ended June 30, 2004, when compared to the same period in 2003.


                                       7
<PAGE>

      Construction  loans are made for the  purpose of  constructing  a personal
residence.  In such  circumstances,  the Company will underwrite such loans on a
construction/permanent  mortgage  loan basis.  At June 30,  2004,  approximately
92.1% of total  outstanding  construction  loans were made to local real  estate
builders and  developers  with whom the Company has worked for a number of years
for  the   purpose   of   constructing   primarily   single-family   residential
developments,  3.0% of total construction loans were made to individuals for the
purpose of  constructing  a personal  residence  and 4.9% of total  construction
loans  were made to a  developer  for the  purpose  of  constructing  a six unit
apartment building. Upon application, credit review and analysis of personal and
corporate financial  statements,  the Company will grant local builders lines of
credit up to designated amounts.  These credit lines may be used for the purpose
of  construction  of speculative  (or unsold)  residential  properties.  In some
instances,  lines of credit  will also be  granted  for  purposes  of  acquiring
finished  residential  lots and developing  speculative  residential  properties
thereon.  Such lines generally have not exceeded $1.0 million,  with the largest
line totaling approximately $1.2 million. Once approved for a construction line,
a developer must still submit plans and specifications and receive the Company's
authorization,  including  an appraisal of the  collateral  satisfactory  to the
Company,  in order to begin utilizing the line for a particular  project.  As of
June 30,  2004,  the  Company  also had $7.9  million or 10.0% of the total loan
portfolio  invested in land development loans, which consisted of 20 loans to 17
developers.

      Speculative  construction  loans  generally have  maturities of 18 months,
including  one 6  month  extension,  with  payments  being  made  monthly  on an
interest-only  basis.  Thereafter,  the permanent  financing  arrangements  will
generally  provide for either an adjustable or fixed interest  rate,  consistent
with the Company's  policies with respect to  residential  and  commercial  real
estate financing.

      The Company intends to maintain its  involvement in  construction  lending
within its primary market area. Such loans afford the Company the opportunity to
increase the interest rate  sensitivity of its loan  portfolio.  Commercial real
estate and  construction  lending is  generally  considered  to involve a higher
level of risk as  compared  to  single-family  residential  lending,  due to the
concentration  of principal in a limited  number of loans and  borrowers and the
effects of general economic  conditions on real estate  developers and managers.
Moreover,  a  construction  loan can  involve  additional  risks  because of the
inherent  difficulty in estimating both a property's  value at completion of the
project and the estimated cost (including  interest) of the project.  The nature
of these loans is such that they are  generally  more  difficult to evaluate and
monitor.  In  addition,  speculative  construction  loans to a  builder  are not
necessarily  pre-sold and thus pose a greater potential risk to the Company than
construction loans to individuals on their personal residences.

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

      Consumer Loans.  The Company offers consumer loans,  although such lending
activity has not  historically  been a large part of its  business.  At June 30,
2004, $11.9 million or 15.0% of the Company's total loan portfolio  consisted of
consumer  loans,  which  represented  a decrease  of $1.6  million or 11.6% from
fiscal 2003.  The consumer loan  portfolio,  like the mortgage  loan  portfolio,
decreased due to the low levels of market interest rates and an increase in loan
refinances. The consumer loans offered by the Company include home equity loans,
home equity lines of credit, automobile loans, deposit account secured loans and
personal loans.  Approximately 92.7% of the Company's consumer loans are secured
by  real  estate  and  are  primarily  obtained  through  existing  and  walk-in
customers.

      The Company will  originate  either a  fixed-rate,  fixed term home equity
loan,  or a home equity line of credit with a variable  rate.  At June 30, 2004,
approximately  64.3% of the Company's home equity loans were at a fixed rate for
a  fixed  term.   Although  there  have  been  a  few  exceptions  with  greater
loan-to-value  ratios,  substantially  all of such loans are  originated  with a
loan-to-value  ratio which,  when coupled with the  outstanding  first  mortgage
loan, does not exceed 80%.

      Commercial Loans. At June 30, 2004, $968 thousand or 1.2% of the Company's
total loan portfolio  consisted of commercial loans, which include loans secured
by  accounts   receivable,   business  inventory  and  equipment,   and  similar
collateral. The $531 thousand or 35.4% decrease from fiscal 2003 was principally
due


                                       8
<PAGE>

to the normal  amortization  of the commercial  loan  portfolio.  The Company is
continuing to develop this line of business in order to increase interest income
and to attract compensating deposit account balances.

      Loan Fee Income.  In addition to interest earned on loans, the Company may
receive   income  from  fees  in  connection   with  loan   originations,   loan
modifications, late payments, prepayments and for miscellaneous services related
to its loans. Income from these activities varies from period to period with the
volume and type of loans made and competitive conditions.

      The  Company's  loan  origination  fees  are  generally  calculated  as  a
percentage of the amount borrowed.  Loan origination and commitment fees and all
incremental  direct loan origination  costs are deferred and recognized over the
contractual  remaining  lives  of the  related  loans  on a level  yield  basis.
Discounts and premiums on loans purchased are accreted and amortized in the same
manner.  In accordance  with SFAS 91, the Company has recognized  $172 thousand,
$332 thousand and $285  thousand of deferred loan fees during fiscal 2004,  2003
and 2002,  respectively,  in  connection  with loan  refinancings,  payoffs  and
ongoing amortization of outstanding loans. The decreases in loan origination fee
income for fiscal year 2004 was  principally  attributable to a higher volume of
loan  refinancings  with lower or no loan  origination  fees.  Loans  previously
originated  lower or no loan  origination  fees will reduce the  recognition  of
associated deferred fee balances.

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

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

      Real  estate  acquired  by the  Company as a result of  foreclosure  or by
deed-in-lieu of foreclosure is classified as real estate owned until it is sold.
When property is acquired,  it is recorded at the lower of cost or fair value at
the date of acquisition and any write-down resulting therefrom is charged to the
allowance for losses on real estate owned. All costs incurred in maintaining the
Company's  interest in the  property are  capitalized  between the date the loan
becomes  delinquent and the date of acquisition.  After the date of acquisition,
all costs incurred in  maintaining  the property are expensed and costs incurred
for the improvement or development of such property are capitalized.


                                       9
<PAGE>

      The following table sets forth the amounts and categories of the Company's
non-performing assets at the dates indicated.

<TABLE>
<CAPTION>
                                                                  At June 30,
                                                ------------------------------------------------
                                                2004       2003       2002       2001       2000
                                                ----       ----       ----       ----       ----
                                                             (Dollars in Thousands)
<S>                                            <C>        <C>        <C>        <C>        <C>
Non-accruing loans:
Real estate:
   Single-family(1)                            $  281     $   59     $  582     $  201     $   67
   Commercial(2)                                    4      3,342      3,267      3,326      2,344
   Construction                                    --         --        520      1,355      1,520
   Land Acquisition and Development (3)           427         58        477         --         --
Consumer (4)                                       71         --         --        134        113
Commercial loans and leases(5)                     45         22        198         --          6
                                               ------     ------     ------     ------     ------
Total non-accrual loans                           828      3,481      5,044      5,016      4,050
                                               ------     ------     ------     ------     ------
Accruing loans greater than 90 days
   Delinquent                                      --         --         --         --         --
                                               ------     ------     ------     ------     ------
     Total non-performing loans                $  828     $3,481     $5,044     $5,016     $4,050
                                               ------     ------     ------     ------     ------
Real estate owned                                  --         --        235         --         --
                                               ------     ------     ------     ------     ------
     Total non-performing assets               $  828     $3,481     $5,279     $5,016     $4,050
                                               ======     ======     ======     ======     ======
Troubled debt restructurings(6)                $1,343     $2,497     $   --     $   --     $   --
                                               ======     ======     ======     ======     ======
Total non-performing loans and troubled
 debt restructurings as a percentage of
 net loans receivable                            3.19%      4.36%      3.30%      2.71%      2.21%
                                               ======     ======     ======     ======     ======
Total non-performing assets to total assets      0.19%      0.95%      1.30%      1.27%      0.99%
                                               ======     ======     ======     ======     ======
Total non-performing assets and troubled
   debt restructurings as a percentage of
    total assets                                 0.50%      1.09%      1.30%      1.27%      0.99%
                                               ======     ======     ======     ======     ======
</TABLE>

----------
(1)   At June 30, 2004, non-accrual  single-family residential real estate loans
      consisted of four loans.

(2)   At June 30, 2004,  non-accrual  commercial  real estate loans consisted of
      one loan.

(3)   At June 30, 2004,  non-accrual  land  acquisition  and  development  loans
      consisted of one loan.

(4)   At June 30, 2004, non-accrual consumer loans consisted of one loan.

(5)   At June 30, 2004, non-accrual commercial loans and leases consisted of one
      loan.

(6)   At June 30, 2004, trouble debt restructurings consisted of one loan.

      The $2.7 million decrease in nonperforming assets during the twelve months
ended  June  30,  2004  was   primarily   attributable   to:  the  $1.4  million
reclassification  of a  commercial  real  estate  loan  from  non-performing  to
restructured,  a $591  thousand net reduction  from the purchase and  subsequent
resale of related participating  interests, a $509 thousand reduction related to
the sale of a personal  care home and a $489  thousand  charge off  related to a
bankruptcy  discussed  below,  which was  partially  offset  by a $222  thousand
increase in non-performing single-family real estate loans.

      The Company has one accruing  commercial loan participation  interest that
has been granted a ninety day  maturity  extension  with a principal  balance of
$795  thousand.  The  loan  is  collateralized  by a  first  mortgage  loan on a
full-service  hotel located within the Company's market area. The Company bought
a 7.4% participating interest from another local lender in July 1999. Weaknesses
in the national and local economies,  along with cut backs in corporate  travel,
have caused  occupancy and average room rates to decline  significantly.  During
the fourth  quarter of fiscal  2004,  the  Company  recorded  general  valuation
allowances totaling approximately $79 thousand or 10% of the outstanding balance
of the loan. The Company believes that this action was prudent given a reduction
in appraised value from $20.2 million (at April 1999) to $12.0 million (at March
2003),  subsequent  declines in room rentals and operating  income,  and reduced
debt coverage  ratios since the March 2003  appraisal.  The ninety day extension
was  granted at the  request of the lead  lender in order to give the  borrowers
time to explore refinancing options.

      The  Company  has  one  restructured  commercial  real  estate  loan  to a
retirement  village located in the North Hills.  The Savings Bank's  outstanding
principal  balance  totaled $2.0  million at June 30,  2003.  During the quarter
ended   September  30,  2003,   the  Savings  Bank  redeemed  $388  thousand  of
participating  interests.  During the quarter ended  December 31, 2003, the Bank
sold a forty percent participating  interest to another financial institution at
par resulting in proceeds totaling $979 thousand. The Savings Bank's outstanding
principal  balance  totaled  $1.3  million at June 30,  2004.  The  Company  had
recorded  interest  received  on this  credit  on a cost  recovery  basis  until
September 30, 2003 and is now recording interest income on a cash basis.

      At June 30,  2004,  the Company had one loan secured by  undeveloped  land
totaling  $427  thousand  and one  unsecured  loan  totaling $71 thousand to two
borrowers.  These loans  represent two  adjudicated  Bankruptcy  Court Claims in
connection  with a  previously  reported  loan to a personal  care home.  During
fiscal 2004,  the personal care home was sold for net proceeds of  approximately
$50 thousand.  During the fourth quarter of fiscal 2004,  the  Bankruptcy  Court
approved a secured claim totaling $440 thousand, and an unsecured claim totaling
$76 thousand,  be paid in accordance with a Bankruptcy  Plan of  Reorganization.
All


                                       10
<PAGE>

Court ordered plans have been received in a timely  manner.  In accordance  with
generally accepted accounting principals, payments received are being applied on
a cost recovery basis.

      The Company had four non-accrual  single-family real estate loans totaling
approximately  $281 thousand at June 30, 2004.  Subsequent to June 30, 2004, two
of these  single-family  loans totaling $140 thousand were paid off in full. The
other two loans are in various stages of collection activity.

      During  fiscal 2004,  2003 and 2002,  approximately  $123  thousand,  $256
thousand and $408 thousand,  respectively,  of interest would have been recorded
on loans accounted for on a non-accrual  basis and troubled debt  restructurings
if such loans had been current according to the original loan agreements for the
entire period.  These amounts were not included in the Company's interest income
for the respective periods. The amount of interest income on loans accounted for
on a  non-accrual  basis and troubled debt  restructurings  that was included in
income  during the same periods  amounted to  approximately  $94  thousand,  $26
thousand and $162 thousand, respectively.

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

      Effective  December 21, 1993, the FDIC, in conjunction  with the Office of
the  Comptroller  of the  Currency,  the  Office of Thrift  Supervision  and the
Federal Reserve Board,  adopted an Interagency Policy Statement on the Allowance
for Loan and Lease Losses  ("Policy  Statement").  The Policy  Statement,  which
effectively supersedes previous FDIC proposed guidance, includes guidance (1) on
the  responsibilities  of management for the assessment and  establishment of an
adequate allowance and (2) for the agencies'  examiners to use in evaluating the
adequacy  of  such  allowance  and  the  policies  utilized  to  determine  such
allowance.  The Policy Statement also sets forth  quantitative  measures for the
allowance with respect to assets classified substandard and doubtful,  described
below,  and with  respect  to the  remaining  portion of an  institution's  loan
portfolio.   Specifically,   the  Policy  Statement  sets  forth  the  following
quantitative measures which examiners may use to determine the reasonableness of
an allowance:  (1) 50% of the portfolio that is classified doubtful;  (2) 15% of
the portfolio  that is classified  substandard;  and (3) for the portions of the
portfolio that have not been  classified  (including  loans  designated  special
mention), estimated credit losses over the upcoming twelve months based on facts
and  circumstances  available on the evaluation date. While the Policy Statement
sets forth this quantitative measure, such guidance is not intended as a "floor"
or "ceiling".

      Federal regulations require that each insured savings institution classify
its assets on a regular basis. In addition,  in connection with  examinations of
insured  institutions,  federal  examiners  have  authority to identify  problem
assets and, if appropriate,  classify them. There are three  classifications for
problem assets:  "substandard",  "doubtful" and "loss".  Substandard assets have
one or more defined weaknesses and are characterized by the distinct possibility
that the insured  institution will sustain some loss if the deficiencies are not
corrected.   Doubtful  assets  have  the  weaknesses  of  those   classified  as
substandard with the added characteristic that the weaknesses make collection or
liquidation  in full on the basis of currently  existing  facts,  conditions and
values  questionable,  and  there  is a  high  possibility  of  loss.  An  asset
classified  as loss is  considered  uncollectible  and of such little value that
continuance as an asset of the  institution is not warranted.  Another  category
designated  "asset  watch" is also  utilized by the Bank for assets which do not
currently  expose  an  insured  institution  to a  sufficient  degree of risk to
warrant  classification  as substandard,  doubtful or loss. Assets classified as
substandard or doubtful require the institution to establish general  allowances
for loan  losses.  If an asset or portion  thereof is  classified  as loss,  the
insured institution must either establish specific allowances for loan losses in
the amount of 100% of the portion of the asset  classified  loss,  or charge-off
such amount.  General  loss  allowances  established  to cover  possible  losses
related  to  assets  classified  substandard  or  doubtful  may be  included  in
determining  an  institution's  regulatory  capital,  while  specific  valuation
allowances for loan losses do not qualify as regulatory capital.


                                       11
<PAGE>

      The Company's  general  policy is to  internally  classify its assets on a
regular  basis and  establish  prudent  general  valuation  allowances  that are
adequate to absorb losses that have not been identified but that are inherent in
the loan portfolio.  The Company maintains general valuation  allowances that it
believes  are  adequate  to  absorb  losses in its loan  portfolio  that are not
clearly   attributable  to  specific  loans.  The  Company's  general  valuation
allowances  are within the following  ranges:  (1) 0% to 5% of assets subject to
special mention; (2) 5% to 100% of assets classified substandard; and (3) 50% to
100% of assets classified doubtful.  Any loan classified as loss is charged-off.
To further  monitor and assess the risk  characteristics  of the loan portfolio,
loan  delinquencies are reviewed to consider any developing problem loans. Based
upon the procedures in place,  considering  the Company's past  charge-offs  and
recoveries and assessing the current risk elements in the portfolio,  management
believes the allowance for loan losses at June 30, 2004, is adequate.

      The allowance for loan losses at June 30, 2004  decreased  $1.2 million to
$1.4  million.  The  decrease  in the  provision  for loan loss was  principally
attributable   to  reduced  levels  of  net  loans   receivable,   the  sale  of
participating  interest in a commercial  real estate loan and collection on past
due loans.  The Company  believes that the loan loss reserve  levels are prudent
and  warranted at this time due to the  weakening of the national  economy.  The
increases in prior years reflected a number of factors,  the most significant of
which were the Company's level of  non-performing  assets and the industry trend
towards greater emphasis on the allowance method of providing for loan losses.


                                       12
<PAGE>

<TABLE>
<CAPTION>

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

                                                                            At June 30,
                                                -------------------------------------------------------------------
                                                   2004           2003          2002          2001           2000
                                                   ----           ----          ----          ----           ----
                                                                       (Dollars in Thousands)
<S>                                             <C>            <C>           <C>           <C>            <C>
Average net loans                               $  74,656      $ 125,221     $ 173,023     $ 185,895      $ 177,557
                                                =========      =========     =========     =========      =========
Allowance balance (at beginning of period)      $   2,530      $   2,758     $   2,763     $   1,973      $   1,842
Provision for loan losses                            (794)          (228)           57           788            150
Charge-offs:
   Real estate:
     Single-family                                     --             --            --            --             --
     Multi-family                                      --             --            --            --             --
     Commercial                                       524             --            --            10             --
     Construction                                      --             --            --            --             --
   Land acquisition and development                    --             --            --            --             --
   Consumer:
     Home equity                                       --             --            25            --             --
     Education                                         --             --            --            --             --
     Other                                             --             --            43            --             19
   Commercial loans and leases                         --             --            --             7             --
                                                ---------      ---------     ---------     ---------      ---------
     Total charge-offs                                524             --            68            17             19
                                                ---------      ---------     ---------     ---------      ---------
Recoveries:
   Real estate:
     Single-family                                     --             --            --            --             --
     Multi-family                                      --             --            --            --             --
     Commercial                                       158             --            --            --             --
     Construction                                      --             --            --            --             --
   Land acquisition and development                    --             --            --            --             --
   Consumer:
     Home equity                                       --             --            --            --             --
     Education                                         --             --            --            --             --
     Other                                             --             --             6            19             --
   Commercial loans and leases                         --             --            --            --             --
                                                ---------      ---------     ---------     ---------      ---------
     Total recoveries                                 158             --             6            19             --
                                                ---------      ---------     ---------     ---------      ---------
Net loans charged-off                                 366             --            62            (2)            19

Transfer to real estate owned loss reserve             --             --            --            --             --
                                                ---------      ---------     ---------     ---------      ---------
Allowance balance (at end of period)            $   1,370      $   2,530     $   2,758     $   2,763      $   1,973
                                                =========      =========     =========     =========      =========
Allowance for loan losses as a percentage of
  total loans receivable                             1.97%          2.68%         1.77%         1.47%          1.06%
                                                =========      =========     =========     =========      =========
Net loans charged-off as a percentage of
  average net loans                                  0.49%          0.00%         0.04%         0.01%          0.01%
                                                =========      =========     =========     =========      =========
Allowance for loan losses to non-performing
  loans                                            165.46%         72.68%        54.68%        55.08%         48.72%
                                                =========      =========     =========     =========      =========
Net loans charged-off to allowance for loan
  losses                                            26.72%          0.00%         2.25%        (0.07)%         0.96%
                                                =========      =========     =========     =========      =========
Recoveries to charge-offs                           30.15%          0.00%         8.82%       111.76%          0.00%
                                                =========      =========     =========     =========      =========
</TABLE>


                                       13
<PAGE>

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

<TABLE>
<CAPTION>
                                                                       At June 30,
                      --------------------------------------------------------------------------------------------------------------
                               2004                  2003                  2002                  2001                  2000
                               ----                  ----                  ----                  ----                  ----
                      % of Total   Loans by  % of Total  Loans by  % of Total  Loans by  % of Total  Loans by  % of Total  Loans by
                        Amount     Category    Amount    Category    Amount    Category    Amount    Category    Amount    Category
                        ------     --------    ------    --------    ------    --------    ------    --------    ------    --------
                                                              (Dollars in Thousands)
<S>                     <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>
Real estate loans:
  Single-family         $    82      32.52%   $    75      40.91%   $   191      53.69%   $   180      51.50%   $   167      52.49%
  Multi-family               18       5.99         26       4.92         31       3.69         35       3.37         30       3.01
  Commercial                597      12.53      1,944      16.98      1,745      15.19      1,721      17.05        704      16.27
  Construction               30      22.76         33      16.03        300      11.92        407      13.73        287      13.34
  Land acquisition
   and development          302      10.01         73       7.03         66       4.00         41       3.09         57       3.72
  Unallocated                --       0.00         --       0.00         10       0.00         --       0.00        363       0.00
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
    Total real estate
      loans               1,029      83.81      2,151      85.87      2,343      88.49      2,384      88.74      1,608      88.83
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
Consumer loans:
  Home equity               117      13.88        124      11.70        165       9.75        231       9.33        184       9.19
  Education                  --       0.00         --       0.00         --       0.00         --       0.02          1       0.03
  Other                      78       1.09         22       1.01         28       0.90         73       1.02         80       1.02
  Unallocated                --       0.00         --       0.00         --       0.00         --       0.00         --       0.00
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
    Total consumer
      loans                 195      14.97        146      12.71        193      10.65        304      10.37        265      10.24
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
Commercial loans:
  Commercial loans          116       1.22        200       1.42        187       0.86         75       0.89        100       0.93
  Unallocated                --       0.00         --       0.00         --       0.00         --       0.00         --       0.00
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
    Total commercial
      loans                 116      14.97        200       1.42        187       0.86         75       0.89        100       0.93
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
Commercial lease
  financings                 --       0.00         --       0.00         --       0.00         --       0.00         --       0.00
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
Off balance-sheet
   items                     30       0.00         33       0.00         35       0.00         --       0.00         --       0.00
                        -------    -------    -------    -------    -------    -------    -------    -------    -------    -------
                        $ 1,370     100.00%   $ 2,530     100.00%   $ 2,758     100.00%   $ 2,763     100.00%   $ 1,973     100.00%
                        =======    =======    =======    =======    =======    =======    =======    =======    =======    =======
</TABLE>

      The Company  determines  its allowance for loan losses in accordance  with
generally  accepted  accounting  principles.   The  Company  uses  a  systematic
methodology  as required by Financial  Reporting  Release No. 28 and the various
Federal Financial Institutions Examination Council guidelines.  The Company also
endeavors to adhere to SEC Staff Accounting  Bulletin No. 102 in connection with
loan loss allowance methodology and documentation issues.

      Our methodology  used to determine the allocated  portion of the allowance
is as  follows.  For  groups of  homogenous  loans,  we apply a loss rate to the
groups'  aggregate  balance.  Our group loss rate reflects our  historical  loss
experience.  We may  adjust  these  group  rates to  compensate  for  changes in
environmental  factors;  but our  adjustments  have not been  frequent  due to a
relatively stable charge-off experience. The Company also monitors industry loss
experience  on similar  loan  portfolio  segments.  We then  identify  loans for
individual  evaluation under SFAS 114. If the individually  identified loans are
performing,  we  apply a  segment  specific  loss  rate  adjusted  for  relevant
environmental  factors, if necessary,  for those loans reviewed individually and
considered  individually impaired, we use one of the three methods for measuring
impairment  mandated by SFAS 114. Generally the fair value of collateral is used
since to date out impaired loans are real estate based.  In connection  with the
fair  value of  collateral  measurement,  the  Company  generally  would  use an
independent  appraisal and determine costs to sell. The Company's appraisals for
commercial  income based loans, such as commercial real estate loans, now assess
value based upon the  operating  cash flows of the business as opposed to merely
"as  built"  values.  The  Company  then  validates  the  reasonableness  of our
calculated  allowances by: (1) reviewing  trends in loan volume,  delinquencies,
restructurings  and   concentrations;   (2)  review  prior  period  (historical)
charge-offs  and  recoveries;  and (3)  present  the  results  of this  process,
quarterly,  to the  Asset  Classification  Committee  and the  Bank's  Board  of
Directors.  We then  tabulate,  format  and  summarize  the  current  loan  loss
allowance balance for financial and regulatory reporting purposes.

      The Company had no unallocated loss allowance balance at June 30, 2004. In
prior fiscal years,  an unallocated  loss  allowance  balance was maintained for
real estate,  consumer and small commercial  loans.  With respect to real estate
loans,  the Company  believed that it was prudent to maintain a certain level of
unallocated  loss  allowances  as the Bank grew its  commercial  real estate and
construction segments. At the time the Company's historical loss experience with
these two segments was somewhat limited. Management


                                       14
<PAGE>

believed that risks were inherent  within those segments but was uncertain as to
the degree of loss. A reasonable  estimate,  using  industry loss  factors,  was
utilized.  The same rationale applied to the unallocated  allowance for consumer
loans. The Company had no unallocated consumer loan allowances for the past four
fiscal years.

      The following table summarizes the calculations of required  allowance for
loan losses by loan category as of June 30, 2004.

                                                                    Allowance
                                                                       for
                                               Group Rate           Loan Loss
                                             ---------------      -------------
      Homogenous loans:
         Single-family                           0.0015              $    38
         Multi-family                            0.0050                   18
         Commercial real estate                  0.0100                   73
         Construction/land acquisition
           and development                  0.0015 - 0.0100 (1)           97
         Secured consumer                        0.0100                  120
         Unsecured consumer                      0.0500                    3
         Commercial loans                        0.0500                   48
         Off balance-sheet items (2)             0.0100                   30
         Unallocated                                                      --

      Individually evaluated loans:
         Single-family                                                    44
         Multi-family                                                     --
         Commercial real estate                                          524
         Construction/land acquisition
           and development                                               235
         Secured consumer                                                 --
         Unsecured consumer                                               72
         Commercial loans                                                 68
         Off balance-sheet items                                          --

      Total allowance for loan losses:
         Single-family                                                    82
         Multi-family                                                     18
         Commercial real estate                                          597
         Construction/land acquisition
           and development                                               332
         Secured consumer                                                120
         Unsecured consumer                                               75
         Commercial loans                                                116
         Off balance-sheet items                                          30
         Unallocated                                                      --
                                                                     -------
      Total allowance for loan losses                                $ 1,370
                                                                     =======

----------
(1)   The  rate  applied  ranges  from  0.0015  to  0.0100  depending  upon  the
      underlying collateral, loan type (permanent vs. construction),  historical
      loss  experience,  industry  loss  experience  on similar  loan  segments,
      delinquency trends,  loan volumes and  concentrations,  and other relevant
      economic and environmental factors.

(2)   The  1.00%  rate  is  applied  to  the  credit  equivalent  amount  of the
      off-balance  sheet item.  Various off- balance sheet items have  different
      risk weightings and credit conversion factors.


                                       15
<PAGE>

      Management  believes that the reserves it has  established are adequate to
cover  potential  losses  in  the  Company's  loan  portfolio.  However,  future
adjustments  to these  reserves may be necessary,  and the Company's  results of
operations  could be adversely  affected if circumstances  differ  substantially
from the  assumptions  used by management in making its  determinations  in this
regard.

Mortgage-Backed Securities

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

      At June 30, 2004,  the Company's  MBS  portfolio  totaled $75.6 million as
compared to $111.9 million at June 30, 2003. The $36.3 million or 32.4% decrease
in MBS balances  outstanding  during fiscal 2004 was primarily  attributable  to
principal  repayments  on CMOs  which  were  partially  offset by  purchases  of
floating rate CMOs. At June 30, 2004, approximately $69.5 million or 91.9% (book
value) of the Company's  portfolio of MBS,  including  CMOs,  were  comprised of
adjustable or floating rate  instruments,  as compared to $97.4 million or 87.1%
at June 30, 2003.  Substantially  all of the Company's  floating rate MBS adjust
monthly based upon changes in certain  short-term  market  indices (e.g.  LIBOR,
Prime, etc.).

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

                                                  2004        2003        2002
                                                  ----        ----        ----
MBS Available for Sale at June 30,                   (Dollars in Thousands)
----------------------------------

FHLMC PCs                                       $     45    $     47    $     48
GNMA PCs                                           2,411       2,510       2,627
FNMA PCs                                             686       1,494       3,228
CMOs - agency collateral                              92         168         293
CMOs - single-family whole loan collateral            --          --          --
                                                --------    --------    --------
Total amortized cost                            $  3,234    $  4,219    $  6,196
                                                ========    ========    ========
Total estimated market value                    $  3,357    $  4,387    $  6,450
                                                ========    ========    ========

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

FHLMC PCs                                       $     17    $     36    $     60
GNMA PCs                                             591       2,603       4,069
FNMA PCs                                              19          29          35
CMOs - agency collateral                          57,131      47,516      55,587
CMOs - single-family whole loan collateral        14,475      57,308      16,342
                                                --------    --------    --------
Total amortized cost                            $ 72,233    $107,492    $ 76,093
                                                ========    ========    ========
Total estimated market value                    $ 72,099    $107,914    $ 76,819
                                                ========    ========    ========

      The Company believes that its present MBS available for sale allocation of
$3.2 million or 4.3% of the carrying value of the MBS portfolio,  is adequate to
meet  anticipated  future  liquidity  requirements and to reposition its balance
sheet and asset/liability mix should it wish to do so in the future.


                                       16
<PAGE>

      The following table sets forth the amortized cost,  contractual maturities
and weighted  average yields of the Company's MBSs,  including CMOs, at June 30,
2004.

<TABLE>
<CAPTION>
                          One Year    After One to   After Five to  Over Ten
                          or Less      Five Years      Ten Years      Years        Total
                          -------      ----------      ---------      -----        -----
                                                (Dollars in Thousands)
<S>                       <C>           <C>           <C>           <C>           <C>
MBS Available for Sale    $     --      $     18      $     --      $  3,216      $  3,234
                              0.00%         9.00%         0.00%         7.29%         7.30%

MBS Held to Maturity      $     --      $     26      $     --      $ 72,207      $ 72,233
                              0.00%         9.00%         0.00%         2.83%         2.83%
                          --------      --------      --------      --------      --------

Total                     $     --      $     44      $     --      $ 75,423      $ 75,467
                          ========      ========      ========      ========      ========
Weighted average yield        0.00%         9.00%         0.00%         3.02%         3.02%
                          ========      ========      ========      ========      ========
</TABLE>

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

      The following table sets forth  information  with respect to the MBS owned
by the Company at June 30, 2004 which had a carrying  value  greater than 10% of
the Company's stockholders' equity at such date, other than securities issued by
the  United  States  Government  or  United  States   Government   agencies  and
corporations.  All MBS  owned  by the  Company  have  been  assigned  a triple A
investment grade rating.

                                                                     Estimated
Name of Issuer                                    Carrying Value    Market Value
--------------                                    --------------    ------------
                                                      (Dollars in Thousands)

Mastr Asset Securitization Trust                     $  6,341        $  6,316
Washington Mutual Mortgage Securities Corp.             3,716           3,683
                                                     --------        --------
                                                     $ 10,057        $  9,999
                                                     ========        ========

Investment Securities

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

      The  Company's  investment   activities  are  directly  monitored  by  the
Company's  Finance  Committee  under policy  guidelines  adopted by the Board of
Directors.  In recent years, the general  objective of the Company's  investment
policy  has been to manage  the  Company's  interest  rate  sensitivity  gap and
generally to increase  interest-earning assets. As reflected in the table below,
the Company  increased  significantly  its  position of U.S.  Government  Agency
obligations.   The  Company  purchased  approximately  $263.0  million  of  U.S.
Government Agency obligations during fiscal 2004.  Outstanding  balances totaled
$223.8 million or 79.6% of the total  investment  portfolio at June 30, 2004, as
compared to $24.1 million or 15.6% of the total investment portfolio at June 30,
2003. At June 30, 2004,  approximately  $222.5 million or 99.4% of the Company's
U.S.  Government  Agency  portfolio  was  comprised  of U.S.  Government  Agency
securities  with  longer-terms  to maturity  and optional  principal  redemption
features ("callable bonds"). The Company purchased approximately $5.2 million of
investment  grade  corporate  debt  securities  during fiscal year 2004 and held
approximately  $16.3  million  or  5.8% of the  total  investment  portfolio  in
corporate debt  obligations.  All Company owned corporate debt  obligations have
been rated  investment grade by at least two nationally  recognized  independent
rating services.


                                       17
<PAGE>

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

<TABLE>
<CAPTION>
                                                         2004         2003         2002
                                                         ----         ----         ----
Investment Securities Available for Sale at June 30,         (Dollars in Thousands)
----------------------------------------------------
<S>                                                   <C>          <C>          <C>
Trust preferred securities                            $      --    $     128    $     860
Corporate debt obligations                                2,532        7,428        6,495
Commercial paper                                             --       15,442           --
Obligations of states and political subdivisions             --        1,000           --
                                                      ---------    ---------    ---------
Total amortized cost                                      2,532       23,998        7,355
Equity securities                                         1,581        1,312        1,020
                                                      ---------    ---------    ---------
Total amortized cost                                  $   4,113    $  25,310    $   8,375
                                                      =========    =========    =========
Total estimated market value                          $   4,416    $  25,641    $   8,426
                                                      =========    =========    =========

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

Corporate debt obligations                            $  13,772    $  66,978    $  58,415
U.S. Government agency securities                       223,808       24,097       55,216
Commercial paper                                             --        1,099           --
Obligations of states and political subdivisions         31,593       29,667       29,327
                                                      ---------    ---------    ---------
                                                        269,173      121,841      142,958
FHLB stock                                                7,532        7,797        8,281
                                                      ---------    ---------    ---------
Total amortized cost                                  $ 276,705    $ 129,638    $ 151,239
                                                      =========    =========    =========
Total estimated market value                          $ 278,635    $ 133,833    $ 154,427
                                                      =========    =========    =========
</TABLE>


                                       18
<PAGE>

      Information  regarding  the amortized  cost,  contractual  maturities  and
weighted average yields of the Company's  investment  portfolio at June 30, 2004
is presented below.

<TABLE>
<CAPTION>
Investment Securities                    One Year     After One to  After Five to    Over Ten
Available for Sale                       or Less       Five Years     Ten Years        Years          Total
------------------                       -------       ----------     ---------        -----          -----
                                                                (Dollars in Thousands)
<S>                                     <C>            <C>            <C>            <C>            <C>
Corporate debt obligations              $   2,532      $      --      $      --      $      --      $   2,532
                                             4.35%          0.00%          0.00%          0.00%          4.35%

Equity securities                       $      --      $      --      $      --      $   1,581      $   1,581
                                             0.00%          0.00%          0.00%          5.23%          5.23%
                                        ---------      ---------      ---------      ---------      ---------

Total                                   $   2,532      $      --      $      --      $   1,581      $   4,113
                                        =========      =========      =========      =========      =========
Weighted average yield                       4.35%          0.00%          0.00%          5.23%          4.69%
                                        =========      =========      =========      =========      =========

<CAPTION>
Investment Securities                    One Year     After One to  After Five to     Over Ten
Held to Maturity                         or Less       Five Years     Ten Years        Years          Total
----------------                         -------       ----------     ---------        -----          -----
<S>                                     <C>            <C>            <C>            <C>            <C>
Corporate debt obligations              $  13,772      $      --      $      --      $      --      $  13,772
                                             4.31%          0.00%          0.00%          0.00%          4.31%

U.S. Government Agency
      securities                        $      --      $      --      $      --      $ 223,808      $ 223,808
                                             0.00%          0.00%          0.00%          4.42%          4.42%

Obligations of states and political
      subdivisions (1)                  $     301      $      --      $   2,062      $  29,230      $  31,593
                                             2.79%          0.00%          6.44%          9.84%          9.55%
                                        ---------      ---------      ---------      ---------      ---------

Total                                   $  14,073      $      --      $   2,062      $ 253,038      $ 269,173
                                        =========      =========      =========      =========      =========
Weighted average yield                       4.28%          0.00%          6.44%          5.04%          5.01%
                                        =========      =========      =========      =========      =========
</TABLE>

----------
(1)   Tax exempt obligations of states and political subdivisions are calculated
      on a taxable equivalent basis utilizing a federal tax rate of 34%.


                                       19
<PAGE>

      Information regarding the amortized cost, earliest call dates and weighted
average  yield  of the  Company's  investment  portfolio  at June 30,  2004,  is
presented  below.  All Company  investments in callable U.S.  Government  Agency
bonds were classified as held to maturity at June 30, 2004.

<TABLE>
<CAPTION>
                                         One Year     After One to  After Five to     Over Ten
                                         or Less       Five Years     Ten Years        Years          Total
                                         -------       ----------     ---------        -----          -----
<S>                                     <C>            <C>            <C>            <C>            <C>
Corporate debt obligations              $  16,304      $      --      $      --      $      --      $  16,304
                                             4.32%          0.00%          0.00%          0.00%          4.32%

U.S. Government Agency
      securities                        $ 222,468      $      --      $      --      $   1,340      $ 223,808
                                             4.44%          0.00%          0.00%          1.63%          4.42%

Obligations of states and political
      subdivisions (1)                  $   7,114      $  17,778      $   6,701      $      --      $  31,593
                                            11.98%          8.95%          8.56%          0.00%          9.55%
                                        ---------      ---------      ---------      ---------      ---------

Total debt obligations                  $ 245,886      $  17,778      $   6,701      $   1,340      $ 271,705
                                        =========      =========      =========      =========      =========
Weighted average yield                       4.65%          8.95%          8.56%          1.63%          5.01%
                                        =========      =========      =========      =========      =========

Equity securities                       $      --      $      --      $      --      $      --      $   1,581
                                        ---------      ---------      ---------      ---------      ---------

Total                                   $ 245,886      $  17,778      $   6,701      $   1,340      $ 273,286
                                        =========      =========      =========      =========      =========
</TABLE>

----------
(1)   Tax exempt obligations of states and political subdivisions are calculated
      on a taxable equivalent basis utilizing a federal tax rate of 34%.

      At June 30, 2004,  the Company  classified  $993 million of U.S.  Treasury
securities  as trading  investment  securities.  See Note 1 to the  consolidated
financial statements.


                                       20
<PAGE>

      The following table sets forth  information with respect to the investment
securities  owned by the  Company at June 30,  2004  which had a carrying  value
greater than 10% of the Company's  stockholders' equity at such date, other than
securities  issued by the United States  Government and United States Government
agencies  and  corporations.  All  investment  securities  owned by the Company,
including those shown below, have been assigned an investment grade rating by at
least two national rating services.

                                                                     Estimated
      Name of Issuer                              Carrying Value    Market Value
      --------------                              --------------    ------------
                                                       (Dollars in Thousands)
      Pittston Area School District                  $ 5,222          $ 5,476
      CINERGY Corp Debenture                           3,509            3,523
      Sempra Energy                                    3,260            3,260
      Diamler-Chrysler Corp.                           3,023            3,025
      New Castle PA School District                    2,977            3,186
                                                     -------          -------
                                                     $17,991          $18,470
                                                     =======          =======

Sources of Funds

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

      Deposits.  The Company's deposits totaled $160.6 million at June 30, 2004,
as compared to $170.9 million at June 30, 2003.  The $10.3 million  decrease was
primarily  attributable to an approximate $14.6 million decrease in certificates
of  deposits,  a $465  thousand  decrease in money  market  accounts  and a $365
thousand  decrease  in escrows,  which was  partially  offset by a $5.1  million
increase in core deposits. In order to attract new and lower cost core deposits,
the Company continued to promote a no minimum balance,  "free", checking account
product and began to offer Internet  Banking.  Current deposit  products include
regular  savings  accounts,  demand  accounts,  negotiable  order of  withdrawal
("NOW")  accounts,  money market deposit  accounts and  certificates  of deposit
ranging in terms from 30 days to 10 years. Included among these deposit products
are  certificates  of deposit  with  negotiable  interest  rates and balances of
$100,000 or more,  which amounted to $6.9 million or 4.3% of the Company's total
deposits at June 30,  2004,  as  compared  to $14.2  million or 8.3% at June 30,
2003. The Company's deposit products also include Individual  Retirement Account
certificates ("IRA certificates").

      The Company's  deposits are obtained  primarily from residents of northern
Allegheny,  southern  Butler and  eastern  Beaver  counties,  Pennsylvania.  The
Company utilizes various  marketing methods to attract new customers and savings
deposits,  including print media  advertising and direct  mailings.  The Company
does not advertise for deposits  outside of its local market area or utilize the
services of deposit  brokers,  and  management  believes  that an  insignificant
number of deposit  accounts were held by  non-residents  of Pennsylvania at June
30, 2004.  The Company has drive-up  banking  facilities  and  automated  teller
machines  ("ATMs") at its  McCandless,  Franklin  Park,  Bellevue and  Cranberry
Township  offices.  The Company also has an ATM machine at its West View Office.
The Company participates in the STAR(R) and CIRRUS(R) ATM networks.  The Company
also  participates in a new ATM program called the Freedom ATM  AllianceSM.  The
Freedom ATM  AllianceSM  allows West View  Savings  Bank  customers to use other
Pittsburgh area Freedom ATM AllianceSM affiliates' ATMs without being surcharged
and vice versa.  The Freedom ATM  AllianceSM was organized to help smaller local
banks compete with larger national banks that have large ATM networks.

      The Company has been  competitive in the types of accounts and in interest
rates it has offered on its deposit  products and continued to price its savings
products  nearer to the market  average  rate as  opposed to the upper  range of
market offering rates.  The Company has continued to emphasize the retention and
growth of core deposits,  particularly demand deposits.  Financial  institutions
generally, including the Company, have experienced a certain degree of depositor
disintermediation to other investment alternatives. Management believes that the
degree of  disintermediation  experienced  by the Company has not had a material
impact on overall liquidity.


                                       21
<PAGE>

      The  following  table sets  forth the  average  balance  of the  Company's
deposits and the average  rates paid  thereon for the past three years.  Average
balances were derived from daily average balances.

<TABLE>
<CAPTION>
                                                              At June 30,
                                   ---------------------------------------------------------------
                                           2004                  2003                  2002
                                           ----                  ----                  ----
                                    Amount      Rate      Amount      Rate      Amount       Rate
                                    ------      ----      ------      ----      ------       ----
                                                       (Dollars in Thousands)
<S>                                <C>          <C>      <C>          <C>      <C>           <C>
Regular savings and club
   accounts                        $ 44,091     0.76%    $ 41,906     1.21%    $ 38,277      1.92%
NOW accounts                         19,948     0.16       19,775     0.21       19,463      0.31
Money market deposit
   accounts                          13,839     0.79       14,334     1.28       13,460      1.91
Certificate of deposit accounts      72,800     2.52       80,208     3.18       90,022      4.44
Escrows                                 899     1.67        1,548     1.55        2,116      1.56
                                   --------    -----     --------    -----     --------     -----
     Total interest-bearing
        deposits and escrows        151,577     1.53      157,771     2.10      163,338      3.11
Non-interest-bearing checking
   accounts                          12,542     0.00       12,149     0.00       11,814      0.00
                                   --------    -----     --------    -----     --------     -----
     Total deposits and escrows    $164,119     1.42%    $169,920     1.95%    $175,152      2.90%
                                   ========    =====     ========    =====     ========     =====
</TABLE>

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

                                                   Year Ended June 30,
                                          --------------------------------------
                                             2004          2003          2002
                                             ----          ----          ----
                                                 (Dollars in Thousands)
Increase(decrease) before interest
   credited                               $ (12,952)    $ (10,245)    $  (9,365)
Interest credited                             2,589         3,499         5,698
                                          ---------     ---------     ---------
Net deposit increase (decrease)           $ (10,363)    $  (6,746)    $  (3,667)
                                          =========     =========     =========

      The following table sets forth maturities of the Company's certificates of
deposit of $100,000 or more at June 30, 2004, by time remaining to maturity.

                                                                 Amounts
                                                                 -------
                                                          (Dollars in Thousands)
      Three months or less                                       $ 1,429
      Over three months through six months                         1,414
      Over six months through twelve months                        2,126
      Over twelve months                                           1,975
                                                                 -------
                                                                 $ 6,944
                                                                 =======

      Borrowings.  Borrowings  are comprised of FHLB advances with various terms
and repurchase  agreements with securities  brokers with original  maturities of
ninety-two days or less. At June 30, 2004,  borrowings totaled $241.4 million as
compared to $162.8 million at June 30, 2003. The $78.6 million or 48.2% increase
was primarily due to purchases of investment and mortgage-backed securities. For
a  detailed   discussion  of  the  Company's  asset  and  liability   management
activities,  please see the  "Quantitative  and  Qualitative  Disclosures  about
Market Risk" section of the Company's fiscal year 2004 Annual Report.  Wholesale
funding also  provides the Company with a larger  degree of control with respect
to the term structure of its liabilities  than traditional  retail deposits.  By
utilizing borrowings,  as opposed to retail certificates of deposit, the Company
also avoids the additional operating costs associated with increasing its branch
network and associated federal deposit insurance premiums.

Competition

      The Company faces significant competition in attracting deposits. Its most
direct  competition for deposits has historically come from commercial banks and
other savings  institutions  located in its market area.  The Company also faces
additional  significant  competition  for investors'  funds from other financial
intermediaries.  The  Company  competes  for  deposits  principally  by offering
depositors a variety of deposit


                                       22
<PAGE>

programs,  competitive  interest rates,  convenient branch locations,  hours and
other  services.  The Company does not rely upon any individual  group or entity
for a material portion of its deposits.

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

Employees

      The Company had 36 full-time  employees  and 15 part-time  employees as of
June 30, 2004. None of these employees is represented by a collective bargaining
agent.  The  Company  believes  that it  enjoys  excellent  relations  with  its
personnel.


                                       23
<PAGE>

                           REGULATION AND SUPERVISION

The Company

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

      Sarbanes-Oxley  Act of 2002.  On July 3,  2002,  President  George W. Bush
signed into law the  Sarbanes-Oxley  Act of 2002, which generally  establishes a
comprehensive  framework to modernize and reform the oversight of public company
auditing,  improve the quality and transparency of financial  reporting by those
companies and strengthen the independence of auditors.

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

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

      The  Federal  Reserve  Board has by  regulation  determined  that  certain
activities are closely related to banking within the meaning of the BHCA.  These
activities  include operating a mortgage company,  finance company,  credit card
company,  factoring company,  trust company or savings  association;  performing
certain data  processing  operations;  providing  limited  securities  brokerage
services;  acting as an investment or financial advisor;  acting as an insurance
agent for certain types of credit-related  insurance;  leasing personal property
on a full-payout,  non-operating  basis;  providing tax planning and preparation
services; operating a collection agency; and providing certain courier services.
The Federal  Reserve Board also has  determined  that certain other  activities,
including real estate  brokerage and  syndication,  land  development,  property
management   and   underwriting   of  life   insurance  not  related  to  credit
transactions, are not closely related to banking and a proper incident thereto.

      Capital  Requirements.  The  Federal  Reserve  Board has  adopted  capital
adequacy  guidelines  pursuant to which it assesses  the  adequacy of capital in
examining and supervising a bank holding  company and in analyzing  applications
to it under the BHCA.  The Federal  Reserve  Board capital  adequacy  guidelines
generally  require bank holding  companies to maintain total capital equal to 8%
of total risk-adjusted  assets, with at least one-half of that amount consisting
of Tier I or core capital and up to one-half of that amount  consisting  of Tier
II or supplementary capital. Tier I capital for bank holding companies generally
consists of the sum of common stockholders' equity and perpetual preferred stock
(subject in the case of the latter to limitations on the kind and amount of such
stocks which may be included as Tier I capital),  less goodwill. Tier II capital
generally  consists of hybrid capital  instruments;  perpetual  preferred  stock
which is not eligible to be included as Tier I capital;  term  subordinated debt
and  intermediate-term  preferred stock;  and,  subject to limitations,  general
allowances for loan losses.  Assets are adjusted under the risk-based guidelines
to take into account different risk characteristics, with the categories ranging
from 0% (requiring  no  additional  capital) for assets such as cash to 100% for
the bulk of assets which are typically held by a bank holding company, including
multi-family  residential and commercial real estate loans,  commercial business
loans and consumer loans.  Single-family  residential first mortgage loans which
are not (90 days or more) past-due or non-performing and which have been made in
accordance with prudent  underwriting  standards are assigned a 50% level in the
risk-weighting system, while certain  privately-issued MBS representing indirect
ownership


                                       24
<PAGE>

of such loans are assigned a 20% level in the risk-weighting system. Off-balance
sheet items also are adjusted to take into account certain risk characteristics.

      In addition to the risk-based  capital  requirements,  the Federal Reserve
Board  requires bank holding  companies to maintain a minimum  leverage  capital
ratio of Tier I capital to total  assets of 3%.  Total  assets for this  purpose
does not include goodwill and any other  intangible  assets and investments that
the Federal Reserve Board determines should be deducted from Tier I capital. The
Federal  Reserve Board has announced  that the 3% Tier I leverage  capital ratio
requirement is the minimum for the top-rated bank holding  companies without any
supervisory,  financial or operational weaknesses or deficiencies or those which
are not  experiencing or  anticipating  significant  growth.  Other bank holding
companies  will be  expected to maintain  Tier I leverage  capital  ratios of at
least 4% to 5% or more, depending on their overall condition.

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

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

The Savings Bank

      General.   The  Savings  Bank  is  subject  to  extensive  regulation  and
examination by the Department and by the FDIC, which insures its deposits to the
maximum  extent  permitted  by  law,  and is  subject  to  certain  requirements
established  by the  Federal  Reserve  Board.  The  federal  and state  laws and
regulations  which are  applicable to banks  regulate,  among other things,  the
scope of their business, their investments, their reserves against deposits, the
timing of the  availability  of deposited funds and the nature and amount of and
collateral for certain  loans.  The laws and  regulations  governing the Savings
Bank  generally  have been  promulgated  to protect  depositors  and not for the
purpose of protecting stockholders.

      FDIC Insurance Premiums. The Savings Bank currently pays deposit insurance
premiums to the FDIC on a risk-based  assessment system  established by the FDIC
for all SAIF-member institutions. Under applicable regulations, institutions are
assigned to one of three capital groups which is based solely on the level of an
institution's  capital  -  "well  capitalized",   "adequately  capitalized"  and
"undercapitalized"-  which is  defined  in the same  manner  as the  regulations
establishing the prompt corrective action system under Section 38 of the Federal
Deposit Insurance Act ("FDIA"),  as discussed below. These three groups are then
divided  into  three  subgroups  which  reflect  varying  levels of  supervisory
concern,  from those  which are  considered  to be  healthy  to those  which are
considered  to be of  substantial  supervisory  concern.  The  matrix so created
results in nine assessment risk  classifications,  with rates ranging from 0.00%
for  well  capitalized,  healthy  institutions  to  0.27%  for  undercapitalized
institutions with substantial  supervisory concerns. The Savings Bank is a "well
capitalized" institution as of June 30, 2004.

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

      The  FDIC's  capital  regulations  establish  a minimum 3% Tier I leverage
capital requirement for the most highly-rated state-chartered, non-member banks,
with an  additional  cushion  of at least 100 to 200 basis  points for all other
state-chartered,  non-member banks,  which effectively will increase the minimum
Tier I leverage ratio for such other banks to 4% to 5% or more. Under the FDIC's
regulation,  highest-rated  banks are  those  that the FDIC  determines  are not
anticipating or experiencing  significant growth and have well diversified risk,
including no undue interest rate risk exposure,  excellent  asset quality,  high
liquidity,  good earnings and, in general, which are considered a strong banking
organization  and rated  composite  1 under the Uniform  Financial  Institutions
Rating System.

      A bank which has less than the minimum leverage capital requirement shall,
within 60 days of the date as of which it fails to comply with such requirement,
submit to its FDIC regional director for review and approval,  a reasonable plan
describing  the means and timing by which the bank  shall  achieve  its  minimum
leverage capital requirement. A bank which fails to file such plan with the FDIC
is deemed to be operating in an unsafe and unsound manner, and could subject the
bank to a cease-and-desist order from the FDIC. The


                                       25
<PAGE>

FDIC's regulation also provides that any insured  depository  institution with a
ratio of Tier I  capital  to total  assets  that is less than 2% is deemed to be
operating in an unsafe or unsound condition pursuant to Section 8(a) of the FDIA
and is subject to potential  termination of deposit insurance.  However, such an
institution will not be subject to an enforcement  proceeding  thereunder solely
on account of its  capital  ratios if it has entered  into and is in  compliance
with a written  agreement with the FDIC to increase its Tier I leverage  capital
ratio to such level as the FDIC deems  appropriate and to take such other action
as may be  necessary  for the  institution  to be  operated  in a safe and sound
manner. The FDIC capital  regulation also provides,  among other things, for the
issuance by the FDIC or its designee(s) of a capital directive, which is a final
order issued to a bank that fails to maintain  minimum capital to be restored to
the minimum leverage capital  requirement  within a specified time period.  Such
directive is enforceable in the same manner as a final cease-and-desist order.

Miscellaneous

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

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


                                       26
<PAGE>

                           FEDERAL AND STATE TAXATION

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

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

      Method of  Accounting.  The  Company  maintains  its books and records for
federal income tax purposes using the accrual method of accounting.  The accrual
method of accounting  generally requires that items of income be recognized when
all events have occurred that  establish the right to receive the income and the
amount of income can be determined  with  reasonable  accuracy and that items of
expense be deducted  at the later of (1) the time when all events have  occurred
that establish the liability to pay the expense and the amount of such liability
can be  determined  with  reasonable  accuracy  or (2) the  time  when  economic
performance with respect to the item of expense has occurred.

      Bad Debt  Reserves.  Historically  under  Section 593 of the Code,  thrift
institutions  such as the Savings  Bank,  which met certain  definitional  tests
primarily  relating  to their  assets  and the  nature of their  business,  were
permitted to establish a tax reserve for bad debts and to make annual  additions
within specified  limitations  which may have been deducted in arriving at their
taxable income. The Savings Bank's deduction with respect to "qualifying loans",
which are generally  loans secured by certain  interests in real  property,  may
currently be computed  using an amount based on the Savings  Bank's  actual loss
experience (the "experience method").

      The Small  Business Job  Protection  Act of 1996,  adopted in August 1996,
generally  (1) repealed the  provision of the Code which  authorized  use of the
percentage  of taxable  income  method by  qualifying  savings  institutions  to
determine deductions for bad debts,  effective for taxable years beginning after
1995,  and (2) required  that a savings  institution  recapture for tax purposes
(i.e. take into income) over a six-year period its applicable  excess  reserves.
For a savings  institution such as West View which is a "small bank", as defined
in the  Code,  generally  this is the  excess  of the  balance  of its bad  debt
reserves as of the close of its last taxable year  beginning  before  January 1,
1996, over the balance of such reserves as of the close of its last taxable year
beginning  before January 1, 1988. Any recapture  would be suspended for any tax
year that began after  December  31,  1995,  and before  January 1, 1998 (thus a
maximum of two years),  in which a savings  institution  originated an amount of
residential loans which was not less than the average of the principal amount of
such loans made by a savings  institution  during  its six most  recent  taxable
years  beginning  before  January 1, 1996.  The amount of tax bad debt  reserves
subject to recapture is approximately  $1.2 million,  which was being recaptured
ratably over a six-year period ending December 31, 2003. In accordance with FASB
No. 109,  deferred  income taxes have  previously  been provided on this amount,
therefore no financial  statement  expense has been recorded as a result of this
recapture.  The Company's  supplemental bad debt reserve of  approximately  $3.8
million is not subject to recapture.

      The  above-referenced  legislation also repealed certain provisions of the
Code that only apply to thrift  institutions  to which Section 593 applies:  (1)
the denial of a portion of certain tax credits to a thrift institution;  (2) the
special rules with respect to the  foreclosure  of property  securing loans of a
thrift  institution;  (3) the reduction in the dividends received deduction of a
thrift  institution;  and (4) the ability of a thrift  institution  to use a net
operating  loss to offset its income  from a residual  interest in a real estate
mortgage  investment  conduit.  The  repeal of these  provisions  did not have a
material adverse effect on the Company's financial condition or operations.

      Audit by IRS. The Company's  consolidated  federal  income tax returns for
taxable  years  through  December 31, 2000,  have been closed for the purpose of
examination by the Internal Revenue Service.

      State Taxation.  The Company is subject to the Pennsylvania  Corporate Net
Income Tax and Capital Stock and Franchise Tax. The  Pennsylvania  Corporate Net
Income Tax rate is 9.99% and is imposed on the Company's  unconsolidated taxable
income for federal purposes with certain  adjustments.  In general,  the Capital
Stock Tax is a property  tax  imposed  at the rate of 0.699% of a  corporation's
capital stock


                                       27
<PAGE>

value, which is determined in accordance with a fixed formula based upon average
net income and consolidated net worth.

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


                                       28
<PAGE>

Item 2.   Properties.
-------   -----------

          The following table sets forth certain information with respect to the
          offices and other properties of the Company at June 30, 2004.

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

          McCandless Office                            Owned
            9001 Perry Highway
            Pittsburgh, PA  15237

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

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

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

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

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

          ----------
          (1)   The   Company   operates   this   office  out  of  a  retirement
                community. The lease expires in June 2006.
          (2)   The lease is for a period of 15 years ending in  September  2006
                with  an  option  for  the  Company  to  renew  the lease for an
                additional five years.

Item 3.   Legal Proceedings.
-------   ------------------

          The 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
          consolidated financial condition of WVS Financial Corp.

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

          Not applicable.


                                       29
<PAGE>

PART II.

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

          (a)   The information required herein is incorporated by reference  on
                page 49 of the Company's 2004 Annual Report.

          (b)   Not applicable.

          (c)   The following  table sets  forth  information  with  respect  to
                purchases of common stock of the Company made by or on behalf of
                the Company during the three months ended June 30, 2004.

<TABLE>
<CAPTION>
          ----------------------------------------------------------------------------------------------------
                                         ISSUER PURCHASES OF EQUITY SECURITIES
          ----------------------------------------------------------------------------------------------------
                                                                      Total Number of       Maximum Number of
                                    Total                           Shares Purchased as    Shares that may yet
                                  Number of                           part of Publicly        be Repurchased
                                    Shares        Average Price      Announced Plans or     Under the Plans or
                Period            Purchased     Paid per Share ($)       Programs (1)        Programs (2)(3)
          ----------------------------------------------------------------------------------------------------
<S>                                 <C>                <C>                  <C>                   <C>
          04/01/04 - 04/30/04       17,400             18.95                17,400                110,185
          ----------------------------------------------------------------------------------------------------
          05/01/04 - 05/31/04        1,278             18.04                 1,278                108,907
          ----------------------------------------------------------------------------------------------------
          06/01/04 - 06/30/04       12,000             17.56                12,000                 96,907
          ----------------------------------------------------------------------------------------------------
               Total                30,678             18.37                30,678                 96,907
          ----------------------------------------------------------------------------------------------------
</TABLE>

          ----------
          (1)   All shares indicated  were  purchased  under the Company's Sixth
                and Seventh Stock Repurchase Programs.
          (2)   Sixth Stock Repurchase Program
                (a)   Announced January 2, 2003.
                (b)   130,000 common shares approved for repurchase.
                (c)   No fixed date of expiration.
                (d)   This Program was completed on April 27, 2004.
                (e)   Not applicable.
          (3)   Seventh Stock Repurchase Program
                (a)   Announced February 24, 2004.
                (b)   125,000 common shares approved for repurchase.
                (c)   No fixed date of expiration.
                (d)   This  Program  has  not  expired  and  has  96,907  shares
                      remaining to be purchased at June 30, 2004.
                (e)   Not applicable.

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

          The  information  required  herein is  incorporated  by reference from
          pages 2 to 3 of the Company's 2004 Annual Report.

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

          The  information  required  herein is  incorporated  by reference from
          pages 4 to 16 of the Company's 2004 Annual Report.

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

          The  information  required  herein is  incorporated  by reference from
          pages 13 to 16 of the Company's 2004 Annual Report.

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

          The  information  required  herein is  incorporated  by reference from
          pages 17 to 48 of the Company's 2004 Annual Report.

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

          Not applicable.


                                       30
<PAGE>

Item 9A.  Controls and Procedures.
--------  ------------------------

          Our  management  evaluated,   with  the  participation  of  our  Chief
          Executive  Officer and Chief Financial  Officer,  the effectiveness of
          our disclosure  controls and procedures (as defined in Rules 13a-15(e)
          and 15d-15(e)  under the  Securities  Exchange Act of 1934) as of June
          30, 2004.  Based on such evaluation,  our Chief Executive  Officer and
          Chief  Financial  Officer have concluded that our disclosure  controls
          and procedures are designed to ensure that information  required to be
          disclosed  by us in the  reports  that  we file or  submit  under  the
          Securities Exchange Act of 1934 is recorded, processed, summarized and
          reported  within the time  periods  specified  in the SEC's  rules and
          regulations and are operating in an effective manner.

          No change in our internal control over financial reporting (as defined
          in Rules 13a-15(f) and 15(d)-15(f)  under the Securities  Exchange Act
          of 1934) occurred during the fourth fiscal quarter of fiscal 2004 that
          has materially affected, or is reasonably likely to materially affect,
          our internal control over financial reporting.

Item 9B.  Other Information.
--------  ------------------

          Not applicable.

PART III

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

          The  information  required  herein is  incorporated  by reference from
          pages 2 to 8 of the  Company's  Proxy  Statement  for the 2004  Annual
          Meeting of Stockholders dated September 24, 2004 ("Proxy Statement").

          The  Company  has  adopted  a Code of  Ethics  for its  employees  and
          directors and executive officers, a copy of which has been filed as an
          exhibit to this Annual Report on Form 10-K.

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

          The  information  required  herein is  incorporated  by reference from
          pages 11 to 16 of the Company's Proxy Statement.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and
--------  ------------------------------------------------------------------
          Related Stockholder Matters.
          ----------------------------

          The security  ownership of certain  beneficial  owners and  management
          information  required herein is incorporated by reference from pages 9
          to 10 of the Company's Proxy  Statement.  For the related  stockholder
          matters  information  required herein,  see "Equity  Compensation Plan
          Information" on page 12 of the Company's Proxy Statement.

Item 13.  Certain Relationships and Related Transactions.
--------  -----------------------------------------------

          The  information  required herein is incorporated by reference on page
          16 of the Company's Proxy Statement.

Item 14.  Principal Accounting Fees and Services.
--------  ---------------------------------------

          The information required herein is incorporated by reference on page 6
          of the Company's Proxy Statement.

PART IV.

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
--------  ----------------------------------------------------------------

          (a)   Documents filed as part of this report.


                                       31
<PAGE>

            (1)   The  following  documents are filed as part of this report and
                  are  incorporated  herein by reference from the Company's 2004
                  Annual Report.

                  Report of Independent Auditors.

                  Consolidated Balance Sheet at June 30, 2004 and 2003.

                  Consolidated  Statement of Income for the Years Ended June 30,
                  2004, 2003 and 2002.

                  Consolidated  Statement of Changes in Stockholders' Equity for
                  the Years Ended June 30, 2004, 2003 and 2002.

                  Consolidated  Statement of Cash Flows for the Years Ended June
                  30, 2004, 2003 and 2002.

                  Notes to the Consolidated Financial Statements.

            (2)   All  schedules for which  provision is made in the  applicable
                  accounting   regulation   of  the   Securities   and  Exchange
                  Commission ("SEC") are omitted because they are not applicable
                  or the required  information  is included in the  Consolidated
                  Financial Statements or notes thereto.

            (3)   The  following  exhibits  are filed as part of this Form 10-K,
                  and this list includes the Exhibit Index.

<TABLE>
<CAPTION>
                   No.            Description                                                         Page
                  ----    -----------------------------                                               ----
<S>                       <C>                                                                         <C>
                   3.1    Articles of Incorporation                                                    *
                   3.2    By-Laws                                                                      *
                     4    Stock Certificate of WVS Financial Corp.                                     *
                  10.1    WVS Financial Corp. Recognition Plans and Trusts for
                            Executive Officers, Directors and Key Employees**                          *
                  10.2    WVS Financial Corp. 1993 Stock Incentive Plan**                              *
                  10.3    WVS Financial Corp. 1993 Directors' Stock Option Plan**                      *
                  10.4    WVS Financial Corp. Employee Stock Ownership Plan and Trust**                *
                  10.5    Amended West View Savings Bank Employee Profit Sharing Plan**                *
                  10.6    Employment Agreements between WVS Financial Corp. and
                            David Bursic **                                                           ***
                  10.7    Directors Deferred Compensation Program**                                    *
                    13    2004 Annual Report to Stockholders                                          E-1
                  14.1    Ethics Policy                                                               E-57
                  14.2    Code of Ethics for Senior Financial Officers                                E-61
                    21    Subsidiaries of the Registrant - Reference is made to
                            Item 1. "Business" for the required information                            2
                    23    Consent of Independent Registered Public Accounting Firm                    E-62
                  31.1    Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive Officer     E-63
                  31.2    Rule 13a-14(a) / 15d-14(a) Certification of the Chief Accounting Officer    E-64
                  32.1    Section 1350 Certification of the Chief Executive Officer                   E-65
                  32.2    Section 1350 Certification of the Chief Accounting Officer                  E-66
</TABLE>

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

**    Management contract or compensatory plan or arrangement.

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

      (b)   The Company filed a Current Report on Form 8-K dated April 30, 2004,
            reporting  under  Item 12  earnings  for the three  and nine  months
            ending  March 31,  2004.  The Company  included as an exhibit to the
            Form 8-K the press release dated April 30, 2004.


                                       32
<PAGE>

                                   SIGNATURES

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

                                           WVS FINANCIAL CORP.


September 24, 2004                     By: /s/ David J. Bursic
                                           -------------------------------------
                                           David J. Bursic
                                           President and Chief Executive Officer

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


/s/ David J. Bursic
-----------------------------------------
David J. Bursic, Director, President and                  September 24, 2004
Chief Executive Officer
(Principal Executive Officer)


/s/ Keith A. Simpson
-----------------------------------------
Keith A. Simpson, Vice President,                         September 24, 2004
Treasurer and Chief Accounting Officer
(Principal Accounting Officer)


/s/ Donald E. Hook
-----------------------------------------
Donald E. Hook,                                           September 24, 2004
Chairman of the Board of Directors


/s/ David L. Aeberli
-----------------------------------------
David L. Aeberli, Director                                September 24, 2004


/s/ Arthur H. Brandt
-----------------------------------------
Arthur H. Brandt, Director                                September 24, 2004


/s/ Lawrence M. Lehman
-----------------------------------------
Lawrence M. Lehman, Director                              September 24, 2004


/s/ John M. Seifarth
-----------------------------------------
John M. Seifarth, Director                                September 24, 2004


/s/ Margaret VonDerau
-----------------------------------------
Margaret VonDerau, Director                               September 24, 2004


                                       33