FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

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

          For the fiscal Year Ended September 30, 2000

                                       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 Number: 000-22255

                          MARKET FINANCIAL CORPORATION
             ------------------------------------------------------
                 (Name of small business issuer in its charter)

             Ohio                                       34-0462464
--------------------------------                ----------------------------
 (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                  Identification Number)


                  7522 Hamilton Avenue, Mt. Healthy, Ohio 45231
           -----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                           Issuer's telephone number:
                                 (513) 521-9772
          -----------------------------------------------------------

         Securities registered under Section 12(b) of the Exchange Act:
                                      None
              -----------------------------------------------------

         Securities registered under Section 12(g) of the Exchange Act:
                        Common Shares, without par value
           -----------------------------------------------------------
                                (Title of class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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  [  ]

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  Form,  and no  disclosure  will 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-KSB
or any amendment to this Form 10-KSB. [X]

     The issuer's  revenues for the fiscal year ended  September 30, 2000,  were
$3.8 million.

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant,  computed  by  reference  to the average of the closing bid and
asked prices quoted by the Nasdaq SmallCap Market, was $11.8 million on December
22, 2000.

     1,259,439 of the registrant's  common shares were issued and outstanding on
December 22, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

Part I of Form 10-KSB - Safe  Harbor  Under the  Private  Securities  Litigation
Reform Act of 1995.



<PAGE>



                                     PART I

Item 1.       Description of Business

General

         Market Financial Corporation, an Ohio corporation ("Market Financial"),
is a unitary savings and loan holding company which was organized under Ohio law
in April 1996 and which owns all of the issued and outstanding  common shares of
Market Bank, a savings and loan association incorporated under Ohio law ("Market
Bank").

         Market  Bank is  principally  engaged in the  business  of  originating
mortgage  loans secured by first  mortgages on one- to  four-family  residential
real estate  located in its primary  market area of Hamilton  County,  Ohio, and
portions of the contiguous counties.  Market Financial also originates a limited
number of loans for the  construction  of one- to four-family  residential  real
estate,  permanent  mortgage loans secured by multifamily real estate (over four
units) and  nonresidential  real estate in its primary  market area, and secured
consumer loans. For liquidity and interest rate risk management purposes, Market
Financial invests in interest-bearing  deposits in other financial institutions,
U.S. Government and agency obligations and mortgage-backed securities. Funds for
lending and other  investment  activities  are obtained  primarily  from savings
deposits,  which are  insured up to  applicable  limits by the  Federal  Deposit
Insurance Corporation ("FDIC"), and loan principal repayments.

         Interest on loans and  investments  is Market Bank's  primary source of
income.  Market Bank's principal  expense is interest paid on deposit  accounts.
Operating  results are  dependent  to a  significant  degree on the net interest
income of Market Bank, which is the difference between interest income earned on
loans,  mortgage-backed  securities and other  investments  and interest paid on
deposits.  Like most thrift  institutions,  Market  Bank's  interest  income and
interest expense are significantly  affected by general economic  conditions and
by the policies of various regulatory authorities.

         Market Bank  conducts  business  from its main  office in Mt.  Healthy,
Ohio,  and from its  full-service  branch  office  located in North Bend,  Ohio.
Market Bank's primary  market area for lending and deposit  activity is Hamilton
County, Ohio, which includes the City of Cincinnati within its boundaries.

         As a savings and loan holding  company,  Market Financial is subject to
regulations,  supervision and examination by the Office of Thrift Supervision of
the United States  Department of the Treasury (the "OTS"). As a savings and loan
association  incorporated  under the laws of the State of Ohio,  Market  Bank is
subject to regulations, supervision and examination by the OTS, the FDIC and the
Ohio Division of Financial Institutions (the "Division").  Market Bank is also a
member of the Federal Home Loan Bank (the "FHLB") of Cincinnati.

Forward-Looking Statements

         When used in this Annual  Report on Form  10-KSB,  the words or phrases
"will  likely  result,"  "are  expected  to,"  "will  continue,"  "anticipated,"
"estimated,"  "projected,"  or similar  expressions  are  intended  to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995. Such statements are subject to certain risks and
uncertainties  including changes in economic  conditions in Market Bank's market
area,  changes in  policies by  regulatory  agencies,  fluctuations  in interest
rates,  demand for loans in Market Bank's market area and competition that could
cause actual results to differ  materially  from  historical  earnings and those
presently  anticipated  or projected.  Factors  listed above could affect Market
Financial's  financial  performance  and could cause Market  Financial's  actual
results for future  periods to differ  materially  from any statement  expressed
with  respect to future  periods.  See Exhibit 99 hereto  "Safe Harbor Under the
Private Securities  Litigation Reform Act of 1995," which is incorporated herein
by reference.

         Market  Financial does not undertake,  and  specifically  disclaims any
obligation,  to publicly revise any forward-looking  statement to reflect events
or circumstances  after the date of such statements or to reflect the occurrence
of anticipated or unanticipated events.

Lending Activities

         General. Market Bank's principal lending activity is the origination of
conventional real estate loans secured by one- to four-family residences located
in Market  Bank's  primary  market  area. A limited  number of loans  secured by


                                      -2-
<PAGE>

multifamily  properties containing five units or more and by nonresidential real
estate and loans for the  construction  of  residences  have been  originated by
Market Bank.  Market Bank does not originate first mortgage loans insured by the
Federal  Housing  Authority or  guaranteed  by the Veterans  Administration.  In
addition to real estate  lending,  Market Bank  originates  a limited  number of
loans secured by deposit accounts.

     Loan  Portfolio   Composition.   The  following   table  presents   certain
information in respect of the composition of Market Bank's loan portfolio at the
dates indicated:
<TABLE>
<CAPTION>

                                                                At September 30,
                                            2000                       1999                     1998
                                            ------                     ------                   ----
                                                   Percent                  Percent                   Percent
                                                   of total                 of total                  of total
                                     Amount          loans       Amount       loans      Amount        loans
                                     ------       ---------      ------     ---------    ------       -------
                                                              (Dollars in thousands)
<S>                                     <C>            <C>         <C>          <C>        <C>           <C>
Real estate loans:
   One- to four-family               $32,876          86.8%      $30,959        87.9%    $29,225         89.1%
   Multifamily                         2,828           7.5         2,049         5.8       1,507          4.6
   Nonresidential                      1,647           4.3         1,737         4.9       1,879          5.7
   Construction                        1,000           2.6           346         1.0         150           .5
   Land                                  136            .4           138          .4           -            -
                                      ------         -----        ------       -----      ------        -----
      Total real estate loans         38,487         101.6        35,229       100.0      32,761         99.9

Consumer loans:
   Loans on deposits                      13            -             26          .1         106           .3
                                      ------         -----        ------       -----      ------        -----

Total loans                           38,500         101.6        35,255       100.1      32,867        100.2

  Less:
   Undisbursed portion of loans
     in process                          608           1.6            17           -           -            -
   Unearned and deferred income
     (costs)                             (39)          (.1)          (33)        (.1)         (1)           -
   Allowance for loan losses              52            .1            52          .2          52           .2
                                      ------         -----        ------       -----      ------        -----

     Net loans                       $37,879         100.0%      $35,219       100.0%    $32,816        100.0%
                                      ======         =====        ======       =====      ======        =====
</TABLE>


         Loan  Maturity  Schedule.   The  following  table  sets  forth  certain
information at September 30, 2000, regarding the dollar amount of loans maturing
in Market Bank's portfolio based on their contractual terms to maturity.  Demand
loans and other  loans  having no stated  schedule  of  repayments  or no stated
maturity are reported as due in one year or less.
<TABLE>
<CAPTION>

                           Amounts      Amounts        Amounts        Amounts         Amounts
                          due within     due in        due in         due in           due in        Amounts due
                            1 year    1 to 3 years  3 to 5 years   5 to 10 years   10 to 20 years  after 20 years    Total
                            ------    ------------  ------------   -------------   --------------  --------------    -----
                                                                 (In thousands)
<S>                         <C>            <C>           <C>           <C>              <C>              <C>          <C>
Real estate mortgage
loans:
   Adjustable-rate          $1,599         $222         $168          $  318           $     -       $     -       $ 2,307
   Fixed-rate                   33          276          266           3,602            12,909        16,298        33,384
Nonresidential real
  estate and land loans        392            -           40             295               725           723         2,175
Consumer and other loans         5            8            -               -                 -             -            13
                             -----          ---          ---           -----            ------        ------       -------
Total loans                 $2,029         $506         $474          $4,215           $13,634       $17,021       $37,879 (1)
                             =====          ===          ===           =====            ======        ======        ======
</TABLE>

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

(1)  Net of  undisbursed  portion of loans in  process,  unearned  and  deferred
     income (costs) and allowance for loan losses.




                                      -3-
<PAGE>

         The  following  table sets forth the  dollar  amount of loans  maturing
after one year from September 30, 2000, which have pre-determined interest rates
or floating or adjustable interest rates.
<TABLE>
<CAPTION>

                                               Predetermined               Floating or
                                                   rates                 Adjustable rates
                                               -------------             ----------------
                                                            (In thousands)
<S>                                                  <C>                        <C>
Residential real estate                            $33,351                      $708
Nonresidential real estate                           1,783                         -
Consumer and other                                       -                         8
                                                    ------                       ---
         Total loans                               $35,134                      $716
                                                    ======                       ===
</TABLE>

         One- to Four-Family Real Estate Loans.  The principal  lending activity
of  Market  Bank is the  origination  of  conventional  loans  secured  by first
mortgages on one- to four-family residences,  primarily single-family residences
located within Market Bank's primary market area. At September 30, 2000,  Market
Bank's  one-  to  four-family  residential  loans  totaled  approximately  $32.9
million, or 86.8% of total loans.

         OTS  regulations  and Ohio law limit the amount  which  Market Bank may
lend in relationship to the appraised value of the real estate and  improvements
which  will  secure  the loan (the  "LTV") at the time of loan  origination.  In
accordance with such regulations,  Market Bank makes fixed-rate loans on one- to
four-family  residences  for up to  95% of the  value  of the  real  estate  and
improvements  thereon,  although most of Market Bank's one- to four-family loans
have an LTV of 80% or less. Market Bank requires private mortgage  insurance for
the  amount  of such  loans in  excess  of 89% of the  value of the real  estate
securing such loans.

         Fixed-rate loans are offered by Market Bank,  currently for terms of up
to 30 years,  though most loans are  originated  with terms of 20 years or less.
Market Bank also offers adjustable-rate  mortgage loans ("ARMs") for terms of up
to 30 years with various  alternative  features in an effort to decrease  Market
Bank's interest rate risk. The interest rate adjustment  periods on the ARMs are
either one year or a fixed rate for three or seven  years  followed  by one-year
adjustment periods.  The interest rate adjustments on ARMs presently  originated
by Market Bank are tied to the U.S. Treasury  maturities index. Rate adjustments
are  computed by adding a stated  margin,  typically  2.75%,  to the index.  The
maximum  allowable  adjustment  at each  adjustment  date is  usually  1% with a
maximum adjustment of 5% over the term of the loan.

         The initial rate on ARMs originated by Market Bank may be less than the
sum of the index at the time of  origination  plus the  specified  margin.  Such
loans may be subject to greater risk of default as the interest  rate adjusts to
the fully-indexed  level,  although such increase is considered in Market Bank's
underwriting of any such loans with a one-year  adjustment  period. Of the total
mortgage loans  originated by Market Bank during the fiscal year ended September
30, 2000, 67.7% were fixed-rate.

         Market Bank also makes closed-end home equity loans in an amount which,
when added to the prior indebtedness secured by the real estate, does not exceed
80% of the estimated  value of the real estate.  Market Bank's home equity loans
are made in a fixed  amount  disbursed  at  closing,  rather than being lines of
credit.  Home  equity  loans are  secured  by real  estate  and are made only to
borrowers as to whom Market Bank holds the first mortgage.  Of the $32.9 million
of one- to  four-family  residential  loans,  approximately  $251,000  were home
equity loans.

         At September 30, 2000,  Market Bank had  nonperforming  loans  totaling
$272,000 in its one- to  four-family  portfolio.  Residential  real estate loans
(including  one-  to  four-family  and  multifamily  lending)  constituted  $6.3
million, or 93.8%, of the $6.8 million of loans originated in fiscal 2000.

         Multifamily  Real  Estate  Loans.  In  addition  to  loans  on  one- to
four-family properties, Market Bank originates a limited number of loans secured
by multifamily properties,  which contain more than four units. At September 30,
2000,  loans  secured  by  multifamily  residences  totaled  approximately  $2.8
million,  or 7.5% of total loans. At September 30, 2000, the largest single loan
secured by a multifamily residence was $659,000 and was performing in accordance
with its terms. Multifamily loans are offered with fixed or adjustable rates for
terms of up to 30 years and have LTVs of up to 80%.

         Multifamily lending is generally  considered to involve a higher degree
of risk  than one- to  four-family  residential  lending  because  the  borrower
typically  depends  upon  income  generated  by the  project to cover  operating
expenses and debt  service.  The  profitability  of a project can be affected by
economic conditions, government policies and other factors beyond the control of

                                      -4-
<PAGE>

the  borrower.   Market  Bank  attempts  to  reduce  the  risk  associated  with
multifamily  lending by evaluating the  creditworthiness of the borrower and the
projected income from the project and by obtaining personal  guarantees on loans
made to corporations and partnerships.  Market Bank requires  borrowers to agree
to submit  financial  statements  annually to enable  Market Bank to monitor the
loan and requires the assignment of rents.

         At September 30, 2000,  Market Bank had no  nonperforming  loans in its
multifamily residential real estate portfolio.

         Nonresidential Real Estate Loans. Market Bank also originates loans for
the purchase of  nonresidential  real estate located  within close  proximity to
Market Bank's offices.  Among the properties  securing the  nonresidential  real
estate loans originated by Market Bank are office  buildings,  retail properties
and a veterinary  clinic,  all located  within the immediate  vicinity of Market
Bank's offices.  At September 30, 2000,  approximately $1.6 million, or 4.3%, of
Market  Bank's  total loans were secured by  mortgages  on  nonresidential  real
estate.  Market Bank's  nonresidential real estate loans have fixed rates, terms
of up to 20 years and LTVs of up to 75%.

         Although  loans  secured by  nonresidential  real  estate  have  higher
interest  rates  than  one-  to  four-family   residential  real  estate  loans,
nonresidential  real estate lending is generally  considered to involve a higher
degree  of risk than  residential  lending  due to the  relatively  larger  loan
amounts  and the  effects  of  general  economic  conditions  on the  successful
operation of income-producing  properties.  Market Bank has endeavored to reduce
such risk by evaluating the credit history of the borrower,  the location of the
real  estate,  the  financial  condition  of  the  borrower,   the  quality  and
characteristics  of  the  income  stream  generated  by  the  property  and  the
appraisals  supporting  the  property's  valuation.  Market  Bank also  requires
personal guarantees.

         At September 30, 2000,  Market Bank had no  nonperforming  loans in its
nonresidential  real estate  portfolio.  With the exception of the  construction
loan  discussed  below,  Market Bank did not originate any  nonresidential  real
estate loans in fiscal 2000.

         Construction  Loans. In the past, Market Bank has made a limited number
of loans  for the  construction  of  residential  real  estate.  Such  loans are
structured as permanent loans with fixed rates of interest and terms of up to 30
years. During the first six months while the residence is being constructed, the
borrower  is  required to pay  interest  only.  Such loans have an LTV of 80% or
less, with the value of the land counting as part of the down payment if already
owned.  Construction  loans  originated  by  Market  Bank  are  usually  made to
owner-occupants  for  the  construction  of  single-family  homes  by a  general
contractor.  At September 30, 2000, however, Market Bank had a construction loan
of approximately $1.0 million, or 2.6% of total loans outstanding, for a church,
with the undisbursed portion of such loan totaling approximately $608,000.

         Construction  loans generally involve greater  underwriting and default
risks than do loans  secured by mortgages on existing  properties.  In addition,
such loans are more  difficult to evaluate and monitor.  Loan funds are advanced
upon the security of the project under construction,  which is more difficult to
value  before  the  completion  of  construction.   Moreover,   because  of  the
uncertainties  inherent  in  estimating  construction  costs,  it is  relatively
difficult to evaluate the LTV's and the total loan funds  required to complete a
project.  In the event a default on a construction  loan occurs and  foreclosure
follows,  Market  Bank would have to take  control of the  project  and  attempt
either to arrange for construction or dispose of the unfinished project.  Almost
all of Market  Bank's  construction  loans are secured by properties in Hamilton
County, with the exception of a construction loan on a church in Butler County.

         None  of  Market  Bank's   construction  loans  were  nonperforming  at
September 30, 2000.

         Commercial  Loans.  Market Bank does not issue any letters of credit or
originate  or  purchase  any  loans for  commercial,  business  or  agricultural
purposes, other than loans secured by real estate.

         Consumer Loans. Market Bank makes loans at adjustable rates of interest
to depositors on the security of their deposit accounts.  At September 30, 2000,
Market Bank had approximately $13,000, or less than .1% of total loans, invested
in such consumer loans.

         Consumer loans may entail greater risk than do residential  real estate
loans.  The risk of  default  on  consumer  loans  increases  during  periods of
recession,  high  unemployment  and other adverse  conditions.  At September 30,
2000, Market Bank had no nonperforming loans in its consumer loan portfolio.

         Loan Solicitation and Processing.  Loan originations are developed from
a number of  sources,  including  continuing  business  with  depositors,  other
borrowers and real estate  developers,  solicitations  by Market Bank's  lending
staff and walk-in customers.

                                      -5-
<PAGE>

         Loan  applications  for  permanent  real estate loans are taken by loan
personnel.  Market  Bank  typically  obtains a credit  report,  verification  of
employment  and  other  documentation  concerning  the  creditworthiness  of the
borrower. An appraisal of the fair market value of the real estate which will be
given as security for the loan is prepared by an appraiser approved by the Board
of  Directors.  Upon  the  completion  of  the  appraisal  and  the  receipt  of
information on the credit history of the borrower, the application for a loan is
submitted for review in accordance with Market Bank's  underwriting  guidelines.
The Managing  Officer of Market Bank has  authority to approve loans of $100,000
or less. Loans for amounts ranging from $100,001 to $200,000 must be approved by
a directors'  committee,  and loans of greater than $200,000 must be approved by
the full Board of Directors of Market Bank.

         Until October 1995, if a mortgage loan application was approved, Market
Bank typically obtained an attorney's opinion of title.  Presently,  Market Bank
obtains  title  insurance on loans secured by real estate unless the borrower is
seeking to refinance a loan Market Bank  originated.  Borrowers  are required to
carry  satisfactory  fire  and  casualty  insurance  and  flood  insurance,   if
applicable, and to name Market Bank as an insured mortgagee.

         The  procedure  for approval of  construction  loans is the same as for
permanent  real estate  loans,  except that an appraiser  evaluates the building
plans,  construction  specifications and estimates of construction costs. Market
Bank also evaluates the feasibility of the proposed construction project and the
experience and record of the builder.  Once approved,  the construction  loan is
disbursed in portions based upon periodic inspections of construction progress.

         Loan Originations and Participation. Currently, Market Bank is offering
both  fixed-rate and  adjustable-rate  loans,  with no intention of selling such
loans in the secondary  market.  Prior to September 1996, Market Bank originated
only  fixed-rate  mortgage  loans.  Market Bank does not service loans for other
financial institutions.

         The following  table presents Market Bank's loan  origination  activity
for the periods indicated:
<TABLE>
<CAPTION>


                                                         Year ended September 30,
                                              2000                 1999               1998
                                              ----                 ----               ----
                                                              (In thousands)
<S>                                              <C>                <C>                <C>
Loans originated:
  Residential (1)                              $6,335              $11,038             $11,023
  Nonresidential                                    -                   98               1,107
  Construction                                    409                  446                 324
  Consumer                                         11                    -                  40
                                                -----               ------              ------
    Total loans originated                      6,755               11,582              12,494

Principal repayments                           (4,089)              (9,182)             (6,183)

Increase in other items, net (2)                   (6)                   3                   3
                                                -----               ------              ------
Net increase                                   $2,660              $ 2,403             $ 6,314
                                                =====               ======              ======
</TABLE>

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

(1)  Includes one- to four-family and multifamily loans.

(2)  Other items consist of loans in process, deferred loan origination fees and
     costs and the allowance for loan losses.


         OTS  regulations  generally  limit the aggregate  amount that a savings
association  may  lend to any one  borrower  to an  amount  equal  to 15% of the
association's  total capital for risk-based  purposes plus any loan reserves not
already included in total capital  (collectively,  "Lending Limit  Capital").  A
savings  association may lend to one borrower an additional amount not to exceed
10% of the association's Lending Limit Capital if the additional amount is fully
secured by certain forms of "readily marketable  collateral." Real estate is not
considered  "readily  marketable   collateral."  In  applying  this  limit,  the
regulations  require that loans to certain  related or  affiliated  borrowers be
aggregated. An exception to this limit permits loans of any type to one borrower
of up to $500,000. In addition, the OTS, under certain circumstances, may permit
exceptions to the lending limit on a case-by-case  basis.  Based on such limits,
Market  Bank was able to lend  approximately  $2.0  million to one  borrower  at
September  30,  2000.  The largest  amount  Market Bank had  outstanding  to one
borrower at September 30, 2000, was $659,000,  consisting of one loan, which was
secured by a  multi-family  real estate and which was  performing  in accordance
with its terms.

                                      -6-
<PAGE>

         Delinquent Loans,  Nonperforming Assets and Classified Assets. Payments
on loans  made by Market  Bank are due on the  first  day of the month  with the
interest portion of the payment  applicable to interest accrued during the prior
month.  When a loan payment has not been made by the  thirtieth of the month,  a
late  notice is sent.  In  addition,  if the loan is on the  borrower's  primary
residence, Market Bank will send a notice of available counseling for delinquent
borrowers.  If payment is not received by the sixtieth  day, a second  notice is
sent.  Telephone  calls are made to the borrower in connection with both the 30-
and 60-day  notices.  If Market Bank is unable to make contact with the borrower
by mail or  telephone,  a  representative  from Market Bank will make a personal
visit to the property in an attempt to speak with the borrower.

         When a loan secured by real estate becomes more than 90 days delinquent
it is considered  nonperforming  by Market Bank and the above steps are repeated
and a letter is sent to the borrower by Market Bank to inform the borrower  that
foreclosure  proceedings will begin if the loan is not brought current promptly.
The borrower is also counseled to make every effort to sell the property  before
it is lost in a sheriff's  sale.  If the  customer  fails to take any action,  a
request is made to the Board of Directors to authorize foreclosure proceedings.

         If a foreclosure occurs, the real estate is sold at public sale and may
be  purchased  by Market  Bank,  to be sold as soon as  possible  by Market Bank
without the use of a real estate agent.

         The following table reflects the amount of loans in a delinquent status
as of the dates indicated:
<TABLE>
<CAPTION>

                                                  At September 30,
                               2000                      1999                      1998
                               -----                     ------                    -----
                                       Percent                    Percent                   Percent
                                       of total                  of total                  of total
                       Number  Amount   loans    Number   Amount   loans   Number   Amount   loans
                                                 (Dollars in thousands)
<S>                       <C>     <C>     <C>      <C>     <C>      <C>      <C>      <C>     <C>
Loans delinquent for:
  30 - 59 days             3     $333     0.9%      1    $    2       -%       7      $125     0.4%
  60 - 89 days             -        -      -        4       250     0.7        5        85     0.3
  90 days and over        12      272     0.7       8       119     0.4       11       171     0.5
                          --    -----     ---     ---     -----     ---       --     -----     ---
   Total delinquent
     loans                15     $605     1.6%     13      $371     1.1%      23      $381     1.2%
                          ==     ====     ===      ==      ====     ===       ==      ====     ===
</TABLE>

         The following table sets forth  information with respect to the accrual
and nonaccrual status of Market Bank's loans and other  nonperforming  assets at
the dates indicated:
<TABLE>
<CAPTION>

                                                     At September 30,
                                         2000               1999                 1998
                                         ----              ----                  ----
                                                    (Dollars in thousands)
<S>                                        <C>               <C>                 <C>
Accruing loans delinquent more
   than 90 days (1)                       $272               $119                $171

   Real estate acquired through
     foreclosure                             -                  -                   -
                                           ---                ---                 ---

     Total nonperforming assets           $272               $119                $171
                                           ===                ===                 ===

     Allowance for loan losses            $ 52               $ 52                $ 52
                                           ===                ===                 ===

     Nonperforming assets as a
       percent of total assets            0.5%               0.2%                0.3%

     Nonperforming loans as a
       percent of total loans             0.7%               0.3%                0.5%

     Allowance for loan losses
       as a percent of
       nonperforming loans               19.1%              43.7%               30.4%
</TABLE>

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

(1)  Consists  entirely of one- to four-family  residential  loans for all dates
     presented.

                                      -7-
<PAGE>

         Management evaluates each loan individually to determine whether Market
Bank should cease accruing interest on the loan, depending on whether management
deems collection of the loan to be likely.  Market Bank had no nonaccruing loans
during the year ended September 30, 2000

         Market Bank  classifies its own assets on a regular basis in accordance
with  federal  regulations.  Problem  assets are  classified  as  "substandard,"
"doubtful" or "loss."  "Substandard"  assets have one or more defined weaknesses
and are characterized by the distinct  possibility that Market Bank will sustain
some loss if the deficiencies are not corrected. "Doubtful" assets have the same
weaknesses as "substandard" assets, with the additional characteristics that (i)
the weaknesses make collection or liquidation in full, on the basis of currently
existing  facts,  conditions and values,  questionable  and (ii) there is a high
possibility of loss. An asset classified "loss" is considered  uncollectible and
of such  little  value that its  continuance  as an asset of Market  Bank is not
warranted. The regulations also contain a "special mention" category, consisting
of assets which do not currently  expose an institution to a different degree of
risk  to  warrant  classification  but  which  possess  credit  deficiencies  or
potential weaknesses deserving management's close attention.

         The aggregate  amounts of Market Bank's  classified assets at the dates
indicated were as follows:
<TABLE>
<CAPTION>

                                                   At September 30,
                                    2000                 1999                   1998
                                    ----                 ----                   ----
                                                     (In thousands)
<S>                                  <C>                  <C>                   <C>
Classified assets:
   Special mention                   $89                  $46                   $60
   Substandard                         9                    7                    23
   Doubtful                            -                    -                     -
   Loss                                -                    -                     2
                                      --                   --                    --
    Total classified assets          $98                  $53                   $85
                                      ==                   ==                    ==
</TABLE>

         Market Bank establishes general allowances for loan losses for any loan
classified as  substandard  or doubtful.  If an asset,  or portion  thereof,  is
classified as loss,  Market Bank establishes  specific  allowances for losses in
the amount of 100% of the portion of the asset  classified  loss. See "Allowance
for Loan  Losses."  Generally,  Market Bank  charges off the portion of any real
estate loan deemed to be uncollectible.

         Market  Bank  analyzes  each  classified  asset on a  monthly  basis to
determine  whether  changes in the  classifications  are  appropriate  under the
circumstances.  Such  analysis  focuses on a variety of factors,  including  the
amount of any delinquency and the reasons for the  delinquency,  if any, the use
of the real  estate  securing  the  loan,  the  status of the  borrower  and the
appraised value of the real estate. As such factors change,  the  classification
of the asset will change accordingly.

         Allowance for Loan Losses.  Market Bank maintains an allowance for loan
losses based upon a number of relevant factors,  including,  but not limited to,
growth and changes in the composition of the loan portfolio, trends in the level
of delinquent and problem loans,  current and anticipated economic conditions in
the primary  lending area, past loss experience and possible losses arising from
specific problem assets.

         The single largest  component of Market Bank's loan portfolio  consists
of one- to four-family residential real estate loans. Substantially all of these
loans are secured by property in Market Bank's lending area of Hamilton  County,
Ohio, which has a fairly stable economy.  Market Bank's practice of making loans
primarily  in  its  local  market  area  has  contributed  to a  low  historical
charge-off  rate.  In addition to one- to  four-family  residential  real estate
loans,  Market Bank makes home  equity,  multifamily  residential  real  estate,
nonresidential  real estate and construction  loans. These real estate loans are
also secured by property in Market Bank's lending area.  During the fiscal years
ended  September 30, 2000,  1999 and 1998,  Market Bank has not  experienced any
charge-offs or recoveries from these other real estate loan categories in recent
years.  Less than .1% of Market  Bank's  total loans are  comprised  of consumer
loans, which carry a higher degree of risk than the real estate loans.

         Market  Bank's  allowance  for loan  losses was  $52,000 for the fiscal
years ended September 30, 2000, 1999 and 1998, which  represented .13%, .15% and
 .16%, respectively, of total loans in those periods.

         The allowance for loan losses is based on estimates and is,  therefore,
monitored monthly and adjusted as necessary to provide an adequate allowance.




                                      -8-
<PAGE>

Investment Activities

         Federal regulation and Ohio law permit Market Bank to invest in various
types of investment  securities,  including  interest-bearing  deposits in other
financial  institutions,  U.S. Treasury and agency obligations,  mortgage-backed
securities and certain other  specified  investments.  The Board of Directors of
Market Bank has adopted an investment policy which authorizes management to make
investments  in U.S.  Government  and agency  securities,  deposits in the FHLB,
certificates of deposit in federally-insured financial institutions, and federal
funds at commercial banks. The Board of Directors has primary responsibility for
implementation  of the investment  policy.  Market Bank's  investment  policy is
designed   primarily  to  provide  and  maintain   liquidity  within  regulatory
guidelines,  to maintain a balance of high quality  investments to minimize risk
and to maximize return without  sacrificing  liquidity and safety. The following
table sets forth the  composition of Market  Financial's  investment  portfolio,
excluding mortgage-backed securities, at the dates indicated:
<TABLE>
<CAPTION>

                                                                       At September 30,
                                               2000                          1999                         1998
                                               -------                       -----                        ----
                                        Carrying      Percent        Carrying        Percent       Carrying      Percent
                                         value        of total         value         of total       value       of total
                                         -----        --------         -----         --------       -----       --------
                                                                     (Dollars in thousands)
<S>                                      <C>             <C>           <C>              <C>           <C>          <C>
Interest-bearing deposits
  in other financial institutions (1)    $   539          4.0%       $ 1,937            11.9%      $  8,556         43.4%
U.S. Government agency
  obligations (2)                         11,400         83.9         12,800            78.5          9,300         47.2
FHLMC stock (3)                            1,160          8.5          1,116             6.8          1,448          7.3
FHLB stock                                   482          3.6            449             2.8            419          2.1
                                          ------        -----         ------           -----         ------        -----
   Total                                 $13,581        100.0%       $16,302           100.0%       $19,723        100.0%
                                          ======        =====         ======           =====         ======        =====
</TABLE>

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

(1)  Includes interest-bearing  deposits, Federal Funds sold and certificates of
     deposit.

(2)  Consists  primarily of investments in U.S.  Treasury Notes and Bills,  FHLB
     bonds,   Federal  Farm  Credit   Bureau  and  Federal  Home  Loan  Mortgage
     Corporation  ("FHLMC")  Medium  Term  Notes  and a Student  Loan  Marketing
     Association  ("SLMA")  bond,  which are  classified  as held to maturity at
     September 30, 2000, 1999 and 1998.

(3)  Classified as available for sale at September 30, 2000, 1999 and 1998.


























                                      -9-
<PAGE>



         Market Bank maintains a portfolio of mortgage-backed  securities in the
form of fixed-rate  participation  interests  issued by the Government  National
Mortgage  Association ("GNMA") and FHLMC.  Mortgage-backed  securities generally
entitle  Market  Bank to receive a portion of the cash flows from an  identified
pool of mortgages and are  guaranteed by the issuing  agency as to principal and
interest.   Although  mortgage-backed   securities  generally  yield  less  than
individual  loans  originated  by Market Bank,  management  believes  they are a
prudent  alternative for investing  excess cash flow when available funds exceed
local loan demand and as part of Market Bank's  interest  rate risk  management.
The  following  table sets forth  certain  information  regarding  Market Bank's
investments in mortgage-backed  securities at the dates indicated,  all of which
are classified as held to maturity:
<TABLE>
<CAPTION>


                                 At September 30, 2000                          At September 30, 1999
                      ------------------------------------------  ----------------------------------------------
                                    Gross     Gross    Estimated                 Gross       Gross     Estimated
                      Amortized  unrealized unrealized   fair     Amortized   unrealized   unrealized     fair
                        cost       gains       loss      value       cost        gains        loss       value
                        ------    -------     ------    -------     ------      ------       ------      ------
                                                             (In thousands)
 <S>                      <C>       <C>        <C>       <C>          <C>         <C>         <C>          <C>
GNMA participation
 certificates           $  499      $17       $ -       $ 516       $  592       $29         $ -        $  621
FHLMC participation
 certificates            1,331        -         18      1,313        1,455         -           9         1,446
                         -----       --         --      -----        -----       ---          --       -------
Total                   $1,830      $17        $18     $1,829       $2,047       $29         $ 9        $2,067
                         =====       ==         ==      =====        =====       ===          ==        ======



                                        At September 30, 1998
                          -----------------------------------------------
                                         Gross       Gross      Estimated
                          Amortized   unrealized   unrealized     fair
                             cost        gains        loss        value
                            ------      ------       ------      ------
                                            (In thousands)
 <S>                          <C>         <C>         <C>           <C>
GNMA participation
 certificates                 $859       $ 43         $ -          $902
FHLMC participation
 certificates                    -          -           -             -
                               ---        ---          --           ---
Total                         $859       $ 43         $ -          $902
                               ===        ===          ==           ===
</TABLE>









                                      -10-
<PAGE>


         The maturities of Market Bank's investment  securities at September 30,
2000, are indicated in the following table:
<TABLE>
<CAPTION>

                                                                     At September 30, 2000
                                ---------------------------------------------------------------------------------------------
                                                            1-5                  5-10                       Total
                                 Less than 1 year          years                years              investment securities
                                 ---------------     -----------------     -----------------    -----------------------------
                                 Book                 Book                  Book                 Book     Market     Average
                                 value     Yield     value       Yield     value      Yield     value     value        yield
                                 -----     -----     ------      -----     ------     -----     -----    -------     --------
                                                                  (Dollars in thousands)
<S>                                <C>       <C>       <C>       <C>        <C>         <C>       <C>        <C>        <C>
Certificates of deposit in
   other financial                $200     6.38%   $   100        6.45%     $  -         -%    $   300   $   300       6.40%
   institutions
U.S. Government agency
   obligations (1)                   -        -     11,400        6.21         -         -      11,400    11,143       6.21
</TABLE>

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

(1)  Consists  primarily of investments in U.S.  Treasury Notes, FHLB bonds, and
     FNMA and FHLMC medium-term  notes, which are classified as held to maturity
     at September 30, 2000.


Deposits and Borrowings

         General.  Deposits have traditionally been the primary source of Market
Bank's funds for use in lending and other investment activities.  In addition to
deposits,  Market  Bank  derives  funds from  interest  payments  and  principal
repayments on loans and income on  interest-earning  assets. Loan payments are a
relatively stable source of funds,  while deposit inflows and outflows fluctuate
in response to general interest rates and money market conditions.

         Deposits.  Deposits are attracted principally from within Market Bank's
market  area  through  the  offering  of a  selection  of  deposit  instruments,
including  regular passbook  savings  accounts,  term  certificate  accounts and
Individual  Retirement  Accounts ("IRAs").  Interest rates paid, maturity terms,
service  fees and  withdrawal  penalties  for the various  types of accounts are
monitored  weekly by the Managing  Officer and reviewed  monthly by the Board of
Directors of Market Bank.  Market Bank does not use brokers to attract deposits.
The  amount  of  deposits  from  outside   Market  Bank's  market  area  is  not
significant.

         At September 30, 2000 Market  Bank's  certificates  of deposit  totaled
approximately  $28.9  million,  or  71.9%  of total  deposits.  Of such  amount,
approximately  $22.5 million in  certificates of deposit mature within one year.
Based on past  experience  and  Market  Bank's  prevailing  pricing  strategies,
management  believes that a substantial  percentage of such certificates will be
renewed  with Market Bank at  maturity.  If,  however,  Market Bank is unable to
renew  the  maturing  certificates  for any  reason,  borrowings  of up to $26.1
million are available from the FHLB of Cincinnati.















                                      -11-
<PAGE>

         The  following  table sets forth the dollar  amount of  deposits in the
various types of accounts offered by Market Bank at the dates indicated:
<TABLE>
<CAPTION>

                                                                   At September 30,
                                          2000                           1999                           1998
                                          ------                         -----                          -----
                                                Percent                         Percent                          Percent
                                               of total                        of total                         of total
                                 Amount        deposits         Amount         deposits           Amount        deposits
                                 ------        --------         ------         --------           ------        --------
                                                                 (Dollars in thousands)
<S>                               <C>            <C>             <C>              <C>               <C>            <C>
Transaction accounts:
   NOW accounts (1)              $   198         0.5%          $     -             -%          $     -                -%
   Statement savings
      accounts (2)                    14           -                 -             -                 -                -
   Passbook accounts (3)           9,731        24.2            10,453          26.2             9,510             25.2
   Club accounts (4)                  57          .1                58            .1                51               .1
   Money market accounts (5)       1,331         3.3             1,829           4.6             2,178              5.8
                                  ------       -----            ------         -----            ------            -----
    Total transaction accounts    11,331        28.1            12,340          30.9            11,739             31.1

Certificates of deposit (6)       28,929        71.9            27,567          69.1            26,006             68.9
                                  ------       -----            ------         -----            ------            -----

     Total deposits              $40,260       100.0%          $39,907         100.0%          $37,745            100.0%
                                  ======       =====           =======         =====            ======            =====
</TABLE>

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

(1)  The weighted  average  interest rate on NOW accounts was 0.76% at September
     30, 2000.

(2)  The weighted average interest rate on statement  savings accounts was 2.67%
     at September 30, 2000.

(3)  The weighted  average  interest  rates on passbook  accounts  were 2.67% at
     September 30, 2000.

(4)  The  weighted  average  interest  rates  on club  accounts  were  5.08%  at
     September 30, 2000.

(5)  The weighted  average interest rates on money market accounts were 2.67% at
     September 30, 2000.

(6)  The weighted  average  rates on all  certificates  of deposit were 6.25% at
     September 30, 2000.


         The  following  table shows rate and  maturity  information  for Market
Bank's certificates of deposit at September 30, 2000:
<TABLE>
<CAPTION>

                                                     Amount Due
                                               Over              Over
                            Up to           1 year to         2 years to
Rate                       one year          2 years           3 years             Total
----                       --------          --------         ---------            -----
                                                   (In thousands)
<S>                           <C>              <C>             <C>                <C>
4.00 - 4.99%                 $   189          $   40            $    -            $   229
5.00 - 5.99%                  11,713           1,306                34             13,053
6.00 - 6.99%                   9,876           2,658             1,275             13,809
7.00 - 7.99%                     722           1,068                48              1,838
                              ------           -----             -----             ------
Total certificates
  of deposit                 $22,500          $5,072            $1,357            $28,929
                              ======           =====             =====             ======
</TABLE>





                                      -12-
<PAGE>

         The following  table presents the amount of Market Bank's  certificates
of deposit of $100,000 or more by the time remaining until maturity at September
30, 2000:
<TABLE>
<CAPTION>

  Maturity                                              Amount
  --------                                              ------
                                                    (In thousands)
<S>                                                       <C>
  December 31, 2000                                      $  665
  March 31, 2001                                            794
  June 30, 2001                                             941
  September 30, 2001                                        803
  After September 30, 2001                                  810
                                                          -----

    Total                                                $4,013
                                                          =====
</TABLE>


         The following  table sets forth Market Bank's deposit  account  balance
activity for the periods indicated:
<TABLE>
<CAPTION>


                                                  Year ended September 30,
                                        2000               1999               1998
                                        ----               ----               ----
                                                  (Dollars in thousands)
<S>                                      <C>                <C>                <C>
  Beginning balance                    $39,907            $37,745             $35,303
  Deposits                              16,439             14,282              14,656
  Withdrawals                          (17,517)           (13,468)            (13,580)
  Interest credited                      1,431              1,348               1,366
                                        ------             ------              ------
  Ending balance                       $40,260            $39,907             $37,745
                                        ======             ======              ======

  Net increase                         $   353            $ 2,162             $ 2,442
                                        ======             ======              ======
  Percent increase                        0.1%               5.7%                6.9%
                                          ===                ===                 ===
</TABLE>


         Borrowings.  The  FHLB  system  functions  as a  central  reserve  bank
providing  credit  for its  member  institutions  and  certain  other  financial
institutions.  See  "REGULATION  - Federal Home Loan Banks." As a member in good
standing  of the FHLB of  Cincinnati,  Market  Bank is  authorized  to apply for
advances  from  the  FHLB  of   Cincinnati,   provided   certain   standards  of
creditworthiness  have been met. Under current regulations,  an association must
meet  certain  qualifications  to be eligible for FHLB  advances.  The extent to
which an  association  is eligible for such advances will depend upon whether it
meets the Qualified  Thrift Lender (the "QTL") test. See "REGULATION - Office of
Thrift  Supervision  -- Qualified  Thrift  Lender  Test." At September 30, 2000,
Market Bank was not utilizing FHLB advances.

Competition

         Market  Bank   competes  for  deposits  with  other  savings  and  loan
associations, savings banks, commercial banks and credit unions and with issuers
of  commercial  paper and other  securities,  including  shares in money  market
mutual  funds.  The primary  factors in  competition  for  deposits are customer
service  and  convenience  of office  location.  In making  loans,  Market  Bank
competes  with  other  savings  associations,  savings  and  loan  associations,
commercial banks, mortgage brokers,  consumer finance companies,  credit unions,
leasing companies and other lenders.  Market Bank competes for loan originations
primarily  through the  interest  rates and loan fees it charges and through the
efficiency  and quality of services it  provides to  borrowers.  Competition  is
intense and is affected  by, among other  things,  the general  availability  of
lendable funds,  general and local economic  conditions,  current  interest rate
levels and other factors that are not readily predictable.  Market Bank does not
offer all of the  products  and  services  offered  by some of its  competitors,
particularly commercial banks.

Employees

         At September 30, 2000, Market Bank had nine full-time employees and one
part-time  employee.  Market Bank believes that relations with its employees are
excellent.  Market  Bank  offers  health,  life and  disability  benefits to all
full-time  employees.  Market  Bank has an  employee  stock  ownership  plan for
employees  who are 21 or older  and who  have  completed  at  least  one year of
service.  None of the employees of Market Bank are  represented  by a collective
bargaining unit.


                                      -13-
<PAGE>
                                   REGULATION

General

         Market  Financial  is a savings  and loan  holding  company  within the
meaning of the Home  Owners  Loan Act, as amended  (the  "HOLA").  Consequently,
Market Financial is subject to regulation,  examination and oversight by the OTS
and must  submit  periodic  reports to the OTS  concerning  its  activities  and
financial  condition.  In addition,  as a corporation  organized under Ohio law,
Market Financial is subject to provisions of the Ohio Revised Code applicable to
corporations generally.

         As an Ohio  savings  and loan  association,  Market  Bank is subject to
regulation, examination and oversight by the Superintendent of the Division (the
"Ohio Superintendent").  Because Market Bank's deposits are insured by the FDIC,
Market Bank also is subject to  regulatory  oversight  by the FDIC.  Market Bank
must file periodic  reports with the OTS concerning its activities and financial
condition.   Examinations  are  conducted  periodically  by  federal  and  state
regulators  to  determine  whether  Market Bank is in  compliance  with  various
regulatory requirements and is operating in a safe and sound manner. Market Bank
is a member of the FHLB and is subject to certain regulations promulgated by the
Board of Governors of the Federal Reserve System (the "FRB").

         On November 12, 1999,  the  Gramm-Leach-Bliley  Act (the "GLB Act") was
enacted into law. The GLB Act repealed  prior laws that had generally  prevented
banks  from  affiliating  with  securities  and  insurance  firms and made other
significant  changes in financial  services in which  various types of financial
institutions may engage.

         Prior to the GLB Act, unitary savings and loan holding  companies which
met certain  requirements were the only financial  institution holding companies
that were permitted to engage in any type of business  activity,  whether or not
the activity was a financial  service.  The GLB Act continues those broad powers
for unitary  thrift  holding  companies in  existence on May 4, 1999,  including
Market Financial.  Any thrift holding company formed after May 4, 1999, however,
will be subject to the same  restrictions as multiple thrift holding  companies,
which  generally are limited to  activities  that are  considered  incidental to
banking. The GLB Act authorizes a new "financial holding company," which can own
banks and  thrifts  and  which is also  permitted  to  engage  in a  variety  of
financial activities, including insurance and securities underwriting and agency
activities, as long as the depository institutions it owns are well capitalized,
well managed and meet certain other tests.

         The GLB Act is not expected to have a material effect on the activities
in which the Market  Financial and Market Bank currently  engage,  except to the
extent that competition with other types of financial  institutions may increase
as they engage in activities not permitted prior to enactment of the GLB Act.

Office of Thrift Supervision

         Regulatory  Capital  Requirements.  Market  Bank  is  required  by  OTS
regulations to meet certain minimum capital  requirements.  The tangible capital
requirement  requires savings associations to maintain "tangible capital" of not
less than 1.5% of their  adjusted total assets.  Tangible  capital is defined in
OTS regulations as core capital minus any intangible assets.

         "Core capital" is comprised of common  stockholders'  equity (including
retained earnings),  noncumulative preferred stock and related surplus, minority
interests in consolidated  subsidiaries,  certain  nonwithdrawable  accounts and
pledged  deposits  of  mutual  associations.  OTS  regulations  require  savings
associations  to maintain  core capital of at least 4% of their  adjusted  total
assets,  except  for  associations  with  the  highest  examination  rating  and
acceptable levels of risk.

         OTS regulations require that savings associations  maintain "risk-based
capital" in an amount not less than 8% of their risk-weighted assets. Risk-based
capital is defined as core  capital plus  certain  additional  items of capital,
which in the case of Market  Bank  includes  a general  loan loss  allowance  of
$52,000  at  September  30,  2000.  The OTS may adjust  the  risk-based  capital
requirement  on an  individualized  basis  to take  into  account  risks  due to
concentrations of credit and non-traditional activities.

         The OTS has adopted  regulations  governing prompt corrective action to
resolve  the  problems  of capital  deficient  and  otherwise  troubled  savings
associations.   At  each  successively   lower  defined  capital  category,   an
association  is subject  to more  restrictive  and more  numerous  mandatory  or
discretionary  regulatory actions or limits, and the OTS has less flexibility in
determining how to resolve the problems of the institution. In addition, the OTS


                                      -14-
<PAGE>

generally can downgrade an association's  capital category,  notwithstanding its
capital level, if, after notice and opportunity for hearing,  the association is
deemed to be  engaging  in an  unsafe or  unsound  practice  because  it has not
corrected  deficiencies  that resulted in it receiving a less than  satisfactory
examination  rating on matters  other  than  capital or it is deemed to be in an
unsafe or unsound  condition.  Market Bank's  capital at September 30, 2000, met
the standards for the highest category, a "well-capitalized" institution.

         Liquidity.  OTS regulations require that a savings association maintain
a minimum daily balance of liquid assets (such as cash,  certain time  deposits,
bankers'  acceptances and specified United States  government,  state or federal
agency obligations) of not less than 4% of its net withdrawable savings deposits
plus borrowings  payable in one year or less computed as of the end of the prior
quarter or based on the average daily balance during the prior quarter. Monetary
penalties  may be imposed  upon  associations  failing  to meet these  liquidity
requirements.  The eligible  liquidity of Market Bank at September 30, 2000, was
approximately  $12.5  million,  or  30.6%,  and  exceeded  the  applicable  4.0%
percentage liquidity requirement by approximately $10.9 million.

         Qualified Thrift Lender Test. Savings associations must meet one of two
tests in order to be a qualified thrift lender ("QTL").  The first test requires
a savings  association  to maintain a specified  level of  investments in assets
that are designated as qualifying thrift investments ("QTIs").  Generally,  QTIs
are assets related to domestic  residential real estate and manufactured housing
and include  credit card,  student and small  business loans and stock issued by
any FHLB,  the FHLMC or the FNMA.  Under the QTL test,  65% of an  institution's
"portfolio assets" (total assets less goodwill and other  intangibles,  property
used to conduct  business  and 20% of liquid  assets)  must  consist of QTI on a
monthly average basis in nine out of every 12 months.  The second test permits a
savings  association  to qualify as a QTL by meeting the definition of "domestic
building  and loan  association"  under the Internal  Revenue  Code of 1986,  as
amended (the "Code").  In order for an  institution  to meet the definition of a
"domestic  building and loan  association"  under the Code, at least 60% of such
institution's assets must consist of specified types of property, including cash
loans  secured by  residential  real estate or deposits,  educational  loans and
certain governmental obligations.  The OTS may grant exceptions to the QTL tests
under certain  circumstances.  If a savings association fails to meet one of the
QTL tests,  the  association  and its holding  company become subject to certain
operating and regulatory restrictions.  A savings association that fails to meet
one of the QTL tests will not be eligible  for new FHLB  advances.  At September
30, 2000, Market Bank qualified as a QTL.

         Transactions with Insiders and Affiliates. Loans to executive officers,
directors and principal shareholders and their related interests must conform to
the  lending  limit on loans to one  borrower,  and the  total of such  loans to
executive  officers,   directors,   principal  shareholders  and  their  related
interests  cannot  exceed the  association's  Lending  Limit Capital (or 200% of
Lending Limit Capital for qualifying institutions with less than $100 million in
deposits).   Most  loans  to   directors,   executive   officers  and  principal
shareholders  must be approved  in advance by a majority of the  "disinterested"
members of the board of  directors  of the  association,  with any  "interested"
director  not  participating.  All loans to  directors,  executive  officers and
principal  shareholders must be made on terms  substantially the same as offered
in  comparable  transactions  with  the  general  public  or as  offered  to all
employees in a company-wide benefit program, and loans to executive officers are
subject to  additional  limitations.  Market  Bank was in  compliance  with such
restrictions at September 30, 2000.

         All transactions between savings associations and their affiliates must
comply with  Sections  23A and 23B of the Federal  Reserve Act (the  "FRA").  An
affiliate of a savings  association is any company or entity that  controls,  is
controlled by or is under common  control with the savings  association.  Market
Financial is an affiliate of Market Bank. Generally, Sections 23A and 23B of the
FRA (i) limit the extent to which a savings  association or its subsidiaries may
engage in "covered  transactions"  with any one  affiliate to an amount equal to
10% of such institution's capital stock and surplus, (ii) limit the aggregate of
all such  transactions  with all  affiliates  to an amount  equal to 20% of such
capital stock and surplus,  and (iii) require that all such  transactions  be on
terms  substantially  the same, or at least as favorable to the association,  as
those  provided  in  transactions  with  a  non-affiliate.   The  term  "covered
transaction" includes the making of loans,  purchasing of assets,  issuance of a
guarantee and other similar types of transactions.  In addition to the limits in
Sections  23A and  23B,  a  savings  association  may not make any loan or other
extension  of credit to an  affiliate  unless the  affiliate  is engaged only in
activities permissible for a bank holding company and may not purchase or invest
in securities of any affiliate except shares of a subsidiary. Market Bank was in
compliance with these requirements and restrictions at September 30, 2000.

         Limitations  on  Capital   Distributions.   The  OTS  imposes   various
restrictions  or  requirements  on the ability of  associations  to make capital
distributions.  Capital distributions include,  without limitation,  payments of
cash dividends,  repurchases and certain other acquisitions by an association of
its shares and payments to stockholders of another association in an acquisition
of such other association.

         An  application  must be submitted  and  approval  from the OTS must be
obtained  by a  subsidiary  of a savings  and loan  holding  company  (i) if the
proposed  distribution would cause total  distributions for the calendar year to


                                      -15-
<PAGE>

exceed net income for that year to date plus the savings association's  retained
net income for the preceding two years; (ii) if the savings association will not
be at least adequately capitalized following the capital distribution;  (iii) if
the  proposed   distribution  would  violate  a  prohibition  contained  in  any
applicable statute,  regulation or agreement between the savings association and
the OTS (or the FDIC), or violate a condition imposed on the savings association
in an OTS-approved application or notice. If a savings association subsidiary of
a holding company is not required to file an application,  it must file a 30-day
notice of the proposed capital distribution with the OTS.

         Holding  Company  Regulation.  As a savings  and loan  holding  company
within the meaning of the HOLA, Market Financial has registered with the OTS and
is  subject  to  OTS   regulations,   examination,   supervision  and  reporting
requirements.

         The HOLA  generally  prohibits a savings and loan holding  company from
controlling any other savings  association or savings and loan holding  company,
without prior  approval of the OTS, or from  acquiring or retaining more than 5%
of the voting shares of a savings association or holding company thereof,  which
is not a  subsidiary.  Under certain  circumstances,  a savings and loan holding
company is permitted to acquire,  with the approval of the OTS, up to 15% of the
previously unissued voting shares of an undercapitalized savings association for
cash without such savings  association  being deemed to be  controlled by Market
Financial.  Except with the prior approval of the OTS, no director or officer of
a savings and loan holding  company or person owning or  controlling by proxy or
otherwise more than 25% of such holding company's stock may also acquire control
of any savings institution,  other than a subsidiary  institution,  or any other
savings and loan holding company.

         As a unitary  savings and loan  holding  company in existence on May 4,
1999, Market Financial  generally has no restrictions on its activities.  If the
OTS determines that there is reasonable  cause to believe that the  continuation
by a savings and loan holding company of an activity  constitutes a serious risk
to the  financial  safety,  soundness  or stability  of its  subsidiary  savings
association,  however,  the OTS may impose such restrictions as deemed necessary
to address such risk, including limiting (i) payment of dividends by the savings
association,   (ii)  transactions   between  the  savings  association  and  its
affiliates,  and (iii) any  activities  of the  savings  association  that might
create  a  serious  risk  that  the  liabilities  of  Market  Financial  and its
affiliates  may be  imposed  on the  savings  association.  Notwithstanding  the
foregoing rules as to permissible  business  activities of a unitary savings and
loan holding company, if the savings association subsidiary of a holding company
fails to meet the QTL test,  then such unitary  savings and loan holding company
would  become  subject to the  activities  restrictions  applicable  to multiple
holding companies. At September 30, 2000, Market Bank met the QTL test.

         Federal  Regulation of Acquisitions of Control of Market  Financial and
Market  Bank.  In  addition  to the  Ohio  law  limitations  on the  merger  and
acquisition  of  Market  Financial,   federal   limitations   generally  require
regulatory approval of acquisitions at specified levels. Under pertinent federal
law and  regulations,  no person,  directly or indirectly,  or acting in concert
with others,  may acquire control of Market Bank or Market Financial  without 60
days' prior notice to the OTS.  "Control"  is  generally  defined as having more
than 25% ownership or voting power;  however,  ownership or voting power of more
than 10% may be  deemed  "control"  if  certain  factors  are in  place.  If the
acquisition  of control is by a company,  the  acquiror  must  obtain  approval,
rather than give notice, of the acquisition.

Federal Deposit Insurance Corporation

         Deposit Insurance and Assessments.  The FDIC is an independent  federal
agency  that  insures  the  deposits,  up to  prescribed  statutory  limits,  of
federally  insured banks and savings and loan  associations  and  safeguards the
safety and  soundness of the banking and savings and loan  industries.  The FDIC
administers two separate  insurance  funds,  the Bank Insurance Fund ("BIF") for
commercial banks and state savings banks and the SAIF for savings  associations.
Market Bank is a member of the SAIF and its deposit  accounts are insured by the
FDIC up to the prescribed  limits.  The FDIC has examination  authority over all
insured  depository  institutions,  including  Market Bank, and has authority to
initiate enforcement actions against  federally-insured  savings associations if
the FDIC does not  believe  the OTS has taken  appropriate  action to  safeguard
safety and soundness and the deposit insurance fund.

         The FDIC is required to maintain  designated  levels of reserves in the
SAIF and in the BIF. The FDIC may increase  assessment  rates for either fund if
necessary  to restore the fund's  ratio of  reserves to insured  deposits to its
target level within a reasonable time and may decrease such rates if such target
level has been met. The FDIC has established a risk-based  assessment system for
both SAIF and BIF members. Under this system, assessments vary based on the risk
the  institution  poses  to its  deposit  insurance  fund.  The  risk  level  is
determined  based on the  institution's  capital  level and the FDIC's  level of
supervisory concern about the institution.

         State-Chartered  Association Activities. The ability of state-chartered
associations  to  engage  in  any   state-authorized   activities  or  make  any

                                      -16-
<PAGE>

state-authorized  investments  is  limited  if such  activity  is  conducted  or
investment is made in a manner  different than that permitted for, or subject to
different  terms and  conditions  than those  imposed  on,  federally  chartered
savings associations. Engaging as a principal in any such activity or investment
not  permissible  for a federal  association is subject to approval by the FDIC.
Such approval will not be granted unless certain  capital  requirements  are met
and there is not a significant  risk to the FDIC  insurance  fund. All of Market
Bank's  activities and investments at September 30, 2000, were permissible for a
federal association.

FRB Reserve Requirements

         Effective   December  28,  2000,  FRB   regulations   require   savings
associations to maintain reserves of 3% of net transaction  accounts  (primarily
NOW  accounts)  up to  $42.8  million  (subject  to an  exemption  of up to $5.5
million),  and of 10% of net transaction accounts in excess of $42.8 million. At
September  30,  2000,  Market Bank was in  compliance  with the present  reserve
requirements and the requirements then in effect.

Federal Home Loan Banks

         The FHLBs  provide  credit to their  members  in the form of  advances.
Market  Bank is a  member  of the  FHLB  of  Cincinnati  and  must  maintain  an
investment  in the capital stock of the FHLB of Cincinnati in an amount equal to
the  greater of 1.0% of the  aggregate  outstanding  principal  amount of Market
Bank's   residential   mortgage  loans,  home  purchase  contracts  and  similar
obligations  at the  beginning of each year, or 5% of its advances from the FHLB
of  Cincinnati.  Market Bank was in  compliance  with this  requirement  with an
investment in stock of the FHLB of Cincinnati of $482,000 at September 30, 2000.

         Upon the  origination  or  renewal  of a loan or  advance,  the FHLB is
required by law to obtain and maintain a security  interest in collateral in one
or more specified categories.

         The FHLB is required to establish standards of community  investment or
service  that its  members  must  maintain  for  continued  access to  long-term
advances.  The  standards  take into  account a member's  performance  under the
Community  Reinvestment Act and its record of lending to first-time home buyers.
All  long-term  advances  by the FHLB  must be made  only to  provide  funds for
residential housing finance.


                                    TAXATION

Federal Taxation

         Market  Financial  and Market Bank are each  subject to the federal tax
laws and regulations which apply to corporations  generally.  In addition to the
regular  income  tax,  Market  Financial  and  Market  Bank may be subject to an
alternative  minimum tax. An alternative minimum tax is imposed at a minimum tax
rate of 20% on  "alternative  minimum  taxable  income"  (which  is the sum of a
corporation's  regular  taxable  income,  with  certain  adjustments,   and  tax
preference  items),  less any available  exemption.  Such tax  preference  items
include  interest on certain  tax-exempt  bonds issued after August 7, 1986.  In
addition, 75% of the amount by which a corporation's "adjusted current earnings"
exceeds its alternative  minimum taxable income computed  without regard to this
preference item and prior to reduction by net operating  losses,  is included in
alternative minimum taxable income. Net operating losses can offset no more than
90% of  alternative  minimum  taxable  income.  The  alternative  minimum tax is
imposed to the extent it exceeds the corporation's  regular income tax. Payments
of  alternative  minimum  tax  may  be  used  as  credits  against  regular  tax
liabilities in future years.  However,  the Taxpayer Relief Act of 1997 repealed
the  alternative  minimum tax for  certain  "small  corporations"  for tax years
beginning after December 31, 1997. A corporation  initially qualifies as a small
corporation if it had average gross receipts of $5,000,000 or less for the three
tax years ending with its first tax year beginning after December 31, 1996. Once
a  corporation  is  recognized  as a small  corporation,  it will continue to be
exempt  from  the  alternative  minimum  tax for as long  as its  average  gross
receipts  for the  prior  three-year  period  does  not  exceed  $7,500,000.  In
determining  if a  corporation  meets this  requirement,  the first year that it
achieved  small  corporation  status is not  taken  into  consideration.  Market
Financial's  average  gross  receipts for the three tax years ending on December
31, 1999,  is $122,000,  and, as a result,  Market  Financial  does qualify as a
small corporation exempt from the alternative minimum tax. Market Bank's average
gross  receipts for the three tax years  ending on December  31,  1999,  is $3.9
million,  and,  as a result,  Market  Bank does  qualify as a small  corporation
exempt from the alternative minimum tax.

         Prior to the enactment of the Small  Business Jobs  Protection Act (the
"Act"),   which  was  signed  into  law  on  August  21,  1996,  certain  thrift


                                      -17-
<PAGE>

institutions,  such as Market Bank, were allowed  deductions for bad debts under
methods more favorable than those granted to other  taxpayers.  Qualified thrift
institutions  could compute  deductions  for bad debts using either the specific
charge-off  method of Section 166 of the Code or one of two  reserve  methods of
Section  593 of the Code.  The  reserve  methods  under  Section 593 of the Code
permitted  a thrift  institution  annually  to elect to deduct  bad debts  under
either (i) the "percentage of taxable  income" method  applicable only to thrift
institutions,  or (ii) the "experience"  method that also was available to small
banks.  Under the "percentage of taxable income"  method,  a thrift  institution
generally  was allowed a deduction for an addition to its bad debt reserve equal
to 8% of its taxable  income  (determined  without  regard to this deduction and
with  additional   adjustments).   Under  the  "experience"   method,  a  thrift
institution  was  generally  allowed a deduction for an addition to its bad debt
reserve  equal to the  greater  of (i) an  amount  based on its  actual  average
experience for losses in the current and five preceding  taxable years,  or (ii)
an amount necessary to restore the reserve to its balance as of the close of the
base year. A thrift  institution  could elect  annually to compute its allowable
addition to bad debt reserves for  qualifying  loans either under the experience
method or the percentage of taxable income method.  For tax years prior to 1996,
Market Bank used the percentage of taxable income method, if available.

         The  Act   eliminated  the  percentage  of  taxable  income  method  of
accounting  for bad debts by thrift  institutions,  effective  for taxable years
beginning after 1995.  Thrift  institutions  that are treated as small banks are
allowed to utilize the experience method applicable to such institutions,  while
thrift institutions that are treated as large banks are required to use only the
specific charge off method.

         A thrift  institution  required  to  change  its  method  of  computing
reserves  for bad debt will  treat  such  change  as a change  in the  method of
accounting,  initiated  by the taxpayer and having been made with the consent of
the  Secretary of the  Treasury.  Section  481(a) of the Code  requires  certain
amounts to be recaptured with respect to such change.  Generally, the amounts to
be recaptured will be determined  solely with respect to the "applicable  excess
reserves" of the taxpayer.  The amount of the applicable excess reserves will be
taken into account ratably over a  six-taxable-year  period,  beginning with the
first  taxable  year  beginning  after  1995,  subject to the  residential  loan
requirement described below. In the case of a thrift institution that is treated
as a large bank,  the amount of the  institution's  applicable  excess  reserves
generally  is the  excess  of (i) the  balances  of its  reserve  for  losses on
qualifying real property loans (generally loans secured by improved real estate)
and its reserve for losses on nonqualifying  loans (all other types of loans) as
of the close of its last taxable year  beginning  before  January 1, 1996,  over
(ii) the  balances  of such  reserves as of the close of its last  taxable  year
beginning before January 1, 1988 (i.e., the "pre-1988 reserves"). In the case of
a thrift  institution  that is treated as a small bank,  like Market  Bank,  the
amount of the institution's  applicable excess reserves  generally is the excess
of (i) the balances of its reserve for losses on qualifying  real property loans
and its  reserve for losses on  nonqualifying  loans as of the close of its last
taxable  year  beginning  before  January 1, 1996,  over (ii) the greater of the
balance of (a) its  pre-1988  reserves or (b) what the thrift's  reserves  would
have been at the close of its last year  beginning  before  January 1, 1996, had
the thrift always used the experience method.

         For  taxable  years that begin  after  December  31,  1995,  and before
January 1, 1998, if a thrift meets the  residential  loan  requirement for a tax
year, the recapture of the applicable excess reserves  otherwise  required to be
taken into  account as a Code  Section  481(a)  adjustment  for the year will be
suspended. A thrift meets the residential loan requirement if, for the tax year,
the principal amount of residential  loans made by the thrift during the year is
not less than its base amount. The "base amount" generally is the average of the
principal  amounts of the  residential  loans made by the thrift  during the six
most recent tax years beginning  before January 1, 1996. A residential loan is a
loan as  described  in Section  7701(a)(19)(C)(v)  (generally  a loan secured by
residential or church property and certain mobile homes), but only to the extent
that the loan is made to the owner of the property.

         The balance of the pre-1988  reserves is subject to the  provisions  of
Section 593(e),  as modified by the Act, which require  recapture in the case of
certain excessive  distributions to shareholders.  The pre-1988 reserves may not
be  utilized  for  payment  of  cash  dividends  or  other  distributions  to  a
shareholder  (including  distributions in dissolution or liquidation) or for any
other  purpose  (except  to  absorb  bad debt  losses).  Distribution  of a cash
dividend by a thrift institution to a shareholder is treated as made: first, out
of the institution's post-1951 accumulated earnings and profits;  second, out of
the pre-1988  reserves;  and third, out of such other accounts as may be proper.
To the extent a distribution  by Market Bank to Market  Financial is deemed paid
out of its pre-1988  reserves under these rules, the pre-1988  reserves would be
reduced and the gross income of Market Bank for tax purposes  would be increased
by the amount which, when reduced by the income tax, if any, attributable to the
inclusion of such amount in its gross income,  equals the amount deemed paid out
of the pre-1988  reserves.  As of September 30, 2000,  the pre-1988  reserves of
Market Bank for tax purposes  totaled  approximately  $1.3 million.  Market Bank
believes it had approximately  $6.0 million of accumulated  earnings and profits
for tax purposes as of September 30, 2000, which would be available for dividend
distributions,  provided  regulatory  restrictions  applicable to the payment of
dividends are met. No representation  can be made as to whether Market Bank will
have current or accumulated earnings and profits in subsequent years.


                                      -18-
<PAGE>

         The tax  returns of Market  Bank have been  audited  or closed  without
audit  through  1996.  In the opinion of  management,  any  examination  of open
returns  would not result in a  deficiency  which could have a material  adverse
effect on the financial condition of Market Bank.

Ohio Taxation

         Market  Financial  is subject to the Ohio  corporation  franchise  tax,
which,  as applied to Market  Financial,  is a tax measured by both net earnings
and net worth.  For tax years beginning after December 31, 1998, the rate of tax
is the greater of (i) 5.1% on the first $50,000 of computed Ohio taxable  income
and 8.5% of  computed  Ohio  taxable  income in excess of  $50,000 or (ii) .400%
times taxable net worth.

         A special litter tax is also applicable to all corporations,  including
Market  Financial,  subject  to the Ohio  corporation  franchise  tax other than
"financial  institutions." If the franchise tax is paid on the net income basis,
the litter tax is equal to .11% of the first  $50,000 of computed  Ohio  taxable
income and .22% of computed  Ohio  taxable  income in excess of $50,000.  If the
franchise  tax is paid on the net worth basis,  the litter tax is equal to .014%
times taxable net worth.

         Market  Bank  is a  "financial  institution"  for  State  of  Ohio  tax
purposes.  As  such,  it is  subject  to the  Ohio  corporate  franchise  tax on
"financial  institutions," which for years prior to 1999 was imposed annually at
a rate of 1.5% of the  taxable  book net  worth of  Market  Bank  determined  in
accordance with generally accepted accounting principles. For tax year 1999, the
franchise tax on financial  institutions  was 1.4% of the taxable book net worth
and for tax year 2000 and years  thereafter  the tax rate is 1.3% of the taxable
book net worth. As a "financial  institution," Market Bank is not subject to any
tax based upon net income or net profits imposed by the State of Ohio.

Item 2.       Description of Property

              The following  table sets forth certain  information  at September
30,  2000,  regarding  the  properties  on which the main  office and the branch
office of Market Bank are located:
<TABLE>
<CAPTION>

                                                                            Approximate
                                           Owned or             Date          square        Net book
Location                                    leased            acquired         footage        value          Deposits
--------                                   --------          ---------    ----------------   -------        ---------
                                                                                                 (In thousands)
<S>                                          <C>                 <C>            <C>            <C>             <C>
7522 Hamilton Avenue                        Owned               1964            5,000         $1,421          $36,101
Mt. Healthy, Ohio 45231

125-127 Miami Avenue                        Owned               1994            1,753             50            4,159
North Bend, Ohio  45052
</TABLE>

Item 3.       Legal Proceedings

              Market  Bank  is not  presently  involved  in any  material  legal
proceedings.  From  time to time,  Market  Bank is a party to legal  proceedings
incidental  to its  business to enforce  its  security  interest  in  collateral
pledged to secure loans made by Market Bank.

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

              Not applicable.

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

              There were 1,259,439 common shares of Market Financial outstanding
on December 20, 2000,  held of record by  approximately  238  shareholders.  The
number of  shareholders  does not reflect all of the persons or entities who may
hold stock in nominee or "street" name through brokerage firms or others.  Price
information  with respect to Market  Financial's  common shares is quoted on the
Nasdaq  SmallCap  System under the symbol "MRKF." The table below sets forth the
high ask and low bid prices for the common shares of Market Financial,  together
with dividends  declared per share, for each quarter of the 2000 and 1999 fiscal
years. Price quotations  reflect  inter-dealer  prices,  without retail mark-up,
mark-down or commission, and may not represent actual transactions.


                                      -19-
<PAGE>

<TABLE>
<CAPTION>

                                                                                 Cash dividends
                                     High Ask                Low Bid           declared per share
<S>                                    <C>                     <C>                     <C>
Fiscal 2000
    Quarter ended:
     December 31, 1999                 $11.25                 $8.25                    $.08
     March 31, 2000                     10.00                  8.00                     .08
     June 30, 2000                       8.13                  7.06                     .08
     September 30, 2000                 12.50                  7.50                     .08

Fiscal 1999
    Quarter ended:
     December 31, 1998                 $12.63                $10.00                    $.07
     March 31, 1999                     12.38                  8.38                     .07
     June 30, 1999                      10.38                  8.25                     .07
     September 30, 1999                 13.75                  9.00                     .07
</TABLE>


                  The  earnings  of  Market  Financial   consist   primarily  of
dividends  from  Market  Bank.  In  addition  to  certain   federal  income  tax
considerations,  regulations issued by the OTS impose limitations on the payment
of dividends and other capital distributions by savings associations.  Under the
regulations,  a  savings  association  that,  immediately  prior  to,  and  on a
pro-forma  basis after giving  effect to a proposed  capital  distribution,  has
total capital (as defined by OTS  regulations)  that is equal to or greater than
the  amount  of  its  "well-capitalized"   capital  requirement,   is  generally
permitted,  without OTS approval (but subsequent to 30 days' prior notice of the
planned  dividend to the OTS) to make  capital  distributions  during a calendar
year in an amount not to exceed its net  earnings for that year to date plus its
retained earnings for the preceding two years.  Savings  associations which have
total capital in excess of the "well-capitalized" capital requirement, and which
have  been  notified  by the OTS  that  they  are in need  of more  than  normal
supervision will be subject to greater restrictions on dividends. In addition, a
savings  association that fails to meet current minimum capital  requirements is
prohibited from making any capital  distributions  without the prior approval of
the OTS.  Market Bank  currently  meets the  definition of a  "well-capitalized"
institution  and,  unless the OTS determines  that Market Bank is an institution
requiring more than normal supervision, may pay dividends in accordance with the
foregoing provisions of the OTS regulations.

Item 6.       Management's Discussion and Analysis or Plan of Operation

General

         The following  discussion  and analysis of the financial  condition and
results of  operations  of Market  Financial  and Market  Bank should be read in
conjunction  with and with reference to the consolidated  financial  statements,
and the notes thereto, included in this Annual Report.

         Market  Financial  was  incorporated  for the  purpose of owning all of
Market Bank's  outstanding stock upon conversion to stock form. As a result, the
discussion that follows focuses on Market Bank's financial condition and results
of operations.

         In  addition  to  the  historical  information  contained  herein,  the
following discussion contains forward-looking  statements that involve risks and
uncertainties.  Economic circumstances, the operations of Market Bank and Market
Financial's  actual results could differ  significantly  from those discussed in
the  forward-looking  statements.  Some  of the  factors  that  could  cause  or
contribute to such  differences are discussed herein but also include changes in
the economy and interest rates in the nation and Market Financial's market area.

         Without  limiting  the  generality  of  the  foregoing,   some  of  the
statements in the following  referenced sections of this discussion and analysis
are  forward  looking  and  are,   therefore,   subject  to  certain  risks  and
uncertainties:

1.   Management's analysis of the interest rate risk of Market Bank as set forth
     under "Asset and Liability Management;"

2.   Management's  discussion  of the  liquidity of Market Bank's assets and the
     regulatory capital of Market Bank as set forth under "Liquidity and Capital
     Resources;"

                                      -20-
<PAGE>

3.   Management's  determination of the amount and adequacy of the allowance for
     loan  losses as set forth  under  "Changes  in  Financial  Condition,"  and
     "Comparison of Operating Results for the Years Ended September 30, 2000 and
     1999;"

4.   Management's estimate as to the effects of recent accounting pronouncements
     as set forth under "Recent Accounting Pronouncements;" and

5.   Management's  determination of the effect of the  Gramm-Leach-Bliley Act on
     the  business  of Market  Financial  and  Market  Bank as set  forth  under
     "Potential  Impact  Of  Gramm-Leach-   Bliley  Act  on  Future  Results  of
     Operation."

Changes in Financial Condition

         Market Financial's assets at September 30, 2000, totaled  approximately
$56.1  million,  a $636,000,  or 1.1%,  increase over the $55.5 million total at
September 30, 1999.  The increase was funded  through growth in deposits and net
earnings for the year.

         Liquid assets (cash and cash  equivalents,  certificates of deposit and
investment  securities)  totaled $13.6 million at September 30, 2000, a decrease
of $2.9  million from the total at September  30,  1999.  Net proceeds  from the
decline in liquid assets were  primarily used to fund net loan  originations  of
$2.7 million.

         Loans  receivable  totaled  $37.9  million at September  30,  2000,  an
increase of $2.7  million,  or 7.6%,  over  September  30, 1999.  This  increase
resulted  primarily  from loan  originations  of $6.8  million,  which  exceeded
principal  repayments of $4.1 million.  Market Bank's  allowance for loan losses
totaled $52,000 at September 30, 2000 and 1999. The allowance  represented  .13%
and  .15%  of  total  loans  at  September  30,  2000  and  1999,  respectively.
Nonperforming  loans totaled  $272,000 and  $119,000,  or .71% and .34% of total
loans at September 30, 2000 and 1999, respectively.

         Although  management  believes  that its  allowance  for loan losses at
September  30,  2000,   was  adequate   based  upon  the  available   facts  and
circumstances,  there can be no assurances that additions to such allowance will
not be  necessary  in  future  periods,  which  could  adversely  affect  Market
Financial's results of operations.

         Deposits  totaled  $40.3  million at September 30, 2000, an increase of
$353,000,  or .9%,  over the  total  at  September  30,  1999.  Demand  accounts
decreased by approximately  $1.0 million,  and certificates of deposit increased
by $1.4 million during the year ended September 30, 2000. At September 30, 2000,
certificates  of deposit that will mature within one year accounted for 55.9% of
Market Bank's deposit  liabilities.  Proceeds from the increase in deposits were
used to  fund  loan  originations  and  the  purchase  of  office  premises  and
equipment.

         Shareholders'  equity  totaled  $14.8 million at September 30, 2000, an
increase of $180,000,  or 1.2%,  over  September 30, 1999.  The increase was due
primarily to net earnings of $311,000 and a decrease in shares acquired by stock
benefit  plans of $269,000,  which were  partially  offset by dividends  paid of
$403,000.

         Market Bank is required to meet each of three minimum capital standards
promulgated  by  the  OTS,   hereinafter   described  as  the  tangible  capital
requirement,   the  core  capital   requirement   and  the  risk-based   capital
requirement.  The tangible capital  requirement  provides for the maintenance of
shareholders'  equity less all intangible assets equal to 1.5% of adjusted total
assets.  The core capital  requirement  provides for the maintenance of tangible
capital plus certain  forms of  supervisory  goodwill  generally  equal to 4% of
adjusted  total  assets,  while  the  risk-based  capital  requirement  mandates
maintenance  of core capital plus  general loan loss  allowances  equal to 8% of
risk-weighted  assets as defined by OTS  regulations.  As of September 30, 2000,
Market  Bank's  tangible and core capital  totaled  $13.0  million,  or 23.7% of
adjusted total assets,  which exceeded the minimum  requirements of $820,000 and
$2.2 million, by $12.1 million and $10.8 million,  respectively. As of September
30,  2000,  Market  Bank's  risk-based  capital was $13.5  million,  or 46.0% of
risk-weighted assets, exceeding the minimum requirement by $11.2 million.

Comparison of Operating Results for the Years Ended September 30, 2000 and 1999

General.  Net earnings totaled $311,000 for the year ended September 30, 2000, a
$387,000,  or 55.4%, decrease from the $698,000 of net earnings recorded for the
year ended September 30, 1999. The decrease in earnings resulted  primarily from
the absence in fiscal 2000 of a $463,000 gain on sale of investments recorded in
fiscal 1999, which was partially offset by a $200,000  decrease in the provision
for federal income taxes.


                                      -21-
<PAGE>

Net Interest Income. Total interest income amounted to $3.8 million for the year
ended  September 30, 2000, a $65,000,  or 1.7%,  increase over fiscal 1999.  The
increase resulted primarily from an increase in the loan portfolio during fiscal
2000. Interest income on loans increased by $168,000,  or 6.5%, primarily due to
a $2.8 million,  or 8.5%, increase in the  weighted-average  balance outstanding
during fiscal 2000,  which was  partially  offset by a 14 basis point (100 basis
points  equals one percent)  decrease in the  weighted-average  yield.  Interest
income on mortgage-backed securities increased by $51,000, or 53.7%, compared to
fiscal  1999,   as  a  result  of  a  $701,000,   or  57.3%,   increase  in  the
weighted-average balance outstanding,  which was partially offset by an 18 basis
point decrease in the weighted-average  yield from 7.76% in fiscal 1999 to 7.58%
in fiscal 2000. Interest income on investment  securities  increased by $96,000,
or  13.6%,   primarily  due  to  an  increase  of  $990,000,  or  8.6%,  in  the
weighted-average  balance outstanding during fiscal 2000, which was coupled with
a 29 basis point  increase in the  weighted-average  yield.  Interest  income on
interest-bearing  deposits  totaled  $93,000  in  fiscal  2000,  a  decrease  of
$250,000,  or 72.9%,  from fiscal 1999. The decrease  resulted  primarily from a
decrease  of  $4.5  million,   or  77.1%,  in  the   weighted-average   balances
outstanding,  which was  partially  offset by a 107 basis point  increase in the
weighted-average yield, from 5.87% in fiscal 1999 to 6.94% in fiscal 2000.

Interest  expense on deposits  totaled $1.9 million for fiscal 2000, an increase
of $79,000,  or 4.4%,  over fiscal 1999.  This  increase was due primarily to an
increase of $805,000,  or 2.1%,  in the weighted  average  balance  outstanding,
coupled  with an 11 basis point  increase in the average  cost of deposits  from
4.54%  in  fiscal  1999 to 4.65%  in  fiscal  2000.  Interest  expense  on other
borrowings decreased by $21,000, or 100.0%, as a result of the $247,000 decrease
in the weighted average balance outstanding in fiscal 2000.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest income  decreased by $7,000,  or .4%, for fiscal 2000,  compared to
fiscal 1999. The interest rate spread increased by five basis points, from 2.58%
in fiscal 1999 to 2.63% in fiscal 2000. The net interest margin increased by one
basis point, from 3.70% in fiscal 1999 to 3.71% in fiscal 2000.

Provision  for Losses on Loans.  A  provision  for losses on loans is charged to
earnings  to bring the total  allowance  to a level  considered  appropriate  by
management  based on  historical  experience,  the  volume  and type of  lending
conducted  by  Market  Bank,  the  status  of past due  principal  and  interest
payments, general economic conditions, particularly as such conditions relate to
Market Bank's market area, and other factors  related to the  collectibility  of
Market Bank's loan portfolio.  As a result of such analysis,  management decided
no additional  provision for losses on loans was necessary during the year ended
September 30, 2000. There can be no assurance,  however,  that the allowance for
loan losses of Market Bank will be  adequate  to cover  losses on  nonperforming
assets in the future.

Other  Income.  Other  income  declined by $463,000 due to the absence in fiscal
2000 of gains on sales of investments  recorded in 1999. Other operating income,
primarily  service fees on money orders and travelers'  checks,  totaled $11,000
for each of the years ended September 30, 2000 and 1999, respectively.

General,  Administrative  and Other Expense.  General,  administrative and other
expense  increased by $131,000,  or 9.7%, for the year ended September 30, 2000,
compared to fiscal 1999. The increase  resulted  primarily  from a $100,000,  or
12.4%,  increase in employee  compensation and benefits, an increase of $27,000,
or 22.3%,  in occupancy and equipment and an increase of $34,000,  or 16.6%,  in
other operating  expense,  which were partially offset by an $11,000,  or 47.8%,
decrease in federal deposit insurance premiums and a $19,000,  or 9.9%, decrease
in franchise taxes.  The increase in employee  compensation and benefits was due
primarily to a $52,000  increase in stock benefit plan expense,  coupled with an
increase  in  staffing  levels and  normal  merit  increases.  The  increase  in
occupancy and equipment  expense  reflects  increases in depreciation  and other
costs related to the new office  expansion  completed  during  fiscal 2000.  The
increase in other operating expense was due primarily to costs related to Market
Bank's start-up of automated  teller machine ("ATM") services during fiscal 2000
and pro-rata increases in operating costs year to year. The decreases in federal
deposit  insurance  premiums  and  franchise  taxes  resulted  from a decline in
premium rates and the rate of tax, respectively, during fiscal 2000.

Federal Income Taxes.  The provision for federal  income taxes totaled  $160,000
for the year ended September 30, 2000, compared to $360,000 for fiscal 1999. The
$200,000,  or 55.6%,  decrease resulted from a $587,000,  or 55.5%,  decrease in
earnings  before  taxes.  The effective tax rate was 34.0% for each of the years
ended September 30, 2000 and 1999.

Comparison of Operating Results for the Years Ended September 30, 1999 and 1998

General.  Net earnings totaled $698,000 for the year ended September 30, 1999, a
$146,000,  or 26.4%, increase over the $552,000 of net earnings recorded for the

                                      -22-
<PAGE>

year ended September 30, 1998. The increase in earnings resulted  primarily from
a $467,000  increase in other income,  which was partially  offset by a $221,000
decrease in net  interest  income and a $76,000  increase in the  provision  for
federal income taxes.

Net Interest Income. Total interest income amounted to $3.7 million for the year
ended September 30, 1999, a $152,000, or 3.9%, decrease from the comparable 1998
period.  The  decrease  resulted  primarily  from a decrease  in the  investment
securities  portfolio  due  to a  $4.7  million  special  cash  distribution  to
shareholders  paid in April  1998.  Interest  income  on  investment  securities
decreased due primarily to a decrease of $1.8 million, or 13.5%, in the weighted
average  balances  outstanding  during fiscal 1999,  which was coupled with a 57
basis  point  decrease  in  the  weighted-average   yield.  Interest  income  on
interest-bearing  deposits  totaled  $343,000  in fiscal  1999,  a  decrease  of
$140,000,  or 29.0%,  from fiscal 1998. The decrease  resulted  primarily from a
decrease of $2.1 million in weighted-average balances outstanding,  coupled with
a 20 basis point decrease in the  weighted-average  yield,  from 6.07% in fiscal
1998 to 5.87% in fiscal  1999.  Interest  income on  mortgage-backed  securities
decreased by $6,000, or 5.9%, during fiscal 1999,  compared to 1998, as a result
of a decline of 105 basis points in the  weighted-average  yield,  from 8.81% in
fiscal  1998 to 7.76% in fiscal  1999.  Interest  income on loans  increased  by
$179,000,  or 7.4%, primarily due to a $3.1 million increase in weighted average
balances outstanding during fiscal 1999, which was partially offset by a decline
of 20 basis points in the  weighted-average  yield, from 7.90% in fiscal 1998 to
7.70% in fiscal 1999.

Interest  expense on deposits  totaled $1.8 million for fiscal 1999, an increase
of $57,000,  or 3.3%,  over the  comparable  1998 period.  This increase was due
primarily  to an  increase  of $2.8  million  in the  weighted  average  balance
outstanding,  which was  partially  offset by a 20 basis  point  decrease in the
average  cost of  deposits  from 4.74% in fiscal  1998 to 4.54% in fiscal  1999.
Interest expense on other borrowings increased by $12,000, or 133.3%,  primarily
due to the increase in the weighted  average  balance  outstanding  of $126,000,
coupled with a 106 basis point increase in the weighted average cost, from 7.44%
in fiscal 1998 to 8.50% in fiscal 1999.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest income decreased by $221,000,  or 10.3%, for fiscal 1999,  compared
to fiscal 1998.  The interest rate spread  decreased by two basis  points,  from
2.60% in  fiscal  1998 to  2.58% in  fiscal  1999  and the net  interest  margin
decreased by 37 basis points, from 4.07% in fiscal 1998 to 3.70% in fiscal 1999.

Provision  for  Losses  on  Loans.  As a result  of an  analysis  of  historical
experience,  the volume and type of lending conducted by Market Bank, the status
of past due  principal  and  interest  payments,  general  economic  conditions,
particularly as such  conditions  relate to Market Bank's market area, and other
factors  related  to  the   collectibility  of  Market  Bank's  loan  portfolio,
management  decided no  additional  provision  for losses on loans was necessary
during the year ended September 30, 1999.

Other Income. Other operating income, primarily service fees on money orders and
travelers' checks,  totaled $11,000 and $7,000 for the years ended September 30,
1999 and 1998,  respectively.  Gains on sale of  securities  during  fiscal 1999
reflected  a  $463,000  increase  over  fiscal  1998.  The  sale  of  investment
securities during fiscal 1999 reflected  management's decision to redeploy price
appreciation on securities to higher yielding earning assets.

General,  Administrative  and Other Expense.  General,  administrative and other
expense  increased by $24,000,  or 1.8%, for the year ended  September 30, 1999,
compared to fiscal 1998.  The increase  resulted  primarily  from a $28,000,  or
3.6%,  increase in  employee  compensation  and  benefits,  due to normal  merit
increases and an increase in expenses related to stock benefit plans.

Federal Income Taxes.  The provision for federal  income taxes totaled  $360,000
for the year ended September 30, 1999,  compared to $284,000 for the 1998 fiscal
year.  The  $76,000,  or 26.8%,  increase  resulted  from a $222,000,  or 26.6%,
increase in earnings before taxes.  The effective tax rate was 34.0% for each of
the years ended September 30, 1999 and 1998.

Average Balance, Yield, Rate and Volume Data

The  following  table  sets  forth  certain   information   relating  to  Market
Financial's  average balance sheet information and reflects the average yield on
interest-earning assets and the average cost of interest-bearing liabilities for
the periods  indicated.  Such yields and costs are derived by dividing income or
expense  by  the  average   monthly  balance  of   interest-earning   assets  or
interest-bearing liabilities,  respectively,  for the periods presented. Average
balances are derived from month-end balances, which include nonaccruing loans in
the loan portfolio, net of the allowance for loan losses.


                                      -23-
<PAGE>

<TABLE>
<CAPTION>
                                               Year ended September 30,


                               2000                            1999                              1998
                               --------------------------      ----------------------------      ----

                              Average  Interest Average Average Interest Average
                            Average Interest Average  outstanding earned/ yield/
                            outstanding   earned/  yield/  outstanding   earned/
                            yield/  balance  paid rate balance paid rate balance
                            paid rate
                                                                  (Dollars in thousands)
<S>                             <C>         <C>        <C>       <C>        <C>        <C>        <C>         <C>        <C>
Interest-earning assets:
  Loans receivable            $36,488      $2,758      7.56%   $33,643     $2,590      7.70%    $30,524      $2,411      7.90%
  Mortgage-backed securities    1,925         146      7.58      1,224         95      7.76       1,147         101      8.81
  Investment securities        12,446         801      6.44     11,456        705      6.15      13,249         890      6.72
  Other interest-earning        1,340          93      6.94      5,845        343      5.87       7,954         483      6.07
                               ------       -----      ----     ------      -----      ----      ------       -----      ----
   assets

    Total interest-earning     52,199       3,798      7.28     52,168      3,733      7.15      52,874       3,885      7.35
     assets

Non-interest-earning assets     3,744                            3,481                            2,559
                               ------                           ------                           ------

    Total assets              $55,943                          $55,649                          $55,433
                               ======                           ======                           ======

Interest-bearing
liabilities:
  NOW accounts                $    77           1      1.30    $     -          -         -     $     -           -         -
                                                                     -
  Passbook and club accounts   10,302         273      2.65     10,136        277      2.73       9,875         279      2.83
  Money market demand           1,561          42      2.69      2,039         55      2.70       2,254          64      2.84
  accounts
  Certificates of deposit      28,088       1,545      5.50     27,048      1,450      5.36      24,246       1,382      5.70
  Borrowings                        -           -        -         247         21      8.50         121           9      7.44
                               ------       -----      ----     ------      -----      ----      ------       -----      ----
    Total interest-bearing
     liabilities               40,028       1,861      4.65     39,470      1,803      4.57      36,496       1,734      4.75
                                            -----      ----                 -----      ----                   -----      ----

Non-interest-bearing            1,376                            1,300                            1,113
                               ------                           ------                           ------
  liabilities

    Total liabilities          41,404                           40,770                           37,609

Shareholders' equity           14,539                           14,879                           17,824
                               ------                           ------                           ------

    Total liabilities and
     shareholders' equity     $55,943                          $55,649                          $55,433
                               ======                           ======                           ======

  Net interest income and
    spread                                 $1,937      2.63%               $1,930      2.58%                 $2,151      2.60%
                                            =====      ====                 =====      ====                   =====      ====

  Net interest margin (net
   interest income as a
   percent of average
   interest-earning assets)                            3.71%                           3.70%                             4.07%
                                                       ====                            ====                              ====
Average interest-earning
  assets to interest-bearing
  liabilities                                        130.41%                         132.17%                           144.88%
                                                     ======                          ======                            ======

</TABLE>



                                      -24-
<PAGE>

The table below  describes  the extent to which  changes in  interest  rates and
changes in volume of interest-earning  assets and  interest-bearing  liabilities
have  affected  Market  Bank's  interest  income  and  expense  during the years
indicated.  For each category of  interest-earning  assets and  interest-bearing
liabilities,  information is provided on changes  attributable to (i) changes in
volume (changes in volume  multiplied by prior year rate),  (ii) changes in rate
(changes in rate  multiplied  by prior year  volume) and (iii) total  changes in
rate and volume.  The combined effects of changes in both volume and rate, which
cannot be separately  identified,  have been  allocated  proportionately  to the
change due to volume and the change due to rate.
<TABLE>
<CAPTION>

                                                              Year ended September 30,
                                                    2000 vs. 1999                     1999 vs.1998
                                           ----------------------------      ----------------------------
                                               Increase                          Increase
                                           (decrease) due to                 (decrease) due to
                                           -----------------                 -----------------
                                           Volume      Rate       Total       Volume      Rate       Total
                                           ------      ----       -----       ------      ----       -----
                                                                    (In thousands)
<S>                                          <C>        <C>       <C>          <C>         <C>       <C>
Interest income attributable to:
    Loans receivable                         $215     $ (47)       $168       $ 240       $(61)     $ 179
    Mortgage-backed securities                 53        (2)         51           6        (12)        (6)
    Investment securities                      63        33          96        (109)       (76)      (185)
    Interest-bearing deposits                (313)       63        (250)       (124)       (16)      (140)
                                              ---       ---         ---        ----        ---       ----
Total interest income                          18        47          65          13       (165)      (152)
Interest expense attributable to:
    Deposits                                   49        30          79         152        (95)        57
    Borrowings                                (21)        -         (21)         11          1         12
                                              ---       ---         ---        ----        ---       ----
Total interest expense                         28        30          58         163        (94)        69
                                              ---       ---         ---        ----        ---       ----
   Increase (decrease) in net interest
    income                                   $(10)     $ 17        $  7       $(150)      $(71)     $(221)
                                              ===       ===         ===        ====        ===       ====
</TABLE>

Asset and Liability Management

Market Bank, like other financial institutions, is subject to interest rate risk
to the extent that its  interest-earning  assets  reprice  differently  than its
interest-bearing  liabilities.  As part of its  effort  to  monitor  and  manage
interest  rate  risk,  Market  Bank  uses  the  "net  portfolio  value"  ("NPV")
methodology  adopted  by the OTS as part of its  capital  regulations.  Although
Market  Bank  is not  currently  subject  to the  NPV  regulation  because  such
regulation does not apply to institutions  with less than $300 million in assets
and risk-based  capital in excess of 12%, the application of the NPV methodology
illustrates certain aspects of Market Bank's interest rate risk.

Generally,  NPV is the  discounted  present  value  of  the  difference  between
incoming cash flows on interest-earning and other assets and outgoing cash flows
on  interest-bearing  and other liabilities.  The application of the methodology
attempts  to  quantify  interest  rate risk as the change in the NPV which would
result from a theoretical 200 basis point change in market interest rates.  Both
a 200 basis  point  increase  in  market  interest  rates and a 200 basis  point
decrease in market interest rates are considered. If the NPV would decrease more
than 2% of the present value of the institution's assets with either an increase
or a decrease in market rates,  the institution must deduct 50% of the amount of
the  decrease  in  excess  of such 2% in the  calculation  of the  institution's
risk-based capital. See "Liquidity and Capital Resources."

At  September  30, 2000,  2% of the present  value of Market  Bank's  assets was
approximately $1.1 million.  Because the interest rate risk of a 200 basis point
increase in market interest rates (which was greater than the interest rate risk
of a 200 basis point  decrease) was $3.1 million at September  30, 2000,  Market
Bank would have been required to deduct  approximately  $1.0 million (50% of the
$2.0 million difference) from its capital in determining whether Market Bank met
its risk-based  capital  requirement.  Regardless of such restriction,  however,
Market  Bank's  risk-based  capital at  September  30,  2000,  would  still have
exceeded the regulatory requirement by $10.2 million.






                                      -25-
<PAGE>

Presented  below,  as of  September  30, 2000,  and  September  30, 1999,  is an
analysis of Market  Bank's  interest rate risk as measured by changes in NPV for
instantaneous  and  sustained  parallel  shifts  of 100  basis  points in market
interest  rates.  During both of these periods,  Market Bank has operated within
the policy  limits set by the Board of  Directors  of Market Bank as the maximum
change  in NPV that the  Board of  Directors  deems  advisable  in the  event of
various changes in interest rates.
<TABLE>
<CAPTION>

                                          September 30, 2000
    Change in interest rate         $ change             % change
           (basis points)            in NPV               in NPV
    -----------------------         -------              --------
                            (Dollars in thousands)
<S>                                      <C>                 <C>
              +300                    $(4,571)               (32)%
              +200                     (3,101)               (22)
              +100                     (1,553)               (11)
                 0                          -                  -
              -100                      1,206                  8
              -200                      1,852                 13
              -300                      2,469                 17

                                           September 30, 1999
    Change in interest rate         $ change             % change
           (basis points)            in NPV               in NPV
    -----------------------         -------              --------
                            (Dollars in thousands)

              +300                    $(4,478)               (33)%
              +200                     (2,959)               (22)
              +100                     (1,417)               (10)
                 0                          -                  -
              -100                      1,026                  7
              -200                      1,736                 13
              -300                      2,405                 18
</TABLE>

As  illustrated  in the  tables,  NPV is more  sensitive  to rising  rates  than
declining rates. Such difference in sensitivity occurs principally  because,  as
rates rise,  borrowers do not prepay fixed-rate loans as quickly as they do when
interest  rates are  declining.  Thus, in a rising  interest  rate  environment,
because  Market Bank has a significant  amount of  fixed-rate  loans in its loan
portfolio,  the amount of interest  Market Bank would receive on its loans would
increase relatively slowly as loans are slowly prepaid and new loans are made at
higher rates. Moreover, the interest Market Bank would pay on its deposits would
increase  rapidly because Market Bank's deposits  generally have shorter periods
to repricing.  The assumptions used in calculating the amounts in this table are
OTS assumptions.

As with any method of measuring  interest rate risk,  certain  shortcomings  are
inherent  in  the  NPV  approach.  For  example,  although  certain  assets  and
liabilities may have similar maturities or periods of repricing,  they may react
in different  degrees to changes in market  interest  rates.  Also, the interest
rates on certain  types of assets and  liabilities  may  fluctuate in advance of
changes in market  interest  rates,  while interest rates on other types may lag
behind  changes in market rates.  Further,  in the event of a change in interest
rates, expected rates of prepayment on loans and mortgage-backed  securities and
early  withdrawal  levels from  certificates  of deposit  would  likely  deviate
significantly from those assumed in making the risk calculations.

In a rising interest rate  environment,  Market Bank's net interest income could
be expected to be negatively  affected.  Moreover,  rising  interest rates could
negatively affect Market Bank's earnings due to diminished loan demand.






                                      -26-
<PAGE>

Liquidity and Capital Resources

Liquidity  refers to the ability of Market Bank to generate  sufficient  cash to
fund current loan demand,  meet deposit  withdrawals and pay operating expenses.
Liquidity is influenced by financial market conditions, fluctuations in interest
rates,  general economic conditions and regulatory  requirements.  Market Bank's
liquid  assets,   primarily   represented  by  cash  and  cash  equivalents  and
interest-bearing  deposits in other financial institutions,  are a result of its
operating,  investing and financing activities.  These activities are summarized
in the following table for the years ended September 30, 2000, 1999 and 1998:
<TABLE>
<CAPTION>
                                                           Year ended September 30,
                                                   ------------------------------------------
                                                   2000               1999               1998
                                                   ----               ----               ----
                                                                 (In thousands)

<S>                                                 <C>                 <C>                <C>
Net cash from operating activities                $  254             $  514             $  798
Net cash from (used in) investing activities
                                                  (1,740)            (3,841)             4,938
Net cash from (used in) financing activities
                                                     (39)               237             (2,603)
                                                   -----              -----              -----
Net change in cash and cash equivalents
                                                  (1,525)            (3,090)             3,133
Cash and cash equivalents at the beginning
   of the year                                     2,291              5,381              2,248
                                                   -----              -----              -----
Cash and cash equivalents at the end of the
   year                                           $  766             $2,291             $5,381
                                                   =====              =====              =====
</TABLE>


Market Bank's principal sources of funds are deposits,  loan and mortgage-backed
securities  repayments,  maturities  of securities  and other funds  provided by
operations.  Market  Bank  also  has the  ability  to  borrow  from  the FHLB of
Cincinnati.  While  scheduled  loan  repayments  and  maturing  investments  are
relatively  predictable,  deposit  flows  and  early  loan  and  mortgage-backed
security  prepayments  are  influenced  to a greater  degree by interest  rates,
general economic conditions and competition.  Market Bank maintains  investments
in liquid assets based upon  management's  assessment of (i) the need for funds,
(ii) expected  deposit flows,  (iii) the yields  available on short-term  liquid
assets and (iv) the  objectives of Market Bank's asset and liability  management
program.

At  September  30,  2000,   Market  Bank's   certificates   of  deposit  totaled
approximately  $28.9  million,  or  71.9%  of total  deposits.  Of such  amount,
approximately  $22.5 million in  certificates of deposit mature within one year.
Based on past  experience  and  Market  Bank's  prevailing  pricing  strategies,
management  believes that a substantial  percentage of such certificates will be
renewed  with  Market  Bank at  maturity.  If Market Bank is unable to renew the
maturing certificates for any reason, however, borrowings of up to $26.1 million
are available from the FHLB of Cincinnati.

OTS  regulations  presently  require  Market Bank to  maintain an average  daily
balance of liquid assets, which may include, but are not limited to, investments
in U.S.  Treasury and federal  agency  obligations  and other  investments in an
amount  equal to 4% of the sum of Market  Bank's  average  daily  balance of net
withdrawable  deposit  accounts and borrowings  payable in one year or less. The
liquidity  requirement,  which  may be  changed  from time to time by the OTS to
reflect  changing  economic  conditions,  is  intended  to  provide  a source of
relatively  liquid  funds upon which  Market Bank may rely if  necessary to fund
deposit  withdrawals or other  short-term  funding needs. At September 30, 2000,
Market Bank's  regulatory  liquidity ratio was 32.7%. At such date,  Market Bank
had no commitments to originate loans,  undisbursed loans in process of $608,000
and no  commitments  to  purchase  or sell  loans.  Market  Bank  considers  its
liquidity and capital  resources  sufficient to meet its outstanding  short-term
and long-term needs. See Note H to the Consolidated Financial Statements.

Market  Bank is required  by  applicable  law and  regulations  to meet  certain
minimum capital  standards.  Such capital  standards  include a tangible capital
requirement,  a core  capital  requirement  or leverage  ratio and a  risk-based
capital  requirement.  Market  Bank  exceeded  all  of  its  regulatory  capital
requirements at September 30, 2000.

The tangible  capital  requirement  requires a savings and loan  association  to
maintain "tangible capital" of not less than 1.5% of the association's  adjusted
total assets.  Tangible  capital is defined in OTS  regulations  as core capital
minus any intangible assets.

"Core capital" is comprised of common  shareholders'  equity (including retained
earnings), noncumulative preferred stock and related surplus, minority interests
in consolidated subsidiaries, certain nonwithdrawable accounts, pledged deposits


                                      -27-
<PAGE>

of mutual  associations and intangible assets,  primarily  consisting of certain
purchased mortgage servicing rights. OTS regulations  require a savings and loan
association  to  maintain  core  capital of 4% - 5% of the  association's  total
assets,  except for those  associations with the highest  examination rating and
acceptable levels of risk.

OTS regulations require that a savings and loan association maintain "risk-based
capital" in an amount not less than 8% of its risk-weighted  assets.  Risk-based
capital is defined as core  capital plus  certain  additional  items of capital,
which in the case of Market  Bank  includes  a general  loan loss  allowance  of
$52,000 at September 30, 2000.

The following table summarizes Market Bank's regulatory capital requirements and
actual capital at September 30, 2000:
<TABLE>
<CAPTION>
                                                                                  Excess of
                                                      Current requirement       actual capital
                                                      -------------------        over current         Applicable
                                  Actual capital                                  requirement         asset total
                              --------------------                            ------------------     ------------
September 30, 2000            Amount       Percent      Amount    Percent     Amount     Percent
------------------            ------       -------      ------    -------     ------     -------
                                                           (Dollars in thousands)
<S>                             <C>           <C>        <C>        <C>         <C>        <C>             <C>
Tangible capital              $12,958        23.7%     $   820      1.5%      $12,138      22.2%         $54,676
Core capital                   12,958        23.7        2,187      4.0        10,771      19.7           54,676
Risk-based capital             13,523        46.0        2,353      8.0        11,170      38.0           29,413
</TABLE>

Potential Impact of Gramm-Leach-Bliley Act on Future Results of Operation

         On November 12, 1999,  the  Gramm-Leach-Bliley  Act (the "GLB Act") was
enacted into law. The GLB Act repealed  prior laws that had generally  prevented
banks  from  affiliating  with  securities  and  insurance  firms and made other
significant  changes in financial  services in which  various types of financial
institutions may engage.

         Prior to the GLB Act, unitary savings and loan holding  companies which
met certain  requirements were the only financial  institution holding companies
that were permitted to engage in any type of business  activity,  whether or not
the activity was a financial  service.  The GLB Act continues those broad powers
for unitary  thrift  holding  companies in  existence on May 4, 1994,  including
Market Financial.  Any thrift holding company formed after May 4, 1999, however,
will be subject to the same  restrictions as multiple thrift holding  companies,
which  generally are limited to  activities  that are  considered  incidental to
banking. The GLB Act authorizes a new "financial holding company," which can own
banks and  thrifts  and  which is also  permitted  to  engage  in a  variety  of
financial activities, including insurance and securities underwriting and agency
activities, as long as the depository institutions it owns are well capitalized,
well managed and meet certain other tests.

         The GLB Act is not expected to have a material effect on the activities
in which the Market  Financial and Market Bank currently  engage,  except to the
extent that competition with other types of financial  institutions may increase
as they engage in activities not permitted prior to enactment of the GLB Act.

Effect of Recent Accounting Pronouncements

         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities,"  which  requires  entities to
recognize  all  derivatives  in their  financial  statements as either assets or
liabilities  measured at fair value.  SFAS No. 133 also specifies new methods of
accounting for hedging transactions,  prescribes the items and transactions that
may be hedged,  and specifies  detailed  criteria to be met to qualify for hedge
accounting.

         The definition of a derivative  financial instrument is complex, but in
general it is an instrument  with one or more  underlyings,  such as an interest
rate or foreign exchange rate, that is applied to a notional amount,  such as an
amount of currency, to determine the settlement amount(s). It generally requires
no  significant  initial  investment and can be settled net or by delivery of an
asset that is readily  convertible to cash.  SFAS No. 133 applies to derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

         SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years
beginning  after June 15, 2000. On adoption,  entities are permitted to transfer
held-to-maturity  debt securities to the  available-for-sale or trading category
without  calling into  question  their intent to hold other debt  securities  to
maturity in the future.  Management  adopted SFAS No. 133  effective  October 1,
2000,  as  required  without  material  impact on Market  Financial's  financial
statements.

                                      -28-
<PAGE>

         In  September  2000,  the FASB  issued SFAS No.  140,  "Accounting  for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
which  revises  the  standards  for  accounting  for  securitizations  and other
transfers of financial assets and collateral and requires  certain  disclosures,
but carries over most of the provisions of SFAS No. 125 without reconsideration.
SFAS No. 140 is effective for  transfers  and servicing of financial  assets and
extinguishments of liabilities  occurring after March 31, 2001, and is effective
for recognition and  reclassification of collateral and for disclosures relating
to  securitization  transactions  and  collateral  for fiscal years ending after
December  15, 2000.  SFAS No. 140 is not  expected to have a material  effect on
Market Financial's financial position or results of operations.




































                                      -29-
<PAGE>


Item 7.       Financial Statements

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Market Financial Corporation

We have audited the accompanying  consolidated statements of financial condition
of Market  Financial  Corporation  as of  September  30, 2000 and 1999,  and the
related consolidated statements of earnings, comprehensive income, shareholders'
equity, and cash flows for each of the three years in the period ended September
30, 2000. These consolidated  financial statements are the responsibility of the
Corporation's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Market Financial
Corporation as of September 30, 2000 and 1999, and the  consolidated  results of
its  operations  and its cash  flows for each of the three  years in the  period
ended  September 30, 2000,  in conformity  with  generally  accepted  accounting
principles.


/s/Grant Thornton LLP


Cincinnati, Ohio
November 15, 2000




















                                      -30-
<PAGE>
                          Market Financial Corporation

<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                  September 30,
                        (In thousands, except share data)

          ASSETS                                                                                 2000              1999
<S>                                                                                              <C>                <C>
Cash and due from banks                                                                       $   527           $   644
Federal funds sold                                                                                100             1,392
Interest-bearing deposits in other financial institutions                                         139               255
                                                                                               ------            ------
          Cash and cash equivalents                                                               766             2,291

Certificates of deposit in other financial institutions                                           300               290
Investment securities held to maturity - at amortized cost, approximate market
  value of $11,143 and $12,529 at September 30, 2000 and 1999                                  11,400            12,800
Investment securities designated as available for sale - at market                              1,160             1,116
Mortgage-backed securities held to maturity - at cost, approximate market
  value of $1,829 and $2,067 at September 30, 2000 and 1999                                     1,830             2,047
Loans receivable - net                                                                         37,879            35,219
Office premises and equipment - at depreciated cost                                             1,471               819
Federal Home Loan Bank stock - at cost                                                            482               449
Accrued interest receivable                                                                       371               320
Prepaid expenses and other assets                                                                 265               100
Prepaid federal income taxes                                                                      163                -
                                                                                               ------            ------

          Total assets                                                                        $56,087           $55,451
                                                                                               ======            ======

     LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                                      $40,260           $39,907
Advances by borrowers for taxes and insurance                                                      70                59
Accrued interest payable                                                                          105                98
Other liabilities                                                                                 272               160
Accrued federal income taxes                                                                       -                 45
Deferred federal income taxes                                                                     625               607
                                                                                               ------            ------
          Total liabilities                                                                    41,332            40,876

Commitments                                                                                        -                 -

Shareholders' equity
  Preferred stock - 1,000,000 shares without par value authorized;
    no shares issued                                                                               -                 -
  Common stock - 4,000,000 shares without par value authorized;
    1,335,725 shares issued                                                                        -                 -
  Additional paid-in capital                                                                    8,160             8,187
  Retained earnings - substantially restricted                                                  7,892             7,984
  Shares acquired by stock benefit plans                                                       (1,211)           (1,480)
  Less 76,286 shares of treasury stock - at cost                                                 (838)             (838)
  Accumulated comprehensive income, unrealized gains on securities
    designated as available for sale, net of related tax effects                                  752               722
                                                                                               ------            ------
          Total shareholders' equity                                                           14,755            14,575
                                                                                               ------            ------

          Total liabilities and shareholders' equity                                          $56,087           $55,451
                                                                                               ======            ======
</TABLE>



The accompanying notes are an integral part of these statements.

                                      -31-
<PAGE>


                          Market Financial Corporation

<TABLE>
<CAPTION>
                       CONSOLIDATED STATEMENTS OF EARNINGS

                            Year ended September 30,
                      (In thousands, except per share data)


                                                                                    2000            1999           1998
<S>                                                                                  <C>            <C>            <C>
Interest income
  Loans                                                                           $2,758          $2,590         $2,411
  Mortgage-backed securities                                                         146              95            101
  Investment securities                                                              801             705            890
  Interest-bearing deposits and other                                                 93             343            483
                                                                                   -----           -----          -----
          Total interest income                                                    3,798           3,733          3,885

Interest expense
  Deposits                                                                         1,861           1,782          1,725
  Borrowings                                                                          -               21              9
                                                                                   -----           -----          -----
          Total interest expense                                                   1,861           1,803          1,734
                                                                                   -----           -----          -----

          Net interest income                                                      1,937           1,930          2,151

Other income
  Gain on sale of investments                                                         -              463             -
  Other operating                                                                     11              11              7
                                                                                   -----           -----          -----
          Total other income                                                          11             474              7

General, administrative and other expense
  Employee compensation and benefits                                                 906             806            778
  Occupancy and equipment                                                            148             121            122
  Federal deposit insurance premiums                                                  12              23             28
  Franchise taxes                                                                    172             191            184
  Other operating                                                                    239             205            210
                                                                                   -----           -----          -----
          Total general, administrative and
            other expense                                                          1,477           1,346          1,322
                                                                                   -----           -----          -----

          Earnings before income taxes                                               471           1,058            836

Federal income taxes
  Current                                                                            156             359            301
  Deferred                                                                             4               1            (17)
                                                                                   -----           -----          -----
          Total federal income taxes                                                 160             360            284
                                                                                   -----           -----          -----

          NET EARNINGS                                                            $  311          $  698         $  552
                                                                                   =====           =====          =====

          EARNINGS PER SHARE
            Basic                                                                   $.26            $.58           $.45
                                                                                     ===             ===            ===

            Diluted                                                                 $.26            $.57           $.45
                                                                                     ===             ===            ===
</TABLE>



The accompanying notes are an integral part of these statements.

                                      -32-

<PAGE>


                          Market Financial Corporation

<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                            Year ended September 30,
                                 (In thousands)


                                                                                    2000            1999           1998
<S>                                                                                  <C>             <C>            <C>
Net earnings                                                                        $311            $698           $552

Other comprehensive income, net of tax:
  Unrealized holding gains on securities during
    the period, net of tax of $15, $47 and $143
    in 2000, 1999 and 1998, respectively                                              30              91            277

Reclassification adjustment for realized gains
  included in earnings, net of tax of $157 in 1999                                    -             (306)            -
                                                                                     ---             ---            ---

Comprehensive income                                                                $341            $483           $829
                                                                                     ===             ===            ===

Accumulated comprehensive income                                                    $752            $722           $937
                                                                                     ===             ===            ===
</TABLE>





























The accompanying notes are an integral part of these statements.

                                      -33-
<PAGE>


                          Market Financial Corporation

<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                  Years ended September 30, 2000, 1999 and 1998
                        (In thousands, except share data)

                                                                                          Shares           Unrealized gains
                                                                                        acquired             on securities
                                                                 Additional             by stock             designated as
                                                         Common     paid-in   Retained   benefit  Treasury     available
                                                          stock     capital   earnings     plans     stock      for sale      Total
<S>                                                         <C>       <C>       <C>         <C>        <C>        <C>         <C>

Balance at October 1, 1997                                 $ -      $12,832     $7,472   $(1,069)    $  -        $660      $19,895

Purchase of shares for stock benefit plans                   -           -          -       (729)       -          -          (729)
Amortization of expense related to stock benefit plans       -           34         -         98        -          -           132
Capital distributions of $3.78 per share                     -       (4,675)      (374)       -         -          -        (5,049)
Unrealized gains on securities designated as available
  for sale, net of related tax effects                       -           -          -         -         -         277          277
Net earnings for the year ended September 30, 1998           -           -         552        -         -          -           552
                                                            --       ------      -----    ------      ----        ---       ------

Balance at September 30, 1998                                -        8,191      7,650    (1,700)       -         937       15,078

Purchase of treasury stock                                   -           -          -         -       (838)        -          (838)
Amortization of expense related to stock benefit plans       -           (4)        -        220        -          -           216
Cash dividends of $.28 per share                             -           -        (364)       -         -          -          (364)
Realized gains on securities designated as available for
  sale, net of related tax effects                           -           -          -         -         -        (306)        (306)
Unrealized gains on securities designated as available
  for sale, net of related tax effects                       -           -          -         -         -          91           91
Net earnings for the year ended September 30, 1999           -           -         698        -         -          -           698
                                                            --       ------      -----    ------      ----        ---       ------

Balance at September 30, 1999                                -        8,187      7,984    (1,480)     (838)       722       14,575

Amortization of expense related to stock benefit plans       -          (27)        -        269        -          -           242
Cash dividends of $.32 per share                             -           -        (403)       -         -          -          (403)
Unrealized gains on securities designated as available
  for sale, net of related tax effects                       -           -          -         -         -          30           30
Net earnings for the year ended September 30, 2000           -           -         311        -         -          -           311
                                                            --       ------      -----     ------      ----       ---       ------

Balance at September 30, 2000                              $ -       $8,160     $7,892    $(1,211)    $(838)     $752      $14,755
                                                            ==        =====      =====     ======      ====       ===       ======
</TABLE>





The accompanying notes are an integral part of these statements.

                                      -34-
<PAGE>


                          Market Financial Corporation

<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            Year ended September 30,
                                 (In thousands)

                                                                                    2000            1999           1998
<S>                                                                                  <C>            <C>            <C>
Cash flows from operating activities:
  Net earnings for the year                                                       $  311         $   698        $   552
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of premiums and discounts on
      investments and mortgage-backed securities, net                                  1               2              1
    Depreciation and amortization                                                     40              30             36
    Amortization of deferred loan origination (fees) costs                             6              (3)            (3)
    Amortization of expense related to stock benefit plans                           242             216            132
    Gain on sale of investment securities designated as available
      for sale                                                                        -             (463)            -
    Federal Home Loan Bank stock dividends                                           (33)            (30)           (29)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable                                                    (51)             (1)           201
      Accrued interest payable                                                         7               3             (4)
      Prepaid expenses and other assets                                             (165)             49            (79)
      Other liabilities                                                              112             (15)            38
      Federal income taxes
        Current                                                                     (208)             27            (30)
        Deferred                                                                       4               1            (17)
                                                                                   -----          ------         ------
         Net cash provided by operating activities                                   266             514            798

Cash flows provided by (used in) investing activities:
  Purchase of investment securities designated as held to maturity                  (790)        (11,000)        (6,600)
  Proceeds from maturity of investment securities                                  2,190           7,500         14,560
  Proceeds from sale of investment securities designated as
    available for sale                                                                -              471             -
  Purchase of mortgage-backed securities designated as held to maturity               -           (1,486)            -
  Principal repayments on mortgage-backed securities                                 216             296            405
  Loan disbursements                                                              (6,755)        (11,582)       (12,494)
  Principal repayments on loans                                                    4,089           9,182          6,183
  Purchase of office premises and equipment                                         (692)           (722)           (16)
  (Increase) decrease in certificates of deposit in other
    financial institutions - net                                                     (10)          3,500          2,900
                                                                                   -----          ------         ------
         Net cash provided by (used in) investing activities                      (1,752)         (3,841)         4,938

Cash flows provided by (used in) financing activities:
  Net increase in deposits                                                           353           2,162          2,442
  Proceeds from other borrowed money                                                 500             180            725
  Repayment of other borrowed money                                                 (500)           (905)            -
  Advances by borrowers for taxes and insurance                                       11               2              8
  Shares acquired for stock benefit plans                                             -               -            (729)
  Purchase of treasury stock                                                          -             (838)            -
  Capital distributions and dividends paid on common stock                          (403)           (364)        (5,049)
                                                                                   -----          ------         ------
         Net cash provided by (used in) financing activities                         (39)            237         (2,603)
                                                                                   -----          ------         ------

         Net increase (decrease) in cash and cash equivalents
           (balance carried forward)                                              (1,525)         (3,090)         3,133
                                                                                   -----          ------         ------
</TABLE>


                                      -35-

<PAGE>


                          Market Financial Corporation

<TABLE>
<CAPTION>
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                            Year ended September 30,
                                 (In thousands)

                                                                                    2000            1999           1998
<S>                                                                                 <C>             <C>            <C>
         Net increase (decrease) in cash and cash
           equivalents (balance brought forward)                                 $(1,525)        $(3,090)        $3,133

Cash and cash equivalents at beginning of year                                     2,291           5,381          2,248
                                                                                  ------          ------          -----

Cash and cash equivalents at end of year                                         $   766         $ 2,291         $5,381
                                                                                  ======          ======          =====


Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Federal income taxes                                                         $   391         $   264         $  340
                                                                                  ======          ======          =====

    Interest on deposits and borrowings                                          $ 1,854         $ 1,800         $1,738
                                                                                  ======          ======          =====


Supplemental disclosure of noncash investing activities:
  Unrealized gains on securities designated as available for sale,
    net of related tax effects                                                   $    30         $    91         $  277
                                                                                  ======          ======          =====
</TABLE>

























The accompanying notes are an integral part of these statements.


                                      -36-
<PAGE>


                          Market Financial Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        September 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF ACCOUNTING POLICIES

    Market  Financial  Corporation  (the  "Corporation")  is a savings  and loan
    holding company whose activities are primarily  limited to holding the stock
    of Market Bank (the "Bank").  Future  references to the  Corporation  or the
    Bank are  utilized  herein as the  context  requires.  The Bank  conducts  a
    general banking  business in southwestern  Ohio which consists of attracting
    deposits from the general public and applying those funds to the origination
    of loans for consumer and residential purposes.  The Bank's profitability is
    significantly  dependent on net  interest  income,  which is the  difference
    between interest income generated from  interest-earning  assets (i.e. loans
    and  investments)   and  the  interest  expense  paid  on   interest-bearing
    liabilities (i.e. customer deposits and borrowed funds). Net interest income
    is  affected  by  the  relative  amount  of   interest-earning   assets  and
    interest-bearing  liabilities  and the  interest  received  or paid on these
    balances.  The level of  interest  rates paid or received by the Bank can be
    significantly  influenced  by a number  of  environmental  factors,  such as
    governmental monetary policy, that are outside of management's control.

    The consolidated financial information presented herein has been prepared in
    accordance  with  generally  accepted  accounting  principles  ("GAAP")  and
    general  accounting  practices within the financial  services  industry.  In
    preparing  financial  statements  in  accordance  with GAAP,  management  is
    required to make estimates and assumptions  that affect the reported amounts
    of assets  and  liabilities  and the  disclosure  of  contingent  assets and
    liabilities  at the  date  of the  financial  statements  and  revenues  and
    expenses during the reporting period.  Actual results could differ from such
    estimates.

    The following is a summary of  significant  accounting  policies  which have
    been   consistently   applied  in  the   preparation  of  the   accompanying
    consolidated financial statements.

    1.  Principles of Consolidation

    The  consolidated   financial   statements   include  the  accounts  of  the
    Corporation  and its  wholly-owned  subsidiary,  the Bank.  All  significant
    intercompany balances and transactions have been eliminated.

    2.  Investment Securities and Mortgage-Backed Securities

    The Corporation  accounts for investment and  mortgage-backed  securities in
    accordance with Statement of Financial Accounting Standards ("SFAS") No. 115
    "Accounting for Certain Investments in Debt and Equity Securities." SFAS No.
    115 requires that investments be categorized as  held-to-maturity,  trading,
    or available-for-sale. Securities classified as held-to-maturity are carried
    at cost only if the  Corporation has the positive intent and ability to hold
    these   securities   to  maturity.   Trading   securities   and   securities
    available-for-sale are carried at fair value with resulting unrealized gains
    or losses recorded to operations or shareholders' equity, respectively.










                                      -37-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    2.  Investment Securities and Mortgage-Backed Securities (continued)

    The  Corporation's   shareholders'  equity  reflected  unrealized  gains  on
    securities  designated as available for sale, net of applicable tax effects,
    totaling $752,000 and $722,000 at September 30, 2000 and 1999, respectively.

    Realized  gains and  losses on the sale of  investment  and  mortgage-backed
    securities are recognized using the specific identification method.

    3.  Loans Receivable

    Loans are stated at the principal amount outstanding,  adjusted for deferred
    loan origination fees and the allowance for loan losses. Interest is accrued
    as earned unless the  collectibility of the loan is in doubt.  Uncollectible
    interest  on loans that are  contractually  past due is charged  off,  or an
    allowance is established  based on  management's  periodic  evaluation.  The
    allowance  is  established  by a  charge  to  interest  income  equal to all
    interest previously accrued,  and income is subsequently  recognized only to
    the extent that cash payments are received until, in management's  judgment,
    the borrower's  ability to make periodic interest and principal payments has
    returned to normal, in which case the loan is returned to accrual status.

    The Company  accounts for loan  origination fees in accordance with SFAS No.
    91, "Accounting for Nonrefundable Fees and Costs Associated with Originating
    or  Acquiring  Loans and Initial  Direct  Costs of Leases."  Pursuant to the
    provisions of SFAS No. 91,  origination  fees  received  from loans,  net of
    direct  origination  costs,  are deferred and  amortized to interest  income
    using the level yield  method,  giving  effect to actual  loan  prepayments.
    Additionally,   SFAS  No.  91  generally   limits  the  definition  of  loan
    origination costs to direct costs  attributable to originating a loan, i.e.,
    principally actual personnel costs.

    4.  Allowance for Loan Losses

    It is the Bank's policy to provide valuation allowances for estimated losses
    on loans  based on past  loss  experience,  current  trends  in the level of
    delinquent and specific problem loans, loan  concentrations,  changes in the
    composition of the loan  portfolio,  adverse  situations that may affect the
    borrower's   ability  to  repay,  the  estimated  value  of  any  underlying
    collateral and current and  anticipated  economic  conditions in the primary
    lending areas. When the collection of a loan becomes doubtful,  or otherwise
    troubled,  the Bank records a charge-off equal to the difference between the
    fair value of the property  securing the loan and the loan's carrying value.
    Major loans and major lending areas are reviewed  periodically  to determine
    potential problems at an early date. The allowances are increased by charges
    to earnings and decreased by charge-offs (net of recoveries).

    The Bank  accounts  for  impaired  loans in  accordance  with SFAS No.  114,
    "Accounting  by Creditors  for  Impairment  of a Loan," which  requires that
    impaired loans be measured  based upon the present value of expected  future
    cash  flows  discounted  at the  loans'  effective  interest  rate or, as an
    alternative,  at the  loans'  observable  market  price or fair value of the
    collateral.






                                      -38-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    4.  Allowance for Loan Losses (continued)

    A loan is  defined  under SFAS No. 114 as  impaired  when,  based on current
    information  and events,  it is probable  that a creditor  will be unable to
    collect all  amounts  due  according  to the  contractual  terms of the loan
    agreement.  In applying the  provisions of SFAS No. 114, the Bank  considers
    its  investment  in one-  to  four-family  residential  loans  and  consumer
    installment  loans to be  homogeneous  and therefore  excluded from separate
    identification  for  evaluation  of  impairment.  With respect to the Bank's
    investment in nonresidential and multifamily  residential real estate loans,
    and  its  evaluation  of  impairment  thereof,   such  loans  are  generally
    collateral  dependent and, as a result, are carried as a practical expedient
    at the lower of cost or fair  value.  Collateral  dependent  loans which are
    more than ninety days  delinquent are  considered to constitute  more than a
    minimum delay in repayment and are evaluated for  impairment  under SFAS No.
    114 at that time.

    At September 30, 2000 and 1999,  the Bank had no loans that would be defined
    as impaired under SFAS No. 114.

    5.  Office Premises and Equipment

    Office  premises and equipment are carried at cost and include  expenditures
    which extend the useful lives of existing assets.  Maintenance,  repairs and
    minor   renewals  are  expensed  as  incurred.   For  financial   reporting,
    depreciation is provided on the straight-line method over the useful service
    lives  of the  assets,  estimated  to be  thirty  to  forty  years  for  the
    buildings,  thirty years for building improvements and five to ten years for
    furniture and equipment. An accelerated  depreciation method is used for tax
    reporting purposes.

    6.  Real Estate Acquired Through Foreclosure

    Real  estate  acquired  through  foreclosure  is carried at the lower of the
    loan's unpaid principal  balance (cost) or fair value less estimated selling
    expenses at the date of  acquisition.  A loan loss provision is recorded for
    any write  down in the  loan's  carrying  value to fair value at the date of
    acquisition.  A real estate loss  provision  is recorded if the  properties'
    fair value subsequently declines below the value determined at the recording
    date. In determining the lower of cost or fair value at  acquisition,  costs
    relating to development and improvement of property are  capitalized.  Costs
    relating to holding real estate acquired through foreclosure,  net of rental
    income, are charged against earnings as incurred.
















                                      -39-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    7.  Federal Income Taxes

    The  Corporation  accounts for federal  income taxes in accordance  with the
    provisions of SFAS No. 109,  "Accounting for Income Taxes."  Pursuant to the
    provisions  of SFAS No. 109, a deferred tax  liability or deferred tax asset
    is computed by applying the expected  statutory  tax rates to net taxable or
    deductible  differences  between the tax basis of an asset or liability  and
    its reported amount in the financial  statements that will result in taxable
    or deductible  amounts in future  periods.  Deferred tax assets are recorded
    only to the extent that the amount of net deductible  temporary  differences
    or carryforward  attributes may be utilized against current period earnings,
    carried back against prior years' earnings, offset against taxable temporary
    differences  reversing  in future  periods,  or  utilized  to the  extent of
    management's  estimate of future taxable  income.  A valuation  allowance is
    provided  for  deferred  tax  assets  to the  extent  that the  value of net
    deductible  temporary   differences  and  carryforward   attributes  exceeds
    management's  estimates of taxes payable on future taxable income.  Deferred
    tax   liabilities  are  provided  on  the  total  amount  of  net  temporary
    differences taxable in the future.

    The Corporation's  principal temporary  differences between pretax financial
    income and taxable  income result  primarily  from the practice of preparing
    tax  returns  on the  cash  basis  of  accounting,  while  the  consolidated
    financial  statements are prepared on the accrual basis of  accounting,  and
    from  different  methods of accounting for deferred loan  origination  fees,
    Federal Home Loan Bank stock  dividends and the Company's  general loan loss
    allowance.  A  temporary  difference  is also  recognized  for  depreciation
    utilizing accelerated methods for federal income tax purposes.

    8.  Benefit Plans

    The Corporation has an Employee Stock Ownership Plan ("ESOP") which provides
    retirement  benefits for  substantially all employees who have completed one
    year of service and have  attained the age of 21. The  Corporation  accounts
    for the  ESOP  in  accordance  with  Statement  of  Position  ("SOP")  93-6,
    "Employers'  Accounting  for  Employee  Stock  Ownership  Plans."  SOP  93-6
    requires  that  compensation  expense  recorded by employers  equal the fair
    value of ESOP shares  allocated to participants  during a given fiscal year.
    Expense  related to the ESOP totaled  approximately  $108,000,  $101,000 and
    $139,000  for the fiscal  years ended  September  30,  2000,  1999 and 1998,
    respectively.

    During fiscal 1998, the Corporation  established a Recognition and Retention
    Plan  ("RRP")  which  provides  for the issuance of shares to members of the
    Board of Directors, management and employees. Upon shareholder approval, the
    RRP purchased and awarded 53,429 shares of the  Corporation's  common stock,
    which are earned ratably over a five-year period.  Expense  recognized under
    the RRP totaled approximately $169,000,  $124,000 and $36,000 for the fiscal
    years ended September 30, 2000, 1999 and 1998, respectively.















                                      -40-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    9.  Cash and Cash Equivalents

    For purposes of reporting  cash flows,  cash and cash  equivalents  includes
    cash and due from banks, federal funds sold and interest-bearing deposits in
    other  financial  institutions  with original terms to maturity of less than
    ninety days.

    10.  Advertising

    Advertising costs are expensed when incurred. The Corporation's  advertising
    expense  totaled  $10,000,  $10,000 and  $12,000 for the fiscal  years ended
    September 30, 2000, 1999 and 1998, respectively.

    11.  Earnings Per Share and Dividends Per Share

    Basic earnings per share is computed based upon the weighted-average  shares
    outstanding  during the period,  less shares in the Corporation's  ESOP that
    are  unallocated and not committed to be released.  Weighted-average  common
    shares  outstanding,  which  gives  effect  to  72,814,  84,096  and  95,863
    unallocated ESOP shares, totaled 1,183,789,  1,208,530 and 1,239,862 for the
    fiscal years ended September 30, 2000, 1999 and 1998, respectively.

    Diluted  earnings  per share is computed  taking into  consideration  common
    shares  outstanding and dilutive  potential common shares to be issued under
    the Corporation's stock option plan.  Weighted-average  common shares deemed
    outstanding  for purposes of computing  diluted  earnings per share  totaled
    1,183,789,  1,215,305 and 1,239,862 for the fiscal years ended September 30,
    2000, 1999 and 1998, respectively. Incremental shares related to the assumed
    exercise of stock options  included in the  calculation of diluted  earnings
    per share  totaled  6,775 for the fiscal  year  ended  September  30,  1999.
    Options  to  purchase  125,558  and  113,526  shares of common  stock with a
    weighted-average  exercise  price of $9.6875 and $13.50 were  outstanding at
    September  30,  2000 and  1998,  respectively,  but were  excluded  from the
    computation of common stock  equivalents  because their exercise prices were
    higher than the average market price of the common shares.

    During fiscal 1998, the Corporation declared capital  distributions of $3.78
    per common  share.  Of this  amount,  $3.50 per share was paid in April 1998
    from funds  retained by the  Corporation in the conversion to stock form and
    was  deemed  by  management  to  constitute  a  return  of  excess  capital.
    Accordingly,  the Corporation charged the return of capital  distribution to
    additional paid-in-capital.
















                                      -41-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    12.  Fair Value of Financial Instruments

    SFAS No.  107,  "Disclosures  about  Fair Value of  Financial  Instruments",
    requires disclosure of the fair value of financial instruments,  both assets
    and liabilities  whether or not recognized in the consolidated  statement of
    financial condition, for which it is practicable to estimate that value. For
    financial  instruments  where quoted market prices are not  available,  fair
    values  are based on  estimates  using  present  value  and other  valuation
    methods.

    The methods used are greatly affected by the assumptions applied,  including
    the  discount  rate and  estimates  of future  cash  flows.  Because  of the
    judgment and subjective  considerations  required in determining appropriate
    and  reasonable  assumptions,  the derived  fair value  estimates  cannot be
    substantiated  by comparison to independent  markets.  Further,  the amounts
    which could be realized in immediate  settlement  of the  instruments  could
    vary  significantly  from the fair value estimate depending upon bulk versus
    individual  settlements  or  sales as well as other  factors.  SFAS No.  107
    excludes certain financial instruments and all nonfinancial instruments from
    its  disclosure  requirements.  Accordingly,  the  aggregate  net fair value
    amounts presented do not represent the underlying value of the Corporation.

    The  following  methods  and  assumptions  were used by the  Corporation  in
    estimating its fair value disclosures for financial instruments at September
    30, 2000 and 1999:

                  Cash and Cash  Equivalents:  The carrying amounts presented in
                  the  consolidated  statements of financial  condition for cash
                  and cash equivalents are deemed to approximate fair value.

                  Certificates of Deposit in Other Financial  Institutions:  The
                  carrying amounts  presented in the consolidated  statements of
                  financial  condition  for  certificates  of  deposit  in other
                  financial institutions are deemed to approximate fair value.

                  Investment and Mortgage-Backed  Securities: For investment and
                  mortgage-backed  securities, fair value is deemed to equal the
                  quoted market price.

                  Loans receivable:  The loan portfolio has been segregated into
                  categories  with  similar  characteristics,  such  as  one- to
                  four-family   residential,    multi-family   residential   and
                  nonresidential real estate. These loan categories were further
                  delineated into fixed-rate and adjustable-rate loans. The fair
                  values for the  resultant  loan  categories  were computed via
                  discounted  cash flow analysis,  using current  interest rates
                  offered for loans with  similar  terms to borrowers of similar
                  credit quality.  For loans on deposit  accounts,  and consumer
                  and other loans, fair values were deemed to equal the historic
                  carrying  values.  The historical  carrying  amount of accrued
                  interest on loans is deemed to approximate fair value.









                                      -42-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

    12.  Fair Value of Financial Instruments (continued)

                  Federal Home Loan Bank Stock: The carrying amount presented in
                  the consolidated  statements of financial  condition is deemed
                  to  approximate  fair value since a quoted market price is not
                  available on Federal Home Loan Bank stock.

                  Deposits:  The fair value of passbook and club  accounts,  and
                  money market  demand  accounts are deemed to  approximate  the
                  amount  payable  on demand  at  September  30,  2000 and 1999,
                  respectively.  Fair  values  for  fixed-rate  certificates  of
                  deposit  have  been  estimated  using a  discounted  cash flow
                  calculation  using the interest  rates  currently  offered for
                  deposits of similar remaining maturities.

                  Commitments   to   Extend    Credit:    For   fixed-rate   and
                  adjustable-rate  loan  commitments,  the fair  value  estimate
                  considers the  difference  between  current levels of interest
                  rates and committed  rates.  The  difference  between the fair
                  value and notional amount of outstanding  loan  commitments at
                  September 30, 2000 and 1999 was not material.

    Based on the foregoing methods and assumptions,  the carrying value and fair
    value of the Company's financial instruments at September 30 are as follows:
<TABLE>
<CAPTION>

                                                                              2000                         1999
                                                                   Carrying         Fair          Carrying         Fair
                                                                      value        value             value        value
                                                                                      (In thousands)
<S>                                                                   <C>          <C>              <C>            <C>
    Financial assets:
      Cash and cash equivalents                                     $   766      $   766           $ 2,291      $ 2,291
      Certificates of deposit in other financial institutions           300          300               290          290
      Investment securities held to maturity                         11,400       11,143            12,800       12,529
      Investment securities designated as available for sale          1,160        1,160             1,116        1,116
      Mortgage-backed securities                                      1,830        1,829             2,047        2,067
      Loans receivable - net                                         37,879       36,074            35,219       33,824
      Federal Home Loan Bank stock                                      482          482               449          449
                                                                     ------       ------            ------       ------

                                                                    $53,817      $51,754           $54,212      $52,566
                                                                     ======       ======            ======       ======

    Financial liabilities:
      Deposits                                                      $40,260      $40,190           $39,907      $39,958
      Advances by borrowers for taxes and insurance                      70           70                59           59
                                                                     ------       ------            ------       ------

                                                                    $40,330      $40,260           $39,966      $40,017
                                                                     ======       ======            ======       ======
</TABLE>

    13.  Reclassifications

    Certain prior year amounts have been  reclassified  to conform to the fiscal
    2000 consolidated financial statement presentation.


                                      -43-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE B - INVESTMENT AND MORTGAGE-BACKED SECURITIES

    The  amortized  cost and estimated  fair values of investment  securities at
    September 30 are summarized below. Certain securities with maturities of one
    to ten years are subject to call provisions and, therefore,  may not be held
    to maturity.
<TABLE>
<CAPTION>

                                                                            2000                           1999
                                                                               Estimated                      Estimated
                                                                Amortized           fair         Amortized         fair
                                                                     cost          value              cost        value
                                                                                       (In thousands)
<S>                                                                 <C>            <C>              <C>            <C>
    Held to maturity:
      U.S. Government agency obligations
        Due within:
          One year                                                $    -         $    -            $ 1,800      $ 1,805
          Three to five years                                      11,400         11,143             8,500        8,269
          Five to ten years                                            -              -              2,500        2,455
                                                                   ------         ------            ------       ------

         Total investment securities
           held to maturity                                        11,400         11,143            12,800       12,529

    Available for sale:
      FHLMC stock                                                      21          1,160                21        1,116
                                                                   ------         ------            ------       ------

         Total investment securities                              $11,421        $12,303           $12,821      $13,645
                                                                   ======         ======            ======       ======
</TABLE>

    At  September  30,  2000,   the  cost   carrying   value  of  the  Company's
    held-to-maturity  investment  portfolio exceeded the estimated fair value by
    $257,000, consisting solely of gross unrealized losses.

    At  September  30,  1999,   the  cost   carrying   value  of  the  Company's
    held-to-maturity  investment  portfolio exceeded the estimated fair value by
    $271,000,  consisting of gross unrealized losses totaling $279,000 and gross
    unrealized gains of $8,000.

    Mortgage-backed securities at September 30, 2000 and 1999, were comprised of
    Government  National  Mortgage  Association  ("GNMA")  and Federal Home Loan
    Mortgage Corporation Gold program participation  certificates.  At September
    30, 2000,  the market value  depreciation  of the Company's  mortgage-backed
    securities  below  cost  was  approximately   $1,000,   comprised  of  gross
    unrealized  gains of $17,000  and gross  unrealized  losses of  $18,000.  At
    September  30,  1999,  the  market  value   appreciation  of  the  Company's
    mortgage-backed  securities  in  excess of cost was  approximately  $20,000,
    comprised of gross unrealized  gains of $29,000 and gross unrealized  losses
    of $9,000. Maturities of mortgage-backed securities are due ratably over the
    next twenty  fiscal years based on the  contractual  repayment  terms of the
    underlying loans.










                                      -44-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE C - LOANS RECEIVABLE

    The composition of the loan portfolio at September 30 is as follows:
<TABLE>
<CAPTION>

                                                               2000                1999
                                                                      (In thousands)
<S>                                                             <C>               <C>
    Real estate mortgage loans
      One- to four-family                                      $32,876          $30,959
      Multifamily                                                2,828            2,049
      Nonresidential                                             1,647            1,737
      Land                                                         136              138
      Construction                                               1,000              346
    Passbook loans                                                  13               26
    Deferred loan origination costs                                 39               33
                                                                ------           ------
                                                                38,539           35,288
    Less:
      Undisbursed portion of loans in process                      608               17
      Allowance for loan losses                                     52               52
                                                                ------           ------

                                                               $37,879          $35,219
                                                                ======           ======
</TABLE>

    As depicted above, the Bank's lending efforts have  historically  focused on
    residential real estate loans, which comprised  approximately $35.7 million,
    or 94%, of the total loan portfolio at September 30, 2000 and $33.3 million,
    or 95%, of the total loan portfolio at September 30, 1999.  Generally,  such
    loans  have  been  underwritten  on  the  basis  of  no  more  than  an  80%
    loan-to-value ratio, which has historically  provided the Bank with adequate
    collateral coverage in the event of default. Nevertheless, the Bank, as with
    any lending institution, is subject to the risk that residential real estate
    values could  deteriorate in its primary lending area of southwestern  Ohio,
    thereby impairing  collateral values.  However,  management is of the belief
    that real estate  values in the Bank's  primary  lending area are  presently
    stable.

    The Bank, in the ordinary  course of business,  has granted loans to some of
    its  directors,  officers,  employees and their related  interests.  Related
    party loans are made on  substantially  the same terms,  including  interest
    rates  and  collateral,  as those  prevailing  at the  time  for  comparable
    transactions with unrelated persons and do not involve more than normal risk
    of   collectibility.   The  aggregate  dollar  amount  of  these  loans  was
    approximately  $499,000  and  $531,000  at  September  30,  2000  and  1999,
    respectively.

    Additionally, the Bank has paid a retainer of $20,000 to a related party for
    legal services, principally related to the loan origination function, during
    each of the fiscal years ended September 30, 2000, 1999 and 1998.







                                      -45-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE D - ALLOWANCE FOR LOAN LOSSES

    The activity in the  allowance  for loan losses is summarized as follows for
the years ended September 30:
<TABLE>
<CAPTION>

                                             2000           1999           1998
                                                    (In thousands)
<S>                                          <C>             <C>            <C>
    Beginning balance                        $ 52           $ 52           $ 52
    Provision for loan losses                  -              -              -
                                              ---            ---            ---

    Ending balance                           $ 52           $ 52           $ 52
                                              ===            ===            ===
</TABLE>

    At September  30, 2000 and 1999,  the Bank's  allowance  for loan losses was
    comprised solely of a general loan loss allowance,  which is includible as a
    component of regulatory risk-based capital.

    Nonperforming loans totaled approximately $272,000, $119,000 and $171,000 at
    September 30, 2000, 1999 and 1998, respectively.

    As of and for the years ended  September 30, 2000 and 1999,  the Bank had no
    loans which would be defined as impaired under SFAS No. 114.


NOTE E - OFFICE PREMISES AND EQUIPMENT

    Office  premises  and  equipment  at  September  30  are  comprised  of  the
following:
<TABLE>
<CAPTION>

                                                                 2000                1999
                                                                        (In thousands)
<S>                                                             <C>                 <C>
    Land                                                       $  641              $  607
    Buildings and improvements                                    871                 264
    Furniture and equipment                                       350                 299
                                                                -----               -----
                                                                1,862               1,170
      Less accumulated depreciation                               391                 351
                                                                -----               -----

                                                               $1,471              $  819
                                                                =====               =====
</TABLE>

    During fiscal 2000, the Bank completed  construction of a building  addition
    to its main office facility at a total cost of $1.3 million.







                                      -46-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE F - DEPOSITS

    Deposits consist of the following major classifications at September 30:
<TABLE>
<CAPTION>

    Deposit type and
    weighted-average                                                     2000                            1999
    interest rate                                                Amount         %                Amount          %
                                                                              (Dollars in thousands)
<S>                                                              <C>           <C>                 <C>          <C>
    NOW accounts - .76% in 2000                                 $   198         .5%              $   -            - %
    Statement savings accounts - 2.67% in 2000                       14         -                    -            -
    Passbook accounts - 2.67% in 2000
      and 1999                                                    9,731       24.2                10,453        26.2
    Club accounts - 5.08% in 2000 and
      5.07% in 1999                                                  57         .1                    58          .1
    Money market demand accounts -
      2.67% in 2000 and 1999                                      1,331        3.3                 1,829         4.6
                                                                 ------     ------                ------       -----
         Total demand accounts                                   11,331       28.1                12,340        30.9

    Certificates of deposit -
      6.25% in 2000 and 5.40% in 1999                            28,929       71.9                27,567        69.1
                                                                 ------     -----                 ------       -----

         Total deposits                                         $40,260     100.0%               $39,907       100.0%
                                                                 ======     =====                 ======       =====
</TABLE>


    At September 30, 2000 and 1999, the Bank had deposit  accounts with balances
    greater than $100,000 totaling $3.2 million and $3.3 million, respectively.

    Interest  expense on deposits  for the fiscal  years ended  September  30 is
summarized as follows:
<TABLE>
<CAPTION>

                                                                2000             1999              1998
                                                                            (In thousands)
<S>                                                             <C>             <C>                 <C>
    NOW accounts                                              $    1           $   -             $   -
    Passbook, statement savings and club accounts                273              277               279
    Money market accounts                                         42               55                64
    Certificates of deposit                                    1,545            1,450             1,382
                                                               -----            -----             -----

                                                              $1,861           $1,782            $1,725
                                                               =====            =====             =====
</TABLE>

    Maturities of outstanding  certificates of deposit are summarized as follows
at September 30:
<TABLE>
<CAPTION>

                                                                 2000              1999
                                                                      (In thousands)
<S>                                                             <C>                <C>
    Less than six months                                      $ 9,835           $ 9,691
    Six months to one year                                     12,665            12,029
    One year to three years                                     6,429             5,847
                                                               ------            ------

                                                              $28,929           $27,567
                                                               ======            ======
</TABLE>


                                      -47-

<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE G - FEDERAL INCOME TAXES

    The  provision  for federal  income  taxes on  earnings  for the years ended
    September  30, 2000,  1999 and 1998,  does not differ  materially  from that
    computed at the statutory corporate tax rate.

    The composition of the Corporation's net deferred tax liability at September
30 is as follows:
<TABLE>
<CAPTION>

                                                                                           2000           1999
    Taxes (payable) refundable on temporary
    differences at estimated corporate tax rate:                                             (In thousands)
<S>                                                                                       <C>             <C>
    Deferred tax assets:
      General loan loss allowance                                                         $  18          $  18
      Stock benefit plan                                                                     57             79
                                                                                           ----           ----
         Total deferred tax assets                                                           75             97

    Deferred tax liabilities:
      Unrealized gains on securities designated as
        available for sale                                                                 (387)          (373)
      Difference between cash and accrual basis of accounting                              (145)          (176)
      Federal Home Loan Bank stock dividends                                               (100)           (89)
      Difference between book and tax depreciation                                          (31)           (29)
      Percentage of earnings bad debt deduction                                              (2)            (4)
      Deferred loan origination costs                                                       (35)           (33)
                                                                                           ----           ----
         Total deferred tax liabilities                                                    (700)          (704)
                                                                                           ----           ----

         Net deferred tax liability                                                       $(625)         $(607)
                                                                                           ====           ====
</TABLE>

    The Bank was allowed a special bad debt  deduction  based on a percentage of
    earnings, generally limited to 8% of otherwise taxable income, or the amount
    of qualifying and  nonqualifying  loans  outstanding  and subject to certain
    limitations based on aggregate loans and savings account balances at the end
    of the calendar  year.  If the amounts  that  qualified  as  deductions  for
    federal  income tax purposes are later used for purposes  other than for bad
    debt losses, including distributions in liquidation, such distributions will
    be subject to federal income taxes at the then current  corporate income tax
    rate.  Retained earnings at September 30, 2000 includes  approximately  $1.3
    million for which federal income taxes have not been provided. The amount of
    the  unrecognized   deferred  tax  liability   relating  to  the  cumulative
    percentage of earnings bad debt deduction totaled approximately  $430,000 at
    September 30, 2000.  The Bank is required to recapture as taxable income its
    post-1987  additions  to its tax bad debt  reserve,  and will be  unable  to
    utilize the percentage of earnings  method to compute its bad debt deduction
    in the  future.  The Bank has  provided  deferred  taxes for this amount and
    began to amortize the recapture of the bad debt reserve into taxable  income
    over a six-year period in fiscal 1997.













                                      -48-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE H - COMMITMENTS

    The Bank is a party to financial instruments with  off-balance-sheet risk in
    the normal course of business to meet the financing  needs of its customers,
    including commitments to extend credit. Such commitments involve, to varying
    degrees,  elements of credit and interest-rate  risk in excess of the amount
    recognized  in  the  consolidated  statement  of  financial  condition.  The
    contract or notional  amounts of the  commitments  reflect the extent of the
    Bank's involvement in such financial instruments.

    The Bank's  exposure  to credit loss in the event of  nonperformance  by the
    other party to the financial  instrument for commitments to extend credit is
    represented by the  contractual  notional amount of those  instruments.  The
    Bank uses the same credit  policies in making  commitments  and  conditional
    obligations as it does for on-balance-sheet instruments.

    At September 30, 2000,  the Bank had no commitments to originate real estate
    loans.  At  September  30, 1999,  the Bank had  outstanding  commitments  of
    approximately $88,000 to originate fixed-rate  residential real estate loans
    at interest rates ranging from 7.00% to 8.25%. In the opinion of management,
    loan commitments  equaled or exceeded  prevalent market interest rates as of
    that date, and such commitments have been  underwritten on the same basis as
    the existing loan portfolio.  Management  believes that all commitments will
    be funded through cash flow from operations and existing  excess  liquidity.
    Fees received in connection with these  commitments have not been recognized
    in earnings.

    Commitments to extend credit are agreements to lend to a customer as long as
    there  is no  violation  of  any  condition  established  in  the  contract.
    Commitments  generally  have  fixed  expiration  dates or other  termination
    clauses and may require  payment of a fee. Since many of the commitments may
    expire  without  being  drawn  upon,  the total  commitment  amounts  do not
    necessarily  represent  future cash  requirements.  The Bank  evaluates each
    customer's   creditworthiness   on  a  case-by-case  basis.  The  amount  of
    collateral obtained, if it is deemed necessary by the Bank upon extension of
    credit,  is based on  management's  credit  evaluation of the  counterparty.
    Collateral  on  loans  may  vary  but the  preponderance  of  loans  granted
    generally include a mortgage interest in real estate as security.


NOTE I - REGULATORY CAPITAL

    The Bank is subject to minimum regulatory  capital standards  promulgated by
    the  Office of Thrift  Supervision  (the  "OTS").  Failure  to meet  minimum
    capital   requirements  can  initiate  certain  mandatory  --  and  possibly
    additional discretionary -- actions by regulators that, if undertaken, could
    have a direct  material  effect on the  consolidated  financial  statements.
    Under capital  adequacy  guidelines and the regulatory  framework for prompt
    corrective  action,  the Bank must meet  specific  capital  guidelines  that
    involve quantitative measures of the Bank's assets, liabilities, and certain
    off-balance-sheet items as calculated under regulatory accounting practices.
    The  Bank's  capital  amounts  and   classification   are  also  subject  to
    qualitative  judgments by the regulators about components,  risk weightings,
    and other factors.








                                      -49-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE I - REGULATORY CAPITAL (continued)

    The minimum capital  standards of the OTS generally  require the maintenance
    of regulatory  capital  sufficient to meet each of three tests,  hereinafter
    described as the tangible capital requirement,  the core capital requirement
    and the risk-based  capital  requirement.  The tangible capital  requirement
    provides for minimum tangible capital (defined as shareholders'  equity less
    all  intangible  assets) equal to 1.5% of adjusted  total  assets.  The core
    capital requirement provides for minimum core capital (tangible capital plus
    certain  forms of  supervisory  goodwill  and  other  qualifying  intangible
    assets)  generally  equal to 4.0% of adjusted  total assets.  The risk-based
    capital  requirement  currently provides for the maintenance of core capital
    plus general  loss  allowances  equal to 8.0% of  risk-weighted  assets.  In
    computing  risk-weighted assets, the Bank multiplies the value of each asset
    on its statement of financial condition by a defined  risk-weighting factor,
    e.g., one- to four-family  residential loans carry a risk-weighted factor of
    50%.

    During fiscal 2000,  the Bank was notified  from its  regulator  that it was
    categorized as "well-capitalized"  under the regulatory framework for prompt
    corrective  action.  To be categorized as  "well-capitalized"  the Bank must
    maintain minimum capital ratios as set forth in the following tables.

    As of September 30, 2000 and 1999, management believes that the Bank met all
    capital adequacy requirements to which it was subject.
<TABLE>
<CAPTION>
                                                             As of September 30, 2000
                                                                                                    Required
                                                                                                 to be "well-
                                                                      Required                capitalized" under
                                                                     for capital               prompt corrective
                                             Actual                adequacy purposes          action provisions
                                         Amount    Ratio           Amount    Ratio             Amount     Ratio
                                                                  (Dollars in thousands)
<S>                                       <C>       <C>             <C>        <C>               <C>        <C>
    Tangible capital                    $12,958    23.7%         =>$  820    =>1.5%          =>$2,734     => 5.0%

    Core capital                        $12,958    23.7%         =>$2,187    =>4.0%          =>$3,281     => 6.0%

    Risk-based capital                  $13,523    46.0%         =>$2,353    =>8.0%          =>$2,941     =>10.0%
</TABLE>

<TABLE>
<CAPTION>
                                                             As of September 30, 1999
                                                                                                    Required
                                                                                                 to be "well-
                                                                      Required                capitalized" under
                                                                     for capital               prompt corrective
                                             Actual                adequacy purposes          action provisions
                                         Amount    Ratio           Amount    Ratio             Amount     Ratio
                                                                  (Dollars in thousands)
<S>                                      <C>        <C>             <C>       <C>              <C>           <C>
    Tangible capital                    $12,379    22.8%         =>$  815    =>1.5%          =>$2,718     => 5.0%

    Core capital                        $12,379    22.8%         =>$2,173    =>4.0%          =>$3,261     => 6.0%

    Risk-based capital                  $12,431    45.4%         =>$2,190    =>8.0%          =>$2,738     =>10.0%
</TABLE>



                                      -50-

<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE I - REGULATORY CAPITAL (continued)

    Management believes that, under the current regulatory capital  regulations,
    the Bank will  continue  to meet its  minimum  capital  requirements  in the
    foreseeable future.  However, events beyond the control of the Bank, such as
    increased  interest  rates or a downturn in the economy in the Bank's market
    area, could adversely affect future earnings and, consequently,  the ability
    to meet future minimum regulatory capital requirements.


NOTE J - STOCK OPTION PLAN

    During  fiscal  1998,  the Board of Directors  adopted the Market  Financial
    Corporation  1998 Stock Option and Incentive Plan (the "Plan") that provided
    for the issuance of 133,572 authorized,  but unissued, common shares at fair
    value at the date of grant. In June 1998, the Corporation granted options to
    purchase  113,526 shares at the fair value of $13.50 per share, all of which
    were fully  exercisable  at the grant date,  with an expiration  term of ten
    years.  During  fiscal 1999,  the  Corporation  cancelled  these options and
    granted  options  to  purchase  125,668  shares  at the fair  value  for the
    Corporation's shares of $9.69 per share.

    The  Corporation  accounts  for the Plan in  accordance  with SFAS No.  123,
    "Accounting for Stock-Based Compensation," which contains a fair value-based
    method for valuing  stock-based  compensation  that entities may use,  which
    measures  compensation cost at the grant date based on the fair value of the
    award.  Compensation is then  recognized  over the service period,  which is
    usually the vesting period. Alternatively,  SFAS No. 123 permits entities to
    continue to account for stock options and similar equity  instruments  under
    Accounting  Principles  Board ("APB") Opinion No. 25,  "Accounting for Stock
    Issued to  Employees."  Entities  that continue to account for stock options
    using APB Opinion No. 25 are required to make pro forma  disclosures  of net
    earnings  and  earnings  per  share,  as if the fair  value-based  method of
    accounting defined in SFAS No. 123 had been applied.

    The Corporation  applies APB Opinion No. 25 and related  Interpretations  in
    accounting  for  the  Plan.  Accordingly,  no  compensation  cost  has  been
    recognized for the Plan. Had compensation  cost for the Plan been determined
    based on the  fair  value at the  grant  dates  for  awards  under  the Plan
    consistent  with  the  accounting  method  utilized  in SFAS  No.  123,  the
    Corporation's  net earnings and earnings per share would have been  recorded
    as the pro forma amounts indicated below:
<TABLE>
<CAPTION>

                                                                            2000           1999           1998
<S>                                                 <C>                      <C>            <C>           <C>
      Net earnings (In thousands)                As reported                $311           $698           $552
                                                                             ===            ===            ===

                                                   Pro-forma                $311           $463           $321
                                                                             ===            ===            ===
      Earnings per share
        Basic                                    As reported                $.26           $.58           $.45
                                                                             ===            ===            ===

                                                   Pro-forma                $.26           $.38           $.26
                                                                             ===            ===            ===

        Diluted                                  As reported                $.26           $.57           $.45
                                                                             ===            ===            ===

                                                   Pro-forma                $.26           $.38           $.26
                                                                             ===            ===            ===
</TABLE>




                                      -51-

<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE J - STOCK OPTION PLAN (continued)

    The fair value of each option  grant is estimated on the date of grant using
    the  modified   Black-Scholes   options-pricing  model  with  the  following
    weighted-average  assumptions  used for  grants  in  fiscal  1999 and  1998:
    dividend yield of 4.0%,  expected  volatility of 20.0%, a risk-free interest
    rate of 6.5% and expected lives of ten years.

    A summary of the status of the  Corporation's  Plan as of and for the fiscal
    years ended September 30, 2000, 1999 and 1998, are presented below:
<TABLE>
<CAPTION>

                                               2000                            1999                       1998
                                                   Weighted-                       Weighted-                  Weighted-
                                                     average                         average                    average
                                                    exercise                        exercise                   exercise
                                         Shares        price         Shares            price         Shares       price
<S>                                      <C>           <C>            <C>              <C>             <C>         <C>
    Outstanding at beginning of year    125,558      $9.6875        113,526         $13.5000             -       $   -
    Granted                                  -            -         125,558           9.6875        113,526       13.50
    Exercised                                -            -              -               -               -           -
    Cancelled                                -            -        (113,526)         13.5000             -           -
                                        -------       ------        -------          -------        -------       -----

    Outstanding at end of year          125,558      $9.6875        125,558         $ 9.6875        113,526      $13.50
                                        =======       ======        =======          =======        =======       =====

    Options exercisable at year-end     125,558      $9.6875        125,558         $ 9.6875        113,526      $13.50
                                        =======       ======        =======          =======        =======       =====

    Weighted-average fair value of
      options granted during the year                    N/A                           $2.83                      $3.08
                                                         ===                            ====                       ====
</TABLE>

    The following  information  applies to options  outstanding at September 30,
2000:

    Number outstanding                                                  125,558
    Range of exercise prices                                            $9.6875
    Weighted-average exercise price                                     $9.6875
    Weighted-average remaining contractual life                      7.75 years
















                                      -52-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE K - CONDENSED FINANCIAL STATEMENTS OF MARKET FINANCIAL CORPORATION

    The  following  condensed  financial   statements  summarize  the  financial
    position of Market Financial  Corporation as of September 30, 2000 and 1999,
    and the  results of its  operations  and its cash flows for the years  ended
    September 30, 2000, 1999 and 1998.

                          Market Financial Corporation
<TABLE>
<CAPTION>
                        STATEMENTS OF FINANCIAL CONDITION
                                  September 30,
                                 (In thousands)

    ASSETS                                                                                       2000              1999
<S>                                                                                             <C>                <C>
    Interest-bearing deposits in Market Bank                                                  $    72           $   512
    Interest-bearing deposits in other financial institutions                                       1                 1
    Loan receivable from ESOP                                                                     777               874
    Investment in Market Bank                                                                  13,710            13,101
    Accrued interest receivable                                                                    41                46
    Prepaid expenses and other assets                                                             157                 1
    Prepaid federal income taxes                                                                  115                82
    Deferred federal income taxes                                                                  27                -
                                                                                               ------            ------

          Total assets                                                                        $14,900           $14,617
                                                                                               ======            ======

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Accrued expenses and other liabilities                                                    $   145           $    39
    Deferred federal income taxes                                                                  -                  3
                                                                                               ------            ------
          Total liabilities                                                                       145                42

    Shareholders' equity
      Common stock and additional paid-in capital                                               8,160             8,187
      Retained earnings                                                                         7,892             7,984
      Shares acquired by stock benefit plans                                                   (1,211)           (1,480)
      Less 76,286 shares of treasury stock - at cost                                             (838)             (838)
      Unrealized gains on securities designated as available for sale, net                        752               722
                                                                                               ------            ------
          Total shareholders' equity                                                           14,755            14,575
                                                                                               ------            ------

          Total liabilities and shareholders' equity                                          $14,900           $14,617
                                                                                               ======            ======
</TABLE>






                                      -53-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE K - CONDENSED FINANCIAL STATEMENTS OF MARKET FINANCIAL CORPORATION
        (continued)

                          Market Financial Corporation

<TABLE>
<CAPTION>
                             STATEMENTS OF EARNINGS

                            Year ended September 30,
                                 (In thousands)
                                                                    2000         1999         1998
<S>                                                                  <C>          <C>          <C>
    Revenue
      Interest income                                               $ 65         $ 68         $157
      Equity in earnings of Market Bank                              482          855          600
                                                                     ---          ---          ---
          Total revenue                                              547          923          757

    Interest expense                                                  -            22            9

    General and administrative expenses                              324          284          221
                                                                     ---          ---          ---

    Earnings before income tax credits                               223          617          527

    Federal income tax credits                                       (88)         (81)         (25)
                                                                     ---          ---          ---

          NET EARNINGS                                              $311         $698         $552
                                                                     ===          ===          ===
</TABLE>




































                                      -54-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE K - CONDENSED FINANCIAL STATEMENTS OF MARKET FINANCIAL CORPORATION
        (continued)

                          Market Financial Corporation
<TABLE>
<CAPTION>
                            STATEMENTS OF CASH FLOWS
                            Year ended September 30,
                                 (In thousands)

                                                                                2000             1999              1998
<S>                                                                              <C>             <C>                <C>
    Cash provided by (used in) operating activities:
      Net earnings for the year                                                 $311           $  698            $  552
      Adjustments to reconcile net earnings to net
      cash provided by (used in) operating activities
        Undistributed earnings of consolidated subsidiary                       (482)            (855)             (600)
        Dividend received from subsidiary                                         -             2,200                -
        Amortization of expense related to stock benefit plans                   145              111                -
        Increase (decrease) in cash due to changes in:
          Accrued interest receivable                                              5                5               (13)
          Prepaid expenses and other assets                                     (156)              28               (30)
          Other liabilities                                                      106               (1)               38
          Prepaid federal income taxes                                           (33)             (48)              (47)
          Deferred federal income taxes                                          (30)              (9)               12
                                                                                 ---            -----             -----
          Net cash provided by (used in) operating activities                   (134)           2,129               (88)

    Cash flows provided by investing activities:
      Repayment of loan to ESOP                                                   97               97                98

    Cash flows provided by (used in) financing activities:
      Proceeds from other borrowed money                                          -               180               725
      Repayment of other borrowed money                                           -              (905)               -
      Shares acquired for stock benefit plans                                     -                -               (729)
      Purchase of treasury stock                                                  -              (838)               -
      Capital distributions and dividends paid on common stock                  (403)            (364)           (5,049)
          Net cash used in financing activities                                 (403)          (1,927)           (5,053)
                                                                                 ---            ------            -----

    Net increase (decrease) in cash and cash equivalents                        (440)             299            (5,043)

    Cash and cash equivalents at beginning of year                               513              214             5,257
                                                                                 ---            -----             -----

    Cash and cash equivalents at end of year                                    $ 73           $  513            $  214
                                                                                 ===            =====             =====
</TABLE>













                                      -55-
<PAGE>


                          Market Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 2000, 1999 and 1998


NOTE K - CONDENSED FINANCIAL STATEMENTS OF MARKET FINANCIAL CORPORATION
         (continued)

    The Bank is subject to  regulations  imposed by the OTS regarding the amount
    of capital distributions payable by the Bank to the Corporation.  Generally,
    the Bank's payment of dividends is limited,  without prior OTS approval,  to
    net earnings for the current  calendar year plus the two preceding  calendar
    years,  less capital  distributions  paid over the  comparable  time period.
    Insured  institutions  are required to file an application  with the OTS for
    capital distributions in excess of this limitation.  During fiscal 1999, the
    Bank   received  OTS  approval  to  make  up  to  $2.2  million  in  capital
    distributions during fiscal 2000. Subsequent to September 30, 2000, the Bank
    received OTS approval to make up to $500,000 in capital distributions during
    fiscal 2001.


NOTE L - PENDING MERGER

    On September 19, 2000, the Corporation entered into an Agreement and Plan of
    Reorganization  (the  "Agreement")  whereby the Corporation  would be merged
    into Peoples Community Bancorp,  Inc. ("Peoples") for total consideration of
    approximately  $16.4 million in either cash or common stock. Under the terms
    of the Agreement, each common share of the Corporation will be exchanged for
    either cash of $13.00 per share or Peoples  common shares with an equivalent
    value,  based on the  average  closing  prices of  Peoples  stock  over a 20
    trading day period ending the day before the effective date of the merger.

Item 8.       Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure

              Not applicable.

                                    PART III

Item 9.       Directors,  Executive Officers,  Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act

              The following table sets forth certain  information  regarding the
directors and executive officers of Market Financial:
<TABLE>
<CAPTION>
                                                                    Director of                 Director of          Term
Name                     Age (1)      Position(s) Held      Market Financial Since (2)       Market Bank Since      Expires
----                     -------      ----------------      --------------------------       -----------------      -------
<S>                       <C>             <C>                          <C>                          <C>               <C>
Rae Skirvin Larimer        64         Director and                     1996                          -               2001
                                      Secretary
L. Craig Martin            54         Director                         2000                        1996              2001
Wilbur H. Tisch            84         Director                         1996                          -               2001
Kathleen A. White          43         Director                         1996                          -               2001
Robert Gandenberger        72         Director and                     1996                        2000              2002
                                      Treasurer
John T. Larimer            67         Director and                     1996                        1975              2002
                                      President
Edgar H. May               83         Director and Vice                1996                        1992              2002
                                      President
Julie M. Bertsch           39         Chief Financial                    -                           -                 -
                                      Officer
</TABLE>

--------------------------
(1)  As of December 15, 2000.

(Footnotes continue on next page)

                                      -56-
<PAGE>

(2)  Except for Mr. Martin, each person became a director of Market Financial in
     connection with the conversion of Market Bank from mutual to stock form and
     the formation of Market  Financial as the holding  company for Market Bank.
     Mr. Martin was  appointed in January  2000, to fill the vacancy  created by
     the death of R.C. Meyerenke.

     Robert Gandenberger. Mr. Gandenberger retired as Supervisor of the Hamilton
County Recorder's Office in 1994. From 1991 to 1994, Mr.  Gandenberger served as
a director of The Cleves-North Bend Building and Loan Company, which merged into
Market Bank in 1994.

     John T. Larimer.  Mr. Larimer,  an attorney,  has been a director of Market
Bank since 1975, President of Market Bank since 1993, Managing Officer of Market
Bank since November 1995,  and President of Market  Financial  since April 1996.
Mr.  Larimer is Rae  Skirvin  Larimer's  spouse and is a  brother-in-law  of Una
Schaeperklaus.

     Rae Skirvin  Larimer.  Ms.  Larimer has been legal  counsel for Market Bank
since  1975.  From  1979 to  1994,  Ms.  Larimer  served  as a  director  of The
Cleves-North  Bend Building and Loan Company.  Ms.  Larimer is John T. Larimer's
spouse and the sister of Una Schaeperklaus, a director of Market Bank.

     L. Craig  Martin.  In January  2000,  Mr.  Martin was appointed to fill the
vacancy created by the death of R.C.  Meyerenke.  For over 20 years,  Mr. Martin
has served as President  of  Environmetrics,  Inc.,  an  architectural  firm and
commercial and residential construction company he founded.

     Edgar H. May.  Mr. May has served as a director  of Market  Bank since 1992
and as Vice  President  of Market Bank and Market  Financial  since  January 14,
1997.  From 1960 until his  retirement in 1994, Mr. May was a broker and partner
in Ed May Realty Co., located in Deer Park, Ohio.

     Wilbur H. Tisch.  Mr. Tisch retired as owner and President of General Metal
Works in 1983. Mr. Tisch served as a director of The Cleves-North  Bend Building
and Loan Company from 1975 to 1994 and as President from 1986 to 1994.

     Kathleen  A. White.  Ms.  White has been  employed  as a real estate  title
examiner since 1980.

Section 16(a)  Beneficial Ownership Reporting Compliance

              Section  16(a) of the  Securities  Exchange  Act of 1934  requires
Market Financial's officers and directors and persons who own 10% or more of the
common  shares of Market  Financial to file reports of ownership  and changes in
ownership on Forms 3, 4 and 5 with the Commission.  Officers,  directors and 10%
or greater shareholders are required by the Commission's  regulations to furnish
Market Financial with copies of all Forms 3, 4 and 5 they file.

              Based on Market  Financial's review of the copies of such forms it
has received, Market Financial believes that all of its officers,  directors and
10% or greater  shareholders  complied  with all Section 16 filing  requirements
applicable to them with respect to transactions during 2000.






















                                      -57-
<PAGE>

Item 10.      Executive Compensation

              The following  table presents  certain  information  regarding the
cash  compensation  received by the  President  and Chief  Executive  Officer of
Market Financial and Market Bank. No other executive officer of Market Financial
or Market Bank  received  compensation  in excess of $100,000  during the fiscal
years ended September 30, 2000, 1999 and 1998:
<TABLE>
<CAPTION>

                                                Summary compensation table

-------------------------------------------------------------------------------------------
                                      Annual Compensation        Long-term compensation

                                     ----------------------
                                                             ------------------------------
Name and principal           Year      Salary     Bonus ($)              Awards
position                               ($)(1)
                                                             ------------------------------
                                                                               Securities
                                                              Restricted       underlying        All Other
                                                             stock awards   options/SARs (#)   Compensation
                                                                  ($)
--------------------------- -------- ------------ ---------- -------------- ----------------- ----------------
<S>                           <C>        <C>        <C>             <C>          <C>                 <C>
John T. Larimer, President   2000     $104,775     $13,238              -            -           $42,221 (2)
 and Chief Executive         1999       99,800      13,238   $   7,619 (3)      34,729 (4)        34,624 (5)
 Officer
                             1998       97,007      11,135     180,320 (3)      33,393 (6)        34,688 (7)
</TABLE>

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

(1)  Does not  include  amounts  attributable  to other  miscellaneous  benefits
     received by executive officers. The cost to Market Financial or Market Bank
     of  providing  such  benefits to Mr.  Larimer was less than 10% of his cash
     compensation.

(2)  Consists of the  September  30,  2000,  $42,221 fair market value of Market
     Financial's  contribution to Mr. Larimer's  account in the Market Financial
     Corporation Employee Stock Ownership Plan (the "ESOP").

(3)  On June 30, 1998 and June 30, 1999,  Mr. Larimer was awarded 13,357 and 802
     common shares,  respectively,  pursuant to the Market Financial Corporation
     Recognition and Retention Plan and Trust Agreement (the "RRP"). Mr. Larimer
     paid  no  consideration  for  such  shares.  Such  shares  are  earned  and
     non-forfeitable at the rate of one-fifth per year on the anniversary of the
     date of award,  assuming continued employment with, or service on the Board
     of Directors of, Market Financial.  The market price of Market  Financial's
     shares on June 30, 1998 and June 30, 1999,  determined  by reference to the
     mean  between  the  closing  high bid and low asked  quotation  for  Market
     Financial's  shares on the Nasdaq  SmallCap Market on each date, was $13.50
     and $9.50 per share,  respectively.  As of September  29, 2000,  the 14,159
     shares had an aggregate  market value of approximately  $171,678,  based on
     the $12.125 per share fair market value for the Market  Financial shares on
     such date, as quoted by Nasdaq.  Dividends and other  distributions paid on
     such  shares and  earnings  on such  dividends  and  distributions  will be
     distributed to Mr. Larimer when the shares are distributed.

(4)  Represents  the  number of common  shares  of Market  Financial  underlying
     options  granted to Mr.  Larimer  pursuant  to the Stock  Option  Plan (the
     "Stock Option Plan") during the fiscal year ended September 30, 1999.

(5)  Consists of the  September  30,  1999,  $34,624 fair market value of Market
     Financial's contribution to Mr. Larimer's ESOP account.

(6)  Represents  the  number of common  shares  of Market  Financial  underlying
     options  granted to Mr.  Larimer  pursuant  to the Market  Financial  Stock
     Option Plan during the fiscal year ended September 30, 1998.  These options
     were cancelled on May 3, 1999.

(7)  Consists of the  September  30,  1998,  $34,688 fair market value of Market
     Financial's contribution to Mr. Larimer's ESOP account.

                                      -58-
<PAGE>

Market Financial Stock Option Plan

         The Stock Option Plan is  administered  by the Stock Option  Committee,
which is composed of three  directors of Market  Financial who are not employees
of Market  Financial.  The Stock Option  Committee  may grant  options under the
Market Financial Stock Option Plan at such times as they deem most beneficial to
Market Bank and Market  Financial on the basis of the  individual  participant's
position   and  duties  and  the  value  of  the   individual's   services   and
responsibilities  to Market  Bank and  Market  Financial.  Options  to  purchase
113,526 common shares were granted  pursuant to the Stock Option Plan during the
fiscal year ended  September 30, 1998.  These  options were  cancelled on May 3,
1999, and options to purchase 125,558 common shares were granted on May 4, 1999.
No options were granted during the fiscal year ended September 30, 2000.

         The  following  table sets forth  information  regarding the number and
value of unexercised options held by Mr. Larimer at September 30, 2000:
<TABLE>
<CAPTION>

                                   Aggregated Option/SAR Exercises in Last Fiscal Year and 9/30/2000 Option/SAR Values

                                                                 Number of Securities Underlying       Value of Unexercised
                                                                   Unexercised Options/SARs at         In The Money Options/
                           Shares Acquired         Value                  9/30/2000(#)                SARs at 9/30/2000($)(1)
Name                        on Exercise(#)      Realized($)         Exercisable/Unexercisable        Exercisable/Unexercisable
<S>                              <C>                <C>                        <C>                             <C>
John T. Larimer                  -0-                N/A                    34,729/-0-                       $84,652/-0-
</TABLE>

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

(1)  For  purposes  of this  table,  the value of the option was  determined  by
     multiplying the number of shares subject to the  unexercised  option by the
     difference  between the $9.6875 exercise price and the fair market value of
     Market Financial's common shares,  which was $12.125 on September 29, 2000,
     based on the last sale of Market Financial shares reported by Nasdaq.

Recognition and Retention Plan and Trust

         The shareholders of Market Financial  adopted the RRP on June 30, 1998.
The RRP purchased  53,429 common shares of Market  Financial,  all of which were
awarded to directors,  executive  officers and employees of Market Financial and
Market  Bank  in  June  1998  and  June  1999.  The  awards  become  earned  and
non-forfeitable at the rate of one-fifth per year on the anniversary of the date
of  award,  assuming  continued  employment  with,  or  service  on the Board of
Directors of, Market Financial, subject to provisions for earlier vesting upon a
change in control of Market Financial.

Director Compensation

         Each director of Market  Financial who is not a director of Market Bank
receives an annual fee of $10,000,  payable  quarterly.  Each director of Market
Bank  currently  receives  a fee of $19,500  per year,  payable  quarterly.  Mr.
Larimer does not receive director's fees from Market Financial or Market Bank.

Employment Agreements

         On April 1, 2000, Market Bank entered into an employment agreement with
Mr.  Larimer.  The  employment  agreement  provides for a term of three years, a
salary  of not less  than  $109,750  and a  performance  review  by the Board of
Directors not less often than annually.  The employment  agreement also provides
for the inclusion of Mr. Larimer in any formally  established  employee benefit,
bonus,  pension and profit-sharing  plans for which senior management  personnel
are eligible.

         The  employment  agreement is terminable by Market Bank at any time. In
the event of  termination  by Market  Bank for "just  cause,"  as defined in the
employment agreement, Mr. Larimer will have no right to receive any compensation
or other  benefits  for any  period  after  such  termination.  In the  event of
termination  by  Market  Bank  before  the  end of the  term  of the  employment
agreement  other  than  for just  cause,  or in  connection  with a  "change  of
control," as defined in the employment  agreement,  Mr. Larimer will be entitled
to a continuation  of salary  payments for a period of time equal to the term of
the employment  agreement and a continuation of benefits  substantially equal to
those being provided at the date of termination of employment until the earliest
to occur of the end of the term of the employment agreement or the date on which
Mr. Larimer becomes employed full-time by another employer.



                                      -59-
<PAGE>

         The employment  agreement also contains  provisions with respect to the
occurrence  of the following  within one year of a "change of control":  (1) the
termination  of employment of Mr.  Larimer for any reason other than just cause,
retirement or termination  at the end of the term of the  employment  agreement;
(2) a material change in the capacity or  circumstances  in which Mr. Larimer is
employed;  or  (3) a  material  reduction  in his  responsibilities,  authority,
compensation or other benefits provided under the employment  agreement.  In the
event of any such occurrence,  Mr. Larimer will be entitled to receive an amount
equal to three times his average annual compensation for the three taxable years
immediately  preceding the termination of employment.  In addition,  Mr. Larimer
will be  entitled  to  continued  coverage  under all  benefit  plans  until the
earliest of the end of the term of the employment agreement or the date on which
he is included in another employer's benefit plans as a full-time employee.  The
maximum that Mr. Larimer may receive under such provisions,  however, is limited
to an amount that will not result in the imposition of a penalty tax pursuant to
Section  280G(b)(3)  of the  Internal  Revenue  Code of 1986,  as  amended  (the
"Code"),  and an amount that will not  violate  applicable  restrictions  of the
Office of Thrift  Supervision  (the "OTS"). A "change of control," as defined in
the employment  agreement,  generally refers to the acquisition by any person or
entity  of the  ownership  or power to vote 25% or more of the  voting  stock of
Market Bank or Market  Financial,  the control of the  election of a majority of
the  directors  of  Market  Bank  or  Market  Financial  or  the  exercise  of a
controlling  influence  over the management or policies of Market Bank or Market
Financial.

Item 11.      Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain  information with respect to the
only  persons  known to  Market  Financial  to own  beneficially  more than five
percent of the outstanding  common shares of Market Financial as of December 22,
2000:
<TABLE>
<CAPTION>

                                              Amount and Nature of                     Percent of
                                              Beneficial Ownership                 Shares Outstanding
<S>                                                   <C>                                  <C>
Name and Address
First Bankers Trust Company, N.A.                  104,924(1)                             8.3%
Market Financial Corporation
  Employee Stock Ownership Plan
1201 Broadway
Quincy, Illinois  62301

John T. Larimer                                    78,458(2)                              6.1
4315 Redstar Court
Cincinnati, Ohio  45238
L. Craig Martin                                    68,336(3)                              5.4
8340 Indian Hill Road
Cincinnati, Ohio  45243
</TABLE>

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

(1)  Includes  72,814  unallocated  shares with  respect to which First  Bankers
     Trust  Company,  N.A.  as the  trustee  for the Market ESOP has sole voting
     power. The trustee has limited shared investment power over all Market ESOP
     shares.

(2)  This number  includes  34,729 shares that may be acquired upon the exercise
     of options awarded pursuant to the Market Financial  Corporation 1998 Stock
     Option and Incentive Plan, 9,974 shares held in Mr. Larimer's ESOP account,
     with respect to which Mr. Larimer has voting control only, and 4,800 shares
     owned jointly with Mr. Larimer's  spouse. It does not include 29,008 shares
     owned by Mr. Larimer's spouse individually.

(3)  This number includes 6,345 shares that may be acquired upon the exercise of
     options awarded pursuant to the Market Financial Stock Option Plan.







                                      -60-
<PAGE>

         The following table sets forth certain  information with respect to the
number of common shares of Market Financial  beneficially owned by each director
of Market Financial and Market Bank and by all directors and executive  officers
of Market Financial and Market Bank as a group as of December 22, 2000:
<TABLE>
<CAPTION>

                                                        Amount and Nature of
                                                        Beneficial Ownership
                                             Sole Voting and           Shared Voting and              Percent of
Name and Address (1)                        Investment Power            Investment Power          Shares Outstanding
--------------------                        ----------------            ----------------          ------------------
<S>                                                <C>                         <C>                       <C>
Robert Gandenberger                                6,345(2)                  35,265(3)                    3.3%
John T. Larimer                                   73,658(4)                   4,800                       6.1
Rae Skirvin Larimer                               29,008(2) (5)               4,800                       2.7
Edgar H. May                                      12,308(2)                       -                       1.0
L. Craig Martin                                   45,536(2)                  22,800                       5.4
Wilbur H. Tisch                                   12,308(2)                       -                       1.0
Una E. Schaeperklaus (6)                          15,808(2)                       -                       1.2
Kathleen A. White                                  7,308(2)                  33,802(3)                    3.2
All directors of and executive officers of
  Market Financial and Market Bank as a
  group (9 people)                               221,177(7)                  70,664(8)                   21.6%
</TABLE>


(1)  Each of the persons listed in this table may be contacted at the address of
     Market Financial.

(2)  This number includes 6,345 shares that may be acquired upon the exercise of
     options awarded pursuant to the Stock Option Plan.

(3)  This number includes 31,802 shares held by the Market Financial Corporation
     Recognition and Retention Plan Trust with regard to which Mr.  Gandenberger
     and Ms. White have voting power as trustees.

(4)  This number  includes  34,729 shares that may be acquired upon the exercise
     of options awarded  pursuant to the Stock Option Plan and 9,974 shares held
     in Mr. Larimer's ESOP account, with respect to which Mr. Larimer has voting
     control only,  but does not include  29,008  shares owned by Mr.  Larimer's
     spouse, Rae Skirvin Larimer.

(5)  This number does not include 73,658 shares owned by Ms.  Larimer's  spouse,
     John T. Larimer.

(6)  Ms. Schaeperklaus is a director of Market Bank but not a director of Market
     Financial.

(7)  This number  includes  92,501 shares that may be acquired upon the exercise
     of options awarded  pursuant to the Market  Financial Stock Option Plan and
     15,515 shares held in the ESOP accounts of officers,  with respect to which
     such officers have voting control only.

(8)  The 4,800 shares held jointly by Mr. and Mrs. Larimer and the 31,802 shares
     held by the  Recognition and Retention Plan Trust are only included once in
     this total.


         On September 19, 2000, Peoples Community Bancorp, Inc.  ("Peoples"),  a
Delaware  corporation  headquartered in Lebanon,  Ohio,  Peoples  Community Bank
("Peoples Bank"), a federal savings bank and wholly-owned subsidiary of Peoples,
Market  Financial  and  Market  Bank  entered  into  an  Agreement  and  Plan of
Reorganization  (the "Agreement")  (including an Agreement of Merger) which sets
forth the terms and conditions  under which Market Financial will merge with and
into Peoples (the "Merger"). Following consummation of the Merger, Peoples shall
cause Market Bank to merge with and into Peoples Bank.

         The  Agreement  provides  that upon  consummation  of the  Merger,  and
subject to certain  further terms,  conditions,  limitations  and procedures set
forth in the Agreement,  each share of common stock of Market Financial ("Market
Financial Common Shares") outstanding immediately prior to the effective time of
the Merger shall be cancelled and extinguished.  Each of such shares (other than
(i) shares as to which dissenters'  rights have been asserted in accordance with


                                      -61-
<PAGE>

Ohio  law and (ii) any  shares  held by  Market  Financial  (including  treasury
shares) or Peoples or any of their respective wholly-owned  subsidiaries) shall,
by virtue of the Merger,  and without any further action by the holder  thereof,
be converted  into and  represent  the right to receive,  at the election of the
holder thereof:

         (i)   the number of shares of common stock of Peoples ("Peoples  Common
         Stock") which is equal to the quotient,  rounded to four decimal places
         (the  "Exchange  Ratio")  determined  by  dividing  $13.00 by the daily
         average of the  closing  price per share of Peoples  Common  Stock,  as
         reported on the Nasdaq Stock Market's  National  Market (as reported by
         an authoritative source), as of the close of trading for each of the 20
         trading  days  ending  at the close of  business  on the  business  day
         immediately preceding the effective time of the Merger, or

         (ii)  a cash  amount  equal  to $13.00 per  share  of Market F inancial
         Common Shares,

subject  to an  overall  requirement  that 50% of the total  outstanding  Market
Common  Shares be  exchanged  for cash and 50% of the total  outstanding  Market
Common Shares be exchanged for Peoples Common Stock.

         Consummation   of  the  Merger  is  subject  to  the  approval  of  the
shareholders  of Market  Financial  and Peoples and the receipt of all  required
regulatory approvals, as well as other customary conditions.

Item 12.      Certain Relationships and Related Transactions

              Not applicable.


Item 13.      Exhibits and Reports on Form 8-K

(a)       Exhibits

          2         Agreement and Plan of Reorganization

          3         Articles of Incorporation and Code of Regulations

          10.1      The Market Financial Corporation Employee Stock Ownership
                    Plan

          10.2      Employment Agreement between John T. Larimer and Market
                    Bank, dated April 1, 2000

          10.3      Market Financial Corporation 1998 Stock Option and
                    Incentive Plan

          10.4      Market Financial Corporation Recognition and Retention
                    Plan and Trust Agreement

          21        Subsidiaries of Market Financial Corporation

          27        Financial Data Schedule

          99        Safe Harbor Under the Private Securities Litigation Reform
                    Act of 1995

(b)      Reports on Form 8-K

         On September 25, 2000,  Market Financial filed a Current Report on Form
8-K  reporting  under Item 5 that Market  Financial  and Market Bank had entered
into an Agreement and Plan of  Reorganization  with Peoples  Community  Bancorp,
Inc.  and  its  wholly-owned  subsidiary,   Peoples  Community  Bank,  effective
September 19, 2000. Pursuant to the Reorganization  Agreement,  Market Financial
will merge into Peoples Community Bancorp,  Inc. and Market Bank will merge into
Peoples Community Bank.









                                      -62-
<PAGE>



                                   SIGNATURES

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

                       MARKET FINANCIAL CORPORATION


                       By:/s/John T. Larimer
                          --------------------------------
                          John T. Larimer, President and Chief Executive Officer
                          (Principal Executive Officer)

                       Date: December 22, 2000

         In accordance with 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/ John T. Larimer                            /s/ Julie M. Bertsch
----------------------------                   -----------------------------
John T. Larimer,                               Julie M. Bertsch,
President and Director                         Chief Financial Officer
                                               (Principal Financial Officer)

Date: December 22, 2000                        Date: December 22, 2000



/s/ Edgar H. May                               /s/ Rae Skirvin Larimer.
----------------------------                   -----------------------------
Edgar H. May                                   Rae Skirvin Larimer
Director and Vice President                    Director and Secretary


Date: December 22, 2000                        Date: December 22, 2000



/s/ Robert Gandenberger                        /s/ L. Craig Martin
----------------------------                   -----------------------------
Robert Gandenberger                            L. Craig Martin
Director and Treasurer                         Director


Date: December 22, 2000                        Date: December 22, 2000



/s/ Wilbur H. Tisch                            /s/ Kathleen H. White
----------------------------                   -----------------------------
Wilbur H. Tisch                                Kathleen H. White
Director                                       Director


Date: December 22, 2000                        Date: December 22, 2000






                                      -63-
<PAGE>
                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>

     EXHIBIT
     NUMBER        DESCRIPTION                                  PAGE NUMBER
     ------        -----------                                  -----------
<S>                             <C>                                             <C>
     2             Agreement and Plan of Reorganization         Incorporated by reference to Current Report on Form 8-K filed
                                                                by Market Financial on September 25, 2000, Exhibit 2.

     3.1           Articles of Incorporation of Market          Incorporated by reference to the Registration Statement on
                   Financial Corporation                        Form S-1 filed by Market Financial on August 16, 1996 (the
                                                                "S-1")  with the Securities and Exchange Commission  (the
                                                                "SEC"),  Exhibit 3.1.

     3.2           Certificate of Amendment to Articles of      Incorporated by reference to Pre-Effective Amendment No. 1 to
                   Incorporation of Market Financial            the S-1, Exhibit 3.2.
                   Corporation

     3.4           Code of Regulations of Market Financial      Incorporated by reference to the S-1, Exhibit 3.3.
                   Corporation

     10.1          The Market Financial Corporation Employee    Incorporated by reference to Pre-Effective Amendment No. 1 to
                   Stock Ownership Plan                         the S-1 filed with the SEC on January 22, 1997 ("Amendment
                                                                No. 1"), Exhibit 10.3.

     10.2          Employment Agreement between Market Bank
                   and John T. Larimer, dated April 1, 2000

     10.3          Market Financial Corporation 1998 Stock      Incorporated by reference to the Annual Report on Form 10-KSB
                   Option and Incentive Plan                    for the fiscal year ended September 30, 1998, filed with the
                                                                SEC on December 23, 1998 (the "1998 10-KSB"), Exhibit 10.3

     10.4          Market Financial Corporation Recognition     Incorporated by reference to the 1998 10-KSB, Exhibit 10.4
                   and Retention Plan and Trust Agreement

     21            Subsidiaries of Market Financial             Incorporated by reference to the Form 10-KSB for the year
                   Corporation                                  ended September 30, 1997, filed with the SEC on December 23,
                                                                1997, Exhibit 21

     27            Financial Data Schedule

     99            Safe Harbor Under the Private Securities
                   Litigation Reform Act of 1995
</TABLE>










                                      -64-