UNITED STATES
                        SECURITY AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB



(Mark One)
   (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
       OF THE SECURITIES EXCHANGE ACT OF 1934

       For the quarterly period ended June 30, 1999

                                       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: 0-26650

                            CSB FINANCIAL GROUP, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           United States                                     37-1336338
---------------------------------                    ---------------------------
  (State or other jurisdiction                       (I.R.S. Employer ID Number)
of incorporation or organization)

  200 South Poplar, Centralia, Illinois                       62801
----------------------------------------                   ----------
(Address of principal executive offices)                   (Zip code)


        Registrant's telephone number, including area code (618) 532-1918


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.   YES  [ X ]   NO  [  ]

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

           Class                            Shares outstanding at August 2, 1999
-----------------------------               ------------------------------------
Common Stock, Par Value $0.01                               732,299


<PAGE>


Contents

PART I.  FINANCIAL INFORMATION

Item I.  Financial Statements

        - Consolidated Statements of Financial Condition

        - Consolidated Statements of Income and Comprehensive Income

        - Consolidated Statements of Cash Flows

        - Notes to Consolidated Financial Statements

Item 2.  Management's Discussion and Analysis of Financial Condition and
          Results of Operations

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults Upon Senior Securities

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

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

SIGNATURES





<PAGE>


CSB FINANCIAL GROUP, INC. and SUBSIDIARY

Consolidated Balance Sheets
June 30, 1999 and September 30, 1998
(in thousands, except share data)
<TABLE>

                                                                 June 30, September 30,
                                                                   1999       1998
------------------------------------------------------------------------------------
                                                               (Unaudited) (Audited)
<S>                                                            <C>         <C>
ASSETS
Cash and cash equivalents .....................................  $  1,562   $  1,542
Securities:
   Available for sale .........................................    15,192     16,931
   Nonmarketable equity securities ............................       216        215
Loans .........................................................    29,471     26,282
Allowance for loan losses .....................................      (215)      (171)
                                                                 -------------------
              Loans, net ......................................    29,256     26,111
Premises and equipment ........................................       704        607
Accrued interest receivable ...................................       423        304
Intangible assets .............................................       554        600
Other assets ..................................................       217        113
                                                                 -------------------

              Total assets ....................................  $ 48,124   $ 46,423
                                                                 ===================

LIABILITIES AND STOCKHOLDERS'  EQUITY

LIABILITIES:
   Deposits:
      Demand ..................................................  $  9,798   $  8,543
      Savings .................................................     3,836      3,387
      Time deposits > $100,000 ................................     2,668      1,680
      Other time deposits .....................................    21,350     22,245
                                                                 -------------------
              Total deposits ..................................    37,652     35,855
                                                                 -------------------
   Other liabilities ..........................................       158        169
   Deferred income taxes ......................................       138        270
                                                                 -------------------
              Total liabilities ...............................    37,948     36,294
                                                                 -------------------

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

STOCKHOLDERS' EQUITY
   Preferred stock, $0.01 par value; 100,000 shares authorized;
      none issued .............................................       - -        - -
   Common stock, $0.01 par value; authorized 2,000,000 shares;
      1,035,000 shares issued .................................        10         10
   Paid-in capital ............................................     7,827      7,823
   Retained earnings ..........................................     6,608      6,384
   Unrealized gain on available for sale securities, net of tax       (64)       154
   Unearned employee stock ownership plan shares ..............      (165)      (180)
   Management recognition plan ................................      (524)      (551)
                                                                 -------------------
                                                                   13,692     13,640
   Less cost of treasury stock; 302,701 shares at June 30, 1999
      and 302,080 shares at September 30, 1998 ................    (3,516)    (3,511)
                                                                 -------------------
              Total stockholders' equity ......................    10,176     10,129
                                                                 -------------------

              Total liabilities and stockholders' equity ......  $ 48,124   $ 46,423
                                                                 ===================
</TABLE>
See Notes to Unaudited Consolidated Financial Statements.
<PAGE>



CSB Financial Group, Inc.
Consolidated Statements of Income
Nine Months Ended June 30, 1999 and 1998
(Unaudited, in thousands, except per share data)


<TABLE>
                                                                       Nine Months
                                                                      Ended June 30,
                                                                    -----------------
                                                                      1999     1998
                                                                    -----------------
<S>                                                                 <C>       <C>

Interest income:
   Loans and fees on loans ......................................   $ 1,666   $ 1,662
   Securities ...................................................       764       838
                                                                    -----------------
              Total interest income .............................     2,430     2,500
                                                                    -----------------

Interest expense on deposits ....................................     1,160     1,230
                                                                    -----------------

              Net interest income ...............................     1,270     1,270
Provision for loan losses .......................................        54        45
                                                                    -----------------

              Net interest income after provision for loan losses     1,216     1,225
                                                                    -----------------

Noninterest income:
   Service charges on deposits ..................................        60        61
   Gain on sale of securities, net ..............................       - -         3
   Gain on sale of loans, net ...................................       - -         6
   Other ........................................................        38        30
                                                                    -----------------
              Total noninterest income ..........................        98       100
                                                                    -----------------

Noninterest expense:
   Compensation and employee benefits ...........................       449       474
   Occupancy and equipment ......................................        71        63
   Data processing ..............................................        76        78
   Audit, legal and other professional ..........................        61        69
   Other ........................................................       333       277
                                                                    -----------------
              Total noninterest expense .........................       990       961
                                                                    -----------------
              Income before income taxes ........................       324       364
Income taxes ....................................................       100        88
                                                                    -----------------
              Net income ........................................   $   224   $   276
                                                                    =================

Earnings per share
   Basic ........................................................   $   0.31  $  0.36
                                                                    =================
   Diluted ......................................................   $   0.31  $  0.34
                                                                    =================

Weighted average shares outstanding
   Basic ........................................................   718,919   774,912
                                                                    =================
   Diluted ......................................................   728,441   804,252
                                                                    =================

</TABLE>
See Notes to Unaudited Consolidated Financial Statements.
<PAGE>


CSB Financial Group, Inc.
Consolidated Statements of comprehensive income
Nine Months Ended June 30, 1999 and 1998
(Unaudited, in thousands, except per share data)


                                                                Nine Months
                                                               Ended June 30,
                                                              ----------------
                                                                1999     1998
                                                              ----------------

Net income ................................................   $  224    $  276
Change in unrealized gain on securities available for sale,
   net of tax of $(134) and $0 ............................     (218)      - -
Less:  Reclassification adjustment, net of tax of $0 and $2      - -        (2)
                                                              ----------------
                                                                (218)       (2)
                                                              ----------------
Comprehensive income ......................................   $    6    $  274
                                                              ================


See Notes to Consolidated Financial Statements.
<PAGE>


CSB Financial Group, Inc.
Consolidated Statements of Income
Three Months Ended June 30, 1999 and 1998
(Unaudited, in thousands, except per share data)
<TABLE>
                                                                      Three Months
                                                                     Ended June 30,
                                                                    -----------------
                                                                      1999      1998
                                                                    -----------------
<S>                                                                 <C>       <C>
Interest income:
   Loans and fees on loans ......................................   $   572   $   542
   Securities ...................................................       236       277
                                                                    -----------------
              Total interest income .............................       808       819
                                                                    -----------------

Interest expense on deposits ....................................       363       406
                                                                    -----------------

              Net interest income ...............................       445       413
Provision for loan losses .......................................        18        15
                                                                    -----------------

              Net interest income after provision for loan losses       427       398
                                                                    -----------------

Noninterest income:
   Service charges on deposits ..................................        21        20
   Gain on sale of securities ...................................       - -       - -
   Gain on sale of loans ........................................       - -         4
   Other ........................................................        13         8
                                                                    -----------------
              Total noninterest income ..........................        34        32
                                                                    -----------------

Noninterest expense:
   Compensation and employee benefits ...........................       123       150
   Occupancy and equipment ......................................        24        21
   Data processing ..............................................        22        28
   Audit, legal and other professional ..........................        15        14
   Other ........................................................       136        89
                                                                    -----------------
              Total noninterest expense .........................       320       302
                                                                    -----------------
              Income before income taxes ........................       141       128
Income taxes ....................................................        46        33
                                                                    -----------------
              Net income ........................................   $    95   $    95
                                                                    =================

Earnings per share
   Basic ........................................................   $  0.13   $  0.12
                                                                    =================
   Diluted ......................................................   $  0.13   $  0.12
                                                                    =================

Weighted average shares outstanding
   Basic ........................................................   719,091   766,449
                                                                    =================
   Diluted ......................................................   728,613   796,837
                                                                    =================
</TABLE>
See Notes to Unaudited Consolidated Financial Statements.
<PAGE>


CSB Financial Group, Inc.
Consolidated Statements of comprehensive income
Three Months Ended June 30, 1999 and 1998
(Unaudited, in thousands, except per share data)


                                                                 Three Months
                                                                Ended June 30,
                                                               ----------------
                                                                 1999     1998
                                                               ----------------

Net income .................................................   $   95    $   95

Change in unrealized gain on securities available for sale,
   net of tax of $(103) and $(1) ...........................     (167)       (1)
                                                               ----------------

Comprehensive income (loss) ................................   $  (72)   $   94
                                                               ================


See Notes to Consolidated Financial Statements.
<PAGE>



CSB Financial Group, Inc.
Consolidated Statements of CASH FLOWS
Nine Months Ended June 30, 1999 and 1998
(Unaudited, in thousands)
<TABLE>

                                                                      Nine Months
                                                                     Ended June 30,
                                                                    ----------------
                                                                     1999      1998
                                                                    ----------------
<S>                                                                 <C>       <C>
Cash Flows from Operating Activities:
   Net income ...................................................   $  224    $  276
   Adjustments to reconcile net income to net cash provided
      by operating activities:
      Provision for loan losses .................................       54        45
      Provision for depreciation ................................       32        27
      Amortization of intangible assets .........................       46        45
      Employee stock ownership plan compensation expense ........       19        29
      Management recognition plan compensation expense ..........       27        28
      Deferred income taxes .....................................        2       - -
      Originations of loans held for sale .......................      - -    (1,194)
      Proceeds from loans held for sale .........................      - -       766
      Gain on sale of securities ................................      - -        (3)
      Gain on sale of loans .....................................      - -        (6)
      Loss on the sale of other real estate owned ...............      - -         3
      Amortization and accretion on securities ..................        9        (1)
      Change in assets and liabilities:
        (Increase) in accrued interest receivable ...............     (119)     (119)
        (Increase) decrease in other assets .....................     (104)       50
        (Decrease) increase in other liabilities ................      (11)      105
                                                                    ----------------
              Net cash provided by operating activities .........      179        51
                                                                    ----------------

Cash Flows from Investing Activities:
   Securities available for sale:
      Purchases .................................................   (4,651)   (9,512)
      Proceeds from sales .......................................      - -     3,755
      Proceeds from maturities and paydowns .....................    6,029     6,111
   Nonmarketable equity securities:
      Purchases of nonmarketable equity securities ..............       (1)       (5)
   (Increase) decrease in loans .................................   (3,199)      725
   Proceeds from the sale of other real estate owned ............      - -        25
   Purchase of premises and equipment ...........................     (129)      (28)
                                                                    ----------------
              Net cash provided by (used in) investing activities   (1,951)    1,071
                                                                    ----------------

Cash Flows from Financing Activities:
   Increase (decrease) in deposits ..............................   $1,797    $ (720)
   Purchase of treasury stock ...................................       (5)   (1,030)
                                                                    -----------------
              Net cash provided by (used in) financing activities    1,792    (1,750)

              Increase (decrease) in cash and cash equivalents ..       20      (628)

Cash and cash equivalents at beginning of period ................    1,542     2,675
                                                                    ----------------

Cash and cash equivalents at end of period ......................   $1,562    $2,047
                                                                    ================

Supplemental Disclosures:
   Cash paid for:
      Interest on deposits ......................................   $1,171     $1,233
      Income taxes ..............................................   $   17     $   37

   Change in gross unrealized gain/loss on securities available
      for sale ..................................................   $  352     $   (4)

   Change in deferred taxes on unrealized gain/loss on securities
      available for sale ........................................   $ (134)    $   (2)
</TABLE>
See Notes to Unaudited Consolidated Financial Statements.
<PAGE>





CSB Financial Group, Inc.

Notes to CONSOLIDATED Financial Statements
( in thousands, except per share data)
--------------------------------------------------------------------------------



Note 1.  Background Information

On October 5, 1995, CSB Financial  Group,  Inc. (the "Company")  acquired all of
the  outstanding  shares of Centralia  Savings Bank (the "Bank") upon the Bank's
conversion  from a state  chartered  mutual  savings  bank to a state  chartered
capital  stock  savings  bank.  Centralia  Savings Bank is located in Centralia,
Illinois and serves  customers in Illinois  counties of Clinton and Marion.  The
Company purchased 100% of the outstanding capital stock of the Bank using 50% of
the net proceeds from the Company's  initial stock  offering which was completed
on October 5, 1995. The Company sold 1,035,000  shares of $0.01 par value common
stock at a price of $8 per  share,  including  82,800  shares  purchased  by the
Bank's Employee Stock Ownership Plan ("ESOP").  The ESOP shares were acquired by
the Bank with proceeds from a Company loan totaling $662,400. The gross proceeds
of the offering were  $8,280,000.  After  reducing gross proceeds for conversion
costs of $696,000,  net proceeds  totaled  $7,584,000.  The Company's  stock was
traded on the NASDAQ  Small Caps market under the symbol  "CSBF" until  December
31,  1998,  at which time the Company  transferred  the  quotation of its common
stock to the OTC Bulletin Board under the same symbol.

The  acquisition  of the Bank by the Company was  accounted for as a "pooling of
interests" under generally accepted  accounting  principles.  The application of
the pooling of interests method records the assets and liabilities of the merged
entities on a historical cost basis with no goodwill or other intangible  assets
being recorded.


Note 2.  Basis of Presentation

The accompanying  consolidated  financial statements include the accounts of CSB
Financial Group, Inc., its wholly owned subsidiary,  Centralia Savings Bank, the
Bank, and the Bank's  wholly-owned  subsidiary,  Centralia  SLA.  Centralia SLA,
Inc.'s  principal  business  activity  is to  provide  insurance  services.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.  The accompanying consolidated financial statements are unaudited
and should be read in conjunction with the consolidated financial statements and
notes  thereto  included in the Bank's annual report on Form 10-KSB for the year
ended  September 30, 1998. The  accompanying  unaudited  consolidated  financial
statements  have been  prepared in  accordance  with the  instructions  for Form
10-QSB and,  therefore,  do not include information or footnotes necessary for a
complete  presentation of financial condition,  results of operations,  and cash
flows in  conformity  with  generally  accepted  accounting  principles.  In the
opinion of  management  of the Company,  the  unaudited  consolidated  financial
statements  reflect all  adjustments  necessary to present  fairly the financial
position of the Company at June 30, 1999 the results of operations for the three
months  ended June 30,  1999 and 1998,  and the results of  operations  and cash
flows for the nine months ended June 30, 1999 and 1998.  All  adjustments to the
financial statements were normal and recurring in nature.

Operating  results for the nine months  ended June 30, 1999 are not  necessarily
indicative of the results that may be expected for the year ending September 30,
1999.


Note 3.  Comprehensive Income

Effective  October 1, 1998,  the Bank adopted FASB  Statement No. 130, which was
issued in June 1997.  Statement No. 130  establishes new rules for the reporting
and display of comprehensive income and its components, but has no effect on the
Bank's net income or total  stockholders'  equity.  Statement  No. 130  requires
unrealized gains and losses on the Bank's available-for-sale  securities,  which
prior to adoption  were  reported  separately  in  stockholders'  equity,  to be
included in  comprehensive  income.  Prior year financial  statements  have been
reclassified to conform to the requirements of Statement No. 130.
<PAGE>


Note 4.  Earnings Per Share

Basic  earnings per share ("EPS") is computed as net income  available to common
stockholders  divided by the weighted  average  common  shares  outstanding  and
vested shares of the Management Recognition Plan.

Diluted EPS is computed as net income available to common  stockholders  divided
by the weighted average common shares outstanding, common stock equivalents, and
shares  awarded under the  Management  Recognition  Plan weighted to reflect the
portion of the period the shares were outstanding.

The following  reflects  earnings per share  calculations  for basic and diluted
methods:
<TABLE>
                                                                     For The
                                                                   Nine Months
                                                                  Ended June 30,
                                                                -------------------
                                                                   1999      1998
                                                                -------------------
<S>                                                             <C>        <C>
Net income available to common shareholders .................   $    224   $    276

Basic diluted potential common shares:
   Weighted average shares outstanding ......................    711,053    769,530
   Management recognition plan shares vested ................      7,866      5,382
                                                                 ------------------

Basic average shares outstanding ............................    718,919    774,912
                                                                 ------------------

Diluted potential common shares:
   Management recognition plan shares granted, but not vested      9,522     13,248
   Stock option equivalents .................................        - -     16,092
                                                                 ------------------

Diluted average shares outstanding ..........................    728,441    804,252
                                                                 ------------------

Basic earnings per share ....................................    $  0.31   $   0.36
                                                                 ==================

Diluted earnings per share ..................................    $  0.31   $   0.34
                                                                 ==================


                                                                     For The
                                                                   Three Months
                                                                  Ended June 30,
                                                                -------------------
                                                                   1999      1998
                                                                -------------------



Net income available to common shareholders .................   $     95   $     95

Basic diluted potential common shares:
   Weighted average shares outstanding ......................    711,225    761,067
   Management recognition plan shares vested ................      7,866      5,382
                                                                -------------------

Basic weighted average shares outstanding ...................    719,091    766,449
                                                                -------------------

Diluted potential common shares:
   Management recognition plan shares granted, but not vested      9,522     13,248
   Stock option equivalents .................................        - -     17,140
                                                                -------------------

Diluted average shares outstanding ..........................    728,613    796,837
                                                                -------------------

Basic earnings per share ....................................   $   0.13   $   0.12
                                                                ===================

Diluted earnings per share ..................................   $   0.13   $   0.12
                                                                ===================
</TABLE>
<PAGE>



Note 5.  Employee Stock Ownership Plan

In conjunction with the conversion, an ESOP was created and 82,800 shares of the
Company's stock were purchased for future allocation to employees.  The purchase
was funded with a loan from the Company.

Shares are allocated to all eligible  employees as the debt is repaid based on a
prorata  share of total  eligible  compensation.  Employees  21 or older with at
least  1,000  hours  of  service  in a  twelve  month  period  are  eligible  to
participate.  Benefits  will vest over a five year period and in full after five
years of qualified service.

As shares  are  committed  to be  released  from  unallocated  shares,  the Bank
recognizes compensation expense equal to the current market price of the shares,
and the shares  become  outstanding  for  purposes of  calculating  earnings per
share. The Bank recognized  compensation expense for the ESOP of $19 and $29 for
the nine months ended June 30, 1999 and 1998, respectively.

Dividends  received,  if any, by the ESOP on unallocated shares will be used for
debt service.

In July 1997,  the Company  repurchased  41,400  shares of common stock from the
ESOP.  The ESOP  used  the  proceeds  received  from the  repurchase  to  reduce
outstanding debt to the Company. The balance in unearned ESOP shares was reduced
by the cost of the shares sold to the Company. As of June 30, 1999 and September
30, 1998, the ESOP held 20,652 and 22,529, respectively, of non-committed shares
with a fair value of $194 and $281, respectively.


Note 6.  Stock Option Plan

At the annual  stockholder's  meeting on May 22,  1996,  the Stock  Option  Plan
("SOP") was approved. The board has reserved an amount of stock equal to 103,500
shares or 10% of the common stock sold in the  conversion for issuance under the
SOP. The options will be granted by a Committee,  comprised of directors, to key
employees and directors based on their  services.  The exercise price of options
granted  must be at least equal to the fair market  value of the common stock on
the date the  option is  granted.  The  options  granted  under the plan  become
exercisable at a rate of 20 percent per year commencing one year after the grant
date and 20 percent on each anniversary date for the following four years. As of
June 30, 1999, 61,750 options had been granted.

The Board  adopted  the 1997  Nonqualified  Stock  Option  Plan (SOP)  effective
January 9, 1997.  The Board has  reserved up to 103,500  shares of common  stock
under  the SOP.  The  options  will be  granted  by a  committee,  comprised  of
directors,  to key employees and directors based on their services. The exercise
price of the option  granted  must be at least equal to the fair market value of
the common stock on the date the option is granted. The terms of the options and
the  exercise  schedule  are  at the  discretion  of the  committee  and  option
agreements  need not be  identical.  As of June 30,  1999,  no options  had been
granted.


Note 7.  Management Recognition Plan

The Management  Recognition  Plan ("MRP") was approved with an effective date of
October  10,  1996 and  amended on January 9, 1997.  The MRP intends to purchase
with funds  provided  by the  Company,  whether  in the open  market or from the
Holding Company in the form of newly issued shares,  62,100 shares, or 6% of the
aggregate  number of shares of Common Stock issued and sold in  connection  with
the Conversion for issuance to officers, directors, and employees of the Holding
Company.  Directors,  officers,  and  employees  become  vested in the shares of
common stock awarded to them under the MRP at a rate of 20% per year, commencing
one year after the grant date, and 20% on the  anniversary  date thereof for the
following  four years.  As of June 30, 1999,  17,388 shares have been awarded to
officers, directors, and employees. MRP compensation expense was $27 and $28 for
the nine months ended June 30, 1999 and 1998,  respectively.  The bank  accounts
for  its  MRP in  accordance  with  Accounting  Principle  Board  Statement  25.
Compensation  expense is recognized  over the vesting  period for shares awarded
under the plan.

<PAGE>


Note 8.  New Accounting Standards

Disclosures about Segments of an Enterprise and Related Information Statement of
Financial  Accounting  Standard  No.  131,  "Disclosures  about  Segments  of an
Enterprise  and Related  Information"  (FAS 131), was issued in July 1997 by the
Financial  Accounting  Standards Board. The Standard requires the Corporation to
disclose the factors used to identify reportable segments including the basis of
organization,  differences  in products  and  services,  geographic  areas,  and
regulatory  environments.  FAS 131 additionally requires financial results to be
reported in the financial  statements for each reportable segment.  The Standard
is effective for financial  statement  years  beginning after December 15, 1997.
The  Statement is not  expected to have a  significant  impact on the  Company's
current business segment disclosures.

Accounting  for  Derivative  Instruments  and Hedging  Activities  Statement  of
Financial  Accounting Standard No. 133,  "Accounting for Derivative  Instruments
and Hedging Activities" (FAS 133) establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts and for hedging activities. It requires that an entity recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position and measure those instruments at fair value. The accounting for changes
in the fair value of a derivative  depends on the intended use of the derivative
and the resulting  designation.  This statement applies to all entities. FAS 133
is effective for all fiscal  quarters of fiscal years  beginning  after June 15,
1999.  The  issuance  of FAS 137  extends  the  application  date to all  fiscal
quarters of fiscal years beginning after June 15, 2000.  Earlier  application is
encouraged.  The  statement  is not to be  applied  retroactively  to  financial
statements  of prior  periods.  The Company does not believe the adoption of FAS
133 will have a material impact on the consolidated financial statements.
<PAGE>



CSB Financial Group, Inc.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONs
(In thousands, except per share data)
--------------------------------------------------------------------------------


General

The  principal  assets of the Company are its  investment  in the Bank's  common
stock  and the net  proceeds  from the  sale of the  Company's  common  stock in
connection  with the  conversion.  The  Company's  principal  revenue  source is
interest and dividends on its  investments.  The principal  business of the Bank
consists of attracting deposits from the general public and using these funds to
originate  mortgage  loans  secured by one- to  four-family  residences  located
primarily in  Centralia,  Illinois and  surrounding  areas.  The Bank engages in
various forms of consumer and commercial  lending and invests in mortgage-backed
U.S.  Government and federal agency  securities,  local  municipal  issues,  and
interest-bearing deposits. The Bank's profitability depends primarily on its net
interest income, which is the difference between the interest income it earns on
its loans and investment  portfolio and its cost of funds, which consists mainly
of interest  paid on deposits.  Net interest  income is affected by the relative
amounts  of  interest-earning  assets,  interest-bearing  liabilities,  and  the
interest rates earned or paid on these balances.

The Bank's profitability is also affected by the level of noninterest income and
expense.  Noninterest  income consists primarily of late charges and other fees.
Noninterest  expense  consists  of  salaries  and  benefits,  occupancy  related
expenses,  deposit  insurance  premiums  paid to the SAIF,  and other  operating
expenses.

The  operations of the Bank are  significantly  influenced  by general  economic
conditions and related  monetary and fiscal policies of financial  institutions'
regulatory  agencies.  Deposit  flows  and the cost of funds are  influenced  by
interest  rates on competing  investments  and general market rates of interest.
Lending  activities  are  affected by the demand for  financing  real estate and
other types of loans,  which in turn is affected by the interest  rates at which
such  financing may be offered and other factors  affecting  loan demand and the
availability of funds.

Business Strategy

The  business  strategy  is to operate  as a well  capitalized,  profitable  and
independent  community  savings bank  dedicated to financing  home ownership and
consumer  needs in its  primary  market  area.  The Bank  has  implemented  this
strategy by: (1) closely monitoring the needs of customers and providing quality
service; (2) emphasizing  consumer-oriented  banking by originating construction
and  permanent  loans on  residential  and  commercial  real estate and consumer
loans, and by offering other financial services and products;  (3) improving and
maintaining high asset quality;  (4) maintaining capital in excess of regulatory
requirements; and (5) managing interest rate risk by emphasizing the origination
of loans with  adjustable  rates or shorter terms and  investments in short-term
and liquid  investments.  The Bank has adopted  various new business  strategies
intended to increase its presence in its primary market area, thereby increasing
its lending activities and sources of income.

Liquidity and Capital Resources

The  Bank's  primary  sources  of funds  consists  of  deposits,  repayment  and
prepayment of loans,  maturities of investments and  interest-bearing  deposits.
Scheduled  repayments of loans and mortgage-backed  securities and maturities of
investment  securities are  predictable,  influenced by general  interest rates,
economic  conditions,  and  competition.  The Bank uses its liquidity  resources
principally  to fund  existing  and future loan  commitments,  to fund  maturing
certificates  of deposit  and  demand  deposit  withdrawals,  to invest in other
interest-earning  assets, to maintain liquidity, and to meet operating expenses.
Management  believes  that loan  repayments  and other  sources of funds will be
adequate to meet the Bank's liquidity needs for the immediate future.

A portion of the Bank's liquidity  consists of cash and cash equivalents,  which
include investments in highly liquid,  short-term  deposits.  The level of these
assets is dependent on the Bank's operating,  investing,  lending, and financing
activities  during any given  period.  At June 30, 1999 and  September 30, 1998,
cash and cash equivalents totaled $1,562 and $1,542, respectively.

Liquidity  management  is  both a  daily  and  long-term  function  of  business
management.  If the Bank  requires  funds  beyond its ability to  generate  them
internally,  the Bank may borrow  additional  funds  from the FHLB.  At June 30,
1999, the Bank had no outstanding advances from the FHLB.
<PAGE>



At June 30,  1999,  the Bank had $1.2  million  of  outstanding  commitments  to
originate loans.

Regulatory Capital

Federally insured savings associations such as the Bank are required to maintain
a minimum level of regulatory  capital.  The Corporation and its subsidiary have
capital  ratios which  substantially  exceed all  regulatory  requirements.  The
Corporation's capital ratios are shown below.

                                           June 30,  September 30,    Minimum
                                             1999        1998       Requirements
                                           -------------------------------------

Total capital to risk weighted assets ...   42.09%      46.20%         8.0%
Tier I capital to risk weighted assets ..   40.01%      45.30%         4.0%
Tier I capital to average assets ........   19.92%      19.80%         4.0%

Financial Condition

Total  assets  increased  $1,701 to  $48,124  at June 30,  1999 from  $46,423 at
September  30, 1998.  The  principal  cause of this  increase was an increase of
$3,145 in the loan  portfolio,  partially  offset by a  decrease  in  securities
available  for sale of $1,739.  The new loans  were  funded by the  maturity  of
existing securities and the overall increase in deposits of $1,797.

Gross loans have increased  $3,189 from $26,282 at September 30, 1998 to $29,471
at June 30, 1999.  The growth in the loan  portfolio  is comprised  primarily of
mortgage  lending.  As the Company  continues to see growth in mortgage lending,
alternative sources of funding are evaluated.  The Bank continues to focus their
efforts  in the  expansion  of the  commercial  loan  market  and  continues  to
originate commercial loans which meet prudent underwriting standards.

Securities  decreased  $1,739 since  September 30, 1998.  The decrease is due to
calls and  maturities  of U.S.  Treasury  securities  and an overall  decline in
market values. All securities are held as available for sale.

Results of Operations

Three months ended June 30, 1999 compared to three months ended June 30, 1998

Net Income - The  Company's  net income for the three months ended June 30, 1999
and  1998  was  $95.  The  increase  in net  interest  income  and  decrease  in
compensation  expense  was offset by  increased  other  noninterest  expense and
income tax expense. Compensation and employee benefits expense is declining as a
result  of the  Company's  redemption  of  shares  held  by the  Employee  Stock
Ownership Plan.

Interest Income - Interest income  decreased for the three months ended June 30,
1999 by $11 to $808 from $819 for the three  months  ended  June 30,  1998.  The
decrease is due to decreasing  yields on the average balance of interest earning
assets for the respective periods due to current market conditions.

Interest  Expense - Interest  expense  decreased for the three months ended June
30,  1998 by $43 to $363 from $406 for the three  months  ended  June 30,  1998.
Although deposits  continue to increase,  current market conditions have reduced
the cost of funds,  which  results in an overall  decline in  interest  expense.
Management continues to price deposit products in order to remain competitive in
the local economy and manage its interest rate risk exposure.

Net Interest  Income - Net interest income after the provision for loan loss for
the three months ended June 30, 1999  increased by $29 to $427 from $398 for the
three months ended June 30, 1998.

Noninterest expense increased for the three months ended June 30, 1999 by $18 to
$320 from $302 for the three months ended June 30, 1998.  The  principal  reason
for the increase is the increase in other noninterest  expense of $47, offset by
the decrease in compensation  and employee  benefits for the quarter of $27. The
increase in other  noninterest  expense is primarily the result of fees incurred
to convert to a new data processing service which occurred in May 1999.
<PAGE>


Nine months ended June 30, 1999 compared to nine months ended June 30, 1998

Net Income -The Company's net income for the nine months ended June 30, 1999 was
$224  compared to $276 for the nine months ended June 30, 1998.  The decrease is
due primarily to an increase in other noninterest  expense due to the conversion
of the data processing  servicer.  Net interest income for the nine months ended
June 30, 1999 and 1998 remained stable at $1,270.

Interest  Income - Interest  income  decreased $70 from $2,500 to $2,430,  or by
2.8% during the nine months of 1999 compared to the  respective  period of 1998.
This decrease  resulted from a decrease in the  investment  portfolio,  combined
with a decrease in current market rates.

Interest  Expense - Interest  expense  decreased  $70 or 5.7%, to $1,160 for the
nine months  ended June 30,  1999 from  $1,230 for the same period in 1998.  The
decrease  resulted  from an overall  decrease  in cost of funds based on current
market rates.

Net  Interest  Income - Net  interest  income for the nine months ended June 30,
1999 and 1998 was $1,270.

Provision for Loan Losses - The allowance for loan losses is established through
a  provision  for loan  losses  based  on  management's  evaluation  of the risk
inherent  in its  loan  portfolio  and  the  general  economy.  Such  evaluation
considers  numerous  factors  including,   general  economic  conditions,   loan
portfolio  composition,  prior loss experience,  the estimated fair value of the
underlying  collateral  and other factors that warrant  recognition in providing
for an adequate loan loss allowance.  During the nine months ended June 30, 1999
and 1998, the provision for loan losses was $54 and $45, respectively.

Allowance  for Loan Losses - The  allowance  for loan losses was $215 or .73% of
loans receivable at June 30, 1999, compared to $171, or .65% of loans receivable
at September 30, 1998. The level of nonperforming  loans was .82% of total loans
at June 30, 1999  compared to 1.56% as of September  30, 1998.  Based on current
balance of the allowance  for loan losses in relation to total loans  receivable
and classified assets and the diligent effort put forth by management to address
problem loan situations in recent years,  management  considers that the balance
in the allowance for loan losses at June 30, 1999 is adequate.

Net  charge-offs  amounted  to $10 during the first nine  months of fiscal  year
1999, compared to net charge-offs of $27 during the first nine months of 1998.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management  believes that the  collectibility of the principal is unlikely.  The
allowance  is an amount  that  management  believes  will be  adequate to absorb
losses on existing loans that may become  uncollectible,  based on evaluation of
the collectibility of loans and prior loss experience. The evaluation also takes
into  consideration such factors as changes in the nature and volume of the loan
portfolio,  overall  portfolio  quality,  review of specific  problem  loans and
current economic conditions that may affect the borrowers' ability to pay. While
management uses the best  information  available to make its evaluation,  future
adjustments to the allowance may be necessary if there are  significant  changes
in economic conditions. In addition, regulatory agencies, as an integral part of
their  examination  process,  periodically  review the Bank's allowance for loan
losses,  and may require the Bank to make  additions to the  allowance  based on
their  judgment  about  information  available  to  them at the  time  of  their
examinations.

Loans are considered  impaired when, based on current information and events, it
is  probable  that the Bank will not be able to collect  all  amounts  due.  The
portion of the allowance for loan losses  applicable to impaired  loans has been
computed  based on the  present  value of the  estimated  future  cash  flows of
interest and principal  discounted at the loan's  effective  interest rate or on
the fair value of the  collateral  for collateral  dependent  loans.  The entire
change  in  present  value  of  expected  cash  flows  of  impaired  loans or of
collateral  value is  reported  as bad debt  expense in the same manner in which
impairment  initially was recognized or as a reduction in the amount of bad debt
expense that otherwise would be reported.  As of June 30, 1999 and September 30,
1998, management had not identified any loans as impaired.

Nonperforming Assets

At June 30, 1999, the Bank had $242, of nonperforming assets,  representing .50%
of total  assets.  On  September  30, 1998,  the Bank had $410 of  nonperforming
assets, representing .88% of total assets.
<PAGE>



Impact on Inflation and Changing Prices

The  unaudited  consolidated  financial  statements  and related data  presented
herein have been  prepared in  accordance  with  generally  accepted  accounting
principles,  which require the measurement of financial  position and results of
operations in terms of historical  dollars  without  considering  changes in the
relative  purchasing power of money over time because of inflation.  Unlike most
industrial companies, virtually all of the assets and liabilities of the Company
are  monetary in nature.  As a result,  interest  rates have a more  significant
impact on the  Company's  performance  than the  effects  of  general  levels of
inflation.  Interest rates do not  necessarily  move in the same direction or in
the same magnitude as the prices of goods and services.

Year 2000 Compliance

The year 2000 has posed a unique set of challenges to those  industries  reliant
on information technology. As a result of methods employed by early programmers,
many software applications and operational programs may be unable to distinguish
the year 2000 from the year 1900.  If not  effectively  addressed,  this problem
could result in the production of inaccurate  data, or, in the worst cases,  the
inability  of  the  systems  to  continue  to  function  altogether.   Financial
institutions  are  particularly  vulnerable due to the industry's  dependence on
electronic data processing  systems. In 1997, the Company started the process of
identifying  the hardware and software issues required to be addressed to assure
year 2000  compliance.  The Company began by assessing the issues related to the
year 2000 and the potential  for those issues to adversely  affect the Company's
operations and those of its subsidiaries.

Since that time, the Company has  established a Year 2000  Compliance  Team (the
Team) composed of representatives from key areas throughout the organization. It
is the mission of this Team to identify areas subject to  complications  related
to the year 2000 and to initiate  remedial  measures  designed to eliminate  any
adverse  effects  on the  Company's  operations.  The  Team has  identified  all
mission-critical  software  and hardware  that may be adversely  affected by the
year 2000 and has required  vendors to  represent  that the systems and products
provided are or will be year 2000 compliant.

All mission  critical  software  was  upgraded  and tested to achieve  year 2000
compliance. In addition, the Team developed contingency plans to address systems
which do not become year 2000 compliant.

Management has determined  that if a business  interruption  as a result of Year
2000 issue occurred,  such an interruption could be material. The primary effort
required to prevent a potential business interruption is to assure the Company's
third  party  processor  is  year  2000  compliant.  As a cost  saving  measure,
management  contracted with a different third party processor and converted data
during the quarter  ended June 30, 1999.  This third party  processor has stated
that Year 2000 remediation and testing efforts have been successfully completed.

The Company is committed to a plan for achieving  compliance,  focusing not only
on its own data processing systems, but also on its loan customers. The Team has
taken steps to educate and assist its customers with identifying their year 2000
compliance  problems.  In addition,  the Team has proposed  policy and procedure
changes  to  help  identify  potential  risks  to the  Company  and to  gain  an
understanding  of how customers are managing the risks  associated with the year
2000.

Management  believes that the organization has an effective year 2000 compliance
program in place and that additional  expenditures required to bring its systems
into  compliance  will not have a  materially  adverse  effect on the  Company's
operations,  cash flow, or financial  condition.  To date,  year 2000 compliance
expenditures  have  amounted to $40,000.  Management  expects  total  additional
out-of-pocket  expenditures  to be less than  $25,000.  This  includes  costs to
upgrade  equipment  specifically  for the  purpose of year 2000  compliance  and
certain administrative expenditures. However, the year 2000 problem is pervasive
and complex and can potentially  affect any computer  process.  Accordingly,  no
assurance  can be given  that  year  2000  compliance  can be  achieved  without
additional unanticipated expenditures and uncertainties that might affect future
financial results.

The Federal  banking  regulators have  established  standards for achieving year
2000 compliance for federally insured depository institutions. If an institution
fails to meet any of the established standards,  its primary regulator may issue
an order directing the institution to cure the deficiency.  Until the deficiency
cited  in the  regulator's  order is  cured,  the  regulator  may  restrict  the
institution's growth rate and take any action the regulator deems appropriate.
<PAGE>



                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         In May 1999, a shareholder  of CSB Financial  Inc. filed a class action
         lawsuit in a Delaware court against the Company,  its top executive and
         its  directors  for  breach of  fiduciary  duty for  failure  to put an
         acquisition  offer to  shareholder  vote.  The class  action is seeking
         buyout of current shares at $14.75 (offered purchase price).

Item 2.  Changes in Securities

         None.

Item 3.  Defaults Upon Senior Securities

         None.

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

         Not applicable.

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8K

         Exhibits:

         None.

         Reports on Form 8K:

         None.




<PAGE>


                                   SIGNATURES


Pursuant  to the  requirement  of the  Securities  Exchange  Act  of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                            CSB Financial Group, Inc.



Date: 8/13/1999
       ------------------------             K. Gary Reynolds
                                            ------------------------------------
                                            K. Gary Reynolds
                                            Chief Executive Officer and Director



Date:  8/13/1999
       ------------------------             Joanne Ticknor
                                            ------------------------------------
                                            Joanne Ticknor
                                            Secretary and Treasurer