<PAGE>   1
                    U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

         For the Fiscal Year Ended December 31, 1999

[ ]      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 000-23109

                       OHIO STATE FINANCIAL SERVICES, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

            Ohio                                           31-1529204
-------------------------------                     -----------------------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                      Identification Number)

                     435 Main Street, Bridgeport, Ohio 43912
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (740) 635-0764
                                               --------------

      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 issuer 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 the issuer'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]

State the issuer's revenues for its most recent fiscal year:  $2.4 million.

Based on the average of the bid and asked prices quoted by the OTC Bulletin
Board as of March 10, 2000, the aggregate market value of the common shares of
the issuer held by non-affiliates of the issuer, on that date, was $3.7 million.

At March 10, 2000, there were 543,720 common shares of the issuer outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Part II of Form 10-KSB: Portions of the Annual Report to Shareholders for the
fiscal year ended December 31, 1999, in Exhibit 13.

Part III of Form 10-KSB: Portions of the Proxy Statement for the 2000 Annual
Meeting of Shareholders, in Exhibit 20.

Transitional Small Business Disclosure Format   Yes [ ]  No [X]
<PAGE>   2
                                     PART I

ITEM 1.       DESCRIPTION OF BUSINESS

GENERAL

         Ohio State Financial Services, Inc. ("OSFS") is a unitary savings and
loan holding company organized under Ohio law in March 1997. On September 26,
1997, OSFS acquired all of the common shares issued by Bridgeport Savings and
Loan Association, a savings and loan association organized under Ohio law (the
"Association"), upon the conversion of the Association from mutual to stock form
(the "Conversion"). The activities of OSFS have been limited primarily to
holding the common shares of the Association. Consequently, the following
discussion focuses primarily on the business of the Association.

         As a savings and loan holding company, OSFS is subject to regulation,
supervision, and examination by the Office of Thrift Supervision (the "OTS"),
the Ohio Department of Commerce, Division of Financial Institutions (the
"Division"), and the Federal Deposit Insurance Corporation (the "FDIC"). The
Association is a member of the Federal Home Loan Bank (the "FHLB") of
Cincinnati, and the deposits of the Association are insured up to applicable
limits by the FDIC in the Savings Association Insurance Fund (the "SAIF").

         The Association conducts business from its main office located in
Bridgeport, Ohio, and from one full-service branch located in Shadyside, Ohio.
The principal business of the Association is the origination of permanent
mortgage loans on one- to four-family residential real estate located in the
Association's primary market area, which consists of Belmont County, Ohio, and
Ohio and Marshall Counties, West Virginia. The Association also originates a
limited number of loans for the construction of one- to four-family residences
and permanent mortgage loans secured by nonresidential real estate in its market
area. In addition to real estate lending, the Association originates secured and
unsecured consumer loans. For liquidity and interest rate risk management
purposes, the Association 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 FDIC, principal repayments of loans, and maturities of investment
securities.

         Interest on loans and investments is the Association's primary source
of income. The Association's principal expense is interest paid on deposit
accounts. Operating results are dependent to a significant degree on the net
interest income of the Association, 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, the Association's
interest income and interest expense are significantly affected by general
economic conditions and by the policies of various regulatory authorities.

LENDING ACTIVITIES

         GENERAL. The Association's principal lending activity is the
origination of conventional fixed-rate real estate loans secured by one- to
four-family residences located in the Association's primary market area.
Although the Association currently originates loans for its portfolio and not
with the intention of selling such loans in the secondary market, fixed-rate
loans are generally underwritten according to secondary market guidelines. In
addition to real estate lending, the Association originates consumer loans,
including loans secured by deposit accounts, automobile loans, and unsecured
loans.
<PAGE>   3
         LOAN PORTFOLIO COMPOSITION. The following table presents certain
information regarding the composition of the Association's loan portfolio at the
dates indicated:

<TABLE>
<CAPTION>
                                                                    At December 31,
                                 --------------------------------------------------------------------------------------
                                           1999                           1998                          1997
                                 --------------------------     --------------------------    -------------------------
                                               Percent of                     Percent of                   Percent of
                                   Amount     total loans         Amount     total loans        Amount     total loans
                                   ------     -----------         ------     -----------        ------     -----------
                                                                 (Dollars in thousands)
<S>                              <C>          <C>                <C>         <C>             <C>           <C>
Real estate loans:
   One- to four-family           $ 21,766        87.55%          $   20,238     80.60%      $    19,754      80.33%
   Nonresidential                     704         2.83                  585      2.33               572       2.33
   Land                                 5          .02                    1      0.01                18       0.07
   Construction                       993         3.99                  708      2.82               124       0.50
Consumer loans:
   Automobiles                      1,070         4.30                1,315      5.24             1,721       7.00
   Savings accounts                   193          .78                  355      1.41               370       1.51
   Other                           112.45          .45                1,870      7.45             1,962       7.98
Commercial loans                       19          .08                   36      0.14                69        .28
                                 ---------    --------           ----------    -------      -----------    -------
       Total loans                 24,862       100.00%              25,108    100.00%           24,590     100.00%
                                                ======                         =======                     =======
Less:
   Loans in process                   595                               367                          36
   Deferred loan fees                 (15)                                5                          36
   Allowance for loan losses          141                               141                         141
                                 --------                         ---------                  ----------
       Total loans, net          $ 24,141                         $  24,595                  $   24,377
                                 ========                         =========                  ==========
</TABLE>

         LOAN MATURITY. The following table sets forth certain information as of
December 31, 1999, regarding the dollar amount of loans maturing in the
Association'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. Mortgage loans originated by
the Association in its portfolio generally include due-on-sale clauses that
provide the Association with the contractual right to deem the loan immediately
due and payable in the event the borrower transfers the ownership of the
property without the Association's consent. The table does not include the
effects of possible prepayments.

<TABLE>
<CAPTION>
                               During       Due 1-3        Due 3-5        Due 5-10       Due 10-20      Due over
                              the year       years          years          years          years         20 years
                               ending        after          after          after          after          after
                              12/31/00      12/31/00       12/31/00       12/31/00       12/31/00       12/31/00        Total
                              --------      --------       --------       --------       ---------      --------        -----
                                                           (Dollars in thousands)
<S>                           <C>           <C>            <C>            <C>            <C>            <C>             <C>
Real estate loans:
   One- to four-family           $205           $163           $806         $6,171        $11,294         $3,127        $21,766
   Nonresidential                  --             16             90            207            391             --            704
   Land                            --              5             --             --             --             --              5
   Construction                    --             --             --             --            797            196            993
Consumer loans                    256            455            590             74             --             --          1,375
Commercial loans                   15              4             --             --             --             --             19
                              -------        -------        -------        -------        -------        -------        -------

       Total                     $476           $643         $1,486         $6,452        $12,482         $3,323        $24,862
                              =======        =======        =======        =======        =======        =======        =======
</TABLE>

                                       2
<PAGE>   4
         The following table sets forth the dollar amounts of all loans
contractually due after December 31, 2000, and shows the amount of such loans
which have fixed interest rates and which have floating or adjustable interest
rates:

<TABLE>
<CAPTION>
                               Fixed        Adjustable
                               rates          rates          Total
                              -------       ----------      -------
                                          (In thousands)
<S>                           <C>           <C>             <C>
Real estate loans:
   One- to four-family        $19,590         $1,971        $21,561
   Nonresidential                 704             --            704
   Land                             5             --              5
   Construction                   993             --            993
Consumer loans                  1,119             --          1,119
Commercial loans                    4             --              4
                              -------        -------        -------
       Total                  $22,415         $1,971        $24,386
                              =======        =======        =======
</TABLE>

         LOANS SECURED BY ONE- TO FOUR-FAMILY REAL ESTATE. The principal lending
activity of the Association is the origination of conventional loans secured by
first mortgages on one- to four-family residences, primarily single-family
residences, located within the Association's primary market area. At December
31, 1999, the Association's one- to four-family residential real estate loans
totaled approximately $21.8 million, or 87.55% of total loans.

         OTS regulations and Ohio law limit the amount which the Association may
lend in relationship to the appraised value of the real estate and improvements
which will secure the loan at the time of loan origination. In accordance with
such regulations, the Association makes loans on one- to four-family residences
of up to 80% of the value of the real estate and improvements thereon (the
"LTV").

         The Association currently offers fixed-rate loans with terms of up to
25 years, although most loans are originated with terms of 15 years. The
Association does offer adjustable-rate mortgage loans ("ARMs") for terms of up
to 25 years, but has originated very few ARMs since 1990. The maximum interest
rate adjustment period on the ARMs is five years, but can be any number of years
less than five. The interest rate adjustments on ARMs presently offered by the
Association are indexed to the quarterly National Average Cost of Funds to
SAIF-Insured Institutions. Rate adjustments are computed by adding a stated
margin, typically 2%, to the index, with a maximum adjustment of 5% over the
term of the loan.

         The Association has purchased interests in loans from other Ohio
financial institutions at times when there was low loan demand in the
Association's primary market area. Such purchases consist of fixed-rate loans
which meet the Association's underwriting standards. The Association's loan
portfolio includes two participation interests in several single-family loans
secured by properties located in Columbus, Ohio. At December 31, 1999, the
outstanding balance of participation loans purchased, which is included in the
one- to four-family loans, was $2.5 million, or 10.0% of the Association's total
loan portfolio.

         LOANS SECURED BY MULTIFAMILY RESIDENCES. The Association occasionally
originates loans secured by multifamily properties, which contain more than four
units. Multifamily loans are offered with fixed rates of interest for terms of
up to 25 years and have LTVs of up to 75%. The Association had no multifamily
loans in its portfolio at December 31, 1999.

         NONRESIDENTIAL REAL ESTATE. The Association originates a limited number
of loans for the purchase of nonresidential real estate. The Association's
nonresidential real estate loans have fixed rates, terms of up to 25 years, and
LTVs of up to 80%. Among the properties securing nonresidential real estate
loans are two churches and a funeral home which are located in the Association's
primary market area.

         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. The Association 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

                                       3
<PAGE>   5
characteristics of the income stream generated by the property, and the
appraisals supporting the property's valuation.

         At December 31, 1999, approximately $704,000, or 2.83% of the
Association's total loans, were secured by mortgages on nonresidential real
estate.

         LAND LOANS. The Association also originates a limited number of loans
secured by single-family land lots. The Association's land loans are generally
three year amortizing loans and require an LTV of 75% or less. At December 31,
1999, the Association had one land loan of approximately $5,000, or .02% of the
Association's total loans.

         CONSTRUCTION LOANS. The Association originates a limited number of
loans for the construction of single-family residential real estate.
Construction loans are structured as permanent loans with fixed rates of
interest and terms of up to 25 years. During the first six months, while the
residence is being constructed, the borrower is required to pay interest only.
Construction loans have LTVs of up to 80%, with the value of the land counting
as part of the owner's equity. At December 31, 1999, the Association had
approximately $993,000, or 3.99% of its total loans, invested in construction
loans.

         CONSUMER LOANS. The Association originates various types of consumer
loans, including home improvement loans, secured by savings accounts and motor
vehicles and unsecured loans. Consumer loans are made at fixed rates of
interest. Consumer loans secured by a deposit or savings account are made at an
interest rate that is 2% above the rate paid on the underlying deposit account.
Automobile loans are originated with terms of up to six years for new
automobiles and up to three years for used automobiles. All automobile loans are
originated directly by the Association.

         The Association 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. Home equity loans are
secured by real estate. The Association does not offer home equity loans with a
line-of-credit feature.

         Consumer loans may entail greater credit risk than do residential
mortgage loans. The risk of default on consumer loans increases during periods
of recession, high unemployment, and other adverse economic conditions. Although
the Association has not had significant delinquencies on consumer loans, no
assurance can be provided that delinquencies will not increase.

         At December 31, 1999, the Association had approximately $1.4 million,
or 5.53% of its total loans, invested in consumer loans.

         COMMERCIAL LOANS. The Association has occasionally made commercial
loans to businesses in its primary market area. At December 31, 1999, the
Association had approximately $19,000, or .08% of total loans, invested in six
commercial loans, which were made to local businesses. Five of the loans are
secured by company vehicles and one loan is unsecured.

         LOAN SOLICITATION AND PROCESSING. Loan originations are generally
obtained from existing customers and members of the local community and from
referrals from real estate brokers, lawyers, accountants, and current and former
customers. The Association also advertises in the local print media and
periodically advertises on radio and television.

         In underwriting real estate loans, the Association 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 that will be given as security for the loan is prepared by a
certified fee 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
the Association's underwriting guidelines which are established annually by the
Board of Directors. The President of the Association has authority to approve
loans of less than $100,000. Loans for amounts greater than $100,000 must be
approved by the full Board of Directors of the Association, which meets twice a
month.

                                       4
<PAGE>   6
         Borrowers are required to carry satisfactory fire and casualty
insurance and flood insurance, if applicable, and to name the Association as an
insured mortgagee. The Association obtains an attorney's opinion of title.

         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. The
Association 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 installments based upon periodic inspections of
construction progress.

         Consumer loans are underwritten on the basis of the borrower's credit
history and an analysis of the borrower's income and expenses, ability to repay
the loan, and the value of the collateral, if any. The President of the
Association has authority to approve secured consumer loans of up to $50,000,
and unsecured consumer loans of up to $25,000. The Assistant Vice President and
the Loan Manager of the Association each have the authority to approve
applications for secured consumer loans up to $25,000 and for unsecured loans up
to $10,000 and $2,000, respectively.

         LOAN ORIGINATIONS AND PARTICIPATIONS. Currently, the Association is
originating fixed-rate loans for its portfolio and not with the intention of
selling such loans in the secondary market. The Association occasionally
purchases participation interests in fixed-rate loans originated by other
financial institutions which meet the Association's underwriting standards.
Typically, the Association purchases a 90% interest in the loan, with the seller
retaining a 10% interest and the servicing of the loan. At December 31, 1999,
the outstanding balance of participation loans purchased, which is included in
the one- to four-family loans, was $2.5 million, or 10.00% of the Association's
total loan portfolio. The Association has not purchased any loan participations
since 1995 See "Loans Secured by One- to Four-Family Real Estate."

         The following table presents the Association's total loan origination,
participation, and repayment activity for the periods indicated:

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                              ------------------------------------------
                                                1999             1998             1997
                                              --------         --------         --------
                                                        (Dollars in thousands)
<S>                                            <C>              <C>              <C>
Total gross loans receivable at
   beginning of period                         $25,108          $24,590          $25,138
                                              --------         --------         --------

Loans originated:
   Real estate:
     One- to four-family                         1,999            2,342            2,588
     Nonresidential                                200               10              210
     Construction                                  795              734               --
   Consumer                                      1,481            1,369            2,454
   Commercial                                       15               --               --
                                              --------         --------         --------
       Total loans originated                    4,490            4,455            5,252

Loan participations:
   One- to four-family                              --               --               --

Loan principal repayments                       (4,736)          (3,824)          (5,786)
Charge-offs                                         --              (42)              --
Foreclosures                                        --              (71)             (14)
                                              --------         --------         --------
       Net loan activity                          (246)             518             (548)
                                              --------         --------         --------

       Total gross loans receivable at
         end of period                         $24,862          $25,108          $24,590
                                              ========         ========         ========
</TABLE>

                                       5
<PAGE>   7
         The Association issues written commitments to prospective borrowers on
all approved mortgage loans and charges an application fee. Commitments expire
within 30 days of the date of issuance although they may be renewed or extended
in some instances. At December 31, 1999, the Association had $159,000 of
outstanding commitments to originate loans and $595,000 in undisbursed funds
related to construction loans. Management estimates that less than 1% of loan
commitments expire without being funded.

         LOANS TO ONE BORROWER LIMITS. OTS regulations generally limit the
aggregate amount that a savings association may lend to any borrower to an
amount equal to 15% of the Association's unimpaired capital and unimpaired
surplus (the "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.

         Based on such limits, the Association would have been able to lend
approximately $893,000 to one borrower at December 31, 1999. The maximum amount
that the Association will lend to one borrower, however, is $500,000. The
largest amount the Association had outstanding to one borrower at December 31,
1999, was $391,000, which consisted of three loans, secured by real property. At
December 31, 1999, the loans were performing in accordance with their terms.

         LOAN ORIGINATION AND OTHER FEES. The Association realizes loan
origination fees and other fee income from its lending activities. In addition,
the Association realizes income from late payment charges, application fees, and
fees for other miscellaneous services.

         Loan origination fees and other fees are a volatile source of income,
varying with the volume of lending, loan repayments, and general economic
conditions. All nonrefundable loan origination fees and certain direct loan
origination costs are deferred and recognized in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 91 as an adjustment to yield over
the life of the related loan.

         DELINQUENT LOANS, NONPERFORMING ASSETS, AND CLASSIFIED ASSETS. The
Association attempts to maintain a high level of asset quality through sound
underwriting policies and efficient collection practices.

         To discourage late payments, the Association charges a late fee of 5%
of the payment amount after 15 days for loans originated since January 1, 1990.
When a loan is 30 days past due, the borrower is sent a delinquency notice and a
personalized letter and one of the Association's loan personnel will telephone
the borrower. When a loan becomes 60 days delinquent, additional contacts are
made and the loan is generally referred to an attorney for foreclosure, unless a
repayment schedule has been established.

         Loans are reviewed on a monthly basis and are placed on nonaccrual
status when collection in full is considered doubtful by management. Generally,
loans past due more than 90 days as to principal or interest are placed on
nonaccrual status. Interest accrued and unpaid at the time a loan is placed on
nonaccrual status is charged against interest income. Subsequent cash payments
are generally applied to interest income unless, in the opinion of management,
the collection of principal and interest is doubtful. In those cases, subsequent
cash payments would be applied to principal.

                                       6
<PAGE>   8
         The following table reflects the amount of loans in a delinquent status
as of the dates indicated:

<TABLE>
<CAPTION>
                                                                 At December 31,
                         -------------------------------------------------------------------------------------------------
                                     1999                              1998                              1997
                         -----------------------------     -----------------------------     -----------------------------
                                              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              25        $433        1.74%         5         $54        0.22%        21        $331        1.35%
  60-90 days               3          52         .21         --          --          --         12         294        1.20
  Over 90 days            --          --        0.00         --          --        0.00          6          98        0.40
                        ----        ----        ----       ----        ----        ----       ----        ----        ----

  Total delinquent
    loans                 28        $485        1.95%         5         $54        0.22%        39        $723        2.95%
                        ====        ====        ====       ====        ====        ====       ====        ====        ====
</TABLE>

         Nonperforming assets include nonaccruing loans, accruing loans which
are delinquent more than 90 days, real estate acquired by foreclosure or by
deed-in-lieu thereof, in-substance foreclosures, and repossessed assets.

         The following table sets forth information with respect to the accrual
and nonaccrual status of the Association's loans and other nonperforming assets
at the dates indicated:

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                           ------------------------------------------
                                                             1999            1998             1997
                                                           ---------       ---------        ---------
                                                                   (Dollars in thousands)
<S>                                                        <C>             <C>               <C>
Loans accounted for on a nonaccrual basis:
  Real estate                                              $      --       $      --        $      64
  Consumer                                                        --              --               34
                                                           ---------       ---------        ---------
    Total nonaccrual loans                                        --              --               98
                                                           ---------       ---------        ---------

    Total nonperforming loans                                     --              --               98

    Real estate owned                                             --              --               --
                                                           ---------       ---------        ---------

    Total nonperforming assets                             $      --       $      --        $      98
                                                           =========       =========        =========

    Allowance for loan losses                                   $141            $141             $141
                                                           =========       =========        =========

    Nonperforming assets as a percent of total assets             --              --            0.26%

    Nonperforming loans as a percent of total loans               --              --            0.40%

    Allowance for loan losses as a percent of
      nonperforming loans                                         --              --          143.86%
</TABLE>
         Real estate acquired in settlement of loans is classified separately on
the balance sheet at the lower of the recorded investment in the property or its
fair value minus estimated costs of sale. Prior to foreclosure, the loan is
written down to the value of the underlying collateral by a charge to the
allowance for loan losses, if necessary. Any subsequent write-downs are charged
against operating expenses. Operating expenses of such properties, net of
related income or loss on disposition, are included in other expenses. At
December 31, 1999, the Association had no real estate acquired in settlement of
loans.

         The Association classifies its 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 the Association will
sustain some loss if the deficiencies are not corrected. "Doubtful" assets have
the same weaknesses as "substandard" assets, with the

                                       7
<PAGE>   9
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 the Association is not warranted. In addition,
federal 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 the Association's classified assets at the
dates indicated were as follows:

<TABLE>
<CAPTION>
                                                At December 31,
                                 ----------------------------------------------
                                   1999               1998               1997
                                 ----------        ----------        ----------
                                            (Dollars in thousands)
<S>                              <C>               <C>                      <C>
Classified assets:
  Substandard                    $       --        $       --               $71
  Doubtful                               --                --                --
  Loss                                   --                --                --
                                 ----------        ----------        ----------

    Total classified assets      $       --        $       --               $71
                                 ==========        ==========        ==========
</TABLE>

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

         The Association 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. At December 31, 1999, the Association had
classified $52,000 of assets as special mention.

         ALLOWANCE FOR LOAN LOSSES. Management reviews on a quarterly basis the
allowance for loan losses as it relates to 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.

         While management believes that it uses the best information available
to determine the allowance for loan losses, unforeseen market conditions could
result in adjustments and net income could be significantly affected if
circumstances differ substantially from the assumptions used in making the final
determination. In addition, the Association's determination as to the amount of
its allowance for loan losses is subject to review by the OTS as part of its
examination process, which may result in the establishment of an additional
allowance based upon the judgment of the OTS after a review of the information
available at the time of the OTS examination.

                                       8
<PAGE>   10
        The following table sets forth an analysis of the Association's
allowance for loan losses for the periods indicated:

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                          ----------------------------------
                                                          1999          1998           1997
                                                          -----         -----          -----
                                                               (Dollars in thousands)
<S>                                                       <C>           <C>            <C>
Balance at beginning of year                              $141          $141           $143
                                                          -----         -----          -----
Charge-offs                                                 --           (42)            (2)
Recoveries                                                  --             1             --
                                                          -----         -----          -----
   Net (charge-offs) recoveries                             --           (41)            (2)
                                                          -----         -----          -----
Provision for loan losses                                   --            41             --
                                                          -----         -----          -----
Balance at end of year                                    $141          $141           $141
                                                          =====         =====          =====
Ratio of net (charge-offs) recoveries to average
   loans outstanding during the year                      N/A          (0.16)%        (0.01)%

Ratio of allowance for loan losses to total loans         0.57%         0.56 %         0.57 %
</TABLE>

         The following table sets forth the allocation of the allowance for loan
losses by category. The allocations are based on management's assessment of the
risk characteristics of each of the components of the total loan portfolio and
are subject to change as and when the risk factors of each such component
change. The allocation is not indicative of either the specific amounts or the
loan categories in which future charge-offs may be taken, nor should it be taken
as an indicator of future loss trends. The allocation of the allowance to each
category is not necessarily indicative of future loss in any particular category
and does not restrict the use of the allowance to absorb losses in any category.

<TABLE>
<CAPTION>
                                                               At December 31,
                              ----------------------------------------------------------------------------------
                                        1999                       1998                        1997
                              --------------------------  ------------------------    --------------------------
                                        Percent of loans          Percent of loans              Percent of loans
                                        in each category          in each category              in each category
                              Amount     to total loans   Amount   to total loans     Amount     to total loans
                              ------    ----------------  ------  ----------------    ------    ----------------
                                                           (Dollars in thousands)
<S>                           <C>       <C>               <C>     <C>                 <C>       <C>
Real estate:
   One- to four-family          $132       87.55%          $117       80.60%          $116           80.33%
   Nonresidential                  2        2.83              2        2.33              2            2.33
   Construction                   --        3.99             --        2.82             --            0.50
   Land                           --        0.02             --        0.00             --            0.07
Consumer                           7        5.53             22       14.10             23           16.49
Commercial                        --        0.08             --        0.15             --            0.28
                              ------      ------         ------      ------         ------          ------

       Total                    $141      100.00%          $141      100.00%          $141          100.00%
                              ======      ======         ======      ======         ======          ======
</TABLE>


                                       9
<PAGE>   11
INVESTMENT ACTIVITIES

         GENERAL. Federal regulation and Ohio law permit the Association 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 the Association has adopted an investment policy which
authorizes management to make investments in U.S. Treasury obligations, U.S.
Government and agency securities, municipal obligations, mortgage-backed
securities, deposits in the FHLB, certificates of deposit in federally-insured
financial institutions, and federal funds at commercial banks. The Association'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.
See "REGULATION."

         The Association's securities available-for-sale and investment
securities held-to-maturity at December 31, 1999, did not contain securities of
any issuer with an aggregate book value in excess of 10% of the Association's
equity, excluding those issued by the U.S. Government or its agencies. As of
December 31, 1999, the Association's investment portfolio was comprised of FHLB
stock, U.S. Government and agency securities, mortgage-backed securities, and
stock of a service provider, with an aggregate market value of $3.9 million.

         At December 31, 1999, the Association held mortgage-backed securities
in its held-to-maturity investment portfolio with an amortized cost of $496,000.
The average yield on mortgage-backed securities at December 31, 1999, was 8.92%.
The Association's mortgage-backed securities at December 31, 1999, were all
issued by the Government National Mortgage Association (the "GNMA") or the
Federal Home Loan Mortgage Corporation (the "FHLMC"), representing participation
interests in direct pass-through pools of long-term mortgage loans originated
and serviced by the issuers of the securities. Expected maturities will differ
from contractual maturities due to scheduled repayments and because borrowers
may have the right to call or prepay obligations with or without prepayment
penalties.

         The following table sets forth the composition of the Association's
interest-bearing deposits and investment securities portfolio, including those
designated as available-for-sale, at the dates indicated:

<TABLE>
<CAPTION>
                                                                     At December 31,
                                   -------------------------------------------------------------------------------------
                                             1999                           1998                         1997
                                   -------------------------      -------------------------     ------------------------
                                    Carrying       Fair            Carrying       Fair           Carrying       Fair
                                     value        value             value        value            value        value
                                   ---------     ---------        ---------     ---------       ---------     ---------
                                                                  (Dollars in thousands)
<S>                                <C>           <C>              <C>           <C>             <C>          <C>
Interest-bearing deposits          $   4,255     $   4,255         $  4,792     $   4,792        $   2,654   $   2,654
Interest-bearing time deposits           400           400            3,100         3,100            4,600       4,600
Investment securities:
   Held-to-maturity:
     U.S. Government and
       federal agencies                3,198         2,988              300           307            3,299       3,310
     Mortgage-backed
       securities                        496           522              667           712              847         914
   Available-for-sale:
     FHLB stock                          400           400              374           374              348         348
     Intrieve, Inc. stock                 15            15               15            15               15          15
                                   ---------     ---------        ---------     ---------       ----------   ---------

       Total                       $   8,764     $   8,580         $  9,248     $   9,300        $  11,763   $  11,841
                                   =========     =========         ========     =========        =========   =========
</TABLE>

                                       10
<PAGE>   12
        The maturities of the Association's interest-bearing deposits and
investment securities (excluding mortgage-backed securities) at December 31,
1999, are indicated in the following table:

<TABLE>
<CAPTION>
                                                             At December 31, 1999
                         -----------------------------------------------------------------------------------------------
                           1 Year or Less       After 1-5 Years           After 5-10 Years            After 10 Years
                         ------------------  ---------------------     ----------------------    -----------------------
                         Carrying   Average  Carrying      Average     Carrying       Average    Carrying        Average
                          value     yield     value         yield       value          yield       value          yield
                          -----     -----     -----         -----       -----          -----       -----          -----
                                                            (Dollars in thousands)
<S>                      <C>        <C>      <C>             <C>        <C>             <C>        <C>             <C>
Interest-bearing         $4,255     3.82%    $   --          0.00%      $   --          0.00%      $   --          0.00%
deposits
   Interest-bearing
     time deposits          300     5.72        100          6.35           --          0.00           --          0.00
Investment securities:
   U.S. Government and
     federal agencies        --     0.00        200          6.25          600          6.46        2,398          6.80
   Intrieve, Inc.            15     0.00         --          0.00           --          0.00           --          0.00
     stock
   FHLB stock               400     6.94         --          0.00           --          0.00           --          0.00
                         ------              ------                     ------                     ------

       Total             $4,970     4.18%    $  300          6.28%        $600          6.46%      $2,398          6.80%
                         ======              ======                     ======                     ======
</TABLE>

<TABLE>
<CAPTION>
                                At December 31, 1999
                         -----------------------------------
                                       Total
                         -----------------------------------
                         Carrying                     Market
                           value           Yield      value
                           -----           -----      ------
                               (Dollars in thousands)
<S>                        <C>              <C>       <C>
Interest-bearing           $4,255           3.82%     $4,255
deposits
   Interest-bearing
     time deposits            400           5.88         400
Investment securities:
   U.S. Government and
     federal agencies       3,198           6.70       2,988
   Intrieve, Inc.              15           0.00          15
     stock
   FHLB stock                 400           6.94         400
                           ------                     ------

       Total               $8,628           5.18%     $8,058
                           ======                     ======
</TABLE>

        The maturities of the Association's mortgage-backed securities portfolio
are indicated in the following tables:

<TABLE>
<CAPTION>
                                                  At December 31, 1999
-------------------------------------------------------------------------------------------------
1 Year or Less       After 1-5 Years           After 5-10 Years            After 10 Years
------------------  ---------------------     ----------------------    -------------------------
Carrying   Average  Carrying      Average     Carrying       Average    Carrying        Average
value     yield     value         yield       value          yield       value          yield
-----     -----     -----         -----       -----          -----       -----          -----
                                                    (Dollars in thousands)
<S>        <C>      <C>           <C>         <C>            <C>         <C>            <C>
 $--       0.00%      $5           9.50%        $20           11.76%       $471           9.48%
</TABLE>

<TABLE>
<CAPTION>
     At December 31, 1999
---------------------------------
            Total
---------------------------------
Carrying                   Market
 value          Yield      value
 -----          -----      ------
           (Dollars in thousands)
<S>       <C>              <C>
  $496           9.57%      $522
</TABLE>

DEPOSITS AND BORROWINGS

         GENERAL. Deposits have traditionally been the primary source of the
Association's funds for use in lending and other investment activities. In
addition to deposits, the Association derives funds from interest payments and
principal repayments on loans and income on 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. The
Association may also borrow funds from the FHLB as a source of funds.

         DEPOSITS. Deposits are attracted principally from within the
Association's market area through the offering of a selection of deposit
instruments, including regular passbook savings accounts, NOW accounts, money
market accounts, and certificates of deposit. Interest rates paid, maturity
terms, service fees, and withdrawal penalties for the various types of accounts
are monitored weekly by the President and reviewed monthly by the Board of
Directors of the Association. The Association does not use brokers to attract
deposits. The amount of deposits from outside the Association's market area is
not significant.

                                       11
<PAGE>   13
         The following table sets forth the dollar amount of deposits in the
various types of accounts offered by the Association at the dates indicated:

<TABLE>
<CAPTION>
                                                                                 At December 31,
                                                ----------------------------------------------------------------------------------
                                                        1999                           1998                          1997
                                                ---------------------        -----------------------       -----------------------
                                                             Percent                      Percent of                      Percent
                                                             of Total                       Total                         of Total
                                                Amount       Deposits        Amount        Deposits         Amount        Deposits
                                                ------       --------        ------        ---------        ------        --------
                                                                             (Dollars in thousands)
<S>                                            <C>             <C>           <C>             <C>           <C>             <C>
Transaction accounts:
   Regular savings accounts (1)                $9,826          38.47%        $9,686          38.06%        $9,947          37.77%
   NOW and Super NOW
     accounts (2)                               1,462           5.73          1,227           4.82            973           3.70
   Money market accounts (3)                    1,821           7.13          2,136           8.39          2,391           9.08
                                              -------        -------        -------        -------        -------        -------

     Total transaction accounts                13,109          51.33         13,049          51.27         13,311          50.55
                                              -------        -------        -------        -------        -------        -------

Certificates of deposit
   3.01 - 5.00%                                 7,476          29.27          5,866          23.05          6,303          23.94
   5.01 - 7.00%                                 4,956          19.40          6,535          25.68          6,719          25.51
                                              -------        -------        -------        -------        -------        -------

     Total certificates of deposit (4)         12,432          48.67         12,401          48.73         13,022          49.45
                                              -------        -------        -------        -------        -------        -------

     Total deposits                           $25,541         100.00%       $25,450         100.00%       $26,333         100.00%
                                              =======        =======        =======        =======        =======        =======
</TABLE>

(1)      The weighted average rate on passbook savings accounts was 3.0% at
         December 31, 1999, 1998, and 1997, respectively.

(2)      The weighted average rate on NOW and Super NOW accounts was 1.75% at
         December 31, 1999, 1998, and 1997, respectively.

(3)      The weighted average rate on money market accounts was 2.75% at
         December 31, 1999, 1998, and 1997, respectively.

(4)      The weighted average rate on all certificates of deposit was 4.96%,
         5.07%, and 5.03% at December 31, 1999, 1998, 1997, respectively.

         The following table shows rate and maturity information for the
Association's certificates of deposit at December 31, 1999:

<TABLE>
<CAPTION>
                                                                         Amount Due
                                       -------------------------------------------------------------------------------
                                                        Over 1 year     Over 2 Years        Over
                                        Up to 1 Year     to 2 Years      to 3 Years       3 Years          Total
                                        ------------     ----------      ----------       -------          -----
                                                                   (Dollars in thousands)
<S>                                       <C>             <C>             <C>              <C>            <C>
3.01% to 5.00%                            $  5,472        $   1,182       $   390          $  432         $   7,476
5.01% to 7.00%                               2,440            1,955           130             431             4,956
                                          --------        ---------       -------          ------         ---------
    Total certificates of deposit         $  7,912        $   3,137       $   520          $  863         $  12,432
                                          ========        =========       =======          ======         =========
</TABLE>

                                       12
<PAGE>   14
         At December 31, 1999, approximately $7.9 million of the Association's
certificates of deposit mature within one year. Based on past experience and the
Association's prevailing pricing strategies, management believes that a
substantial percentage of such certificates will be renewed with the Association
at maturity. If, however, the Association is unable to renew the maturing
certificates for any reason, borrowings of up to $7.9 million are available from
the FHLB of Cincinnati.

        The following table presents the amount of the Association's
certificates of deposit of $100,000 or more by the time remaining until maturity
at December 31, 1999:

<TABLE>
<CAPTION>
                               Maturity                                        Amount
                               --------                                        ------
                                                                           (In thousands)
<S>                                                                        <C>
                      3 months or less                                        $ 1,099
                      Over 3 months to 6 months                                   628
                      Over 6 months to 12 months                                1,136
                      Over 12 months                                            1,332
                                                                              -------
                               Total                                          $ 4,195
                                                                              =======
</TABLE>

         The majority of the above certificates of deposit are held by long-time
depositors at the Association and management believes that a substantial
percentage of such certificates will be renewed with the Association at
maturity.

         The following table sets forth the Association's deposit account
balance activity for the periods indicated:

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                       -------------------------------------------------
                                                           1999               1998               1997
                                                       --------------      ------------      -----------
                                                                      (Dollars in thousands)
<S>                                                     <C>                  <C>               <C>
Beginning balance                                       $ 25,450             $ 26,333          $ 28,791
Net decrease before interest credited                       (903)              (1,909)           (3,597)
Interest credited                                            994                1,026             1,139
                                                       ----------           ----------        ---------

Ending balance                                          $ 25,541             $ 25,450          $ 26,333
                                                        ========             ========          ========

Net increase (decrease)                                 $     91             $   (833)         $ (2,458)
                                                        ========             =========         =========
</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, the Association 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." If an association meets the
QTL test, the association will be eligible for such advances only to the extent
it holds specified QTL test assets. At December 31, 1999, the Association was in
compliance with the QTL test. During the years ending December 31, 1999, 1998,
and 1997, the Association did not utilize FHLB advances.

         During the year ended December 31, 1999, the Association had short-term
borrowings with two local financial institutions with average balances of
$69,000.

                                       13
<PAGE>   15
COMPETITION

         The Association faces competition for deposits and loans from branches
of two large independent commercial banks located in Bridgeport and branches of
two larger independent commercial banks and one branch of a super-regional
commercial bank in Shadyside. In addition, competing financial institutions
exist in surrounding communities located in the Association's market area. The
primary factors in competition for deposits are customer service and convenience
of office location. The Association 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 which are not readily predictable. The Association does not offer all of
the products and services offered by some of its competitors, particularly
commercial banks.

EMPLOYEES

         At December 31, 1999, the Association had 13 full-time employees and no
part-time employees. The Association believes that relations with its employees
are excellent. The Association offers health, life, and disability benefits to
all employees and has a defined benefit pension plan and a 401(k) plan for its
eligible full-time employees. None of the employees of the Association is
represented by a collective bargaining unit.

YEAR 2000

         The Association evaluated both information technology systems (computer
systems) and non-information technology systems (e.g., vault timers and
electronic door locks) for Year 2000 risk. Based upon such evaluations,
management determined that the Association had Year 2000 risk in three areas:
(1) the Association's own computers (2) the computers of others used by the
Association's borrowers, and (3) the computers of others who provide the
Association with data processing. These risk areas are apparently in full
compliance and no material costs have been incurred subsequent to December 31,
1999.

                                   REGULATION

GENERAL

         OSFS is a savings and loan holding company within the meaning of the
Home Owners Loan Act, as amended (the "HOLA"). Consequently, OSFS 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, OSFS is subject to
provisions of the Ohio Revised Code applicable to corporations generally,
including laws which restrict takeover bids, tender offers, and control share
acquisitions involving public companies which have significant ties to Ohio.

         As a savings and loan association chartered under the laws of Ohio, the
Association is subject to regulation, examination, and oversight by the
Superintendent of the Division (the "Ohio Superintendent"). Because the
Association's deposits are insured by the FDIC, the Association also is subject
to regulatory oversight by the FDIC. The Association 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 the
Association is in compliance with various regulatory requirements and is
operating in a safe and sound manner. The Association is a member of the FHLB.

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

                                       14
<PAGE>   16
companies in existence on May 4, 1999, including OSFS. 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 authorizes a new "financial holding company," which can own
banks and thrifts and which are 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 OSFS and the Association currently engage, except to the extent that
competition from other types of financial institutions may increase as they
engage in activities not permitted prior to enactment of the GLB Act.

OHIO SAVINGS AND LOAN REGULATION

         The Ohio Superintendent is responsible for the regulation and
supervision of Ohio savings and loan associations in accordance with the laws of
the State of Ohio and imposes assessments on Ohio associations based on their
asset size to cover the costs of supervision and examination. Ohio law
prescribes the permissible investments and activities of Ohio savings and loan
associations, including the types of lending that such associations may engage
in and the investments in real estate, subsidiaries and corporate or government
securities that such associations may make. The ability of the Ohio associations
to engage in these state-authorized investments and activities is subject to
oversight and approval by the FDIC, if such investments or activities are not
permissible for a federally-chartered savings association. The Ohio
Superintendent also has approval authority over any mergers involving, or
acquisitions of control of, Ohio savings and loan associations. The Ohio
Superintendent may initiate certain supervisory measures or formal enforcement
actions against Ohio associations. Ultimately, if the grounds provided by law
exist, the Ohio Superintendent may place an Ohio association in conservatorship
or receivership.

         In addition to being governed by the laws of Ohio specifically
governing savings and loan associations, the Association is also governed by
Ohio corporate law, to the extent such law does not conflict with the laws
specifically governing savings and loan associations.

OFFICE OF THRIFT SUPERVISION

         GENERAL. The OTS is an office of the Department of the Treasury and is
responsible for the regulation and supervision of all federally-chartered
savings associations and all other savings associations, the deposits of which
are insured by the FDIC and the SAIF. The OTS issues regulations governing the
operation of savings associations, regularly examines such associations and
imposes assessments on savings associations based on their asset size to cover
the costs of general supervision and examination. The OTS also may initiate
enforcement actions against savings associations and certain persons affiliated
with them for violations of laws or regulations or for engaging in unsafe or
unsound practices. If the grounds provided by law exist, the OTS may appoint a
conservator or receiver for a savings association.

         Savings associations are subject to regulatory oversight under various
consumer protection and fair lending laws. These laws govern, among other
things, truth-in-lending disclosures, equal credit opportunity, fair credit
reporting, and community reinvestment. Failure to abide by federal laws and
regulations governing community reinvestment could limit the ability of an
association to open a new branch or engage in a merger. Community reinvestment
regulations evaluate how well and to what extent an institution lends and
invests in its designated service area, with particular emphasis on low- to
moderate-income communities and borrowers in that area.

         REGULATORY CAPITAL REQUIREMENTS. The Association is required by OTS
regulators 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.

                                       15
<PAGE>   17
         "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 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 the Association, includes allowances for loan and lease
losses of $141,000 at December 31, 1999.

         The OTS has adopted an interest rate risk component to the risk-based
capital requirement. Pursuant to the interest rate risk component, a savings
association must measure the effect of an immediate 200 basis point change in
interest rates on the value of its portfolio as determined under the methodology
of the OTS. If the measured interest rate risk is above the level deemed normal
under the regulation, the association will be required to deduct one-half of
such excess exposure from its total capital when determining its risk-based
capital. In general, an association with less than $300 million in assets and a
risk-based capital ratio in excess of 12% will not be subject to the interest
rate risk component.

         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
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. All undercapitalized associations must submit a
capital restoration plan to the OTS within 45 days after becoming
undercapitalized. Such associations will be subject to increased monitoring and
asset growth restrictions and will be required to obtain prior approval for
acquisitions, branching, and engaging in new lines of business. Furthermore,
critically undercapitalized institutions must be placed in conservatorship or
receivership within 90 days of reaching that capitalization level, except under
limited circumstances. The Association's capital at December 31, 1999, met the
standards for the highest category, a "well-capitalized" institution.

         Federal law prohibits a savings association from making a capital
distribution to anyone or paying management fees to any person having control of
the association if, after such distribution or payment, the association would be
undercapitalized. In addition, each company controlling an undercapitalized
association must guarantee that the association will comply with its capital
plan until the association has been adequately capitalized on an average during
each of four preceding calendar quarters and must provide adequate assurances of
performance. The aggregate liability pursuant to such guarantee is limited to
the lesser of (a) an amount equal to 5% of the association's total assets at the
time the institution became undercapitalized and (b) the amount that is
necessary to bring the association into compliance with all capital standards
applicable to such association at the time the association fails to comply with
its capital restoration plan.

         LIQUIDITY. OTS regulations require that a savings association maintain
an average 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 the Association at December 31, 1999,
was approximately $6.0 million, or 23.79%, and exceeded the applicable 4.0%
liquidity requirement by approximately $5.0 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,
although they also include credit card, student and small business

                                       16
<PAGE>   18
loans and stock issued by any FHLB, the FHLMC or the Federal National Mortgage
Association. 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 its 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 and the savings association will not be eligible for new
FHLB advances. At December 31, 1999, the Association qualified as a QTL.

         LENDING LIMIT. OTS regulations generally limit the aggregate amount
that a savings association can lend to one borrower to an amount equal to 15% of
the association's 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." Certain types of loans are not subject to the lending
limit. A general exception to the 15% limit provides that an association may
lend to one borrower up to $500,000 for any purpose. In applying the limit on
loans to one borrower, the regulations require that loans to certain related
borrowers be aggregated. At December 31, 1999, the Association was in compliance
with this lending limit.

         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. Loans to executive officers are
subject to additional limitations. The Association was in compliance with such
restrictions at December 31, 1999.

         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. OSFS is
an affiliate of the Association. 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. The Association was
in compliance with these requirements and restrictions at December 31, 1999.

         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
exceed net income for that year to date plus the savings association's retained
net income for that year to date plus the retained net income for the preceding
two years; (ii) if the savings association will not be at least adequately

                                       17
<PAGE>   19
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 notice of
the proposed capital distribution with the OTS. The Association paid $2.5
million in dividends to OSFS during 1999.

         HOLDING COMPANY REGULATION. OSFS is a savings and loan holding company
within the meaning of the HOLA. As such, OSFS 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 OSFS.
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, OSFS generally has no
restrictions on its activities. Such companies are the only financial
institution holding companies which may engage in any commercial, securities,
and insurance activities without restriction. The broad latitude to engage in
activities under current law can be restricted. 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, 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
OSFS 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 holding
company would become subject to the activities restrictions applicable to
multiple holding companies. At December 31, 1999, the Association met both those
tests.

         If OSFS acquired control of another savings institution, other than
through a merger or other business combination with the Association, OSFS would
become a multiple savings and loan holding company. Unless the acquisition was
an emergency thrift acquisition and each subsidiary savings association met the
QTL test, the activities of OSFS and any of its subsidiaries (other than the
Association) would thereafter be subject to activity restrictions.

         The OTS may approve acquisitions resulting in the formation of a
multiple savings and loan holding company that controls savings associations in
more than one state only if the multiple savings and loan holding company
involved controls a savings association that operated a home or branch office in
the state of the association to be acquired as of March 5, 1987, or if the laws
of the state in which the institution to be acquired is located specifically
permit institutions to be acquired by state-chartered institutions or savings
and loan holding companies located in the state where the acquiring entity is
located (or by a holding company that controls such state-chartered savings
institutions). As under prior law, the OTS may approve an acquisition resulting
in a multiple savings and loan holding company controlling savings associations
in more than one state in the case of certain emergency thrift acquisitions.
Bank holding companies have had more expansive authority to make interstate
acquisitions than savings and loan holding companies since August 1995.

         FEDERAL REGULATION OF ACQUISITIONS OF CONTROL OF OSFS AND THE
ASSOCIATION. In addition to the Ohio law limitations on the merger and
acquisition of the Association and OSFS, 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 the Association or OSFS 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

                                       18
<PAGE>   20
the acquisition of control is by a company, the acquirer must obtain approval,
rather than give notice, of the acquisition.

         In addition, any merger of the Association must be approved by the OTS
as well as the Superintendent. Further, any merger of OSFS in which OSFS is not
the resulting company must also be approved by both the OTS and the
Superintendent.

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.
The Association 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 the Association, 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
state-authorized investments is limited if such activity is conducted or
investment is made in a manner different than that permitted for, or is 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 the
Association's activities and investments at December 31, 1999, were permissible
for a federal association.

FEDERAL RESERVE REQUIREMENTS

         FRB regulations require savings associations to maintain reserves of 3%
of net transaction accounts (primarily NOW accounts) up to $44.3 million
(subject to an exemption of up to $5.0 million), and of 10% of net transaction
accounts in excess of $44.3 million. At December 31, 1999, the Association was
in compliance with the reserve requirements.

FEDERAL HOME LOAN BANKS

         The FHLBs provide credit to their members in the form of advances. The
Association 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 the
Association'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. The Association was in compliance with this requirement with an
investment in stock of the FHLB of Cincinnati of $400,000 at December 31, 1999.

        FHLB advances to member institutions who meet the QTL test are generally
limited to the lower of (i) 25% of the member's assets or (ii) 20 times the
member's investment in FHLB stock. At December 31, 1999, the Association's
maximum limit on advances was approximately $7.9 million. The granting of
advances is also subject to the FHLB's collateral and credit underwriting
guidelines.

                                       19
<PAGE>   21
         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 of the following categories: fully-disbursed, whole first mortgage loans
on improved residential property, or securities representing a whole interest in
such loans; securities, issued, insured, or guaranteed by the United States
Government or an agency thereof; deposits in any FHLB; or other real estate
related collateral (up to 30% of the member association's capital) acceptable to
the FHLB, if such collateral has a readily ascertainable value and the FHLB can
perfect its security interest in the collateral.

         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

         OSFS and the Association are each subject to the federal tax laws and
regulations which apply to corporations generally. In addition to the regular
income tax, OSFS and the Association may be subject to the alternative minimum
tax which 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 do
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.

         The Association's average gross receipts for the three tax years ending
on December 31, 1999, are $2.5 million and as a result, the Association 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
institutions, such as the Association, 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 1995, 1994, and
1993, the Association used the percentage of taxable income method.


                                       20
<PAGE>   22
         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 debts 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 the Association, the
amount of the institution's applicable excess reserves generally is the excess
of (i) the balance of its reserve 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 the Association to OSFS is deemed paid out of
its pre-1988 reserves under these rules, the pre-1988 reserves would be reduced
and the gross income of the Association 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 December 31, 1999, the pre-1988 reserves of the
Association for tax purposes totaled approximately $789,000. The Association
believes it had approximately $4.7 million of accumulated earnings and profits
for tax purposes as of December 31, 1999, which would be available for dividend
distributions, provided regulatory restrictions applicable to the payment of
dividends are met. See Note 8 to the financial statements. No representation can
be made as to whether the Association will have current or accumulated earnings
and profits in subsequent years.

         The tax returns of the Association have been audited or closed without
audit through fiscal year 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 the Association.

                                       21
<PAGE>   23
OHIO TAXATION

         OSFS is subject to the Ohio corporation franchise tax, which as applied
to OSFS, 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
OSFS, 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.

         The Association 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 is imposed annually at a rate of 1.4% of the
book net worth of the Association determined in accordance with generally
accepted accounting principles for tax year 1999. For tax years 2000 and years
thereafter, the tax will be 1.3% of the book net worth. As a "financial
institution," the Association is not subject to any tax based upon net income or
net profits imposed by the State of Ohio.

                                       22
<PAGE>   24
ITEM 2.      DESCRIPTION OF PROPERTY

        The following table sets forth certain information at December 31, 1999,
regarding the properties on which the main office and the branch office of the
Association are located:

<TABLE>
<CAPTION>
                                      Owned           Dated           Square          Net book
Location                            or leased        acquired         footage          value           Deposits
--------                            ---------        --------         -------          -----           --------
                                                                                                    (In thousands)

<S>                                 <C>              <C>              <C>             <C>           <C>
435 Main Street                       Owned            1964            4,744          $120,695         $18,751
Bridgeport, Ohio 43912

4000 Central Avenue                   Owned            1979            2,197          $274,394         $ 6,868
Shadyside, Ohio 43947
</TABLE>

         The Association owns all of its electronic data processing equipment.
Such equipment includes several personal computers with a net book value of
approximately $10,000.

ITEM 3.       LEGAL PROCEEDINGS

         Neither OSFS nor the Association is presently involved in any legal
proceedings of a material nature. From time to time, the Association is a party
to legal proceedings incidental to its business to enforce its security interest
in collateral pledged to secure loans made by the Association.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters submitted to a vote of the shareholders of OSFS
during the last quarter of the fiscal year ended December 31, 1999.

                                       23
<PAGE>   25
                                     PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The information contained in that portion of the Annual Report to
Shareholders for the fiscal year ended December 31, 1999 (the "Annual Report")
included in Exhibit 13 hereto under the caption "MARKET PRICE OF COMMON SHARES
OF OSFS AND RELATED SHAREHOLDER MATTERS" is incorporated herein by reference.

ITEM 6.       MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The information contained in that portion of the Annual Report included
in Exhibit 13 hereto under the caption "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" is incorporated herein by
reference.

ITEM 7.       CONSOLIDATED FINANCIAL STATEMENTS

        The Consolidated Financial Statements contained in that portion of the
Annual Report included in Exhibit 13 hereto in the "REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS AND CONSOLIDATED FINANCIAL STATEMENTS" is
incorporated herein by reference.

ITEM 8.       CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

         Not applicable.

                                       24
<PAGE>   26
                                    PART III

ITEM 9.       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         The information contained in the definitive Proxy Statement for the
2000 Annual Meeting of Shareholders of OSFS (the "Proxy Statement"), which is
included in Exhibit 20 hereto, under the captions "PROPOSAL ONE-ELECTION OF
DIRECTORS," "EXECUTIVE OFFICERS" and "SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE" is incorporated herein by reference.

ITEM 10.      EXECUTIVE COMPENSATION

         The information contained in the Proxy Statement, which is included in
Exhibit 20 hereto, under the caption "COMPENSATION OF EXECUTIVE OFFICERS AND
DIRECTORS" is incorporated herein by reference.

ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information contained in the Proxy Statement, which is included in
Exhibit 20 hereto, under the caption "VOTING SECURITIES AND OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" is incorporated herein by reference.

ITEM 12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Not applicable.

ITEM 13.      EXHIBITS AND REPORTS ON FORM 8-K

              (a)     Exhibits

                      For a list of Exhibits filed with this Annual Report on
                      Form 10-KSB, see the "Index to Exhibits" following the
                      signature page.

              (b)     No current report on Form 8-K was filed by OSFS during the
                      last quarter of the fiscal year covered by this Report.

                                       25
<PAGE>   27
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on March 24, 2000.

                                          OHIO STATE FINANCIAL SERVICES, INC.


                                          By: /s/ Jon W. Letzkus
                                             -----------------------------------
                                              Jon W. Letzkus
                                              Principal Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.


By: /s/ Jon W. Letzkus                               Date:    March 24, 2000
   ---------------------------------------------
    Jon W. Letzkus
    Principal Executive Officer
    Principal Financial and Accounting Officer (pro tempore)
    Director


By: /s/ John O. Costine                              Date:    March 24, 2000
   ---------------------------------------------
    John O. Costine
    Director


By: /s/ Anton M. Godez                               Date:    March 24, 2000
   ---------------------------------------------
    Anton M. Godez
    Director


By: /s/ William E. Reline                            Date:    March 24, 2000
   ---------------------------------------------
    William E. Reline
    Director


By: /s/ Manuel C. Thomas                             Date:    March 24, 2000
   ---------------------------------------------
    Manuel C. Thomas
    Director

                                       26
<PAGE>   28
                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit No.                        Description                             Location
-----------                        -----------                             --------
<S>                                <C>                                     <C>
3.1                                Articles of Incorporation of Ohio       Incorporated herein by reference to
                                   State Financial Services, Inc.          Exhibits 3.1 and 3.3 of Pre-Effective
                                   ("OSFS"), as amended through July 1,    Amendment No. 1 to the Form S-1 of OSFS,
                                   1997                                    dated August 1, 1997 (Registration No.
                                                                           333-29649)

3.2                                Regulations of OSFS                     Incorporated herein by reference to
                                                                           Exhibit 3.2 to the Registration Statement
                                                                           on Form S-1 of OSFS, dated June 20, 1997
                                                                           (Registration No. 333-29649) (the "Form
                                                                           S-1")

*10.1                              Employment Agreement between            Incorporated herein by reference to
                                   Bridgeport Savings and Loan             Exhibit 10.1 to the Annual Report on Form
                                   Association (the "Association") and     10-KSB of OSFS for the fiscal year ended
                                   Jon W. Letzkus                          December 31, 1998 (File No. 000-23109)

*10.2                              Employment Agreement Extension          Filed herein
                                   between the Association and Jon W.
                                   Letzkus

*10.3                              Bridgeport Savings and Loan             Filed herein
                                   Association Recognition and Retention
                                   Plan and Trust Agreement, as amended
                                   on April 21, 1999

*10.4                              Ohio State Financial Services, Inc.     Filed herein
                                   1998 Stock Option and Incentive Plan,
                                   as amended on April 21, 1999

*10.5                              Bridgeport Savings and Loan             Incorporated herein by reference to
                                   Association Employee Stock Ownership    Exhibit 10.3 to the Form S-1
                                   Plan

13                                 1999 Annual Report to Shareholders of   Filed herein
                                   OSFS

20                                 Proxy Statement for the 2000 Annual     Filed herein
                                   Meeting of Shareholders of OSFS

21                                 Subsidiaries of OSFS                    Incorporated herein by reference to
                                                                           Exhibit 21 to the Annual Report on Form
                                                                           10-KSB of OSFS for the fiscal year ended
                                                                           December 31, 1997 (File No. 000-23109)
</TABLE>
<PAGE>   29
<TABLE>
<S>                                <C>                                     <C>
23                                 Consent of Independent Auditors         Filed herein

27                                 Financial Data Schedule                 Filed herein
</TABLE>

--------------
*Indicates management contracts or compensatory plans or arrangements that are
required to be filed as an exhibit to this Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1999.


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