<PAGE>   1
                       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   June 30, 2001
                                 -------------

                                       OR

[ ]  Transition report pursuant to section 13 or 15(d) of the Securities
     Exchange Act of 1934 For the transition period from __________________ to
     __________________.

Commission File No. 0-22997

                               WSB Holding Company
               --------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

Pennsylvania                                                     23-2908963
-------------------------------                              -------------------
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

807 Middle Street, Pittsburgh, Pennsylvania                       15212
-------------------------------------------                     ---------
(Address of Principal Executive Offices)                        (Zip Code)

Issuer's Telephone Number, Including Area Code:                (412) 231-7297
                                                              ----------------

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

Securities registered under to Section 12(g) of the Exchange Act:

                     Common Stock, par value $0.10 per share
                     ---------------------------------------
                                (Title of Class)

         Check whether the issuer: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
YES  X   NO    .
    ---     ---

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         State issuer's revenues for its most recent fiscal year.   $3,003,573

         The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant, based on the average bid and asked
price of the registrant's Common Stock on September 10, 2001, was approximately
$4.96 million.

         As of September 10, 2001, there were issued and outstanding 302,684
shares of the registrant's Common Stock.

         Transition Small Business Disclosure Format (check one): YES     NO  X
                                                                      ---    ---

<PAGE>   2
                                     PART I


         WSB Holding Company (the "Company" or "Registrant") may from time to
time make written or oral "forward-looking statements", including statements
contained in the Company's filings with the securities and exchange commission
(including this annual report on form 10-KSB and the exhibits thereto), in its
reports to stockholders and in other communications by the Company, which are
made in good faith by the Company pursuant to the "safe harbor" provisions of
the private securities litigation reform act of 1995.

         These forward-looking statements involve risks and uncertainties, such
as statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the board of governors of the
federal reserve system, inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors' products and services; the willingness of users to substitute
competitors' products and services for the Company's products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes; acquisitions; changes in consumer spending
and savings habits; and the success of the Company at managing the risks
involved in the foregoing.

         On August 30, 2001, the shareholders ratified a definitive Agreement
and Plan of Reorganization (the Agreement), dated May 16, 2001, which provides
for the affiliation of the Company with ESB Financial Corporation (ESB)
headquartered in Ellwood City, Pennsylvania. The Agreement provides that the
affiliation will be effected by means of a merger of the Company and ESB. In the
merger, which is slated to complete by month end October 2001, each stockholder
of the Company shall receive either the equal to the quotient determined by
dividing $17.10 by the average share price of ESB common stock or $17.10 in cash
in exchange for each share of the Company's stock, subject to certain terms,
conditions, and limitations set forth in the Agreement, as well as regulatory
approvals.

         The Company cautions that the foregoing list of important factors is
not exclusive. The Company does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Company.

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

General

         The Company is a Pennsylvania corporation organized in June 1997 at the
direction of Workingmens Bank (the "Bank") to acquire all of the capital stock
that the Bank issued in its conversion from the mutual to stock form of
ownership (the "Conversion"). On August 27, 1997, the Bank completed the
Conversion and became a wholly owned subsidiary of the Company. The Company is a
unitary savings and loan holding company which, under existing laws, generally
is not restricted in the types of business activities in which it may engage
provided that the Bank retains a specified amount of its assets in housing-
related investments. The Company conducts no significant business or operations
of its own other than holding all of the outstanding stock of the Bank.
References to the Company or Registrant generally refers to the consolidated
entity which includes the main operating company, the Bank, unless the context
indicates otherwise.

         The Bank is a federally chartered stock savings bank headquartered in
Pittsburgh, Pennsylvania. It is subject to examination and comprehensive
regulation by the Office of Thrift Supervision ("OTS") and its deposits are
federally insured by the Savings Association Insurance Fund ("SAIF"). The Bank
is a


<PAGE>   3

member of and owns capital stock in the Federal Home Loan Bank (the "FHLB") of
Pittsburgh, which is one of the 12 regional banks in the FHLB System.

         The Registrant operates a traditional savings bank business, attracting
deposit accounts from the general public and using those deposits, together with
other funds, primarily to originate and invest in one- to four-family
residential real estate loans, multi-family real estate loans, and commercial
real estate loans. To a lesser extent, the Registrant also originates consumer
loans, which primarily consist of home equity loans, second mortgage loans, and
loans secured by deposit accounts.

Competition

         Competition for deposits comes from other insured financial
institutions such as commercial banks, thrift institutions, credit unions,
finance companies, and multi-stage regional banks in the Registrant's market
areas located in the communities of the north side of Pittsburgh, Baldwin, and
the surrounding areas of Allegheny County. Deposit competition also includes a
number of insurance products sold by local agents and investment products such
as mutual funds and other securities sold by local and regional brokers. Loan
competition varies depending upon market conditions and comes from commercial
banks, thrift institutions, credit unions and mortgage bankers.

Lending Activities

         Analysis of Loan Portfolio. The following table sets forth the
composition of the Registrant's loan portfolio in dollar amounts and in
percentages of the respective portfolios at the dates indicated.

<TABLE>
<CAPTION>
                                                                   June 30,
                                                   ---------------------------------------
                                                         2001                  2000
                                                   ----------------------------------------
                                                   Amount     Percent    Amount     Percent
                                                   ------     -------    ------     -------
                                                           (Dollars in Thousands)
<S>                                               <C>        <C>        <C>         <C>
Type of Loans:
--------------
Real Estate Loans:
  One- to four-family ...........................  $11,437     62.28%    $11,620     61.09%
  Multi-family ..................................    2,058     11.21       3,252     17.10
  Home equity and second mortgage loans..........    2,888     15.73       1,762      9.26
  Commercial.....................................      999      5.44       1,212      6.37
                                                   -------     -----     -------     -----
Total real estate loans..........................   17,382     94.66      17,846     93.82
                                                   -------     -----     -------     -----
Consumer Loans:
  Share loans....................................      390      2.13         378      1.98
  Other loans....................................      590      3.21         798      4.20
                                                   -------     -----     -------     -----
Total consumer loans.............................      980      5.34       1,176      6.18
                                                   -------     -----     -------     -----
     Total loans.................................   18,362     100.0%     19,022     100.0%
                                                               =====                 =====
Less:
  Allowance for loan losses......................      155                   155
                                                   -------               -------
     Total loans, net............................  $18,207               $18,867
                                                   =======               =======
</TABLE>

<PAGE>   4
Loan Maturity Tables

         The following table sets forth the estimated maturity of the
Registrant's loan portfolio at June 30, 2001. The table does not include
prepayments or scheduled principal repayments. All mortgage loans are shown as
maturing based on contractual maturities.

<TABLE>
<CAPTION>
                                                                            Due after
                                                            Due within      1 through      Due after
                                                              1 year         5 years        5 years       Total
                                                              ------         -------        -------       -----
                                                                               (In Thousands)
<S>                                                           <C>          <C>             <C>          <C>
One- to four-family residential real estate mortgages..        $ 56          $   64         $11,317      $11,437
Multi-family real estate...............................          13              88           2,787        2,888
Commercial real estate.................................           4             299             696          999
Home equity and second mortgage loans..................         441             720             897        2,058
Consumer loans.........................................         135             456             389          980
                                                               ----          ------         -------      -------
Total..................................................        $649          $1,627         $16,086      $18,362
                                                               ====          ======         =======      =======

</TABLE>

         The following table sets forth as of June 30, 2001, the dollar amount
of all loans due after June 30, 2002, which have fixed interest rates and
floating or adjustable interests rates.

<TABLE>
<CAPTION>
                                                               Floating or
                                               Fixed Rates   Adjustable Rates    Total
                                               -----------   ----------------    -----
                                                              (In Thousands)
<S>                                              <C>               <C>         <C>
One- to four-family real estate mortgages...      $11,381           $ --        $11,381
Multi-family................................        2,875             --          2,875
Commercial..................................          995             --            995
Home equity and second mortgages............        1,617             --          1,617
Consumer....................................          845             --            845
                                                  -------           ----         ------
    Total...................................      $17,713             --        $17,713
                                                  =======           ====        =======
</TABLE>

         One- to Four-Family Residential Loans. The Registrant's primary lending
activity consists of the origination of one- to four-family fixed rate
residential mortgage loans secured by property located in its primary market
area. The Registrant generally originate one- to four-family fixed rate
residential mortgage loans in amounts up to 90% of the lesser of the appraised
value or purchase price, with private mortgage insurance required on loans with
a loan-to-value ratio in excess of 80%. The maximum loan-to- value ratio on
mortgage loans secured by non-owner occupied properties generally is limited to
80%. The Registrant retains all of the mortgage loans and originates these loans
with maturities of up to 20 years. On a limited basis, the Registrant originates
and retains fixed rate balloon loans having terms of up to 15 years, with
principal and interest payments calculated using up to a 30-year amortization
period. Mortgage loans originated and held by the Registrant generally include
due-on-sale clauses. This gives the Registrant the right to deem the loan
immediately due and payable in the event the borrower transfers ownership of the
property securing the mortgage loan without the Registrant's consent.

         Multi-Family and Commercial Real Estate Loans. Multi-family real estate
loans are secured by apartment buildings and the size of the loans generally
have not exceeded $500,000 or have terms greater than 20 years. Commercial real
estate loans are secured by office buildings, and other commercial properties
and the size of the loans generally have not exceeded $500,000, or have terms
greater than 20 years.



<PAGE>   5

         Multi-family and commercial real estate loans have significantly more
risk than one-to four-family residential loans due to the usually higher loan
amounts and the credit risk, which arises from concentration of principal in a
smaller number of loans, the effects of general economic conditions on income
producing property and the difficulty of evaluating and monitoring the loans. To
minimize these risks, the Registrant generally limits this type of lending to
its primary market area and to borrowers who are generally well known to the
Registrant.

         Home Equity and Second Mortgage Loans. The Registrant originates home
equity loans and second mortgage loans which are secured by one to four-family
residences. These loans are originated on one- to four-family residences with
fixed rate terms of up to 10 years. The loans are generally subject to a 80%
combined loan-to-value limitation, including any other outstanding mortgages or
liens.

         Loan Approval Authority and Underwriting. The Registrant has
established various lending limits for its officers and maintains a loan
committee. The President has loan authority to approve all loans and the Vice
President and Treasurer has authority to approve all applications for secured
and unsecured consumer loans. The loan committee ratifies all fixed rate
residential mortgage loans of $200,000 or more and all other real estate loans
and consumer loans.

         Upon receipt of a completed loan application from a prospective
borrower, a credit report is ordered. Income and certain other information is
verified. If necessary, additional financial information may be requested. An
appraisal or other estimate of value of the real estate intended to be used as
security for the proposed loan is obtained. Appraisals are processed by
independent fee appraisers.

         Title insurance is generally required on all real estate mortgage
loans. The Registrant does not require title insurance on home equity loans and
second mortgages, but obtains a property report from its local state tax office
which indicates whether there are any liens or other encumbrances against the
property. Borrowers also must obtain fire and casualty insurance. Flood
insurance is also required on loans secured by property that is located in a
flood zone.

         Loan Commitments. Written commitments are given to prospective
borrowers on all approved real estate loans. Generally, the commitment requires
acceptance within 60 days of the date of issuance. At June 30, 2001, commitments
to fund originations of one-to four-family and multi-family mortgage loans
totaled $88,500. The Registrant believes that virtually all of their commitments
will be funded.



<PAGE>   6
         Nonperforming Assets. The following table sets forth information
regarding nonaccrual loans and real estate owned, as of the dates indicated. The
Registrant has no loans categorized as troubled debt restructurings within the
meaning of the Statement of Financial Accounting Standards ("SFAS") 15 and no
impaired loans within the meaning of SFAS 114, as amended by SFAS 118. Interest
income that would have been recorded on loans accounted for on a nonaccrual
basis under the original terms of such loans was approximately $28,136 for the
year ended June 30, 2001.

<TABLE>
<CAPTION>
                                                                               At June 30,
                                                                           -------------------
                                                                           2001           2000
                                                                           ----           ----
                                                                         (Dollars in Thousands)
<S>                                                                        <C>            <C>
Loans accounted for on a non-accrual basis:
Real estate loans:
  One- to four-family residential real estate.........................     $  --          $  --
  Commercial real estate..............................................       310            310
  Home equity and second mortgages....................................        --             --
Consumer..............................................................        --             --
                                                                           -----          -----
Total non-accrual loans...............................................       310            310
                                                                           =====          =====
Accruing loans which are contractually past due 90 days or more:
Real estate loans:
   One-to four-family residential real estate.........................        --             --
   Commercial real estate.............................................        --             --
   Home equity and second mortgages...................................        --             --
Consumer..............................................................        --             --
                                                                           -----          -----
Total accrual loans...................................................     $  --          $  --
                                                                           =====          =====
Total non-performing loans............................................     $ 310          $ 310
                                                                           =====          =====
Real estate owned.....................................................     $  --          $  --
                                                                           =====          =====
Total non-performing assets...........................................     $ 310          $ 310
                                                                           =====          =====
Total non-performing loans to total loans.............................      1.69%          1.63%
                                                                           =====          =====
Total non-performing loans to total assets............................      0.71%          0.75%
                                                                           =====          =====
Total non-performing assets to total assets...........................      0.71%          0.75%
                                                                           =====          =====
</TABLE>

         Classified Assets. OTS regulations provide for a classification system
for problem assets of savings associations which covers all problem assets.
Under this classification system, problem assets of savings institutions such as
ours are classified as "substandard," "doubtful," or "loss." An asset is
considered substandard if it is inadequately protected by the current net worth
and paying capacity of the borrower or of the collateral pledged, if any.
Substandard assets include those characterized by the "distinct possibility"
that the savings institution will sustain "some loss" if the deficiencies are
not corrected. Assets classified as doubtful have all of the weaknesses inherent
in those classified substandard, with the added characteristic that the
weaknesses present make "collection or liquidation in full," on the basis of
currently existing facts, conditions, and values, "highly questionable and
improbable." Assets classified as loss are those considered "uncollectible" and
of such little value that their continuance as assets without the establishment
of a specific loss reserve is not warranted. Assets may be designated "special
mention" because of potential weakness that do not currently warrant
classification in one of the aforementioned categories.

         When a savings association classifies problem assets as either
substandard or doubtful, it may establish general allowances for loan losses in
an amount deemed prudent by management. General


<PAGE>   7

allowances represent loss allowances which have been established to recognize
the inherent risk associated with lending activities, but which, unlike specific
allowances, have not been allocated to particular problem assets. When a savings
association classifies problem assets as loss, it is required either to
establish a specific allowance for losses equal to 100% of that portion of the
asset so classified or to charge off such amount. A savings association's
determination as to the classification of its assets and the amount of its
valuation allowances is subject to review by the OTS, which may order the
establishment of additional general or specific loss allowances. A portion of
general loss allowances established to cover possible losses related to assets
classified as substandard or doubtful may be included in determining a savings
association's regulatory capital. Specific valuation allowances for loan losses
generally do not qualify as regulatory capital.

         The following table sets forth the Registrant's classified assets in
accordance with its classification system:

                                                At June 30, 2001
                                                ----------------
                                                 (In Thousands)

          Special Mention                             $  --
          Substandard                                   310
          Doubtful                                       --
          Loss                                           --
                                                      -----
                                                      $ 310
                                                      =====

         Allowances for Loan Losses. A provision for loan losses is charged to
operations based on management's evaluation of the losses that may be incurred
in our loan portfolio. The evaluation, including a review of all loans on which
full collectibility of interest and principal may not be reasonably assured,
considers: (i) our past loan loss experience, (ii) known and inherent risks in
our portfolio, (iii) adverse situations that may affect the borrower's ability
to repay, (iv) the estimated value of any underlying collateral, and (v) current
economic conditions.

         Management monitors the allowance for loan losses and makes additions
to the allowance as economic conditions dictate. There can be no assurance that
the allowance for losses will be adequate to cover losses which in fact may be
realized in the future and that additional provisions for losses will not be
required.



<PAGE>   8

         The following table sets forth information with respect to the
Registrant's allowance for loan losses at the dates indicated:

<TABLE>
<CAPTION>
                                                               June 30,
                                                          -----------------
                                                          2001         2000
                                                          ----         ----
                                                        (Dollars in Thousands)
<S>                                                     <C>          <C>
Total loans outstanding .............................   $ 18,362     $ 19,022
                                                        ========     ========
Average loans outstanding ...........................   $ 18,066     $ 18,532
                                                        ========     ========
Allowance balances at beginning of period ...........   $    155     $    165
Provision:
  Real estate .......................................         --           --
  Commercial ........................................         --           --
  Home equity and second mortgages ..................         --           --
  Consumer ..........................................         --           --
Charge-offs:
  Real estate .......................................         --           --
  Commercial ........................................         --           --
  Consumer ..........................................         (1)         (10)
Recoveries:
   Real estate ......................................         --           --
   Commercial .......................................         --           --
   Home equity and second mortgages .................         --           --
   Consumer .........................................         --           --
                                                        --------     --------
Allowance balance at end of period ..................   $    154     $    155
                                                        ========     ========

Allowance for loan losses as a percent of total loans
  outstanding .......................................       0.84%        1.00%
                                                        ========     ========
Net loans charged off as a percent of average loans
  outstanding .......................................       0.01%        0.05%
                                                        ========     ========
</TABLE>

         Analysis of the Allowance for Loan Losses. The following table
illustrates the allocation of the allowance for loan losses for each category of
loan. The allocation of the allowance to each category is not necessarily
indicative of future loss in any particular category and does not restrict our
use of the allowance to absorb losses in other loan categories.

<TABLE>
<CAPTION>
                                                                           At June 30,
                                                 ---------------------------------------------------------------
                                                            2001                               2000
                                                 ----------------------------       ----------------------------
                                                                 Percent of                         Percent of
                                                               Loans in Each                      Loans in Each
                                                                Category to                        Category to
                                                  Amount        Total Loans         Amount         Total Loans
                                                  ------        -----------         ------         -----------
                                                                (Dollars in Thousands)
<S>                                              <C>               <C>             <C>                <C>
  One- to four-family..................            $ 86              62.29%          $ 87               61.09%
  Multi-family.........................              29              15.73             33               17.10
  Home equity and second
      mortgage loans...................              21              11.21             18                9.26
 Commercial............................              10               5.44             12                6.37
 Consumer..............................               8               5.33              5                6.18
                                                   ----             ------           ----              ------
    Total..............................            $154             100.00%          $155              100.00%
                                                   ====             ======           ====              ======
</TABLE>



<PAGE>   9

Investment Activities

         The Registrant is required under federal regulations to maintain a
minimum amount of liquid assets which may be invested in specified short-term
securities and certain other investments. The level of liquid assets varies
depending upon several factors, including: (i) the yields on investment
alternatives, (ii) management's judgment as to the attractiveness of the yields
then available in relation to other opportunities, (iii) expectation of future
yield levels, and (iv) management's projections as to the short-term demand for
funds to be used in loan origination and other activities. Investment
securities, including mortgage-backed securities, are classified at the time of
purchase, based upon management's intentions and abilities, as securities held
to maturity or securities available for sale. Debt securities acquired with the
intent and ability to hold to maturity are classified as held to maturity and
are stated at cost and adjusted for amortization of premium and accretion of
discount, which are computed using the level yield method and recognized as
adjustments of interest income. All other debt securities are classified as
available for sale to serve principally as a source of liquidity.

         Current regulatory and accounting guidelines regarding investment
securities (including mortgage backed securities) require the Registrant to
categorize securities as "held to maturity," "available for sale" or "trading."
As of June 30, 2001, Registrant had securities (including mortgage-backed
securities) classified as "held to maturity" and "available for sale" in the
amount of $7,924,000 and $6,787,000, respectively and had no securities
classified as "trading." Securities classified as "available for sale" are
reported for financial reporting purposes at the fair market value with net
changes in the market value from period to period included as a separate
component of stockholders' equity, net of income taxes. Changes in the market
value of securities available for sale do not affect the Company's income. In
addition, changes in the market value of securities available for sale do not
affect the Bank's regulatory capital requirements or its loan-to-one borrower
limit.

         At June 30, 1999, the Registrant's investment portfolio policy allowed
investments in instruments such as: (i) U.S. Treasury obligations, (ii) U.S.
federal agency or federally sponsored agency obligations, (iii) local municipal
obligations, (iv) mortgage-backed securities, (v) banker's acceptances, (vi)
certificates of deposit, and (vii) investment grade corporate bonds, and
commercial paper. The board of directors may authorize additional investments.

         As a source of liquidity and to supplement Registrant's lending
activities, the Registrant has invested in residential mortgage-backed
securities. Mortgage-backed securities can serve as collateral for borrowings
and, through repayments, as a source of liquidity. Mortgage-backed securities
represent a participation interest in a pool of single-family or other type of
mortgages. Principal and interest payments are passed from the mortgage
originators, through intermediaries (generally quasi-governmental agencies) that
pool and repackage the participation interests in the form of securities, to
investors, like us. The quasi-governmental agencies guarantee the payment of
principal and interest to investors and include the Federal Home Loan Mortgage
Corporation ("FHLMC"), Government National Mortgage Association ("GNMA"), and
Federal National Mortgage Association ("FNMA").

         Mortgage-backed securities typically are issued with stated principal
amounts. The securities are backed by pools of mortgages that have loans with
interest rates that are within a set range and have varying maturities. The
underlying pool of mortgages can be composed of either fixed rate or adjustable
rate mortgage loans. Mortgage-backed securities are generally referred to as
mortgage participation certificates or pass-through certificates. The interest
rate risk characteristics of the underlying pool of mortgages (i.e., fixed rate
or adjustable rate) and the prepayment risk, are passed on to the certificate
holder. The life of a mortgage-backed pass-through security is equal to the life
of the underlying mortgages. Expected maturities will differ from contractual
maturities due to scheduled repayments and


<PAGE>   10

because borrowers may have the right to call or prepay obligations with or
without prepayment penalties. Mortgage-backed securities issued by FHLMC, GNMA,
and FNMA make up a majority of the pass- through certificates market.

         At June 30, 2001, the Registrant's securities portfolio did not contain
securities of any issuer, other than those issued by U.S. government or its
agencies, with an aggregate book value in excess of 10% of the Registrant's
equity.

         Investment Portfolio. The following table sets forth the carrying value
of the Registrant's securities at the dates indicated.

<TABLE>
<CAPTION>
                                                        At June 30,
                                                     ----------------
                                                     2001        2000
                                                     ----        ----
                                                    (In Thousands)
<S>                                                 <C>         <C>
Securities held to maturity:
 U.S. Government and agency securities ..........   $ 7,373     $14,794
 CMOs ...........................................       325         324
 Corporate debt securities ......................       226         100
                                                    -------     -------
Total securities held to maturity ...............     7,924      15,218
                                                    -------     -------

Securities available for sale:
FHLMC ...........................................        38          44
GNMA ............................................       645         872
FNMA ............................................       195         192
CMOs ............................................        --           9
Municipal bonds .................................       922         863
Corporate debt securities .......................     3,873         292
Equity securities - mutual funds ................       865         960
FHLMC common stock ..............................        --          41
FNMA common stock ...............................       250          52
                                                    -------     -------
Total securities available for sale .............     6,788       3,325
                                                    -------     -------

Total investment and mortgage-backed securities..   $14,712     $18,543
                                                    =======     =======
</TABLE>


<PAGE>   11
         The following table sets forth information regarding the scheduled
maturities, carrying values, approximate fair values, and weighted average
yields for our investment securities portfolio at June 30, 2001 by contractual
maturity. The following table does not take into consideration the effects of
scheduled repayments or the effects of possible prepayments.

<TABLE>
<CAPTION>
                                                                     As of June 30, 2001
                     -------------------------------------------------------------------------------------------------------------
                                             More than         More than         More than        Total Investment Securities and
                     One Year or Less    One to Five Years  Five to Ten Years    Ten Years           Mortgage-Backed Securities
                     -----------------  ------------------  ----------------- ----------------   ---------------------------------
                     Carrying  Average  Carrying   Average  Carrying Average  Carrying Average   Carrying      Average      Market
                      Value     Yield    Value      Yield    Value    Yield    Value    Yield     Value         Yield       Value
                     -------   -------  -------    -------  -------  -------  -------  -------   -------       -------     -------
                                                                (Dollars in Thousands)
<S>                 <C>         <C>    <C>          <C>     <C>       <C>    <C>       <C>       <C>             <C>      <C>
U.S. Government
    and agency
    securities...... $    --       --%   $800      6.39%   $1,748    6.44%    $4,825    6.78%      $7,373         6.66%    $ 7,290
Municipal bonds.....      --       --      --        --        --      --        922    4.78          922         4.78         922
Corporate debt
  securities........   2,845     4.38   1,253      6.33        --      --        100    7.50        4,198         5.04       4,196
FNMA common
  stock.............     250       --      --        --        --      --         --      --          250           --         250
Mortgage-backed
  securities........      --       --      --        --        --      --      1,104    7.23        1,104         7.23       1,106
                     -------            ------             ------             ------              -------                  -------

  Total............. $ 3,095     4.03%  $2,053     6.35%   $1,748    6.44%    $6,951    6.60%     $13,847         5.97%    $13,764
                     =======            ======             ======             ======              =======                  =======
</TABLE>


(1)  Equity securities in the amount of $865 are not included in the above
     table. Such equity securities are comprised of mutual funds which have no
     stated maturity or stated interest rate.


<PAGE>   12

Sources of Funds

         General. Deposits are the major external source of the Registrant's
funds for lending and other investment purposes. The Registrant derives funds
from amortization and prepayment of loans and, to a much lesser extent,
maturities of investment securities, borrowings, mortgage-backed securities and
operations. Scheduled loan principal repayments are a relatively stable source
of funds, while deposit inflows and outflows and loan prepayments are
significantly influenced by general interest rates and market conditions.

         Deposits. Consumer and commercial deposits are attracted principally
from within the Registrant's primary market area through the offering of a
selection of deposit instruments including regular savings accounts, money
market accounts, and term certificate accounts. Deposit account terms vary
according to the minimum balance required, the time period the funds must remain
on deposit, and the interest rate, among other factors. At June 30, 2001, the
Registrant had no brokered accounts.

         Time Deposits. The following table indicates the amount of the
Registrant's time deposits of $100,000 or more by time remaining until maturity
as of June 30, 2001.


                      Maturity Period               Time Deposits
                      ---------------               -------------
                                                   (In Thousands)

Within three months...............................      $  404
More than three through six months................         303
Six through twelve months.........................         400
Over twelve months................................       1,265
                                                        ------
         Total....................................      $2,372
                                                        ======

Borrowings

         The Registrant may obtain advances from the FHLB of Pittsburgh (the
"FHLB") to supplement its supply of lendable funds. Advances from the FHLB are
typically secured by a pledge of the Registrant's stock in the FHLB and a
portion of the Registrant's first mortgage loans and certain other assets. Each
FHLB credit program has its own interest rate, which may be fixed or variable,
and range of maturities. The Registrant, if the need arises, may also access the
Federal Reserve Bank discount window to supplement its supply of lendable funds
and to meet deposit withdrawal requirements.

         The following table sets forth the maximum month-end balance and the
average balance of FHLB advances for the periods indicated.



<PAGE>   13

<TABLE>
<CAPTION>
                                                                 During the Year Ended
                                                                        June 30,
                                                                 ---------------------
                                                                    2001       2000
                                                                    ----       ----
                                                                     (In thousands)
<S>                                                                <C>       <C>
Maximum amount of short-term borrowings outstanding at any month
end:
  Advances from FHLB..........................................      $1,500    $3,000
Approximate average short-term borrowings outstanding with
respect to:
  Advances from FHLB..........................................      $  525    $1,497
  Approximate weighted average rate paid on:
  Advances from FHLB..........................................        6.76%     6.10%

</TABLE>

Employees

         At June 30, 2001, the Registrant had 11 full-time employees and one
part-time employee. None of the Registrant's employees are represented by a
collective bargaining group. The Registrant believes that its relationship with
its employees is good.

Regulation

         Set forth below is a brief description of certain laws which related to
the regulation of the Company and the Bank. The description does not purport to
be complete and is qualified in its entirety by reference to applicable laws and
regulations.

Recent Regulation

         The Gramm-Leach-Bliley Act (the "Act"), became effective March 11,
2000, which permits qualifying bank holding companies to become financial
holding companies and thereby affiliate with securities firms and insurance
companies and engage in other activities that are financial in nature. The Act
defines "financial in nature" to include securities underwriting, dealing and
market making; sponsoring mutual funds and investment companies; insurance
underwriting and agency; merchant banking activities; and activities that the
Board has determined to be closely related to banking. A qualifying national
bank also may engage, subject to limitations on investment, in activities that
are financial in nature, other than insurance underwriting, insurance company
portfolio investment, real estate development, and real estate investment,
through a financial subsidiary of the bank.

         The Act also prohibits new unitary thrift holding companies from
engaging in nonfinancial activities or from affiliating with an nonfinancial
entity. As a grandfathered unitary thrift holding company, the Company will
retain its authority to engage in nonfinancial activities. However, the Act will
have few direct effects on the operations or powers of federal savings
associations or of savings and loan holding companies.

         The Act imposes significant new financial privacy obligations and
reporting requirements on all financial institutions, including federal savings
associations. Specifically, the statute, among other things, will require
financial institutions (a) to establish privacy policies and disclose them to
customers both at the commencement of a customer relationship and on an annual
basis and (b) to permit customers to opt out of a financial institution's
disclosure of financial information to nonaffiliated third parties. The Act
requires the federal financial regulators to promulgate regulations implementing
these provisions within six months of enactment, and the statute's privacy
requirements will take effect one year after enactment.


<PAGE>   14

Regulation of the Company

         General. The Company is a unitary savings and loan holding company
subject to regulatory oversight by the OTS. As such, the Company is required to
register and file reports with the OTS and is subject to regulation and
examination by the OTS. In addition, the OTS has enforcement authority over the
Company and its non-savings association subsidiaries, should such subsidiaries
be formed, which also permits the OTS to restrict or prohibit activities that
are determined to be a serious risk to the subsidiary savings association. This
regulation and oversight is intended primarily for the protection of the
depositors of the Bank and not for the benefit of stockholders of the Company.

         As a unitary savings and loan holding company, the Company generally is
not subject to activity restrictions, provided the Bank satisfies the Qualified
Thrift Lender ("QTL") test. The Act terminated the "unitary thrift holding
company exemption" for all companies that applied to acquire savings
associations after May 4, 1999. Since the Company is grandfathered under this
provision of the Act, its unitary holding company powers and authorities were
not affected. However, if the Company were to acquire control of an additional
savings association, its business activities would be subject to restriction
under the Home Owners' Loan Act. Furthermore, if the Company were in the future
to sell control of the Bank to any other company, such company would not succeed
to the Company's grandfathered status under the Act and would be subject to the
same business activity restrictions. See "- Regulation of the Bank - Qualified
Thrift Lender Test."

Regulation of the Bank

         General. Set forth below is a brief description of certain laws that
relate to the regulation of the Bank. The description does not purport to be
complete and is qualified in its entirety by reference to applicable laws and
regulations. As a federally chartered, SAIF-insured savings association, the
Bank is subject to extensive regulation by the OTS and the FDIC. Lending
activities and other investments must comply with various federal statutory and
regulatory requirements. The Bank is also subject to certain reserve
requirements promulgated by the Federal Reserve Board.

         The OTS, in conjunction with the FDIC, regularly examines the Bank and
prepares reports for the consideration of the Bank's Board of Directors on any
deficiencies that are found in the Bank's operations. The Bank's relationship
with its depositors and borrowers is also regulated to a great extent by federal
and state law, especially in such matters as the ownership of savings accounts
and the form and content of the Bank's mortgage documents.

         The Bank must file reports with the OTS and the FDIC concerning its
activities and financial condition, in addition to obtaining regulatory
approvals prior to entering into certain transactions such as mergers with or
acquisitions of other savings institutions. This regulation and supervision
establishes a comprehensive framework of activities in which an institution can
engage and is intended primarily for the protection of the BIF and depositors.
The regulatory structure also gives the regulatory authorities extensive
discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of
assets and the establishment of adequate loan loss reserves for regulatory
purposes.

         Insurance of Deposit Accounts. The deposit accounts held by the Bank
are insured by the BIF to a maximum of $100,000 for each insured member (as
defined by law and regulation). The Bank is required to pay insurance premiums
based on a percentage of its insured deposits to the FDIC for insurance of its
deposits by the BIF. The FDIC also maintains another insurance fund, the Savings
Institution


<PAGE>   15

Insurance Fund ("SAIF"), which primarily insures commercial bank deposits. The
FDIC has set the deposit insurance assessment rates for BIF-member institutions
for the first six months of 2001 at 0% to .027% of insured deposits on an
annualized basis, with the assessment rate for most savings institutions set at
0%.

         In addition, all FDIC-insured institutions are required to pay
assessments to the FDIC at an annual rate of approximately .0212% of insured
deposits to fund interest payments on bonds issued by the Financing Corporation
("FICO"), an agency of the Federal government established to recapitalize the
predecessor to the SAIF. These assessments will continue until the FICO bonds
mature in 2017.

         Regulatory Capital Requirements. OTS capital regulations require
savings institutions to meet three capital standards: (1) tangible capital equal
to 1.5% of total adjusted assets, (2) a leverage ratio (core capital) equal to
at least 3% of total adjusted assets, and (3) a risk-based capital requirement
equal to 8.0% of total risk-weighted assets.

         Loans to One Borrower. A savings association may not make a loan or
extend credit to a single or related group of borrowers in excess of 15% of the
associations's unimpaired capital and surplus. An additional amount may be lent,
equal to 10% of the unimpaired capital and surplus, under certain circumstances.
At June 30, 2001, the Registrant's lending limit for loans to one borrower was
approximately $665,000 and had no outstanding commitments that exceeded the
loans to one borrower limit at the time originated or committed.

         Dividend and Other Capital Distribution Limitations. The OTS imposes
various restrictions or requirements on the ability of savings institutions to
make capital distributions, including cash dividends.

         A savings association that is a subsidiary of a savings and loan
holding company, such as the Bank must file an application or a notice with the
OTS at least 30 days before making a capital distribution. Savings associations
are not required to file an application for permission to make a capital
distribution and need only file a notice if the following conditions are met:
(1) they are eligible for expedited treatment under OTS regulations, (2) they
would remain adequately capitalized after the distribution, (3) the annual
amount of capital distribution does not exceed net income for that year to date
added to retained net income for the two preceding years, and (4) the capital
distribution would not violate any agreements between the OTS and the savings
association or any OTS regulations. Any other situation would require an
application to the OTS.

         The OTS may disapprove an application or notice if the proposed capital
distribution would: (i) make the savings association undercapitalized,
significantly undercapitalized, or critically undercapitalized; (ii) raise
safety or soundness concerns; or (iii) violate a statue, regulation, or
agreement with the OTS (or with the FDIC), or a condition imposed in an
OTS-approved application or notice. Further, a federal savings association, like
the Bank, cannot distribute regulatory capital that is needed for its
liquidation account.

         Qualified Thrift Lender Test. Federal savings institutions must meet
one of two Qualified Thrift Lender ("QTL") tests. To qualify as a QTL, a savings
institution must either (i) be deemed a "domestic building and loan association"
under the Internal Revenue Code by maintaining at least 60% of its total assets
in specified types of assets, including cash, certain government securities,
loans secured by and other assets related to residential real property,
educational loans and investments in premises of the institution or (ii) satisfy
the statutory QTL test set forth in the Home Owner's Loan Act by maintaining at
least 65% of its "portfolio assets" in certain"Qualified Thrift Investments"
(defined to include residential mortgages


<PAGE>   16

and related equity investments, certain mortgage-related securities, small
business loans, student loans and credit card loans, and 50% of certain
community development loans). For purposes of the statutory QTL test, portfolio
assets are defined as total assets minus intangible assets, property used by the
institution in conducting its business, and liquid assets equal to 10% of total
assets. A savings institution must maintain its status as a QTL on a monthly
basis in at least nine out of every 12 months. A failure to qualify as a QTL
results in a number of sanctions, including the imposition of certain operating
restrictions and a restriction on obtaining additional advances from its FHLB.
At June 30, 2001, the Bank was in compliance with its QTL requirement.

         Federal Home Loan Bank System. The Bank is a member of the FHLB of
Pittsburgh, which is one of 12 regional FHLBs that administers the home
financing credit function of savings associations. Each FHLB serves as a reserve
or central bank for its members within its assigned region. It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB System. It makes loans to members (i.e., advances) in accordance with
policies and procedures established by the Board of Directors of the FHLB.

         As a member, the Bank is required to purchase and maintain stock in the
FHLB of Pittsburgh in an amount equal to at least 1% of its aggregate unpaid
residential mortgage loans, home purchase contracts or similar obligations at
the beginning of each year.

         Liquidity Requirements. All savings associations are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. The liquidity requirement may vary from
time to time (between 4% and 10%) depending upon economic conditions and savings
flows of all savings associations.

         Federal Reserve System. The Federal Reserve Board requires all
depository institutions to maintain non-interest bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW, and Super
NOW checking accounts) and non-personal time deposits. The balances maintained
to meet the reserve requirements imposed by the Federal Reserve Board may be
used to satisfy the liquidity requirements that are imposed by the OTS. At June
30, 2001, the Bank was in compliance with these Federal Reserve Board
requirements.

Item 2.  Description of Property
--------------------------------

         (a) Properties. The Registrant owns its main office and branch office
which are both located in Pittsburgh, Pennsylvania. The main office is located
at 807 Middle Street and the branch office is located at 5035 Curry Road.

         (b) Investment Policies. See "Item 1. Business" above for a general
description of the Bank's investment policies and any regulatory or Board of
Directors' percentage of assets limitations regarding certain investments. The
Bank's investments are primarily acquired to produce income, and to a lesser
extent, possible capital gain.

                  (1)    Investments in Real Estate or Interests in Real Estate.
See "Item 1. Business - Lending Activities and - Regulation of the Bank," and
"Item 2. Description of Property."

                  (2)    Investments in Real Estate Mortgages. See "Item 1.
Business - Lending Activities and - Regulation of the Bank."


<PAGE>   17

                  (3)    Investments in Securities of or Interests in Persons
Primarily Engaged in Real Estate Activities. See "Item 1. Business - Lending
Activities and - Regulation of the Bank."

         (c)     Description of Real Estate and Operating Data.  Not Applicable.

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

         There are various claims and lawsuits in which the Registrant are
periodically involved, such as claims to enforce liens, condemnation proceedings
on properties in which the Registrant holds security interests, claims involving
the making and servicing of real property loans, and other issues incident to
the Registrant's business. In the opinion of management, no material loss is
expected from any of such pending claims or lawsuits.

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

         No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year.


<PAGE>   18

                                     PART II

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

Stock Market Information

         The Company's common stock has been traded on the OTC Bulletin Board
under the trading symbol of "WSBH" since it commenced trading in August 1997.
The following table reflects high and low bid quotations as published by
Bloomberg, L.P. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down, or commission, and may not represent actual transactions.


                                                                     Dividends
               Date                      High ($)    Low ($)        Declared($)
               ----                      --------    -------        -----------
July 1, 1998 to September 30, 1998         14.88      13.50              --
October 1, 1998 to December 31, 1998       14.00       9.88             .04
January 1, 1999 to March 31, 1999          12.75      10.00              --
April 1, 1999 to June 30, 2000             11.25       9.00              --
July 1, 1999 to September 30, 1999         10.75      10.00             .08
October 1, 1999 to December 31, 1999       10.50      10.00              --
January 1, 2000 to March 31, 2000          15.00      10.00              --
April 1, 2000 to June 30, 2000             11.25      10.13              --
July 1, 2000 to September 30, 2000         13.00      10.13              --
October 1, 2000 to December 31, 2000       12.31      11.13              --
January 1, 2001 to March 31, 2001          12.13      11.13              --
April 1, 2001 to June 30, 2001             16.30      11.25              --

         The number of shareholders of record of common stock as of the record
date of September 10, 2001, was approximately 240. This does not reflect the
number of persons or entities who held stock in nominee or "street" name through
various brokerage firms. At September 1, 2001, there were 302,684 shares
outstanding. The Company's ability to pay dividends to stockholders is dependent
upon the dividends it receives from the Bank. The Bank may not declare or pay a
cash dividend on any of its stock if the effect thereof would cause the Bank's
regulatory capital to be reduced below (1) the amount required for the

<PAGE>   19
liquidation account established in connection with the Conversion, or (2) the
regulatory capital requirements imposed by the OTS.


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

Corporate Profile

         WSB Holding Company (the "Company") is a Pennsylvania corporation
organized in June 1997 at the direction of Workingmens Bank (the "Bank") to
acquire all of the capital stock that the Bank issued in its conversion from the
mutual to stock form of ownership (the "Conversion"). On August 27, 1997,
Workingmens Savings Bank, FSB completed the Conversion, changed its name to
Workingmens Bank and became a wholly owned subsidiary of the Company. The
Company is a unitary savings and loan holding company which, under existing
laws, generally is not restricted in the types of business activities in which
it may engage provided that the Bank retains a specified amount of its assets in
housing-related investments. The Company conducts no significant business or
operations of its own other than holding all of the outstanding stock of the
Bank and investing the Company's portion of the net proceeds obtained in the
Conversion.

         Workingmens Bank began operations in 1881 under the name "Workingmens
Premium and Loan Association of Allegheny County," and is a federally chartered
stock savings bank headquartered in Pittsburgh, Pennsylvania. The Bank is
subject to examination and comprehensive regulation by the Office of Thrift
Supervision and its deposits are federally insured by the Savings Association
Insurance Fund. The Bank is a member of and owns capital stock in the Federal
Home Loan Bank ("FHLB") of Pittsburgh, which is one of the 12 regional banks in
the FHLB System. The Bank operates a traditional savings bank business,
attracting deposit accounts from the general public and using those deposits,
together with other funds, primarily to originate and invest in loans secured by
single-family residential real estate.

Selected Financial Ratios and Other Data

<TABLE>
<CAPTION>
                                                                 For the Years Ended
                                                                        June 30,
                                                                 -------------------
                                                                   2001       2000
                                                                   ----       ----
<S>                                                             <C>       <C>
Return on average assets
  (net income divided by average total assets) ...........          .29%       .58%

Return on average equity
  (net income divided by average equity) .................         2.40%      5.05%

Average equity to average assets ratio
  (average equity divided by average total assets) .......        11.85%     11.52%

Equity to assets at period end ...........................        11.60%     11.92%

Dividend payout ratio
  (dividends declared per share divided by net income
   per share) ............................................           --       9.09%

Net interest rate spread .................................         2.19%      2.55%

Net yield on average interest-earnings assets ............         2.98%      3.12%

Non-performing loans to total assets .....................          .71%       .75%

Non-performing loans to total loans ......................         1.69%      1.63%

Allowance for loan losses to non-performing assets .......        49.89%     50.00%

Book value per share .....................................     $  16.79    $  16.30

</TABLE>


<PAGE>   20
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATION

         The Private Securities Litigation Reform Act of 1995 contains safe
harbor provisions regarding forward-looking statements. When used in this
discussion, the words "believes," "anticipates," "contemplates," "expects," and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those projected. Those risks and
uncertainties include changes in interest rates, risks associated with the
ability to control costs and expenses, and general economic conditions. We
undertake no obligation to publicly release the results of any revisions to
those forward-looking statements which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

         References in this discussion to "we," "us," and "our," refer
collectively to WSB Holding Company and Workingmens Savings Bank.

Overview

         Our results of operations are primarily dependent on our net interest
income, which is the difference between the interest earned on our assets,
primarily loans and investments, and the interest expense on our liabilities,
primarily deposits and borrowings. Net interest income may be affected
significantly by general economic and competitive conditions and policies of
regulatory agencies, particularly those with respect to market interest rates.
The results of operations are also significantly influenced by the level of
noninterest expenses, such as compensation and employee benefits, noninterest
income, such as service charges on deposit-related services, and our provision
for loan losses.

Asset and Liability Management

         Our objective in our asset and liability management program is to
manage liquidity and interest rate risk in order to maximize net income and
return on equity in a changing interest rate environment. The ability to
maximize net interest income is largely dependent upon achieving a positive
interest rate spread that can be sustained during fluctuations in prevailing
interest rates. We are subject to interest rate risk as a result of the
difference in the maturity of interest-bearing liabilities (including deposits)
and interest-earning assets (including loans) and the volatility of interest
rates. Because most deposit accounts, given their shorter terms to maturity,
react more quickly to market interest rate movements than do traditional
mortgage loans, increases in interest rates may have an adverse effect on our
earnings.

         We attempt to manage the interest rate we pay on deposits while
maintaining a stable deposit base and providing quality services to our
customers. We have continued to rely primarily upon deposits as our source of
funds. To the extent we are unable to invest these funds in loans originated in
our market area, we will continue to purchase (i) mortgage-backed securities and
(ii) high quality investment securities.

Net Portfolio Value

         We measure our interest rate risk by computing amounts by which the net
present value of our cash flow from assets, liabilities, and off-balance sheet
items ("NPV") would change in the event of a range of assumed changes in market
interest rates. These computations estimate the effect on our NPV from
instantaneous and permanent one percent to three percent (100 to 300 basis
points) increases and decreases in market interest rates. Based upon the Office
of Thrift Supervision ("OTS") assumptions, the following table presents our NPV
at June 30, 2001.

<PAGE>   21

                                     Changes in Net Portfolio Value
                                  --------------------------------------
     Changes in Market                                       Changes in
      Interest Rates              NPV Ratio(1)              NPV Ratio(2)
      --------------              ------------              ------------

         +300bp                     4.14%                        -598bp

         +200bp                     6.22%                        -390bp

         +100bp                     8.23%                        -188bp

            0bp                    10.11%                           0bp

         -100bp                    11.40%                         129bp

         -200bp                    11.70%                         159bp

         -300bp                    11.43%                         131bp

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

(1)  Calculated as the estimated NPV divided by present value of total assets.

(2)  Calculated as the excess (deficiency) of the NPV ratio assuming the
     indicated change in interest rates over the estimated NPV ratio assuming no
     change in interest rates.

         Computations of prospective effects of hypothetical interest rate
changes are based on numerous assumptions, including relative levels of market
interest rates, prepayments, and deposit run-offs, and should not be relied upon
as indicative of actual results. Certain shortcomings are inherent in such
computations. Although certain assets and liabilities may have similar maturity
or periods of repricing, they may react at different times and in different
degrees to changes in the market interest rates. The interest rates on certain
types of assets and liabilities may fluctuate in advance of changes in market
interest rates, while rates on other types of assets and liabilities may lag
behind changes in market interest rates. Certain assets, such as adjustable rate
mortgages, generally have features which restrict changes in interest rates on a
short-term basis and over the life of the asset. In the event of a change in
interest rates, prepayments and early withdrawal levels could deviate
significantly from those assumed in making calculations set forth above.
Additionally, an increased credit risk may result as the ability of many
borrowers to service their debt may decrease in the event of an interest rate
increase.

Financial Condition

         Total consolidated assets remained relatively unchanged at $43.8
million and $41.4 million at June 30, 2001 and 2000. Net loans decreased by
$659,000 and investments and mortgage-backed securities decreased by $3.8
million which was offset by a $5.8 million increase in cash and cash
equivalents. The increase in cash and cash equivalents was the result of
investment maturities and calls.

         Deposits increased $3.9 million, or 11.2%, to $38.5 million at June 30,
2001. Savings accounts and noninterest-bearing checking accounts remained
relatively unchanged at $13.5 million while certificate of deposit accounts
increased by $3.8 million. We operate in a highly competitive market with other
larger financial institutions as well as brokerage firms, mutual funds, and
insurance companies. We will continue to offer customers competitive deposit
products with lower service charge costs than many of our competitors to promote
continued deposit growth.

<PAGE>   22

Average Balance Sheet

         The following table sets forth a summary of our average balances of
assets and liabilities as well as average yield and cost information. Average
balances are derived from monthly balances, however, we do not believe the use
of month-end balances has caused any material differences in the information
presented. There have been no tax equivalent adjustments made to yields.

<TABLE>
<CAPTION>
                                                              For the Year Ended June 30,
                                    ------------------------------------------------------------------------------

                                                      2001                                     2000
                                    ---------------------------------------  --------------------------------------
                                          Average                 Average        Average                   Average
                                          Balance      Interest  Yield/Cost      Balance       Interest  Yield/Cost
                                          -------      --------  ----------      -------       --------  ----------
                                                                (Dollars in Thousands)
<S>                                      <C>           <C>      <C>             <C>            <C>       <C>
Interest-earning assets:

  Loans receivable                        $18,066       $1,436     7.95%         $18,532        $1,468      7.92%

  Investment securities                    18,290        1,239     6.77           18,779         1,230      6.59

  Other interest-earning assets             2,745          138     5.03            1,761            83      4.71
                                          -------       ------                   -------        ------
Total interest-earning assets              39,101        2,813     7.19           39,072         2,781      7.20

Noninterest-earning assets                  3,033                                  2,541
                                          -------                                -------
Total assets                              $42,134                                $41,613
                                          =======                                =======
Interest-bearing liabilities:

  Passbook and club accounts              $10,184       $  297     2.92%         $10,763        $  321      2.98%

  Certificates of deposit                  22,741        1,340     5.89           21,036         1,132      5.38

  Other interest-bearing liabilities          525           35     6.67            1,822           110      6.04
                                          -------       ------                   -------        ------
Total interest-bearing liabilities         33,450        1,672     5.00           33,621         1,563      4.65

Noninterest-bearing liabilities             3,689                                  3,197
                                          -------                                -------
Total liabilities                          37,139                                 36,818
                                          -------                                -------
Stockholders' equity                        4,995                                  4,795
                                          -------                                -------
Total liabilities and
  stockholders' equity                    $42,134                                $41,613
                                          =======                                =======
  Net interest income                                   $1,141                                  $1,218
                                                        ======                                  ======
Interest rate spread                                               2.19%                                    2.55%
                                                                 ======                                    =====
Net yield on interest-earning
  assets                                                           2.92%                                    3.12%
                                                                 ======                                    =====
Ratio of average interest-
  earning assets to average
  interest-bearing liabilities                                   116.89%                                  116.21%
                                                                 ======                                   ======
</TABLE>

<PAGE>   23
Rate/Volume Analysis

         The table below sets forth information regarding our interest income
and interest expenses for the years ended June 30, 2001 and 2000. For each
category, interest-earning assets and interest-bearing liabilities, information
is provided on changes attributable to: (i) changes in volume (changes in volume
multiplied by old rate); (ii) changes in rate (changes in rate multiplied by old
volume). Increases and decreases due to both rate and volume, which cannot be
separated, have been allocated proportionally to the change due to volume and
the change due to rate.

<TABLE>
<CAPTION>
                                             Year Ended June 30,
                                       ---------------------------
                                               2001 vs. 2000
                                       ---------------------------
                                            Increase (Decrease)
                                                  Due to
                                       ---------------------------
                                       Volume      Rate        Net
                                       ------      ----        ---
                                              (In thousands)
<S>                                    <C>        <C>        <C>
Interest income:

  Loans receivable                     $ (37)     $   5      $ (32)

  Investment securities                  (32)        65         33

  Other interest-earning assets           46          9         55
                                       -----      -----      -----
Total interest-earning assets          $ (23)     $  79      $  56
                                       =====      =====      =====

Interest expense:

  Passbook and club accounts           $ (17)     $  (7)     $ (24)

  Certificates of deposit                 92        116        208

  Other liabilities                      (78)         3        (75)
                                       -----      -----      -----
Total interest-bearing liabilities     $  (3)     $ 112      $ 109
                                       =====      =====      =====

Change in net interest income          $ (20)     $ (33)     $ (53)
                                       =====      =====      =====

</TABLE>

Operating Results

         Net Income. Net income decreased $122,000 or 50.4%, to $120,000 for the
year ended June 30, 2001, as compared to $242,000 for the year ended June 30,
2000. This decrease resulted primarily from decreases of $76,000 in net interest
income and $41,000 in noninterest income and an increase in noninterest expense
of $54,000, offset by a decrease in income tax expense of $49,000.

<PAGE>   24
Net Interest Income.

         Net interest income is the most significant component of our income
from operations. Net interest income is the difference between interest we
receive on our interest-earning assets (primarily loans, investments and
mortgage-backed securities) and interest we pay on our interest-bearing
liabilities (primarily deposits and borrowed funds). Net interest income depends
on the volume of and rates earned on interest-earning assets and the volume of
and rates paid on interest-bearing liabilities. Our net interest income
decreased to $1,141,000 for the year ended June 30, 2001, as compared to
$1,217,000 for the year ended June 30, 2000.

         Average passbook and club accounts and average other interest-bearing
liabilities decreased $579,000 and $1,297,000, respectively. These decreases
were offset by an increase in average certificates of deposit of $1,705,000.

         Interest on interest-bearing liabilities increased $109,000, primarily
as a result of an overall change in the portfolio mix. This was coupled with a
slight incline in the average costs of interest-bearing liabilities of 35 basis
points. See "Average Balance Sheet" for fuller detail.

         Provision for Loan Losses. There was no provision for loan losses for
the years ended June 30, 2001 and 2000. At June 30, 2001, we had $310,000
non-performing loans in our loan portfolio.

         Average passbook and club accounts and average other interest-bearing
liabilities decreased $579,000 and $1,297,000, respectively. These decreases
were offset by an increase in average certificates of deposit of $1,705,000.

         Historically, we have emphasized our loss experience over other factors
in establishing the provision for loan losses. We review the allowance for loan
losses in relation to (i) our past loan loss experience, (ii) known and inherent
risks in our portfolio, (iii) adverse situations that may affect the borrower's
ability to repay, (iv) the estimated value of any underlying collateral, and (v)
current economic conditions. Management believes the allowance for loan losses
is at a level that is considered to be adequate to provide for estimated losses;
however, there can be no assurance that further additions will not be made to
the allowance and that such losses will not exceed the estimated amount.

         Noninterest Income. Noninterest income consists substantially of
service charges, fees on deposit accounts, and net gains or losses from sales of
securities and foreclosed real estate. Noninterest income decreased $41,000, or
17.7%, to $190,000 for the year ended June 30, 2001 from $231,000 for the year
ended June 30, 2000. In fiscal 2001, net gains on sales of securities and other
real estate owned decreased $40,000 and $7,000, respectively. Other noninterest
income increased by $6,000, primarily the result of increased value in the cash
surrender value of the bank owned life insurance purchased in 1999 of $10,000.

         Noninterest Expense. Our noninterest expense increased $54,000, or
4.8%, primarily due to an incline in compensation and benefits expense of
$26,000. The incline in compensation and benefits expense is due to an increase
in pension expense based on actuarial calculations and an increase in expense
relating to our employee stock option plan and our restricted stock plan as a
result of a decline in the market value of our stock.

         Income Tax Expense. Our income tax expense for the year ended June 30,
2001 was $27,000 compared to $76,000 for the year ended June 30, 2000. The
decrease was mainly attributable to lower levels of taxable income resulting
from the above mentioned factors.

<PAGE>   25
Liquidity and Capital Resources

         Our primary sources of funds include deposits, loan repayments and
prepayments, cash flow from operations, and borrowings from the Federal Home
Loan Bank of Pittsburgh. We use our capital resources principally to fund loan
originations, repay maturing borrowings, purchase investments, and for our short
and long-term liquidity needs. We expect to be able to fund, on a timely basis,
our loan commitments. At June 30, 2001, our commitments to fund loans totaled
$88,000, and we had unused lines of credit of $595,000.

         Net cash provided by our operating activities (the cash effects of
transactions that enter into our determination of net income - e.g., non-cash
items, amortization and depreciation, provision for loan losses, net gains on
sales) for the year ended June 30, 2001 was $157,000 as compared to $243,000 for
the year ended June 30, 2000.

         Net cash provided by  our investing activities  (i.e., cash receipts,
primarily from our investment securities and mortgage-backed securities
portfolios and our loan portfolio) for the year ended June 30, 2001 totaled
$4,468,000, which re-presents an increase of $6,630,000 from our using cash of
$2,162,000 for June 30, 2000. The increase was primarily attributable to
investment maturities and calls in fiscal 2001 compared to 2000.

         Net cash provided by our financing activities (i.e., cash receipts
primarily from net increases in deposits) for the year ended June 30, 2001 was
$2,270,000, as compared to using cash of $277,000 during fiscal 2000.

         Our liquidity may be adversely affected by unexpected deposit outflows,
excessive interest rate paid by our competitors, and economic conditions. We
monitor our projected liquidity needs and determine our desired level based on
our commitment to make loans and our ability to generate funds. We are also
subject to federal regulations that impose certain minimum capital requirements.



<PAGE>   26

Item  7.  Financial Statements
------------------------------



                               WSB HOLDING COMPANY

                            PITTSBURGH, PENNSYLVANIA




                                  AUDIT REPORT

                                  JUNE 30, 2001




<PAGE>   27






                               WSB HOLDING COMPANY
                    AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001


                                                                      Page
                                                                     Number
                                                                     ------
Report of Independent Auditors                                          1

Financial Statements

    Consolidated Balance Sheet                                          2

    Consolidated Statement of Income                                    3

    Consolidated Statement of Changes in Stockholders' Equity           4

    Consolidated Statement of Cash Flows                                5

Notes to the Consolidated Financial Statements                         6-28


<PAGE>   28


                         REPORT OF INDEPENDENT AUDITORS


Board of Directors and Stockholders
WSB Holding Company

         We have audited the accompanying consolidated balance sheets of WSB
Holding Company and subsidiaries as of June 30, 2001 and 2000, and the related
consolidated statements of income, changes in stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of WSB Holding
Company and subsidiaries as of June 30, 2001 and 2000, and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.


/s/ S. R. Snodgrass, A.C.

Wexford, PA

July 26, 2001, except as to Note 16, as to which
               the date is August 31, 2001


<PAGE>   29


                              WSB HOLDING COMPANY
                           CONSOLIDATED BALANCE SHEET


<TABLE>
<CAPTION>
                                                                                June 30,
                                                                        2001                  2000
                                                                    ------------          ------------
<S>                                                                <C>                   <C>
ASSETS
     Cash and due from banks                                        $    287,874          $    301,724
     Interest-bearing deposits in other banks                          7,823,521               915,437
                                                                    ------------          ------------

     Cash and cash equivalents                                         8,111,395             1,217,161

     Investment securities available for sale                          5,909,323             2,209,267
     Investment securities held to maturity (market
       value of $7,614,243 and $14,033,582)                            7,698,527            14,894,110
     Mortgage-backed securities available for sale                       878,163             1,116,035
     Mortgage-backed securities held to maturity (market
       value of $227,711 and $313,838)                                   225,956               323,803
     Loans receivable (net of allowance for loan losses
       of $154,428 and $155,000)                                      18,207,125            18,866,204
     Bank owned life insurance                                         1,276,083             1,214,106
     Accrued interest receivable                                         264,574               351,453
     Premises and equipment                                              844,086               916,305
     Federal Home Loan Bank stock                                        200,000               200,000
     Other assets                                                        208,308                85,904
                                                                    ------------          ------------

         TOTAL ASSETS                                               $ 43,823,540          $ 41,394,348
                                                                    ============          ============

LIABILITIES
     Deposits                                                       $ 38,460,978          $ 34,585,942
     Advances by borrowers for taxes and insurance                       176,545               247,127
     Federal Home Loan Bank borrowings                                        --             1,500,000
     Accrued interest payable and other liabilities                      104,224               128,353
                                                                    ------------          ------------

         TOTAL LIABILITIES                                            38,741,747            36,461,422
                                                                    ------------          ------------

COMMITMENTS AND CONTINGENCIES                                                 --                    --

STOCKHOLDERS' EQUITY
     Preferred stock, par value $.10, 1,000,000 shares
       authorized; none issued and outstanding                                --                    --
     Common stock, par value $.10 per share; 4,000,000
       shares authorized; 330,600 issued                                  33,060                33,060
     Additional paid-in capital                                        3,002,252             2,994,998
     Retained earnings - substantially restricted                      2,624,986             2,504,860
     Accumulated other comprehensive loss                                 (1,159)                 (689)
     Unallocated shares held by Employee Stock
       Ownership Plan (ESOP)                                            (159,472)             (189,538)
     Unallocated shares held by Restricted Stock Plan (RSP)             (106,132)              (98,023)
     Treasury stock (27,916 shares at cost)                             (311,742)             (311,742)
                                                                    ------------          ------------

         TOTAL STOCKHOLDERS' EQUITY                                    5,081,793             4,932,926
                                                                    ------------          ------------

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $ 43,823,540          $ 41,394,348
                                                                    ============          ============

</TABLE>

See accompanying notes to the consolidated financial statements.


<PAGE>   30


                               WSB HOLDING COMPANY
                        CONSOLIDATED STATEMENT OF INCOME


<TABLE>
<CAPTION>
                                                                 Year Ended June 30,
                                                               2001               2000
                                                            ----------         ----------
<S>                                                        <C>                <C>
INTEREST INCOME
     Loans receivable                                       $1,436,240         $1,467,624
     Interest-bearing deposits in other banks                  137,525             83,156
     Investment securities
         Taxable                                             1,194,096          1,183,839
         Exempt from federal income tax                         45,613             45,613
                                                            ----------         ----------
         Total interest income                               2,813,474          2,780,232
                                                            ----------         ----------

INTEREST EXPENSE
     Deposits                                                1,637,133          1,453,375
     FHLB borrowings                                            35,173            109,536
                                                            ----------         ----------
         Total interest expense                              1,672,306          1,562,911
                                                            ----------         ----------

NET INTEREST INCOME                                          1,141,168          1,217,321

     Provision for loan losses                                      --                 --
                                                            ----------         ----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES          1,141,168          1,217,321
                                                            ----------         ----------

NONINTEREST INCOME
     Service fees on deposit accounts                           44,859             43,770
     Investment securities gains, net                           23,643             63,556
     Gain on sale of other real estate owned                      --                6,727
     Other                                                     121,597            117,095
                                                            ----------         ----------
         Total noninterest income                              190,099            231,148
                                                            ----------         ----------

NONINTEREST EXPENSE
     Compensation and employee benefits                        543,618            517,193
     Occupancy and equipment                                   169,002            170,616
     Data processing                                           151,096            141,830
     Professional services                                      87,283             94,032
     Other                                                     233,186            206,790
                                                            ----------         ----------
         Total noninterest expense                           1,184,185          1,130,461
                                                            ----------         ----------

     Income before income taxes                                147,082            318,008
     Income tax expense                                         26,956             75,700
                                                            ----------         ----------

NET INCOME                                                  $  120,126         $  242,308
                                                            ==========         ==========

EARNINGS PER SHARE:

         Basic                                              $     0.43         $     0.89
         Diluted                                            $     0.43         $     0.89

</TABLE>

See accompanying notes to the consolidated financial statements.



<PAGE>   31


                               WSB HOLDING COMPANY
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                  Accumulated     Unallocated    Unallocated
                                                 Additional                          Other          Shares         Shares
                                    Common         Paid-in        Retained       Comprehensive      Held by        Held by
                                    Stock          Capital        Earnings       Income (Loss)       ESOP            RSP
                                  ---------      ----------      ----------      -------------    -----------    -----------
<S>                              <C>            <C>             <C>                <C>           <C>             <C>
Balance, June 30, 1999            $  33,060      $2,994,026      $2,287,772         $29,929       $(215,988)      $(139,679)

Net income                                                          242,308
Other comprehensive income:
  Unrealized loss on
  available for sale
  securities, net of
  reclassification
  adjustment, net of tax
  benefit of $15,773                                                                (30,618)


Comprehensive income

ESOP shares released                                    972                                          26,450
RSP shares released                                                                                                  41,656
Cash dividends
  ($.08 per share)                                                  (25,220)
Purchase treasury stock
                                  ---------      ----------      ----------         -------       ---------       ---------


Balance, June 30, 2000               33,060       2,994,998       2,504,860            (689)       (189,538)        (98,023)

Net income                                                          120,126
Other comprehensive income:
  Unrealized loss on
  available for sale
  securities, net of
  reclassification
  adjustment, net of tax
  benefit of $242                                                                      (470)

Comprehensive income

ESOP shares released                                                  7,254                          30,066
RSP shares activity                                                                                                  (8,109)
                                  ---------      ----------      ----------         -------       ---------       ---------

Balance, June 30, 2001            $  33,060      $3,002,252      $2,624,986         $(1,159)      $(159,472)      $(106,132)
                                  =========      ==========      ==========         =======       =========       =========


                                                                                                    2001            2000
                                                                                                  ---------       ---------
 Components of other comprehensive income:
     Change in net unrealized gain on investment securities available for sale                    $  15,134       $  11,329
     Net realized gains included in net income,
       net of taxes $8,039 and $21,609                                                              (15,604)        (41,947)

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

 Total                                                                                            $    (470)      $ (30,618)
                                                                                                  =========       =========

</TABLE>




<TABLE>
<CAPTION>


                                                      Total
                                      Treasury     Stockholders'   Comprehensive
                                       Stock           Equity         Income
                                      --------     -------------   -------------
<S>                                 <C>            <C>              <C>
Balance, June 30, 1999               $(204,792)     $4,784,328

Net income                                             242,308         242,308
Other comprehensive income:
  Unrealized loss on
  available for sale
  securities, net of
  reclassification
  adjustment, net of tax
  benefit of $15,773                                  (30,618)         (30,618)

                                                                     ---------
Comprehensive income                                                 $ 211,690
                                                                     =========
ESOP shares released                                   27,422
RSP shares released                                    41,656
Cash dividends
  ($.08 per share)                                    (25,220)
Purchase treasury stock               (106,950)      (106,950)
                                     ---------      ----------


Balance, June 30, 2000                (311,742)      4,932,926

Net income                                             120,126       $ 120,126
Other comprehensive income:
  Unrealized loss on
  available for sale
  securities, net of
  reclassification
  adjustment, net of tax
  benefit of $242                                         (470)           (470)
                                                                     ---------
Comprehensive income                                                 $ 119,656
                                                                     =========
ESOP shares released                                    37,320
RSP shares activity                                     (8,109)
                                     ---------      ----------

Balance, June 30, 2001               $(311,742)     $5,081,793
                                     =========      ==========

</TABLE>


See accompanying notes to the consolidated financial statements.


<PAGE>   32



                               WSB HOLDING COMPANY
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Year Ended June 30,
                                                                          2001                  2000
                                                                      ------------          ------------
<S>                                                                   <C>                  <C>
OPERATING ACTIVITIES
     Net income                                                       $    120,126          $    242,308
     Adjustments to reconcile net income to
       net cash provided by operating activities:
         Depreciation                                                       73,618                76,585
         Amortization of premium and discount on investments                43,989                  (431)
         Investment securities gains, net                                  (23,643)              (63,556)
         Deferred income taxes                                             (31,399)                5,538
         Decrease (increase) in accrued interest receivable                 86,879               (48,038)
         Amortization of ESOP and RSP unearned compensation                 29,211                69,078
         Gain on sale of other real estate owned                                --                (6,727)
         Other, net                                                       (176,871)              (31,300)
                                                                      ------------          ------------
         Net cash provided by operating activities                         121,910               243,457
                                                                      ------------          ------------

INVESTING ACTIVITIES
     Investments available for sale:
         Purchases                                                     (11,657,688)             (658,851)
         Proceeds from sales                                               502,566               836,380
         Maturities and repayments                                       7,643,641               380,582
     Investment held to maturity:
         Purchases                                                        (225,000)           (1,100,000)
         Maturities and repayments                                       7,546,671               256,331
     Net increase (decrease) in loans receivable                           659,079            (1,895,783)
     Proceeds from sale of other real estate owned                              --                26,252
     Purchase of premises and equipment, net                                (1,399)               (6,422)
                                                                      ------------          ------------
         Net cash (used for) investing activities                        4,467,870            (2,161,511)
                                                                      ------------          ------------

FINANCING ACTIVITIES
     Net increase (decrease) in deposits                                 3,875,036              (664,685)
     Net increase (decrease) in advances by borrowers
       for taxes and insurance                                             (70,582)               19,886
     Net increase (decrease) in short-term FHLB borrowings              (1,500,000)            1,500,000
     Repayment of long-term FHLB borrowings                                     --            (1,000,000)
     Purchase of treasury stock                                                 --              (106,950)
     Cash dividends paid                                                        --               (25,220)
                                                                      ------------          ------------
         Net cash provided by (used for) financing activities            2,304,454              (276,969)
                                                                      ------------          ------------

         Increase (decrease) in cash and cash equivalents                6,894,234            (2,195,023)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                           1,217,161             3,412,184
                                                                      ------------          ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                              $  8,111,395          $  1,217,161
                                                                      ============          ============

</TABLE>


See accompanying notes to the consolidated financial statements.



<PAGE>   33

                              WSB HOLDING COMPANY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting and reporting policies applied in the
presentation of the accompanying financial statements follows:

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

WSB Holding Company (the "Company") is a Pennsylvania corporation and is
registered under the Bank Holding Company Act. The Company was organized to be
the holding company of Workingmens Bank (the "Bank"). The Company's and the
Bank's principal sources of revenue emanate from interest earnings on its
investment and mortgage-backed securities, and mortgage and consumer loan
portfolios as well as a variety of deposit services provided to its customers
through two locations. The Company and the Bank are subject to regulation by the
Office of Thrift Supervision ("OTS").

The consolidated financial statements of the Company include the accounts of the
Bank and the Bank's wholly owned subsidiary, Workingmens Service Corporation
("WSC"). The impact of WSC on the consolidated financial statements is not
material. All intercompany transactions have been eliminated in consolidation.
The investment in the subsidiary on the parent company financial statements is
carried at the Company's equity in the underlying assets of the Bank.

The accounting principles followed by the Company and the methods of applying
these principles conform with accounting principles generally accepted in the
United States of America and with general practice within the banking industry.
In preparing the financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of
the balance sheet date and related revenues and expenses for the period. Actual
results could differ significantly from those estimates.

INVESTMENT AND MORTGAGE-BACKED SECURITIES

Investment and mortgage-backed securities are classified at the time of
purchase, based on management's intention and ability, as securities held to
maturity or securities available for sale. Debt securities, acquired with the
intent and ability to hold to maturity are stated at cost and adjusted for
amortization of premium and accretion of discount, which are computed using a
level yield method and are recognized as adjustments of interest income. Certain
other debt and equity securities have been classified as available for sale to
serve principally as a source of liquidity. Unrealized holding gains and losses
for available for sale securities are reported as a separate component of
stockholders' equity, net of tax, until realized. Realized securities gains and
losses are computed using the specific identification method. Interest and
dividends on investment securities are recognized as income when earned.

Common stock of the Federal Home Loan Bank of Pittsburgh ("FHLB") represents
ownership in an institution which is wholly-owned by other financial
institutions. This equity security is accounted for at cost and reported
separately on the accompanying consolidated balance sheet.

LOANS RECEIVABLE

Loans receivable are stated at their unpaid principal amounts net of the
allowance for loan losses. Interest on loans is recognized as income when earned
on the accrual method. Interest accrued on loans more than 90 days delinquent is
generally offset by a reserve for uncollected interest and is not recognized as
income.


<PAGE>   34



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

LOANS RECEIVABLE (CONTINUED)

The accrual of interest is generally discontinued when management has serious
doubts about further collectibility of principal or interest, even though the
loan may be currently performing. A loan may remain on accrual status if it is
in the process of collection and is either guaranteed or well secured. When a
loan is placed on nonaccrual status, unpaid interest is charged against income.
Interest received on nonaccrual loans is either applied to the principal or
reported as interest income according to management's judgment as to the
collectibility of the principal.

LOAN ORIGINATION FEES

Loan origination and commitment fees and certain direct loan origination costs
are being deferred, and the net amount amortized as an adjustment of the related
loan's yield. The Company is amortizing these amounts over the contractual life
of the related loans using the interest method.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses represents the amount which management estimates
is adequate to provide for probable losses inherent in the loan portfolio, as of
the balance sheet date. The allowance method is used in providing for loan
losses. Accordingly, all loan losses are charged to the allowance, and all
recoveries are credited to it. The allowance for loan losses is established
through a provision for loan losses charged to operations. The provision for
loan losses is based on management's periodic evaluation of individual loans,
economic factors, past loan loss experience, changes in the composition and
volume of the portfolio, and other relevant factors. The estimates used in
determining the adequacy of the allowance for loan losses, including the amounts
and timing of future cash flows expected on impaired loans, are particularly
susceptible to changes in the near term.

A loan is considered impaired when it is probable that the borrower will not
repay the loan according to the original contractual terms of the loan
agreement. Management has determined that first mortgage loans on one-to-four
family properties and all consumer loans represent large groups of
smaller-balance homogeneous loans that are to be collectively evaluated.
Management considers an insignificant delay, which is defined as less than 90
days by the Company, will not cause a loan to be classified as impaired. A loan
is not impaired during a period of delay in payment if the Company expects to
collect all amounts due including interest accrued at the contractual interest
rate during the period of the delay. All loans identified as impaired are
evaluated independently by management. The Company estimates credit losses on
impaired loans based on the present value of expected cash flows or the fair
value of the underlying collateral if the loan repayment is expected to come
from the sale or operation of said collateral. Impaired loans, or portions
thereof, are charged off when it is determined that a realized loss has
occurred. Until such time, an allowance for loan losses is maintained for
estimated losses. Cash receipts on impaired loans are applied first to accrued
interest receivable, unless otherwise required by the loan terms, except when an
impaired loan is also a nonaccrual loan, in which case the portion of the
receipts related to interest is recognized as income.

PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is calculated using straight-line and accelerated methods over the
useful lives of the related assets. Expenditures for maintenance and repairs are
charged to operations as incurred. Costs of major additions and improvements are
capitalized.



<PAGE>   35



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

REAL ESTATE OWNED

Real estate owned acquired in settlement of foreclosed loans is carried at the
lower of cost or fair value minus estimated cost to sell. Valuation allowances
for estimated losses are provided when the carrying value exceeds the fair
value. Direct costs incurred on such properties are recorded as expenses of
current operations.

INCOME TAXES

Deferred tax assets or liabilities are computed based on the difference between
the financial statement and income tax basis of assets and liabilities using the
enacted marginal tax rates. Deferred income tax expenses or benefits are based
on the changes in the deferred tax asset or liability from period to period.

EARNINGS PER SHARE

The Company provides dual presentation of basic and diluted earnings per share.
Basic earnings per share is calculated utilizing net income as reported in the
numerator and average shares outstanding in the denominator. The computation of
diluted earnings per share differs in that the dilutive effects of any stock
options, warrants, and convertible securities are adjusted in the denominator.

EMPLOYEE BENEFIT PLAN

The Bank sponsors a trusteed, defined benefit pension plan covering all eligible
employees. The Bank's funding policy is to make annual contributions, as needed,
based upon the funding formula developed by the plan's actuary.

STOCK OPTIONS

The Company maintains a stock option plan for the directors, officers, and
employees. When the exercise price of the Company's stock options is greater
than or equal to the market price of the underlying stock on the date of the
grant, no compensation expense is recognized in the Company's financial
statements. Pro forma net income and earnings per share are presented to reflect
the impact of the stock option plan assuming compensation expense had been
recognized based on the fair value of the stock options granted under the plan.

COMPREHENSIVE INCOME

The Company is required to present comprehensive income in a full set of general
purpose financial statements for all periods presented. Other comprehensive
income is comprised exclusively of unrealized holding gains (losses) on the
available for sale securities portfolio. The Company has elected to report the
effects of other comprehensive income as part of the Consolidated Statement of
Changes in Stockholders' Equity.

CASH FLOW INFORMATION

The Company has defined cash and cash equivalents as those amounts included in
the balance sheet captions, Cash and due from banks and Interest-bearing
deposits in other banks.

Cash payments for interest in 2001 and 2000 were $1,650,375 and $1,559,667,
respectively. Cash payments for income taxes amounted to $97,000 in 2001 and
$18,500 in 2000. The transfer of loans to other real-estate owned totaled
$19,525 in 2000.




<PAGE>   36



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards Nos. 141, Business Combinations, effective for
all business combinations initiated after June 30, 2001, as well as all business
combinations accounted for by the purchase method that are completed after June
30, 2001. The new statement requires that the purchase method of accounting be
used for all business combinations and prohibits the use of the
pooling-of-interests method. The adoption of Statement No. 141 is not expected
to have a material effect on the Company's financial position or results of
operations.

In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001. The new statement changes the accounting for goodwill
from an amortization method to an impairment-only approach. Thus, amortization
of goodwill, including goodwill recorded in past business combinations, will
cease upon adoption of this Statement. The adoption of Statement No. 142 is not
expected to have a material effect on the Company's financial position or
results of operations.

RECLASSIFICATION OF COMPARATIVE AMOUNTS

Certain comparative account balances for the prior period have been reclassified
to conform to the current period classifications. Such reclassifications did not
affect net income or stockholders' equity.

2.   EARNINGS PER SHARE

There are no convertible securities which would affect the numerator in
calculating basic and diluted earnings per share; therefore, net income as
presented on the Consolidated Statement of Income will be used as the numerator.
The following table sets forth a reconciliation of the denominator of the basic
and diluted earnings per share computation.

                                                     2001              2000
                                                    -------           -------

Weighted-average common shares and
  common stock equivalents used to
  calculate basic earnings per share                277,403           273,154

Additional common stock equivalents
  (stock options) used to calculate
  diluted earnings per share                            424                --
                                                    -------           -------

Weighted-average common shares and
  common stock equivalents used
  to calculate diluted earnings per share           277,827           273,154
                                                    =======           =======






<PAGE>   37



3.   INVESTMENT SECURITIES

The amortized cost and estimated market values of investment securities
available for sale and held to maturity are summarized as follows:

<TABLE>
<CAPTION>
                                                   2001
                             --------------------------------------------------
                                           Gross        Gross         Estimated
                              Amortized  Unrealized   Unrealized       Market
                                Cost       Gains        Losses          Value
                             ----------  ----------   ----------     ----------
<S>                         <C>          <C>          <C>           <C>
Available for Sale
Obligations of state and
  political subdivisions     $  949,337   $    --      $(27,744)     $  921,593
Corporate debt securities     3,861,006    12,114          (468)      3,872,652
                             ----------   -------      --------      ----------
     Total debt securities    4,810,343    12,114       (28,212)      4,794,245

Mutual funds                    864,470    19,234       (18,776)        864,928
Federal National Mortgage
  Association common stock      250,000       150            --         250,150
                             ----------   -------      --------      ----------

               Total         $5,924,813   $31,498      $(46,988)     $5,909,323
                             ==========   =======      ========      ==========

Held to Maturity
U.S. Government agency
  securities                 $7,373,527   $ 3,435      $(86,480)     $7,290,482
Corporate debt securities       325,000        89        (1,328)        323,761
                             ----------   -------      --------      ----------

               Total         $7,698,527   $ 3,524      $(87,808)     $7,614,243
                             ==========   =======      ========      ==========
</TABLE>



<PAGE>   38

3.   INVESTMENT SECURITIES (Continued)

<TABLE>
<CAPTION>
                                                        2000
                                ------------------------------------------------------
                                                Gross         Gross         Estimated
                                 Amortized    Unrealized    Unrealized        Market
                                   Cost         Gains         Losses          Value
                                -----------   -----------   -----------    -----------
<S>                            <C>           <C>           <C>            <C>
Available for Sale
Obligations of state and
  political subdivisions        $   949,018      $     --     $ (85,173)   $   863,845

Corporate debt securities           299,857            --        (7,471)       292,386
                                -----------      --------     ---------    -----------
     Total debt securities        1,248,875            --       (92,644)     1,156,231

Mutual funds                        841,140       119,208            --        960,348
Federal National Mortgage
  Association common stock           56,750            --        (4,562)        52,188
Federal Home Loan Mortgage
  Corporation preferred stock        45,945            --        (5,445)        40,500
                                -----------      --------     ---------    -----------

               Total            $ 2,192,710      $119,208     $(102,651)   $ 2,209,267
                                ===========      ========     =========    ===========

Held to Maturity
U.S. Government agency
 securities                     $14,794,110      $     --     $(856,540)   $13,937,570
Certificates of deposit             100,000            --        (3,988)        96,012
                                -----------      --------     ---------    -----------

               Total            $14,894,110      $     --     $(860,528)   $14,033,582
                                ===========      ========     =========    ===========
</TABLE>


The amortized cost and estimated market value of investments in debt securities
at June 30, 2001, by contractual maturity, are shown below.

<TABLE>
<CAPTION>
                                  Available for Sale        Held to Maturity
                               ------------------------  ----------------------
                                                         Estimated    Estimated
                                Amortized     Market     Amortized     Market
                                  Cost         Value        Cost        Value
                               ----------   ----------   ----------   ----------
<S>                           <C>          <C>          <C>          <C>
Due within one year            $2,843,728   $2,844,808   $       --   $       --
Due after one year through
  five years                    1,017,278    1,027,844    1,024,658    1,026,765
Due after five years through
  ten years                            --           --    1,748,374    1,742,404
Due after ten years               949,337      921,593    4,925,495    4,845,074
                               ----------   ----------   ----------   ----------

               Total           $4,810,343   $4,794,245   $7,698,527   $7,614,243
                               ==========   ==========   ==========   ==========
</TABLE>

Proceeds from the sales of investment securities available for sale and the
gross realized gains and losses on those sales for the years ended June 30, are
as follows:

<TABLE>
<CAPTION>
                           2001          2000
                         --------      --------
<S>                     <C>           <C>
Proceeds from sales      $502,566      $836,380
Gross gains                23,643        67,573
Gross losses                   --         4,017
</TABLE>



<PAGE>   39




4.   MORTGAGE-BACKED SECURITIES

The amortized cost and estimated market value of mortgage-backed securities
available for sale and held to maturity are summarized as follows:

<TABLE>
<CAPTION>
                                                          2001
                                   ----------------------------------------------------
                                                   Gross          Gross       Estimated
                                   Amortized    Unrealized     Unrealized       Market
                                      Cost         Gains         Losses         Value
                                   ---------    ----------     ----------     ---------
<S>                               <C>          <C>            <C>            <C>
Available for Sale
     Government National
       Mortgage Association         $630,519      $14,386       $    --        $644,905
     Federal National Mortgage
        Association                  196,790           --        (1,366)        195,424
     Federal Home Loan
        Mortgage Corporation          37,120          714            --          37,834
                                    --------      -------       -------        --------

                    Total           $864,429      $15,100       $(1,366)       $878,163
                                    ========      =======       =======        ========

Held to Maturity
     Collateralized mortgage
        obligations                 $225,956      $ 1,755       $    --        $227,711
                                    --------      -------       -------        --------

                    Total           $225,956      $ 1,755       $    --        $227,711
                                    ========      =======       =======        ========
</TABLE>

<TABLE>
<CAPTION>
                                                               2000
                                     ----------------------------------------------------------
                                     Amortized      Unrealized      Unrealized        Market
                                       Cost           Gains           Losses           Value
                                    ----------      ----------      ----------       ----------
<S>                                <C>             <C>             <C>              <C>
Available for Sale
     Government National
        Mortgage Association        $  878,265      $    4,575      $  (11,090)      $  871,750
     Federal National Mortgage
        Association                    200,713              --          (9,158)         191,555
     Federal Home Loan
        Mortgage Corporation            44,226              --             (50)          44,176
     Collateralized mortgage
        obligations                     10,432              --          (1,878)           8,554
                                    ----------      ----------      ----------       ----------

                    Total           $1,133,636      $    4,575      $  (22,176)      $1,116,035
                                    ==========      ==========      ==========       ==========

Held to Maturity
     Collateralized mortgage
        obligations                 $  323,803      $       --      $   (9,965)      $  313,838
                                    ----------      ----------      ----------       ----------

                    Total           $  323,803      $       --      $   (9,965)      $  313,838
                                    ==========      ==========      ==========       ==========
</TABLE>



<PAGE>   40



4.   MORTGAGE-BACKED SECURITIES (Continued)

The amortized cost and estimated market value of mortgage-backed securities at
June 30, 2001, by contractual maturity, are shown below. Mortgage-backed
securities provide for periodic payments of principal and interest. Due to
expected repayment terms being significantly less than the underlying mortgage
loan pool contractual maturities, the estimated lives of these securities could
be significantly shorter.

<TABLE>
<CAPTION>
                                     Available for Sale          Held to Maturity
                                  -----------------------    -----------------------
                                                Estimated                 Estimated
                                  Amortized      Market      Amortized      Market
                                    Cost         Value          Cost         Value
                                  --------      --------     ---------    ----------
<S>                              <C>           <C>          <C>          <C>
Due within one year               $     --      $     --      $     --      $     --
Due after one year through
  five years                            --            --            --            --
Due after five years through
  ten years                             --            --            --            --
Due after ten years                864,429       878,163       225,956       227,711
                                  --------      --------      --------      --------

               Total              $864,429      $878,163      $225,956      $227,711
                                  ========      ========      ========      ========
</TABLE>


5.   LOANS RECEIVABLE

Loans receivable consist of the following:

<TABLE>
<CAPTION>
                                        2001             2000
                                    -----------      -----------
<S>                                <C>              <C>
Mortgage loans:
     1 - 4 family                   $11,437,440      $11,620,137
     Home equity                      2,057,772        1,762,009
     Multi-family                     2,887,523        3,251,524
     Commercial                         998,913        1,211,944
                                    -----------      -----------
                                     17,381,648       17,845,614
                                    -----------      -----------
Consumer loans:
     Share loans                        389,554          377,725
     Other                              590,351          797,865
                                    -----------      -----------
                                        979,905        1,175,590
                                    -----------      -----------
                                     18,361,553       19,021,204
Less:
     Allowance for loan losses          154,428          155,000
                                    -----------      -----------

                    Total           $18,207,125      $18,866,204
                                    ===========      ===========
</TABLE>


The Company's primary business activity is with customers located within its
local trade area. Commercial, residential, and personal loans are granted.
Although the Company has a diversified loan portfolio at June 30, 2001 and 2000,
the repayment of these loans is dependent upon the local economic conditions in
its immediate trade area.




<PAGE>   41



5.   LOANS RECEIVABLE (Continued)

Activity in the allowance for loan losses for the years ended June 30, is as
follows:

<TABLE>
<CAPTION>
                                     2001                2000
                                   ---------           ---------
<S>                               <C>                 <C>
Balance, July 1,                   $ 155,000           $ 165,482

Loans charged off                       (708)            (10,582)
Recoveries                               136                 100
                                   ---------           ---------

Net loans charged off                   (572)            (10,482)
Provision for loan losses
                                   ---------           ---------

Balance, June 30,                  $ 154,428           $ 155,000
                                   =========           =========
</TABLE>


The Company had nonaccrual loans of $309,529 at June 30, 2001 and 2000, which in
management's opinion did not meet the definition of impaired. Interest income on
loans would have been increased by $1,270 and $9,830, respectively, if these
loans had performed in accordance with their original terms.

6.   ACCRUED INTEREST RECEIVABLE

Accrued interest receivable consists of the following:

<TABLE>
<CAPTION>
                              2001              2000
                            --------          --------
<S>                        <C>               <C>
Investments                 $191,956          $262,564
Loans receivable              72,618            88,889
                            --------          --------

             Total          $264,574          $351,453
                            ========          ========
</TABLE>


7.   PREMISES AND EQUIPMENT

Premises and equipment consist of the following:

<TABLE>
<CAPTION>
                                          2001                2000
                                       ----------          ----------
<S>                                   <C>                 <C>
Land and improvements                  $  121,027          $  121,027
Buildings and improvements                998,400             998,184
Furniture and equipment                   439,840             438,657
                                       ----------          ----------
                                        1,559,267           1,557,868
Less accumulated depreciation             715,181             641,563
                                       ----------          ----------

               Total                   $  844,086          $  916,305
                                       ==========          ==========
</TABLE>


Depreciation expense for the years ended June 30, 2001 and 2000 was $73,618 and
$76,585, respectively.

8.   FEDERAL HOME LOAN BANK

The Bank is a member of the FHLB System. As a member, the Bank maintains an
investment in the capital stock of the FHLB of Pittsburgh, at cost, in an amount
not less than the greater of one percent of its outstanding home loans or five
percent of its outstanding notes payable to the FHLB of Pittsburgh as calculated
at December 31 of each year.



<PAGE>   42



9.   DEPOSITS

Comparative details of deposits are as follows:

<TABLE>
<CAPTION>
                                                     2001                                  2000
                                       ------------------------------        -------------------------------
                                         Amount                  %             Amount                  %
                                       -----------             ------        -----------             ------
<S>                                   <C>                     <C>           <C>                     <C>
Savings                                $10,137,624              26.36%       $10,154,570              29.37%
Noninterest-bearing checking             3,398,522               8.84          3,320,279               9.60
                                       -----------             ------        -----------             ------
                                        13,536,146              35.20         13,474,849              38.97
                                       -----------             ------        -----------             ------

Time certificates of deposit:
     3.00 - 3.99%                          589,491               1.53             59,854               0.17
     4.00 - 4.99%                        4,589,738              11.93          4,607,802              13.32
     5.00 - 5.99%                        6,821,397              17.74          8,058,691              23.30
     6.00 - 6.99%                       12,078,347              31.40          8,353,051              24.15
     7.00 - 7.99%                          845,859               2.20             31,695               0.09
                                       -----------             ------        -----------             ------
                                        24,924,832              64.80         21,111,093              61.03
                                       -----------             ------        -----------             ------

               Total                   $38,460,978             100.00%       $34,585,942             100.00%
                                       ===========             ======        ===========             ======
</TABLE>


The aggregate amount of certificates of deposit with a minimum denomination of
$100,000 was $2,372,024 and $1,552,103 at June 30, 2001 and 2000, respectively.
Deposits in excess of $100,000 are not federally insured.

The scheduled maturities of time certificates of deposit as of June 30, 2001 are
as follows:

<TABLE>
<CAPTION>
<S>                                                             <C>
     Within one year                                            $12,258,751
     Beyond one year but within three years                      10,809,158
     Beyond three years but within five years                     1,856,923
     Beyond five years                                                   --
                                                                -----------

              Total                                             $24,924,832
                                                                ===========
</TABLE>


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

<TABLE>
<CAPTION>
                                         2001                2000
                                      ----------          ----------
<S>                                  <C>                 <C>
Savings                               $  297,207          $  320,918
Time certificates of deposit           1,339,926           1,132,457
                                      ----------          ----------

         Total                        $1,637,133          $1,453,375
                                      ==========          ==========
</TABLE>


<PAGE>   43


10.  FEDERAL HOME LOAN BANK BORROWINGS

The Bank has the capability to borrow funds through a credit arrangement with
the FHLB. The FHLB borrowings are subject to annual renewal, incur no service
charges, and are secured by a blanket security agreement on certain investment
and mortgage-backed securities, qualifying residential mortgages, and the Bank's
investment in FHLB stock. At June 30, 2001, the Bank's remaining borrowing
capacity with the FHLB was approximately $15 million.

Short-term Borrowings

The following table sets forth information concerning short-term advances from
FHLB:


<TABLE>
<CAPTION>
                                                  2001                 2000
                                               ----------           ----------
<S>                                            <C>                  <C>
Balance at year-end                            $       --           $1,500,000
Average  balance outstanding                      525,342            1,497,260
Maximum month-end balance                       1,500,000            3,000,000
Weighted-average rate at year-end                      --%                7.08%
Weighted-average rate during the year                6.70%                6.10%
</TABLE>



         LONG-TERM BORROWINGS

         At June 30, 1999, the Bank had outstanding FHLB long-term borrowings of
$1,000,000 maturing on October 25, 2000 bearing an interest rate of 5.78%. The
Bank had no long-term borrowings outstanding at June 30, 2000.

11.  INCOME TAXES

The components of the income taxes for the years ended June 30, are summarized
as follows:

<TABLE>
<CAPTION>
                                 2001                2000
                                -------            -------
<S>                             <C>                <C>
Current payable:
     Federal                    $58,355            $70,162
     State                           --                 --
                                -------            -------
                                 58,355             70,162

Deferred federal taxes          (31,399)             5,538
                                -------            -------

        Total                   $26,956            $75,700
                                =======            =======
</TABLE>



<PAGE>   44



11.      INCOME TAXES (Continued)

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

<TABLE>
<CAPTION>
                                                      2001              2000
                                                    --------          --------
<S>                                                <C>               <C>
Deferred tax assets:
     Loan origination fees, net                     $    167          $    294
     Allowance for loan losses                        52,506            52,700
     State net operating loss carryforward            35,040            19,826
     Restricted stock plan accrued                    14,126            14,126
     Net unrealized loss on securities                   596               355
                                                    --------          --------
Total gross deferred tax assets                      102,435            87,301
Less valuation allowance                              35,040            19,826
                                                    --------          --------
     Net deferred tax assets                          67,395            67,475
                                                    --------          --------

Deferred tax liabilities:
     Premises and equipment                            6,945            27,415
     Accrued interest receivable                      25,173            26,727
     Prepaid pension                                      --             9,696
                                                    --------          --------
Total gross deferred tax liabilities                  32,118            63,838
                                                    --------          --------

     Net deferred assets                            $ 35,277          $  3,637
                                                    ========          ========
</TABLE>


The reconciliation of the federal statutory rate and the Company's effective
income tax rate is as follows:

<TABLE>
<CAPTION>
                                                     2001                                      2000
                                       -----------------------------              -----------------------------
                                                               % of                                      % of
                                                             Pre-tax                                   Pre-tax
                                        Amount                Income              Amount                Income
                                       ---------             -------              -------              -------
<S>                                   <C>                   <C>                  <C>                  <C>
Federal income tax at
  statutory rate                        $ 50,008               34.0%             $108,123                34.0%
Tax-exempt income                        (15,508)             (10.6)              (15,508)               (4.9)
Other                                     (7,544)              (5.1)              (16,915)               (5.3)
                                       ---------               ----               -------                ----
     Actual tax benefit
       and effective rate              $  26,956               18.3%              $75,700                23.8%
                                       =========               ====               =======                ====
</TABLE>


The Company is subject to the Pennsylvania Mutual Thrift Institution's tax,
which is calculated at 11.5 percent of earnings based on generally accepted
accounting principles with certain adjustments. At June 30, 2001 the Company has
Pennsylvania net operating loss carryforwards of approximately $300,000 which
will begin to expire in fiscal year June 30, 2003. The deferred tax benefit
associated with this loss carryforward is approximately $34,500 and a valuation
allowance has been established at 100 percent.



<PAGE>   45



12.  EMPLOYEE BENEFITS

DEFINED BENEFIT PLAN

In July 2001, the Bank discontinue providing future benefits under the defined
benefit plan. Employers are still entitled to the benefits accrued over the
employers past service to the Bank. A gain of $161,997 associated with the
curtailment of the pension plan is include in the accompanying consolidated
income statement for the fiscal year ended June 30, 2001.

The following table sets forth the change in plan assets and benefit obligation
at June 30:

<TABLE>
<CAPTION>
                                                         2001               2000
                                                      ---------           ---------
<S>                                                  <C>                 <C>
Plan assets at fair value, beginning of year          $ 612,400           $ 474,418
Actual return (loss) on plan assets                      32,527              64,560
Employer contribution                                   106,134              78,946
Benefits paid                                                --              (5,524)
                                                      ---------           ---------
Plan assets at fair value, end of year                  751,061             612,400
                                                      ---------           ---------

Benefit obligation, beginning of year                   646,569             588,818
Service cost                                             45,797              44,757
Interest cost                                            45,260              41,014
Actuarial adjustments                                    56,524             (22,496)
Benefits paid                                                --              (5,524)
Curtailment adjustment                                 (161,997)                 --
                                                      ---------           ---------
Benefit obligation, end of year                         632,153             646,569
                                                      ---------           ---------

Funded status                                           118,908             (34,169)
Transition adjustment                                        --                 944
Unrecognized net loss from past experience
  different from that assumed                                --              62,142
                                                      ---------           ---------

Prepaid pension liability                             $ 118,908           $  28,917
                                                      =========           =========
</TABLE>


The plan assets are invested primarily in stocks and bonds under the control of
the plan's trustees as of June 30, 2001.

Assumptions used in the accounting for the defined benefit plan are as follows:

<TABLE>
<CAPTION>
                                                  2001                2000
                                                  ----                ----
<S>                                             <C>                 <C>
     Discount rate                                7.00%               7.00%
     Expected return on plan assets               7.50%               7.50%
     Rate of compensation increase                4.00%               4.00%
</TABLE>


The plan utilizes the straight-line method of amortization for unrecognized
gains and losses.



<PAGE>   46



12.  EMPLOYEE BENEFITS (Continued)

DEFINED BENEFIT PLAN (Continued)

Net periodic pension cost includes the following components:


<TABLE>
<CAPTION>
                                                         2001               2000
                                                       --------           --------
<S>                                                   <C>                <C>
Service cost of the current period                     $ 45,797           $ 44,757
Interest cost on projected benefit obligation            45,260             41,014
Actual (return) loss on plan assets                      32,527            (65,560)
Net amortization and deferral                           (82,687)            30,627
                                                       --------           --------

Net periodic pension cost                              $ 40,897           $ 50,838
                                                       ========           ========
</TABLE>


SUPPLEMENTAL RETIREMENT PLAN

On March 23, 1999, the Company established a nonqualified indexed defined
contribution supplemental retirement plan (SRP) for its current directors and
key employees. The present value of estimated supplemental retirement benefits
is charged to operations. No set retirement benefit amount is promised to the
participants, and no deferral of salary or income is required by the
participants. Rather, the Company has agreed to place certain funds into an
insurance policy on behalf of the participants. Each year, whatever income the
policy generates above and beyond the Company's predetermined index rate will be
accrued into a retirement account that has been established for the participant.
The accumulated benefit was $33,404 at June 30, 2001.

EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP")

The Company has an ESOP for the benefit of employees who meet the eligibility
requirements which include having completed one year of service with the Company
or its subsidiary and attained age 21. The ESOP trust purchased 26,450 shares of
common stock since the date of conversion with proceeds from a loan from the
Company. The Bank makes cash contributions to the ESOP on an annual basis
sufficient to enable the ESOP to make required loan payments to the Company. The
loan bears an interest rate of 8.50 percent with interest payable quarterly and
principal payable in equal annual installments over ten years. The loan is
secured by the unallocated shares of stock.

As the debt is repaid, shares are released from collateral and allocated to
qualified employees based on the proportion of debt service paid in the year.
Accordingly, the shares pledged as collateral are reported as unallocated ESOP
shares in the consolidated balance sheet. As shares are released from
collateral, the Company reports compensation expense equal to the current market
price of the shares, and the shares become outstanding for earnings per share
computations. Compensation expense for the ESOP was $33,186 and $27,422 for the
years ended June 30, 2001 and 2000, respectively.



<PAGE>   47



12.  EMPLOYEE BENEFITS (Continued)

EMPLOYEE STOCK OWNERSHIP PLAN (Continued)

The following table presents the components of the ESOP shares:

<TABLE>
<CAPTION>
                                           2001              2000
                                         --------          --------
<S>                                     <C>               <C>
Allocated shares                            9,178             5,951

Shares released for allocation              1,543             1,543

Shares distributed                             --                --

Unreleased shares                          15,729            18,956
                                         --------          --------

Total ESOP shares                          26,450            26,450
                                         ========          ========

Fair value of unreleased shares          $251,664          $213,255
                                         ========          ========
</TABLE>


STOCK OPTION PLAN

During 1998, the Board of Directors adopted a stock option plan for the
directors, officers, and employees. An aggregate of 33,060 shares of authorized
but unissued common stock of the Company were reserved for future issuance under
this plan. The stock options typically have expiration terms of ten years
subject to certain extensions and terminations. The per share exercise price of
a stock option shall be, at a minimum, equal to the fair value of a share of
common stock on the date the option is granted.

Qualified stock options were granted for the purchase of 21,820 shares,
exercisable at the market price of $15.75. The recipients of the stock options
vest over a five-year period. At June 30, 2001, there were 11,240 shares
available for future grant.

The following table presents share data related to the outstanding options:

<TABLE>
<CAPTION>
                                             Weighted-                   Weighted-
                                              average                    average
                                             Exercise                    Exercise
                               2001           Price         2000          Price
                              ------         --------      ------        ------
<S>                         <C>             <C>          <C>            <C>
Outstanding, July 1           21,820          $15.75       21,820        $15.75
     Granted                      --              --           --            --
     Exercised                    --              --           --            --
     Forfeited                    --              --           --            --
                              ------                       ------

Outstanding, June 30          21,820           15.75       21,820         15.75
                              ======                       ======
</TABLE>



<PAGE>   48



12.  EMPLOYEE BENEFITS (Continued)

STOCK OPTION PLAN (Continued)

The following table summarizes the characteristics of stock options outstanding
at June 30, 2001:

<TABLE>
<CAPTION>
                                           Outstanding                                 Exercisable
                             ----------------------------------------              ----------------------
                                                              Average                            Average
                                              Average        Exercise                            Exercise
    Exercise Price           Shares            Life            Price               Shares         Price
    --------------           ------           -------        --------              ------        --------
<S>                         <C>              <C>           <C>                  <C>           <C>
        $15.75               21,820             6.7           $ 15.75              14,183        $ 15.75
</TABLE>


For purposes of computing pro forma results, the Company estimated the fair
values of stock options using the Black-Scholes option pricing model. The model
requires the use of subjective assumptions which can materially effect fair
value estimates. Therefore, the pro forma results are estimates of results of
operations as if compensation expense had been recognized for the stock option
plans. The fair value of each stock option granted was estimated using the
following weighted-average assumptions for grants in 2000: (1) expected dividend
yield of 0.8 percent; (2) risk-free interest rate of 5.45 percent; (3) expected
volatility of 15.0 percent; and (4) expected life of 8.75 years.

The Company accounts for its stock option plans under provisions of APB Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
Under this Opinion, no compensation expense has been recognized with respect to
the plans because the exercise price of the Company's employee stock options
equals the market price of the underlying stock on the grant date.

Had compensation expense for the stock option plans been recognized in
accordance with the fair value accounting provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-based Compensation," net
income applicable to common stock, basic and diluted net income per common
share, for the years ended June 30 would have been as follows:

<TABLE>
<CAPTION>
                                                           2001          2000
                                                         --------      --------
<S>                                                     <C>           <C>
    Net income applicable to common stock:
       As reported                                       $120,126      $242,308
       Pro forma                                          115,986       236,036
    Basic net income per common share:
       As reported                                       $   0.43      $   0.89
       Pro forma                                             0.42          0.86
    Diluted net income per common share:
       As reported                                       $   0.43      $   0.89
       Pro forma                                             0.42          0.86
</TABLE>

RESTRICTED STOCK PLAN ("RSP")

In 1998, the Board of Directors adopted a RSP for directors, officers, and
employees. The objective of this plan is to enable the Company and the Bank to
retain its corporate directors, officers, and key employees who have the
experience and ability necessary to manage these entities. Directors, officers,
and key employees who are selected by members of a Board-appointed committee are
eligible to receive benefits under the RSP. The non-employee directors of the
Company and the Bank serve as trustees for the RSP and have the responsibility
to invest all funds contributed by the Company to the Trust created for the RSP.




<PAGE>   49



12.  EMPLOYEE BENEFITS (Continued)

RESTRICTED STOCK PLAN ("RSP") (Continued)

In 1998, the Trust purchased, with funds contributed by the Company, 13,224
shares of the common stock of the Company, of which 3,965 shares were issued to
directors, 4,892 shares were issued to officers and employees, and 5,027 shares
remain unissued as of June 30, 2000. Directors, officers, and key employees who
terminate their association with the Company shall forfeit the right to any
shares which were awarded but not earned.

The Company granted a total of 8,857 shares of common stock in March 1998. All
plan share awards granted are earned at a rate of 20 percent one year after the
date of grant and 20 percent annually thereafter. The unearned RSP shares are
excluded from stockholders' equity. The Company recognizes compensation expense
in the amount of fair value of the common stock at the grant date, pro rata,
over the years during which the shares are payable and recorded as an addition
to the stockholders' equity. Net compensation expense attributable to the RSPs
amounted to $27,900 and $41,656 for the years ended June 30, 2001 and 2000,
respectively.

13.  COMMITMENTS AND CONTINGENT LIABILITIES

COMMITMENTS

In the normal course of business, there are various outstanding commitments and
contingent liabilities which are not reflected in the accompanying financial
statements. Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the contract. Such
commitments involve, to varying degrees, elements of credit and interest rate
risk in excess of the amount recognized in the financial statements. The
exposure to loss under these commitments is limited by subjecting them to credit
approval and monitoring procedures. The amount of collateral obtained, if deemed
necessary by the Company, upon the extension of credit is based on management's
credit evaluation of the counterparty. Substantially all commitments to extend
credit are contingent upon customers maintaining specific credit standards at
the time of the loan funding. Management assesses the credit risk associated
with certain commitments to extend credit in determining the level of the
allowance for loan losses. Since many of the commitments are expected to expire
without being drawn upon, the total contractual amounts do not necessarily
represent future funding requirements.

The off-balance sheet commitments were comprised of the following:

<TABLE>
<CAPTION>
                                                                 2001               2000
                                                               --------           --------
<S>                                                           <C>                <C>
     Commitments to extend credit:
         One-to-four family                                    $ 88,500           $145,013
         Unfunded lines of credit                               594,859            624,204
</TABLE>


All of the Company's commitments to fund future one-to-four family real estate
loans are fixed rates at 7.25 percent. The rates on unfunded lines of credit are
indexed to the prime lending rate.

CONTINGENT LIABILITIES

In the normal course of business, the Company is involved in various legal
proceedings primarily involving the collection of outstanding loans. None of
these proceedings are expected to have a material effect on the financial
position or operations of the Company.



<PAGE>   50



REGULATORY MATTERS

DIVIDEND RESTRICTIONS

The Bank is subject to a dividend restriction which generally limits the amount
of dividends that can be paid by an OTS-chartered bank. OTS regulations require
that the Bank give the OTS 30 days notice of any proposed declaration of
dividends to the Company, and the OTS has the authority under its supervisory
powers to prohibit the payment of dividends by the Bank to the Company.

REGULATORY CAPITAL REQUIREMENTS

Federal regulations require the Company and the Bank to maintain minimum amounts
of capital. Specifically, each is required to maintain certain minimum dollar
amounts and ratios of Total and Tier I capital to risk-weighted assets and of
Tier I capital to average total assets.

In addition to the capital requirements, the Federal Deposit Insurance
Corporation Improvement Act ("FDICIA") established five capital categories
ranging from "well capitalized" to "critically undercapitalized." Should any
institution fail to meet the requirements to be considered "adequately
capitalized," it would become subject to a series of increasingly restrictive
regulatory actions.

As of June 30, 2001 and 2000, the Office of Thrift Supervision categorized the
Bank as well capitalized under the regulatory framework for prompt corrective
action. To be classified as a well capitalized financial institution, Total
risk-based, Tier 1 risk-based, Tier 1 Leverage capital, and Tangible equity
capital ratios must be at least 10.0 percent, 6.0 percent, 5.0 percent, and 1.5
percent, respectively.

The actual capital ratios are presented in the following tables, which show that
both the Company and the Bank met all regulatory capital requirements.

The following table reconciles the Company's capital under accounting principles
generally accepted in the United States of America to regulatory capital.

<TABLE>
<CAPTION>
                                              2001               2000
                                            ---------          ---------
<S>                                        <C>                <C>
Total capital                               5,081,793          4,932,926
Unrealized loss on securities
   available for sale                           1,159                689
                                            ---------          ---------
Tier I, core, and tangible capital          5,082,952          4,933,615
Allowance for loan losses                     154,428            155,000
                                            ---------          ---------

Risk-based capital                          5,237,380          5,088,615
                                            =========          =========
</TABLE>



<PAGE>   51




14.  REGULATORY MATTERS (Continued)

REGULATORY CAPITAL REQUIREMENTS (Continued)

 Actual capital levels of the Company and minimum required levels are as
follows:

<TABLE>
<CAPTION>
                                                   2001                              2000
                                       --------------------------         --------------------------
                                         Amount             Ratio           Amount             Ratio
                                       ----------           -----         ----------           -----
<S>                                   <C>                  <C>           <C>                  <C>
Total Capital
  (to Risk-weighted Assets)

Actual                                 $5,237,380            23.2%        $5,088,615            27.0%
For Capital Adequacy Purposes           1,810,033             8.0          1,506,828             8.0
To Be Well Capitalized                  2,262,541            10.0          1,883,535            10.0

Tier I Capital
  (to Risk-weighted Assets)

Actual                                 $5,082,952            22.5%        $4,933,615            26.2%
For Capital Adequacy Purposes             905,016             4.0            753,414             4.0
To Be Well Capitalized                  1,357,525             5.0          1,130,121             6.0

Core Capital
  (to Adjusted Assets)

Actual                                 $5,082,952            12.4%        $4,933,615            11.9%
For Capital Adequacy Purposes           1,226,747             3.0          1,246,747             3.0
To Be Well Capitalized                  2,044,579             5.0          2,077,911             5.0

Tangible Capital
  (to Adjusted Assets)

Actual                                 $5,082,952            12.4%        $4,933,615            11.9%
For Capital Adequacy Purposes             613,374             1.5            623,373             1.5
To Be Well Capitalized                        N/A             N/A                N/A             N/A
</TABLE>



<PAGE>   52


14.  REGULATORY MATTERS (Continued)

REGULATORY CAPITAL REQUIREMENTS (Continued)

Actual capital levels of the Bank and minimum required levels are as follows:

<TABLE>
<CAPTION>
                                                   2001                              2000
                                       ---------------------------        --------------------------
                                         Amount             Ratio          Amount              Ratio
                                       ----------           -----         ----------           -----
<S>                                   <C>                  <C>           <C>                 <C>
Total Capital
  (to Risk-weighted Assets)

Actual                                 $4,439,844            20.5%        $4,238,006            23.7%
For Capital Adequacy Purposes           1,736,000             8.0          1,430,000             8.0
To Be Well Capitalized                  2,170,000            10.0          1,787,500            10.0

Tier I Capital
  (to Risk-weighted Assets)

Actual                                 $4,285,416            19.8%        $4,083,006            22.8%
For Capital Adequacy Purposes             868,000             4.0            715,000             4.0
To Be Well Capitalized                  1,302,000             6.0          1,072,500             6.0

Core Capital
  (to Adjusted Assets)

Actual                                 $4,285,416            10.7%        $4,083,006            10.1%
For Capital Adequacy Purposes           1,198,999             3.0          1,220,831             4.0
To Be Well Capitalized                  1,998,331             5.0          2,034,719             5.0

Tangible Capital
  (to Adjusted Assets)

Actual                                 $4,285,416            10.7%        $4,083,006            10.1%
For Capital Adequacy Purposes             599,499             1.5            610,416             1.5
To Be Well Capitalized                        N/A             N/A                N/A             N/A
</TABLE>





<PAGE>   53



15.      FAIR VALUE DISCLOSURE

The estimated fair values of the Company's financial instruments at June 30, are
as follows:

<TABLE>
<CAPTION>
                                                        2001                                      2000
                                           --------------------------------          --------------------------------
                                             Carrying              Fair               Carrying               Fair
                                              Value                Value                Value                Value
                                           -----------          -----------          -----------          -----------
<S>                                       <C>                  <C>                  <C>                  <C>
Financial assets:
     Cash and cash equivalents             $ 8,111,395          $ 8,111,395          $ 1,217,161          $ 1,217,161
     Investment securities:
        Available for sale                   5,909,323            5,909,323            2,209,267            2,209,267
        Held to maturity                     7,698,527            7,614,243           14,894,110           14,033,582
     Mortgage-backed securities:
        Available for sale                     878,163              878,163            1,116,035            1,116,035
        Held to maturity                       225,956              227,711              323,803              313,838
     Loans receivable                       18,207,125           18,535,125           18,866,204           18,491,204
     Bank owned life insurance               1,276,083            1,276,083            1,214,106            1,214,106
     Accrued interest receivable               264,574              264,574              351,453              351,453
     FHLB stock                                200,000              200,000              200,000              200,000
                                           -----------          -----------          -----------          -----------

        Total                              $42,771,146          $43,016,617          $39,174,978          $37,929,485
                                           ===========          ===========          ===========          ===========
     Financial Liabilities:
        Deposits                            38,460,978           38,726,978           34,585,942           34,226,942
        Advances by borrowers
          For taxes and insurance              141,920              141,920              247,127              247,127
        Short-term borrowings                       --                   --            1,500,000            1,500,000
        Accrued interest payable                42,591               42,591               20,660               20,660
                                           -----------          -----------          -----------          -----------

        Total                              $38,645,489          $38,911,489          $36,353,729          $35,994,729
                                           ===========          ===========          ===========          ===========
</TABLE>

Financial instruments are defined as cash, evidence of an ownership interest in
an entity, or a contract which creates an obligation or right to receive or
deliver cash or another financial instrument from/to a second entity on
potentially favorable or unfavorable terms.

Fair value is defined as the amount at which a financial instrument could be
exchanged in a current transaction between willing parties other than in a
forced or liquidation sale. If a quoted market price is available for a
financial instrument, the estimated fair value would be calculated based upon
the market price per trading unit of the instrument.

If no readily available market exists, the fair value estimates for financial
instruments are based upon management's judgment regarding current economic
conditions, interest rate risk, expected cash flows, future estimated losses,
and other factors as determined through various option pricing formulas or
simulation modeling. As many of these assumptions result from judgments made by
management based upon estimates which are inherently uncertain, the resulting
estimated fair values may not be indicative of the amount realizable in the sale
of a particular financial instrument. In addition, changes in the assumptions on
which the estimated fair values are based may have a significant impact on the
resulting estimated fair values.



<PAGE>   54

15.  FAIR VALUE DISCLOSURE (Continued)

As certain assets, such as deferred tax assets and premises and equipment, are
not considered financial instruments, the estimated fair value of financial
instruments would not represent the full value of the Company.

The Company employed simulation modeling in determining the estimated fair value
of financial instruments for which quoted market prices were not available based
upon the following assumptions:

CASH AND CASH EQUIVALENTS, BANK OWNED LIFE INSURANCE, ACCRUED INTEREST
RECEIVABLE, FHLB STOCK, ADVANCES BY BORROWERS FOR TAXES AND INSURANCE,
SHORT-TERM BORROWINGS, AND ACCRUED INTEREST PAYABLE

The fair value is equal to the current carrying value.

INVESTMENT AND MORTGAGE-BACKED SECURITIES

The fair value of these securities is equal to the available quoted market
price. If no quoted market price is available, fair value is estimated using the
quoted market price for similar securities.

LOANS RECEIVABLE AND DEPOSITS

The fair value of loans is estimated by discounting the future cash flows using
a simulation model which estimates future cash flows based upon current market
rates adjusted for prepayment risk and credit quality. Savings, checking, and
money market deposit accounts are valued at the amount payable on demand as of
year-end. Fair values for time deposits are estimated using a discounted cash
flow calculation that applies contractual costs currently being offered in the
existing portfolio to current market rates being offered for deposits of similar
remaining maturities.

COMMITMENTS TO EXTEND CREDIT

These financial instruments are generally not subject to sale, and estimated
fair values are not readily available. The carrying value, represented by the
net deferred fee arising from the unrecognized commitment and the fair value,
determined by discounting the remaining contractual fee over the term of the
commitment using fees currently charged to enter into similar agreements with
similar credit risk, are not considered material for disclosure. The contractual
amounts of unfunded commitments are presented in Note 13.



<PAGE>   55

16.  SUBSEQUENT EVENT

On August 30, 2001, the shareholders ratified a definitive Agreement and Plan of
Reorganization (the Agreement), dated May 16, 2001, which provides for the
affiliation of the Company with ESB Financial Corporation (ESB) headquartered in
Ellwood City, Pennsylvania. The Agreement provides that the affiliation will be
effected by means of a merger of the Company and ESB. In the merger, which is
slated to complete by month end October 2001, each stockholder of the Company
shall receive either the equal to the quotient determined by dividing $17.10 by
the average share price of ESB common stock or $17.10 in cash in exchange for
each share of the Company's stock, subject to certain terms, conditions, and
limitations set forth in the Agreement, as well as regulatory approvals.



<PAGE>   56

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

         None.


                                    PART III


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


BOARD OF DIRECTORS

         Robert D Neudorfer, 64, has been employed by the Bank since 1975 and
has been the President and a member of the board of directors since 1988. Mr.
Neudorfer is a member of the board of directors and the treasurer of Community
Development Foundation and is also a member of the board of directors of the
Western Pennsylvania League of Savings Institutions. Mr. Neudorfer is a choir
member of the Baldwin Community United Methodist Church.

         Ronald W. Moreschi, 58, has been employed by the Bank since 1987 and
became vice-president and treasurer in 1989 and was appointed executive vice
president in July 2000. Mr. Moreschi was appointed to the board of directors in
November 1999.

         Johanna C. Guehl, 47, has been a Director and Secretary since 1991.
Since 1991, Ms. Guehl has been a partner in the law firm of Barbender & Guehl.
Ms. Guehl is a member of the board of directors for Women's Leadership
Assembly and she is the treasurer for Center For Victims of Violent Crimes and
Women's Business Network.

         Joseph J. Manfred, 78, has been a member of the board of directors
since 1973 and Chairman of the Board from 1973 to 2000. Mr. Manfred is a choir
member of St. John Fisher Church and a eucharistic minister for Forbes Regional
Hospital. Mr. Manfred is also a retired insurance agent who owned Manfred
Insurance Agency.

         John P. Mueller, 63, has been a member of the board of directors since
1994 and Chairman of the Board since 2000. Mr. Mueller is President and majority
stockholder of Mueller's Hardware in Pittsburgh. He is also the President of
Northside Chamber of Commerce and a member of the board of directors of St.
Ambrose Manor.


         Stanford H. Rosenberg, 67, has been a member of the board of directors
since 1985. Since 1974, he has been a professor at La Roche College in
Pittsburgh.

Item 10.  Executive Compensation


DIRECTOR COMPENSATION

         For the first six month period and last six month period of fiscal year
ended 2001, each non-employee director was paid a monthly fee (including two
paid absences) of $850 and $1,000 and each employee director was paid a monthly
fee of $150 and $300, respectively. Directors are not paid a fee for attending
committee meetings. For the fiscal year ended June 30, 2001, total fees paid by
the Bank to Directors were $33,600.

         Under the 1998 Stock Option Plan ("Option Plan") and the Bank's RSP,
each director was granted stock options and awarded RSP shares. Under the Option
Plan, each director was granted options to acquire shares of Common Stock at the
fair market value of the Common Stock on the effective date of grant. Under the
RSP, each director was awarded shares of Common Stock. Option shares and RSP
shares are exercisable at the rate of 20% per year commencing one year from the
effective date of grant. Under the Option Plan and RSP, Mr. Neudorfer received
8,265 options and 3,306 RSP shares. The non-employee directors each received
1,653 option shares and 793 RSP shares. Mr. Moreschi received 2,645 option
shares and 793 RSP shares. In accordance with the RSP, dividends are paid on
shares awarded or held in the RSP.

A Supplemental Retirement Plan ("SRP") has been implemented for the benefit of
each director. The SRP provides that each director shall receive at termination
of service, or age 65 for Messrs. Neudorfer and Moreschi, a retirement benefit
equal to the value of the Bank's annual discretionary contributions to each
individual's retirement account, reduced by the investment expenses associated
with any life insurance contracts on such individual, and increased by any
investment returns on such life insurance contracts. As of June 30, 2001,
deferred compensation under the SRP was $15,729 for Robert Neudorfer, $1,157 for
Ronald Moreschi, $445 for Johanna Guehl, and $4,661 each for Joseph Manfred,
John Mueller, and Stanford Rosenberg.




<PAGE>   57
EXECUTIVE OFFICER COMPENSATION

         The Company has no full time employees, but relies on the employees of
the Bank for the limited services. All compensation paid to officers and
employees is paid by the Bank.

         Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the president. No other executive
officer of either the Bank or the Company had a salary and bonus during the
three years ended June 30, 2001 that exceeded $100,000 for services rendered in
all capacities to the Bank or the Company.

<TABLE>
<CAPTION>
                                                                                             Long-Term Compensation
                                           Annual Compensation                                 Awards
                          ------------------------------------------------------- ---------------------------------
                                                                                    Restricted       Securities
    Name and               Fiscal                                Other Annual         Stock          Underlying      All Other
   Principal Position       Year     Salary($)     Bonus($)      Compensation      Award(s)($)       Options #     Compensation($)
   ------------------       ----     ---------     --------      ------------      -----------       ---------     ---------------
<S>                        <C>       <C>          <C>           <C>               <C>               <C>           <C>
   Robert D. Neudorfer      2001      85,000            --            --                --               --           39,229(1)
    President               2000      77,000         6,000            --                --               --           21,365
                            1999      72,000         4,500            --                --               --            1,640
</TABLE>

(1)  At June 30, 2001 consists of 2,350 shares allocated under the ESOP at a
     cost basis of $10.00 per share. Such shares had an aggregate market value
     of $27,318 at June 30, 2001. Also includes deferred compensation of $15,729
     under the SRP. See "Director and Executive Compensation - Director
     Compensation."

     Employment Agreement. The Bank has entered into an employment agreement
with Robert D. Neudorfer, President of the Bank (the "Agreement"). The Agreement
has a three-year term. Under the Agreement, Mr. Neudorfer's employment may be
terminated by the Bank for "just cause" as defined in the Agreement. If the Bank
terminates Mr. Neudorfer without just cause, Mr Neudorfer will be entitled to a
continuation of his salary from the date of termination through the remaining
term of the Agreement. In the event the termination of employment is connected
with any change is control of the Bank during the term of the Agreement, Mr.
Neudorfer will be paid in a lump sum an amount equal to three times his prior
year's taxable compensation. In the event of a change in control at June 30,
2001, Mr. Neudorfer would have been entitled to a lump sum payment of
approximately $235,000.

     Stock Awards. The following tables set forth information with respect to
previously awarded stock options to purchase the Common Stock granted in 1998
to Mr. Neudorfer and held by him as of June 30, 2001. The Company has not
granted Mr. Neudorfer any stock appreciation rights ("SARs").

              AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR,
                          AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
                                                                     Number of Securities                  Value of Unexercised
                                                                     Underlying Unexercised                    In-The-Money
                                                                          Options/SARs                         Options/SARs
                        Shares Acquired           Value                   at FY-End (#)                        at FY-End ($)
       Name             on Exercise(#)       Realized($)(1)         Exercisable/Unexercisable         Exercisable/Unexercisable(1)
       ----             --------------       --------------         -------------------------         ----------------------------
<S>                     <C>                 <C>                    <C>                               <C>
    Robert D. Neudorfer       --                    --                    4,959/3,306                           $ - / $ -
</TABLE>

(1)  Based upon an exercise price of $15.75 per share and estimated price of
     $16.00 at June 30, 2001.



<PAGE>   58

Item 11. Security Ownership of Certain Beneficial Owners and Management

         Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). Based upon the
records of the Company's Transfer agent, the following table sets forth, as of
June 30, 2001, persons or Groups who own more than 5% of the common stock, all
directors of the Company, the named executive officer, and the ownership of all
executive officers and directors of the Bank as a group. Other than as noted
below, management knows of no person or group that owns more than 5% of the
outstanding shares of common stock at that date.

<TABLE>
<CAPTION>
                                                                                          Percent of Shares of
                                                             Amount and Nature of         Common Stock
Name and Address of Beneficial Owner                         Beneficial Ownership         Outstanding (%)
------------------------------------                         --------------------         ---------------
<S>                                                         <C>                          <C>
Workingmens Savings Bank
Employee Stock Ownership Plan ("ESOP")
807 Middle Street
Pittsburgh, Pennsylvania 15212  (1)                               26,450                       8.74%

Jeffrey L. Gendell
Tontine Partners, L.P.
Tontine Management, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166  (2)                                     30,050                       9.93%

Robert D. Neudorfer
807 Middle Street
Pittsburgh, Pennsylvania 15212  (3)                               24,308                       8.03%

All directors and officers of the Company
as a group (six persons)  (4)                                     75,283                       24.87%
</TABLE>

(1)  The ESOP purchased such shares for the exclusive benefit of plan
     participants With funds borrowed from the Company. These shares are held in
     a suspense account and will be allocated among ESOP participants annually
     on the basis of compensation as the ESOP debt is repaid. The Bank's board
     of directors has appointed a committee consisting of directors Manfred and
     Mueller to serve as the ESOP administrative committee ("ESOP Committee")
     and to serve as the ESOP Trustees ("ESOP Trustees"). The ESOP Committee or
     the board instructs the ESOP Trustees regarding investment of ESOP plan
     assets. The ESOP Trustees must vote all shares allocated to participants
     Accounts under the ESOP as directed by participants. Unallocated shares and
     shares for which no timely voting direction is received, will be voted by
     the ESOP Trustee as directed by the board or the ESOP Committee. As of the
     record date, 9,178 shares have been allocated under the ESOP to participant
     accounts.

(2)  The information as to Jeffrey L. Gendell, Tontine Partners, L.P., and
     Tontine Management, L.L.C.(collectively, the "Reporting Persons"), is
     derived from a Schedule 13G, dated February 10, 2000, which states that the
     Reporting Persons, through certain of its affiliates, had shared voting
     power and shared dispositive power with respect to 30,050 shares.

(3)  Includes 307 shares and 1,587 option shares awarded to Mr. Neudorfer's
     spouse through the restricted stock plan and the 1998 stock option plan.
     Mr. Neudorfer dis-claims beneficial ownership of such shares.

(4)  Includes shares of common stock held directly as well as by spouses or
     minor children, in trust and other indirect ownership,over which shares the
     individuals effectively exercise sole voting and investment power, unless
     otherwise indicated. Includes options to purchase 12,089 shares of common
     stock that may be exercised under the 1998 stock option plan within 60 days
     of the record date. Excludes 21,228 shares held by the ESOP(26,450 shares
     minus 5,222 shares allocated to executive officers) and excludes 7,319
     shares previously awarded but presently subject to forfeiture and un-
     allocated shares held by the restricted stock plan ("RSP") over which
     certain directors by their position as either a member of the ESOP
     Committee, ESOP trust or RSP trust, exercise shared voting and investment
     power. Such individuals serving as a member of the ESOP Committee, ESOP
     trust or RSP trust disclaim beneficial ownership with respect to the ESOP
     and RSP shares.

Item 12. Certain Relationships and Related Transactions

         The Bank, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors, and employees. The loans
have been made in the ordinary course of the Bank's business and on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with the Bank's other
customers, and do not involve more than the normal risk of collectibility, or
present other unfavorable features.



<PAGE>   59



Item 13.  Exhibits, List, and Reports on Form 8-K

          3.   The following exhibits are included in this Report or
               incorporated herein by reference:

               (a)  List of Exhibits:

                    3(i)  Restated Articles of Incorporation of WSB Holding
                          Company *

                     3(ii) Bylaws of WSB Holding Company **

                    4     Specimen Stock Certificate **

                    10    Employment Agreement between the Bank and Robert D.
                          Neudorfer

                    10.1  1998 Stock Option Plan ***

                    10.2  Restricted Stock Plan and Trust Agreement ***

                    10.3  Form of Supplemental Benefit Agreement****

                    10.4  Form of Split Dollar Agreement****

                    21    Subsidiaries of the Registrant
                          (See "Item 1-Description of Business")

                    23    Consent of S.R. Snodgrass, A.C.

               (b)  Reports on Forms 8-K, dated March 5, 2001 and May 17, 2001
                    were filed to disclose the correction of basic and diluted
                    earnings per share previously recorded in the December 31,
                    2000 10-QSB and Agreement and Plan of Reorganization to
                    merge with ESB Financial Corporation.

---------
*    Incorporated by reference to the Form 8A (File No. 0-22997) declared
     effective by the SEC on August 21, 1997.

**   Incorporated by reference to the registration statement on Form SB-2 (File
     No. 333- 29389) declared effective by the SEC on July 15, 1997.

***  Incorporated by reference to the Proxy Statement for the Special Meeting of
     Stockholders on March 16, 1998 and filed with the SEC on February 4, 1998.

**** Incorporated by reference to the June 30, 1999 Form 10-KSB filed with the
     SEC on September 22, 1999.




<PAGE>   60

                                   SIGNATURES





         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized as of September 25,
2001.

                        WSB HOLDING COMPANY


                        By: /s/ Robert D. Neudorfer
                           ------------------------------------------------
                            Robert D. Neudorfer
                            President, Chief Executive Officer and Director
                            (Duly Authorized Representative)


         Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of September 25, 2001.

<TABLE>
<CAPTION>
<S>                                                         <C>
/s/ Robert D. Neudorfer                                       /s/ John P. Mueller
--------------------------------------------------            ----------------------------------------------
Robert D. Neudorfer                                           John P. Mueller
President, Chief Executive Officer and Director               Chairman of the Board
(Principal Executive and Financial Officer)


/s/ Ronald W. Moreschi                                        /s/ Stanford H. Rosenberg
--------------------------------------------------            ----------------------------------------------
Ronald W. Moreschi                                            Stanford H. Rosenberg
Treasurer, Chief Financial Officer, and Director              Vice President and Director
(Principal Accounting Officer)


/s/ Joseph J. Manfred                                         /s/ Johanna C. Guehl
--------------------------------------------------            ----------------------------------------------
Joseph J. Manfred                                             Johanna C. Guehl
Director                                                      Director
</TABLE>