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

                                   FORM 10-QSB

(Mark One)

      |X|   QUARTERLY  REPORT  UNDER  SECTION  13 OR 15 (d)  OF  THE  SECURITIES
            EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

      |_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to ____________.

Commission File Number 0-22223
                       -------

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      ------------------------------------
        (Exact name of small business issuer as specified in its charter)

            Delaware                                              31-1499862
            --------                                              ----------
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)

                     101 E. Court Street, Sidney, Ohio 45365
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (937) 492-6129
                                 --------------
                          (Issuer's telephone number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during  the past 12  months,  and (2) has been
subject to such filing requirements for the past 90 days.

Yes |X|     No |_|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes |_|     No |X|

As of October 31, 2005, the latest  practicable  date,  1,405,148  shares of the
issuer's common shares, $.01 par value, were issued and outstanding.

Transitional Small Business Disclosure Format (Check One):

Yes |_|     No |X|

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


                                                                              1.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                   <C>
PART I - FINANCIAL INFORMATION

  Item 1. Financial Statements (Unaudited)

          Consolidated Balance Sheets ...........................................      3

          Consolidated Statements of Income .....................................      4

          Consolidated Statements of Comprehensive Income .......................      5

          Condensed Consolidated Statements of Changes in Shareholders' Equity ..      6

          Consolidated Statements of Cash Flows .................................      7

          Notes to Consolidated Financial Statements ............................      8

  Item 2. Management's Discussion and Analysis ..................................     15

  Item 3. Controls and Procedures ...............................................     21

PART II - OTHER INFORMATION

  Item 1. Legal Proceedings .....................................................     22

  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ...........     22

  Item 3. Defaults Upon Senior Securities .......................................     22

  Item 4. Submission of Matters to a Vote of Security Holders ...................     22

  Item 5. Other Information .....................................................     22

  Item 6. Exhibits ..............................................................     22

SIGNATURES ......................................................................     23

INDEX TO EXHIBITS ...............................................................     24
</TABLE>

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


                                                                              2.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS

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

Item 1. Financial Statements
        --------------------

<TABLE>
<CAPTION>
                                                              September 30,         June 30,
                                                                   2005               2005
                                                              -------------      -------------
                                                               (Unaudited)
<S>                                                           <C>                <C>
ASSETS
Cash and due from financial institutions                      $   1,210,118      $   1,366,825
Interest-bearing deposits in other financial institutions         4,141,644          3,954,371
                                                              -------------      -------------
     Total cash and cash equivalents                              5,351,762          5,321,196
Securities available for sale                                     5,360,475          5,433,915
Federal Home Loan Bank stock                                      1,694,400          1,673,900
Loans, net of allowance of $852,400 and $835,500                122,220,415        121,110,189
Accrued interest receivable                                         834,270            745,534
Premises and equipment, net                                       2,053,655          2,095,691
Other assets                                                        165,493            314,841
                                                              -------------      -------------

     Total assets                                             $ 137,680,470      $ 136,695,266
                                                              =============      =============

LIABILITIES
Deposits                                                      $  85,509,874      $  85,930,737
Borrowed funds                                                   34,153,514         32,588,719
Accrued interest payable and other liabilities                      334,615            414,419
                                                              -------------      -------------
     Total liabilities                                          119,998,003        118,933,875

SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 500,000 shares
  authorized, none issued and outstanding                                --                 --
Common stock, $.01 par value, 3,500,000 shares
  authorized, 1,785,375 shares issued                                17,854             17,854
Additional paid-in capital                                       10,793,272         10,785,770
Retained earnings                                                11,735,821         11,702,497
Treasury stock, 360,227 and 352,727 shares, at cost              (4,217,778)        (4,113,716)
Unearned employee stock ownership plan shares                      (556,116)          (588,958)
Accumulated other comprehensive loss                                (90,586)           (42,056)
                                                              -------------      -------------
     Total shareholders' equity                                  17,682,467         17,761,391
                                                              -------------      -------------

     Total liabilities and shareholders' equity               $ 137,680,470      $ 136,695,266
                                                              =============      =============
</TABLE>

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

          See accompanying notes to consolidated financial statements.


                                                                              3.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

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

                                                          Three Months Ended
                                                             September 30,
                                                       -------------------------
                                                          2005           2004
                                                       ----------     ----------

Interest income
     Loans, including fees                             $1,947,843     $1,837,810
     Securities                                            53,034         45,590
     Demand, time and overnight deposits                   25,222         10,883
     Dividends on FHLB Stock                               20,568         17,108
                                                       ----------     ----------
         Total interest income                          2,046,667      1,911,391

Interest expense
     Deposits                                             433,651        369,897
     Borrowed funds                                       433,122        410,863
                                                       ----------     ----------
         Total interest expense                           866,773        780,760
                                                       ----------     ----------

Net interest income                                     1,179,894      1,130,631

Provision for loan losses                                  16,914         26,769
                                                       ----------     ----------

Net interest income after provision for loan losses     1,162,980      1,103,862

Noninterest income
     Service fees and other charges                        34,650         31,677
     Gain on sale of real estate owned                        657             --
                                                       ----------     ----------
         Total noninterest income                          35,307         31,677

Noninterest expense
     Compensation and benefits                            427,819        409,737
     Director fees                                         24,300         24,300
     Occupancy and equipment                              101,018        102,616
     Computer processing                                   86,768         58,942
     Professional fees                                     53,224         28,394
     State franchise taxes                                 49,763         52,798
     Other                                                 80,427         83,578
                                                       ----------     ----------
         Total noninterest expense                        823,319        760,365
                                                       ----------     ----------

Income before income taxes                                374,968        375,174

Income tax expense                                        135,400        135,300
                                                       ----------     ----------

Net income                                             $  239,568     $  239,874
                                                       ==========     ==========

Earnings per common share - basic                      $     0.17     $     0.17
                                                       ==========     ==========

Earnings per common share - diluted                    $     0.17     $     0.17
                                                       ==========     ==========

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

          See accompanying notes to consolidated financial statements.


                                                                              4.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)

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

                                                          Three Months Ended
                                                            September 30,
                                                       ------------------------
                                                          2005           2004
                                                       ---------      ---------

Net income                                             $ 239,568      $ 239,874

Other comprehensive income (loss)
     Unrealized holding gains and (losses) on
       available-for-sale securities                     (73,530)       120,845
     Tax effect                                           25,000        (41,087)
                                                       ---------      ---------
         Other comprehensive income (loss)               (48,530)        79,758
                                                       ---------      ---------

Comprehensive income                                   $ 191,038      $ 319,632
                                                       =========      =========

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

          See accompanying notes to consolidated financial statements.


                                                                              5.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
                              SHAREHOLDERS' EQUITY
                                   (Unaudited)

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

<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                                    September 30,
                                                             ----------------------------
                                                                 2005             2004
                                                             -----------      -----------
<S>                                                          <C>              <C>
Balance, beginning of period                                 $17,761,391      $17,430,913

Net income for period                                            239,568          239,874

Cash dividends, $.15 and $.14 per share for the three
  months ended September 30, 2005 and 2004                      (206,244)        (191,895)

Purchase of 7,500 shares of treasury stock for the three
   months ended September 30, 2005                              (104,062)              --

Commitment to release 2,799 and 2,944 employee stock
  ownership plan shares for the three months ended
  September 30, 2005 and 2004, at fair value                      40,344           47,331

Change in fair value on securities available for
  sale, net of tax                                               (48,530)          79,758
                                                             -----------      -----------

Balance, end of period                                       $17,682,467      $17,605,981
                                                             ===========      ===========
</TABLE>

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

          See accompanying notes to consolidated financial statements.


                                                                              6.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

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

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                        September 30,
                                                               ------------------------------
                                                                   2005              2004
                                                               ------------      ------------
<S>                                                            <C>               <C>
Cash flows from operating activities
     Net income                                                $    239,568      $    239,874
     Adjustments to reconcile net income to net cash from
       operating activities
         Depreciation                                                45,447            43,876
         Provision for loan losses                                   16,914            26,769
         Net accretion on securities                                    (90)              (90)
         Gain on sale of real estate owned                             (657)               --
         FHLB stock dividends                                       (20,500)          (17,100)
         Compensation expense for ESOP shares                        40,344            47,331
         Change in:
              Accrued interest receivable and other assets           60,612           110,352
              Accrued expense and other liabilities                 (54,804)         (160,415)
              Deferred loan fees                                      8,211              (701)
                                                               ------------      ------------
                  Net cash from operating activities                335,045           289,896

Cash flows from investing activities
     Net change in loans                                         (1,184,634)       (1,307,145)
     Premises and equipment expenditures                             (3,411)           (9,296)
     Proceeds from sale of real estate owned                         49,940                --
                                                               ------------      ------------
         Net cash from investing activities                      (1,138,105)       (1,316,441)

Cash flows from financing activities
     Net change in deposits                                        (420,863)         (558,847)
     Repayments of long-term FHLB advances                         (435,205)         (474,810)
     Proceeds from long-term FHLB advances                        2,000,000                --
     Cash dividends paid                                           (206,244)         (191,895)
     Purchase of treasury stock                                    (104,062)               --
                                                               ------------      ------------
         Net cash from financing activities                         833,626        (1,225,552)
                                                               ------------      ------------

Net change in cash and cash equivalents                              30,566        (2,252,097)

Cash and cash equivalents at beginning of period                  5,321,196        10,033,688
                                                               ------------      ------------

Cash and cash equivalents at end of period                     $  5,351,762      $  7,781,591
                                                               ============      ============

Supplemental disclosures of cash flow information
     Interest paid                                             $    862,997      $    783,897
     Income taxes paid                                                   --            15,000

Noncash transactions
     Transfer from loans to other real estate owned            $     49,283      $         --
</TABLE>

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

          See accompanying notes to consolidated financial statements.


                                                                              7.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:  The accompanying consolidated financial statements
---------------------------
include accounts of  Peoples-Sidney  Financial  Corporation  ("Peoples") and its
wholly-owned   subsidiary,   Peoples  Federal   Savings  and  Loan   Association
("Association"), a federal stock savings and loan association, together referred
to as the Corporation.  All significant  intercompany  transactions and balances
have been eliminated.

These interim  consolidated  financial statements are prepared without audit and
reflect all adjustments  which,  in the opinion of management,  are necessary to
present fairly the financial  position of the  Corporation at September 30, 2005
and its results of operations and cash flows for the periods presented. All such
adjustments are normal and recurring in nature.  The  accompanying  consolidated
financial  statements have been prepared in accordance with the instructions for
Form  10-QSB  and,  therefore,  do not  purport  to  contain  all the  necessary
financial  disclosures  required by accounting  principles generally accepted in
the  United  States  of  America  that  might  otherwise  be  necessary  in  the
circumstances, and should be read in conjunction with the consolidated financial
statements and notes thereto of the  Corporation  for the fiscal year ended June
30, 2005,  included in the  Corporation's  2005 Annual Report on Form 10-KSB for
the  fiscal  year  ended  June 30,  2005.  Reference  is made to the  accounting
policies of the  Corporation  described in the notes to  consolidated  financial
statements  contained in such report. The Corporation has consistently  followed
these policies in preparing this Form 10-QSB.

Nature of Operations:  The Corporation  provides  financial services through its
--------------------
main  office in Sidney,  Ohio,  and branch  offices in Sidney,  Anna and Jackson
Center,  Ohio.  Its primary  deposit  products  are  checking,  savings and term
certificate accounts, and its primary lending products are residential mortgage,
commercial  and  installment  loans.  Substantially  all  loans are  secured  by
specific items of collateral  including  business  assets,  consumer  assets and
commercial  and  residential  real estate.  Commercial  loans are expected to be
repaid from cash flow from operations of businesses.  Substantially all revenues
and  services are derived from  financial  institution  products and services in
Shelby County and contiguous  counties.  Management considers the Corporation to
operate primarily in one segment, banking.

Use of Estimates:  To prepare financial statements in conformity with accounting
----------------
principles generally accepted in the United States of America,  management makes
estimates and assumptions  based on available  information.  These estimates and
assumptions  affect  the  amounts  reported  in  the  financial  statements  and
disclosures  provided,  and actual results could differ.  The allowance for loan
losses and fair values of  financial  instruments  are  particularly  subject to
change.

Income Taxes:  Income tax expense is based on the effective tax rate expected to
------------
be  applicable  for the  entire  year.  Income  tax  expense is the total of the
current year income tax due or refundable  and the change in deferred tax assets
and liabilities. Deferred tax assets and liabilities are the expected future tax
amounts for the temporary differences between the carrying amounts and tax basis
of assets  and  liabilities,  computed  using  enacted  tax rates.  A  valuation
allowance,  if needed,  reduces deferred tax assets to the amount expected to be
realized.

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


                                   (Continued)

                                                                              8.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Earnings Per Common  Share:  Basic  earnings  per common  share  ("EPS") are net
--------------------------
income  divided by the  weighted  average  number of common  shares  outstanding
during the period.  Employee stock ownership plan ("ESOP") shares are considered
outstanding for this calculation unless unearned. Diluted EPS shows the dilutive
effect of additional common shares upon exercise of stock options.

Stock -Based Compensation:  Employee compensation expense under stock options is
-------------------------
reported  using the fair value  recognition  provisions  of FASB  Statement  123
(revised 2004) (FAS 123R), Share Based Payment.  The Corporation has adopted FAS
123R using the modified  prospective  method.  Under this  method,  compensation
expense will be recognized for the unvested portion of previously  issued awards
that remained  outstanding as of July 1, 2005 and for any future  awards.  Prior
interim  periods and fiscal year results  will not be restated.  For the quarter
ended September 30, 2005, no  compensation  expense was recognized in the income
statement as all outstanding options were fully vested prior to June 30, 2005.

NOTE 2 - SECURITIES AVAILABLE FOR SALE

Securities available for sale were as follows.

                                                        Gross          Gross
                                          Fair        Unrealized     Unrealized
                                          Value         Gains          Losses
                                       ----------     ----------     ----------
September 30, 2005
------------------
    U.S. Government agencies           $5,360,475     $      155     $ (137,404)
                                       ==========     ==========     ==========

June 30, 2005
-------------
    U.S. Government agencies           $5,433,915     $    3,905     $  (67,624)
                                       ==========     ==========     ==========

Contractual  maturities of  securities  available for sale at September 30, 2005
were as  follows.  Actual  maturities  may differ  from  contractual  maturities
because  borrowers  may have the  right to call or  prepay  obligations  with or
without call or prepayment penalties.

                                                                   Fair
                                                                   Value
                                                                ----------

      Due after one year through five years                     $2,475,465
      Due after five years through ten years                     2,885,010
                                                                ----------

                                                                $5,360,475
                                                                ==========

There were no sales of  securities  available  for sale during the three  months
ended  September 30, 2005 or 2004.  No securities  were pledged as collateral at
September 30, 2005 or June 30, 2005.

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


                                   (Continued)

                                                                              9.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

NOTE 2 - SECURITIES AVAILABLE FOR SALE (Continued)

Securities  with  unrealized  losses at  September  30, 2005 and June 30,  2005,
aggregated by investment category and length of time that individual  securities
have been in a continuous unrealized loss position, are as follows.

<TABLE>
<CAPTION>
                                Less than 12 Months             12 Months or More                    Total
                             -------------------------      -------------------------      -------------------------
                                Fair        Unrealized         Fair        Unrealized         Fair        Unrealized
Description of Securities       Value          Loss            Value          Loss            Value          Loss
-------------------------    ----------     ----------      ----------     ----------      ----------     ----------
<S>                          <C>            <C>             <C>            <C>             <C>            <C>
September 30, 2005
------------------

U.S. Government agencies     $1,975,310     $  (24,321)     $2,885,010     $ (113,083)     $4,860,320     $ (137,404)
                             ==========     ==========      ==========     ==========      ==========     ==========

June 30, 2005
-------------

U.S. Government agencies     $1,990,000     $   (9,602)     $2,940,010     $  (58,022)     $4,930,010     $  (67,624)
                             ==========     ==========      ==========     ==========      ==========     ==========
</TABLE>

Unrealized  losses on the investment  securities  have not been  recognized into
income  because the securities  are of high credit  quality,  management has the
intent and ability to hold for the foreseeable  future,  and the decline in fair
value is largely due to changes in interest rates. The fair value is expected to
recover as the securities approach their maturity date or reset date.

NOTE 3 - LOANS

Loans were as follows.

                                            September 30,         June 30,
                                                 2005               2005
                                            -------------      -------------
      Mortgage loans:
           1-4 family residential           $  94,615,609      $  94,593,583
           Multi-family residential             1,410,380          1,297,418
           Commercial real estate              12,774,250         12,564,156
           Real estate construction and
             development                        2,118,519          1,441,815
           Land                                 2,128,995          2,186,890
                                            -------------      -------------
               Total mortgage loans           113,047,753        112,083,862
      Consumer loans                            5,375,294          5,056,291
      Commercial loans                          5,037,111          5,184,668
                                            -------------      -------------
               Total loans                    123,460,158        122,324,821
      Less:
           Allowance for loan losses             (852,400)          (835,500)
           Deferred loan fees                    (387,343)          (379,132)
                                            -------------      -------------

                                            $ 122,220,415      $ 121,110,189
                                            =============      =============

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


                                   (Continued)

                                                                             10.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

NOTE 3 - LOANS (Continued)

Activity in the allowance for loan losses is summarized as follows.

                                                   Three Months Ended
                                                      September 30,
                                                -------------------------
                                                   2005            2004
                                                ---------       ---------

      Balance at beginning of period            $ 835,500       $ 752,900
      Provision for losses                         16,914          26,769
      Charge-offs                                    (111)         (2,669)
      Recoveries                                       97              --
                                                ---------       ---------

      Balance at end of period                  $ 852,400       $ 777,000
                                                =========       =========

Impaired loans were as follows.

<TABLE>
<CAPTION>
                                                                        September 30,  June 30,
                                                                            2005         2005
                                                                        -------------  --------
<S>                                                                       <C>          <C>
Period-end impaired loans with no allowance for loan losses allocated     $     --     $     --
Period-end impaired loans with allowance for loan losses allocated         241,000      161,000
Amount of the allowance allocated to impaired loans                        142,000      134,000
</TABLE>

                                                           Three Months Ended
                                                              September 30,
                                                         -----------------------
                                                           2005           2004
                                                         --------       --------

Average of impaired loans during the period              $186,000       $129,000
Interest income recognized during the period                3,274          3,182
Cash-basis interest income recognized                       1,126            530

Nonperforming loans were as follows.

                                                      September 30,    June 30,
                                                          2005           2005
                                                      -------------   ----------

      Loans past due over 90 days still on accrual     $  347,000     $  349,000
      Nonaccrual loans                                  1,094,000      1,318,000

Nonperforming   loans  include  smaller  balance   homogeneous  loans,  such  as
residential  mortgage and consumer  loans that are  collectively  evaluated  for
impairment and individually classified impaired loans.

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


                                   (Continued)

                                                                             11.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

NOTE 4 - BORROWED FUNDS

At September 30, 2005 and June 30, 2005, the  Association  had a cash management
line of credit enabling it to borrow up to $8,000,000 from the Federal Home Loan
Bank of  Cincinnati  ("FHLB").  All cash  management  advances  have an original
maturity  of 90 days.  The line of credit  must be renewed  on an annual  basis.
There  were  $2,500,000  in  outstanding  borrowings  on this  line of credit at
September 30, 2005 and June 30, 2005.

As a member  of the FHLB  system,  the  Association  has the  ability  to obtain
borrowings up to a maximum total of $67.5 million  including the cash management
line of credit. Advances from the Federal Home Loan Bank were as follows.

<TABLE>
<CAPTION>
                                                            September 30,      June 30,
                                                                 2005            2005
                                                            -------------    -----------
<S>                                                          <C>             <C>
      Cash management advance, variable rate 4.06%
        at September 30, 2005 and 3.53% at June 30, 2005     $ 2,500,000     $ 2,500,000
      6.13%  FHLB  fixed-rate advance, due June 25, 2008       7,000,000       7,000,000
      4.42% FHLB  fixed-rate  advance, due  July 9, 2010        2,000,000             --
      6.00% FHLB  convertible advance, fixed-rate  until
        December 2005, due June 11, 2009                       5,000,000       5,000,000
      6.27% FHLB  convertible  advance, fixed-rate until
        December 2005, due September 8, 2010                   5,000,000       5,000,000
      5.30% select  pay mortgage-matched  advance, final
        maturity May 1, 2011                                     827,302         858,399
      5.35% select  pay mortgage-matched  advance, final
        maturity July 1, 2011                                  1,697,673       1,954,752
      3.92% select pay  mortgage-matched  advance, final
        maturity November 1, 2012                                681,550         702,046
      3.55% select pay  mortgage-matched  advance, final
        maturity March 1, 2013                                   782,188         804,848
      4.10% select  pay mortgage-matched  advance, final
       maturity March 1, 2015                                    959,120         979,664
      4.09% select pay  mortgage-matched  advance, final
        maturity November 1, 2017                                692,430         703,360
      3.31%  select pay  mortgage-matched advance, final
        maturity April 1, 2019                                   786,511         797,932
      4.72%  select pay  mortgage-matched advance, final
        maturity November 1, 2022                              2,460,549       2,483,689
      4.38% select  pay  mortgage-matched advance, final
        maturity December 1, 2022                                819,992         827,909
      3.92% select  pay  mortgage-matched advance, final
        maturity December 1, 2022                                732,487         739,884
      3.64% select pay  mortgage-matched  advance, final
        maturity March 1, 2023                                 2,213,712       2,236,236
                                                             -----------     -----------

                                                             $34,153,514     $32,588,719
                                                             ===========     ===========
</TABLE>

Advances under the borrowing  agreements are  collateralized by a blanket pledge
of the Association's residential mortgage loan portfolio and its FHLB stock.

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


                                   (Continued)

                                                                             12.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

NOTE 4 - BORROWED FUNDS (Continued)

The interest rates on the convertible  advances are fixed for a specified number
of years,  then convertible to a variable rate at the option of the FHLB. If the
convertible  option is exercised,  the advance may be prepaid without prepayment
fee. The select pay  mortgage-matched  advances  require  monthly  principal and
interest payments and annual additional principal payments.

Maturities  of FHLB  advances  for the next five  years and  thereafter  were as
follows.

            Year ended September 30,
                     2006                                $ 4,520,996
                     2007                                  1,772,709
                     2008                                  8,560,361
                     2009                                  6,378,268
                     2010                                  8,223,741
                  Thereafter                               4,697,439
                                                         -----------

                                                         $34,153,514
                                                         ===========

NOTE 5 - OFF-BALANCE-SHEET ACTIVITIES

Loss  contingencies,  including claims and legal actions arising in the ordinary
course of business,  are recorded as liabilities  when the likelihood of loss is
probable and an amount or range of loss can be reasonably estimated.  Management
does not believe there now are such matters that will have a material  effect on
the financial statements.

Some financial instruments,  such as loan commitments,  credit lines, letters of
credit and overdraft  protection,  are issued to meet customer  financing needs.
These are  agreements to provide  credit or to support the credit of others,  as
long as  conditions  established  in the  contract  are met,  and  usually  have
expiration dates.  Commitments may expire without being used.  Off-balance-sheet
risk of credit loss exists up to the face amount of these instruments,  although
material losses are not  anticipated.  The same credit policies are used to make
such  commitments  as are used for  loans,  including  obtaining  collateral  at
exercise of the commitment.

The contractual amount of financial instruments with  off-balance-sheet risk was
as follows.

                                                      September 30,    June 30,
                                                          2005           2005
                                                      -------------   ----------

1-4 family residential real estate - fixed rate        $  110,000     $  407,000
1-4 family residential real estate - variable rate        225,000        695,000
Land - variable rate                                      460,000             --
Land - fixed rate                                         400,000             --
Commercial lines of credit                              2,614,000      2,592,000
Home equity lines of credit                               795,000        709,000

The  interest  rate on  fixed-rate  commitments  ranged  from  5.88% to 6.63% at
September  30,  2005 and 5.75% to 7.00% at June 30,  2005.  Commitments  to make
loans are generally made for a period of 30 days or less.  The maximum  maturity
for fixed-rate commitments range from 10 years to 20 years.

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


                                   (Continued)

                                                                             13.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

NOTE 5 - OFF-BALANCE-SHEET ACTIVITIES (Continued)

At September 30, 2005 and June 30, 2005,  the  Corporation  was required to have
$296,000 and $325,000 on deposit with its correspondent  banks as a compensating
clearing requirement.

The Corporation entered into employment agreements with certain of its officers.
The  agreements  provide  for a term of one to  three  years  and a  salary  and
performance  review by the Board of Directors not less often than  annually,  as
well as inclusion of the employee in any formally  established employee benefit,
bonus,  pension and  profit-sharing  plans for which  management  personnel  are
eligible. The agreements provide for extensions for a period of one year on each
annual  anniversary  date,  subject to review and  approval of the  extension by
disinterested  members  of  the  Board  of  Directors  of the  Association.  The
employment agreements also provide for vacation and sick leave.

NOTE 6 - EARNINGS PER SHARE

The factors used in the earnings per share computation follow.

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                              September 30,
                                                       ----------------------------
                                                           2005             2004
                                                       -----------      -----------
<S>                                                    <C>              <C>
      Basic Earnings Per Common Share

            Net income                                 $   239,568      $   239,874
                                                       ===========      ===========

            Weighted average common shares
              outstanding                                1,427,349        1,432,648
            Less:  Average unallocated ESOP shares         (48,791)         (60,494)
                                                       -----------      -----------
            Weighted average common shares
              outstanding for basic earnings
              per common share                           1,378,558        1,372,154
                                                       ===========      ===========

            Basic earnings per common share            $      0.17      $      0.17
                                                       ===========      ===========

      Diluted Earnings Per Common Share

            Net income                                 $   239,568      $   239,874
                                                       ===========      ===========

            Weighted average common shares
              outstanding for basic earnings
              per common share                           1,378,558        1,372,154
            Add:  Dilutive effects of assumed
               exercises of stock options                       --              542
                                                       -----------      -----------
            Weighted average common shares
               and dilutive potential common
              shares outstanding                         1,378,558        1,372,696
                                                       ===========      ===========

            Diluted earnings per common share          $      0.17      $      0.17
                                                       ===========      ===========
</TABLE>

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


                                   (Continued)

                                                                             14.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Item 2. Management's Discussion and Analysis
        ------------------------------------

Introduction

In the  following  pages,  management  presents an analysis of the  consolidated
financial  condition of the  Corporation  as of September 30, 2005,  compared to
June 30, 2005,  and results of operations  for the three months ended  September
30, 2005,  compared with the same period in 2004. This discussion is designed to
provide a more comprehensive  review of operating results and financial position
than could be obtained from an  examination of the financial  statements  alone.
This  analysis  should  be  read  in  conjunction  with  the  interim  financial
statements and related footnotes included herein.

Overview and Outlook

As the Federal Reserve Board continues to analyze market adjustments in interest
rates to control inflationary pressures, depositors and borrowers alike continue
to make a shift  in the  type of  instrument  that  suits  their  immediate  and
long-term  needs. We are currently seeing increases in money market accounts and
decreases in demand deposits as well as longer-term  certificates of deposit. As
certificates mature,  customers are repositioning  deposits into higher yielding
liquid type accounts to take advantage of future  increasing  interest rates. On
the lending side, many borrowers are again considering adjustable rate mortgages
as market  interest rates have pushed fixed rate mortgages to higher levels.  We
expect rates to continue to increase as our fiscal year progresses.

Forward-Looking Statements

When  used  in this  filing  or  future  filings  by the  Corporation  with  the
Securities   and   Exchange   Commission,   or  other   public  or   shareholder
communications,  or in oral  statements  made with the approval of an authorized
executive officer, the words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated,"  "estimate,"  "project," "believe" or similar
expressions  are intended to identify  "forward-looking  statements"  within the
meaning of the Private Securities Litigation Reform Act of 1995. The Corporation
wishes  to  caution   readers   not  to  place   undue   reliance  on  any  such
forward-looking statements,  which speak only as of the date made, and to advise
readers  that  various  factors,   including   regional  and  national  economic
conditions,  changes in levels of market interest rates, credit risks of lending
activities   and   competitive   and  regulatory   factors,   could  affect  the
Corporation's  financial  performance and could cause the  Corporation's  actual
results  for future  periods to differ  materially  from  those  anticipated  or
projected.

The Corporation is not aware of any trends,  events or  uncertainties  that will
have or are  reasonably  likely  to have a  material  effect  on its  liquidity,
capital resources or operations  except as discussed herein.  The Corporation is
not aware of any current  recommendations  by regulatory  authorities that would
have such effect if implemented.

The Corporation does not undertake,  and specifically disclaims,  any obligation
to  publicly  release  the  result  of any  revisions  that  may be  made to any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.

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

                                   (Continued)


                                                                             15.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Financial Condition

Total  assets at  September  30,  2005 were  $137.7  million  compared to $136.7
million at June 30,  2005,  an increase of $1.0  million.  The increase in total
assets was  primarily  due to an  increase in loans of $1.1  million,  funded by
borrowed funds, which increased by $1.6 million.

Cash and cash equivalents  increased $31,000 from $5,352,000 at June 30, 2005 to
$5,321,000 at September 30, 2005.

The securities  portfolio,  which is classified as available for sale, decreased
$74,000,  from  $5,434,000 at June 30, 2005 to $5,360,000 at September 30, 2005.
The decrease is related to a decrease in the fair value of the securities during
the reporting period as no securities transactions occurred. See Note 2 of Notes
to Consolidated Financial Statements.

Federal Home Loan Bank stock increased  $20,000 from $1,674,000 at June 30, 2005
to $1,694,000 at September 30, 2005 as a result of normal dividend payments.

Loans  increased  $1.1  million  from $121.1  million at June 30, 2005 to $122.2
million at September 30, 2005.  The most  significant  change was in real estate
construction  and  development  loans,  which  increased  $0.7 million from $1.4
million at June 30, 2005 to $2.1 million at September 30, 2005.  Commercial real
estate  loans and  multi-family  residential  increased  $0.2  million  and $0.1
million,  respectively from June 30, 2005 to September 30, 2005.  Consumer loans
also provided an increase to the loan portfolio with growth of $0.3 million from
June 30, 2005 to September 30, 2005.  Other loan categories had nominal changes,
that combined,  totaled a decrease of $0.2 million for the current  period.  See
Note 3 of Notes to Consolidated Financial Statements.

Premises and  equipment  decreased  $42,000 from  $2,096,000 at June 30, 2005 to
$2,054,000   at  September  30,  2005.   This  decrease   resulted  from  normal
depreciation  of existing  assets  partially  offset by equipment  purchases and
routine improvements to the office building.

Total  deposits  decreased  $0.4 million from $85.9  million at June 30, 2005 to
$85.5 million at September 30, 2005  primarily due to a decrease of $1.1 million
in certificates of deposit. NOW accounts also decreased $0.4 million and savings
account  decreased $0.3 million.  These  decreases  were partially  offset by an
increase of $1.4 million in money market accounts.

Borrowed  funds  increased  $1.6 million from $32.6  million at June 30, 2005 to
$34.2  million  at  September  30,  2005.  This  increase  was the result of the
addition of a $2.0  million  FHLB  fixed-rate  advance,  which was offset by the
scheduled repayments of mortgage-matched advances. The increase in FHLB advances
was used to fund the increase in loans and offset the decrease in deposits.  See
Note 4 of Notes to Consolidated Financial Statements.

Results of Operations

The  operating  results of the  Corporation  are  affected  by general  economic
conditions,  monetary and fiscal  policies of federal  agencies  and  regulatory
policies of agencies that regulate  financial  institutions.  The  Corporation's
cost of funds is  influenced  by interest  rates on  competing  investments  and
general  market rates of interest.  Demand for real estate loans and other types
of loans  influence  lending  activities,  which in turn is affected by interest
rates at which such loans are made, general economic conditions and availability
of funds for lending activities.

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

                                   (Continued)


                                                                             16.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

The Corporation's net income primarily depends on its net interest income, which
is the difference  between  interest income earned on  interest-earning  assets,
such as loans and securities and interest expense  incurred on  interest-bearing
liabilities,  such as deposits and borrowings.  The level of net interest income
is dependent on the interest  rate  environment  and volume and  composition  of
interest-earning  assets and  interest-bearing  liabilities.  Net income is also
affected by provisions for loan losses,  service  charges,  gains on the sale of
assets and other income, noninterest expense and income taxes.

Three  Months  Ended  September  30,  2005  Compared to the Three  Months  Ended
September 30, 2004

Net Income.  The  Corporation  earned net income of $240,000  for both the three
months ended  September  30, 2005 and  September  30, 2004.  Although net income
remained unchanged, there were changes in the components of net income. The most
significant  changes  occurred in net interest income,  which increased  coupled
with a decrease  in the  provision  for loan  losses  offset by an  increase  in
noninterest expense.

Net Interest Income. Net interest income totaled $1,180,000 for the three months
ended  September  30, 2005  compared to  $1,131,000  for the three  months ended
September 30, 2004,  representing  an increase of $49,000.  The increase was the
result of an  improvement  in the net  interest  rate  spread  between  interest
earning assets and interest bearing liabilities during the current period.

Interest and fees on loans  increased  $110,000  from  $1,838,000  for the three
months  ended  September  30,  2004 to  $1,948,000  for the three  months  ended
September  30,  2005.  The  increase in interest  income was due  primarily to a
higher  average  balance of loans and,  to a lesser  extent,  an increase in the
average yield earned.  The average  balance of loans increased to $121.4 million
with an average  yield of 6.42% for the three  months ended  September  30, 2005
compared to an average  balance of $116.6 million with an average yield of 6.30%
for the same three month period last year.

Interest on securities  increased $7,000 due to an increase in the average yield
earned  during  the  current  period.  Interest  on demand,  time and  overnight
deposits  increased  $14,000 to $25,000 for the three months ended September 30,
2005 as  compared to $11,000  for the same  period  last year.  The  increase in
interest earned on deposits with other financial  institutions was the result of
a higher average yield earned on such deposits partially offset by a decrease in
the average balance.

Dividends on FHLB stock increased over the comparable  period due to an increase
in the dividend rate paid by the FHLB coupled with a higher average balance.

Interest paid on deposits  increased  $64,000 from $370,000 for the three months
ended  September  30, 2004 to $434,000 for the three months ended  September 30,
2005. The increase  resulted from an increase in the average  interest rate paid
on deposits  partially  offset by a decrease in the average balance of deposits.
The average  balance of deposits for the three months ended  September  30, 2005
was $84.6 million at an average cost of 2.03% compared to an average  balance of
$85.0  million at an average cost of 1.73% for the three months ended  September
30, 2004.

Interest  paid on borrowed  funds  totaled  $433,000  for the three months ended
September 30, 2005 compared to $411,000 for the three months ended September 30,
2004.  The increase of $22,000 in interest  expense on borrowed  funds  resulted
from an increase in the average balance of borrowed funds partially  offset by a
decrease in the average cost of these borrowings.

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

                                   (Continued)


                                                                             17.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Provision  for Loan Losses.  The  Corporation  maintains  an allowance  for loan
losses in an amount  that,  in  management's  judgment,  is  adequate  to absorb
probable  losses  in the loan  portfolio.  While  management  utilizes  its best
judgment and information  available,  the ultimate  adequacy of the allowance is
dependent  upon  a  variety  of  factors,   including  the  performance  of  the
Corporation's  loan  portfolio,  the economy,  changes in real estate values and
interest  rates  and  the  view  of  the  regulatory   authorities  toward  loan
classifications.  The  provision  for loan losses is determined by management as
the amount to be added to the  allowance  for loan losses after net  charge-offs
have been deducted to bring the allowance to a level that is considered adequate
to absorb  probable  incurred  losses in the loan  portfolio.  The amount of the
provision is based on  management's  monthly  review of the loan  portfolio  and
consideration of such factors as historical loss experience,  general prevailing
economic  conditions,  changes in the size and composition of the loan portfolio
and specific borrower  considerations,  including the ability of the borrower to
repay the loan and the estimated value of the underlying collateral.

The  provision  for loan losses for the three  months ended  September  30, 2005
totaled  $17,000  compared to $27,000 for the three months ended  September  30,
2004.  The  decrease  of $10,000 in the  provision  for loan losses was due to a
modest decline in  nonperforming  loans in the three months ended  September 30,
2005  while  the  prior  year  three-month  period  had  a  modest  increase  in
nonperforming loans. Additionally, net charge-offs were less in the three months
ended  September 30, 2005 compared to the three months ended September 30, 2004.
The  allowance  for loan  losses  totaled  $852,000,  or  0.69%  of gross  loans
receivable   net  of  deferred  loan   origination   fees  and  59.2%  of  total
nonperforming loans at September 30, 2005,  compared with $777,000,  or 0.66% of
gross loans receivable, net of deferred loan origination fees and 50.5% of total
nonperforming loans at September 30, 2004. Overall, the Corporation's charge-off
history  remains  very  modest  and is the  product  of a  variety  of  factors,
including the Corporation's  underwriting guidelines,  which generally require a
loan-to-value  or  projected  completed  value  ratio  of 80%  for  purchase  or
construction  of  one-  to  four-family   residential  properties  and  75%  for
commercial  real  estate and land  loans,  established  income  information  and
defined ratios of debt to income.

Noninterest  income.  Noninterest  income,  which includes  service fees,  other
miscellaneous  income and the net gain or loss on the sale of real estate owned,
increased  $3,000 from $32,000 for the three months ended  September 30, 2004 to
$35,000 for the three months ended September 30, 2005

Noninterest  expense.  Noninterest expense totaled $823,000 for the three months
ended  September  30,  2005  compared  to $760,000  for the three  months  ended
September 30, 2004, an increase of $63,000.  Compensation  and benefits  expense
increased $18,000 resulting from normal salary  increases.  Computer  processing
increased  $28,000  due to the  Corporation's  upgrade to a new data  processing
system.  Professional  fees also increased $25,000 as a result of new government
regulations and requirements.

Income Tax  Expense.  Income tax  expense  totaled  $135,000  for both the three
month-periods  ended September 30, 2005 and 2004,  representing an effective tax
rate of 36.1%.

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

                                   (Continued)


                                                                             18.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Liquidity and Capital Resources

The Corporation's liquidity, primarily represented by cash and cash equivalents,
is a result of operating,  investing and financing activities.  These activities
are summarized below for the three months ended September 30, 2005 and 2004.

                                                               Three Months
                                                           Ended September 30,
                                                         ----------------------
                                                           2005          2004
                                                         --------      --------
                                                         (Dollars in thousands)

Net income                                               $    240      $    240
Adjustments to reconcile net income to net cash from
  operating activities                                         95            50
                                                         --------      --------
Net cash from operating activities                            335           290
Net cash from investing activities                         (1,138)       (1,316)
Net cash from financing activities                            834        (1,226)
                                                         --------      --------
Net change in cash and cash equivalents                        31        (2,252)
Cash and cash equivalents at beginning of period            5,321        10,034
                                                         --------      --------

Cash and cash equivalents at end of period               $  5,352      $  7,782
                                                         ========      ========

The  Corporation's  principal  sources of funds are deposits,  borrowings,  loan
repayments,  maturities of securities  and other funds  provided by  operations.
While  scheduled  loan  repayments  and  maturing   investments  are  relatively
predictable,  deposit flows and early loan  prepayments  are more  influenced by
interest rates,  general economic  conditions and  competition.  The Corporation
maintains  investments in liquid assets based on management's  assessment of the
(1) need for  funds,  (2)  expected  deposit  flows,  (3)  yields  available  on
short-term  liquid assets and (4) objectives of the  asset/liability  management
program.  Management  believes that loan  repayments  and other sources of funds
will be adequate to meet the Corporation's foreseeable liquidity needs.

The  Corporation  also has the  ability to borrow  from the FHLB up to a maximum
total of $67.5 million including the cash management line of credit.  See Note 4
of  the  Notes  to  Consolidated  Financial  Statements  for  a  detail  of  the
Corporation's borrowings from the FHLB at September 30, 2005.

At September 30, 2005, the Corporation  had commitments to originate  fixed-rate
loans  totaling  $510,000  and  variable-rate  loans  totaling  $685,000.   Loan
commitments  are generally for 30 days. See Note 5 of the Notes to  Consolidated
Financial  Statements  for a detail of the  Corporation's  loan  commitments  at
September 30, 2005.  The Office of Thrift  Supervision  regulations  require the
Corporation's  insured  subsidiary  to maintain a safe and sound level of liquid
assets. The Corporation  considers its liquidity and capital reserves sufficient
to meet its  outstanding  short  and  long-term  needs,  and  believes  it is in
compliance with regulatory requirements.

The  Association  is  subject  to  various   regulatory   capital   requirements
administered  by  the  federal  regulatory  agencies.   Under  capital  adequacy
guidelines  and the  regulatory  framework  for prompt  corrective  action,  the
Association  must meet specific  capital  guidelines  that involve  quantitative
measures of the Association's assets,  liabilities and certain off-balance-sheet
items as calculated under regulatory accounting  practices.  Capital amounts and
classifications  are also subject to  qualitative  judgments by the  regulators.
Failure to meet minimum capital requirements can result in regulatory action.

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

                                   (Continued)


                                                                             19.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Prompt  corrective  action  regulations  provide  five   classifications:   well
capitalized,    adequately    capitalized,    undercapitalized,    significantly
undercapitalized, and critically undercapitalized,  although these terms are not
used to  represent  overall  financial  condition.  If  adequately  capitalized,
regulatory   approval   is   required   to   accept   brokered   deposits.    If
undercapitalized,  capital  distributions  are  limited,  as is asset growth and
expansion, and capital restoration plans are required.

At September  30, 2005 and June 30, 2005,  management  believes the  Association
complies with all regulatory  capital  requirements.  Based on the Association's
computed   regulatory   capital  ratios,  the  Association  is  considered  well
capitalized  under the Federal  Deposit  Insurance Act at September 30, 2005 and
June 30, 2005.  No  conditions  or events have  occurred  subsequent to the last
notification  by  regulators  that  management  believes  would have changed the
Association's category.

At  September  30, 2005 and June 30,  2005,  the  Association's  actual  capital
levels,  minimum required levels and levels to be considered "well  capitalized"
were as follows.

<TABLE>
<CAPTION>
                                                                                       To Be
                                                                                  Well Capitalized
                                                           For Capital        Under Prompt Corrective
                                     Actual             Adequacy Purposes        Action Regulations
                              -------------------      -------------------      -------------------
                               Amount      Ratio        Amount      Ratio        Amount      Ratio
                              -------     -------      -------     -------      -------     -------
                                                      (Dollars in Thousands)
                                                      ----------------------
<S>                           <C>            <C>       <C>             <C>      <C>            <C>
September 30, 2005
------------------
Total capital (to risk-
  weighted assets)            $17,204        21.1%     $ 6,523         8.0%     $ 8,154        10.0%
Tier 1 (core) capital (to
  risk-weighted assets)        16,383        20.1        3,261         4.0        4,892         6.0
Tier 1 (core) capital (to
  adjusted total assets)       16,383        11.9        5,517         4.0        6,897         5.0
Tangible capital (to
  adjusted total assets)       16,383        11.9        2,069         1.5          N/A

June 30, 2005
-------------
Total capital (to risk-
  weighted assets)            $16,909        20.7%     $ 6,550         8.0%     $ 8,188        10.0%
Tier 1 (core) capital (to
  risk-weighted assets)        16,083        19.6        3,275         4.0        4,913         6.0
Tier 1 (core) capital (to
  adjusted total assets)       16,083        11.8        5,471         4.0        6,838         5.0
Tangible capital (to
  adjusted total assets)       16,083        11.8        2,052         1.5          N/A
</TABLE>

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


                                                                             20.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                             CONTROLS AND PROCEDURES

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

Item 3. Controls and Procedures
        -----------------------

Any control system,  no matter how well designed and operated,  can provide only
reasonable   (not  absolute)   assurance  that  its  objectives   will  be  met.
Furthermore,  no evaluation of controls can provide absolute  assurance that all
control issues and instances of fraud, if any, have been detected.

Disclosure Controls

The  Company's  management,  with  the  participation  of  the  Company's  Chief
Executive Officer and Chief Financial  Officer,  has evaluated the effectiveness
of the Company's disclosure controls and procedures,  as such term is defined in
Rules  13a - 15(e)  and  15d -  15(e)  of the  Securities  Exchange  Act of 1934
(Exchange Act) as of the end of the period covered by the report.

Based upon that  evaluation,  our Chief  Executive  Officer and Chief  Financial
Officer  concluded  that as of September  30, 2005 our  disclosure  controls and
procedures  were  effective  to  provide  reasonable   assurance  that  (i)  the
information  required  to be  disclosed  by  us in  this  Report  was  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms,  and (ii)  information  required to be disclosed by us in
our reports that we file or submit under the  Exchange  Act is  accumulated  and
communicated to our management,  including our principal executive and principal
financial officers,  or persons performing similar functions,  as appropriate to
allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There  have not been any  changes in the  Corporation's  internal  control  over
financial  reporting  (as such term is defined in Rules  13a-15(f) and 15d-15(f)
under the Exchange Act) during the fiscal  quarter to which this report  relates
that have materially  affected,  or are reasonably likely to materially  affect,
the Corporation's internal control over financial reporting.

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


                                                                             21.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           PART II - OTHER INFORMATION

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

Item 1.     Legal Proceedings
            -----------------

            The Company is not involved in any pending legal  proceedings  other
            than routine legal  proceedings  occurring in the ordinary course of
            business,  which,  in the  aggregate,  involved  amounts  which  are
            believed to be immaterial to the  consolidated  financial  condition
            and operations of the Company.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
            -----------------------------------------------------------

            The following table  illustrates the repurchase of the Corporation's
            common stock during the period ended September 30, 2005.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                                                            Total Number of          Maximum
                                                            Shares Purchased    Number of Shares
                                                               as Part of        That May Yet Be
                        Total Number of    Average Price        Publicly         Purchased Under
                             Shares            Paid         Announced Plans        the Plan or
         Period            Purchased         Per Share        or Programs           Programs
------------------------------------------------------------------------------------------------
<S>                          <C>              <C>                <C>                 <C>
July l, 2005 -
July 31, 2005                7,500            $13.875            7,500               64,100
------------------------------------------------------------------------------------------------
August l, 2005 -
August 31, 2005                 --                 --               --               64,100
------------------------------------------------------------------------------------------------
September 1, 2005 -
September 30, 2005              --                 --               --               64,100
------------------------------------------------------------------------------------------------
Total                        7,500            $13.875            7,500               64,100
------------------------------------------------------------------------------------------------
</TABLE>

            On April  19,  2005,  the  registrant  announced  that its  Board of
            Directors  had  authorized  management to repurchase up to 5% of the
            Registrant's  common  stock both through the open market and through
            unsolicited negotiated transactions. The authorization, which is for
            71,600  shares,  will  continue for a  twelve-month  period and will
            expire in April 2006, if not renewed.

Item 3.     Defaults Upon Senior Securities
            -------------------------------

            Not applicable.

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

            None.

Item 5.     Other Information
            -----------------

            None.

Item 6.     Exhibits
            --------

            (a) (1) Exhibits 31.1 and 31.2: Section 302 Certifications

            (2) Exhibit 32: Section 906 Certifications

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


                                                                             22.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                                   SIGNATURES

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


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


Date: November 14, 2005                 /s/ Douglas Stewart
      ---------------------------       ----------------------------------------
                                        Douglas Stewart
                                        President and Chief Executive Officer


Date: November 14, 2005                 /s/ Debra Geuy
      ---------------------------       ----------------------------------------
                                        Debra Geuy
                                        Chief Financial Officer

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


                                                                             23.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
 NUMBER        DESCRIPTION
-------        -----------
<S>            <C>                                          <C>
 3.1           Articles of Incorporation of                 Incorporated  by reference to the  Registration  Statement
               Peoples-Sidney Financial                     on Form S-1 filed by Peoples-Sidney  Financial Corporation
               Corporation                                  on January 27, 1997 (the  "S-1") with the  Securities  and
                                                            Exchange Commission (the "SEC"), Exhibit 3.1.

 3.2           Bylaws  of  Peoples-Sidney   Financial       Incorporated by reference to the S-1, Exhibit 3.2.
               Corporation

 10.1          Employee Stock Ownership Plan                Incorporated by reference to the S-1, Exhibit 10.1

 10.2          Form  of  Employment   Agreement  with       Incorporated by  Pre-Effective  Amendment No. 1 to the S-1
               Douglas Stewart                              filed with the SEC on March 12, 1997, Exhibit 10.2

 10.3          Form  of  Employment  Agreements  with       Incorporated by  Pre-Effective  Amendment No. 1 to the S-1
               David R. Fogt,  Gary N. Fullenkamp and       filed with the SEC on March 12, 1997, Exhibit 10.3
               Debra A. Geuy

 10.4          Form  of  Severance   Agreement   with       Incorporated by  Pre-Effective  Amendment No. 1 to the S-1
               Steve Goins                                  filed with the SEC on March 12, 1997, Exhibit 10.4

 10.5          401 (k) Plan                                 Incorporated by  Pre-Effective  Amendment No. 1 to the S-1
                                                            filed with the SEC on March 12, 1997, Exhibit 10.5

 10.6          Peoples-Sidney  Financial  Corporation       Filed as an exhibit to the  Registrant's  Annual Report on
               Amended   and   Restated   1998  Stock       Form  10-KSB for the fiscal year ended June 30, 1999 (File
               Option and Incentive Plan                    No. 0-22223) and incorporate herein by reference.

 10.7          Peoples-Sidney  Financial  Corporation       Filed as an exhibit to the  Registrant's  Annual Report on
               Amended and Restated  1998  Management       Form  10-KSB for the fiscal year ended June 30, 1999 (File
               Recognition Plan                             No. 0-22223) and incorporate herein by reference.

 11            Statement  Regarding   Computation  of       See Note 6 to the consolidated financial statements.
               Earnings per Share

 31.1          Certification  of Principal  Executive
               Officer  Pursuant  to  Section  302 of
               the Sarbanes-Oxley Act of 2002

 31.2          Certification  of Principal  Financial
               Officer  Pursuant  to  Section  302 of
               the Sarbanes-Oxley Act of 2002
</TABLE>

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


                                                                             24.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
 NUMBER        DESCRIPTION
-------        -----------
<S>            <C>                                          <C>
 32            Certifications  of the Chief Executive
               Officer   and  the   Chief   Financial
               Officer  Pursuant  to  Section  906 of
               the Sarbanes-Oxley Act of 2002
</TABLE>

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


                                                                             25.