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, 2004

      |_|   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 |_|

As of November 5, 2004, the latest  practicable  date,  1,432,648  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 or Plan or Operation........................     16

  Item 3. Controls and Procedures..........................................................     22

PART II - OTHER INFORMATION

  Item 1. Legal Proceedings................................................................     23

  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds......................     23

  Item 3. Defaults Upon Senior Securities..................................................     23

  Item 4. Submission of Matters to a Vote of Security Holders..............................     23

  Item 5. Other Information................................................................     23

  Item 6. Exhibits and Reports on Form 8-K.................................................     23

SIGNATURES ................................................................................     24

INDEX TO EXHIBITS..........................................................................     25
</TABLE>

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


                                                                              2.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

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

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

<TABLE>
<CAPTION>
                                                               September 30,          June 30,
                                                                   2004                 2004
                                                                   ----                 ----
<S>                                                            <C>                 <C>
ASSETS
Cash and due from financial institutions                       $   1,221,953       $   1,327,745
Interest-bearing deposits in other financial institutions          5,559,638           4,705,943
Overnight deposits                                                 1,000,000           4,000,000
                                                               -------------       -------------
     Total cash and cash equivalents                               7,781,591          10,033,688
Securities available for sale                                      5,409,215           5,288,280
Federal Home Loan Bank stock                                       1,618,500           1,601,400
Loans, net of allowance of $777,000 and $752,900                 116,932,987         115,651,910
Accrued interest receivable                                          743,813             670,521
Premises and equipment, net                                        2,090,406           2,124,986
Real estate owned                                                     99,085              99,085
Other assets                                                         117,516             301,160
                                                               -------------       -------------

     Total assets                                              $ 134,793,113       $ 135,771,030
                                                               =============       =============

LIABILITIES
Deposits                                                       $  86,205,406       $  86,764,253
Borrowed funds                                                    30,665,578          31,140,388
Accrued interest payable and other liabilities                       316,148             435,476
                                                               -------------       -------------
     Total liabilities                                           117,187,132         118,340,117

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                                        10,761,634          10,748,851
Retained earnings                                                 11,690,960          11,642,982
Treasury stock, 352,727 shares, at cost                           (4,113,716)         (4,113,716)
Unearned employee stock ownership plan shares                       (692,572)           (727,121)
Accumulated other comprehensive loss                                 (58,179)           (137,937)
                                                               -------------       -------------
     Total shareholders' equity                                   17,605,981          17,430,913
                                                               -------------       -------------

     Total liabilities and shareholders' equity                $ 134,793,113       $ 135,771,030
                                                               =============       =============
</TABLE>

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

          See accompanying notes to consolidated financial statements.


                                                                              3.
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                                September 30,
                                                            2004            2003
                                                            ----            ----
<S>                                                      <C>             <C>
Interest income
     Loans, including fees                               $1,837,810      $1,951,798
     Securities                                              45,590          70,329
     Demand, time and overnight deposits                     10,883          16,843
     Dividends on FHLB Stock                                 17,108          15,516
                                                         ----------      ----------
         Total interest income                            1,911,391       2,054,486

Interest expense
     Deposits                                               369,897         509,212
     Borrowed funds                                         410,863         425,874
                                                         ----------      ----------
         Total interest expense                             780,760         935,086
                                                         ----------      ----------

Net interest income                                       1,130,631       1,119,400

Provision for loan losses                                    26,769          14,051
                                                         ----------      ----------

Net interest income after provision for loan losses       1,103,862       1,105,349

Noninterest income
     Service fees and other charges                          31,677          34,132
                                                         ----------      ----------
         Total noninterest income                            31,677          34,132

Noninterest expense
     Compensation and benefits                              409,737         388,112
     Director fees                                           24,300          24,300
     Occupancy and equipment                                102,616         100,972
     Computer processing                                     58,942          61,821
     Professional fees                                       28,394          27,816
     State franchise taxes                                   52,798          48,558
     Other                                                   83,578          92,716
                                                         ----------      ----------
         Total noninterest expense                          760,365         744,295
                                                         ----------      ----------

Income before income taxes                                  375,174         395,186

Income tax expense                                          135,300         146,600
                                                         ----------      ----------

Net income                                               $  239,874      $  248,586
                                                         ==========      ==========

Earnings per common share - basic                        $     0.17      $     0.18
                                                         ==========      ==========

Earnings per common share - diluted                      $     0.17      $     0.18
                                                         ==========      ==========
</TABLE>

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

          See accompanying notes to consolidated financial statements.


                                                                              4.
<PAGE>

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

                                                         Three Months Ended
                                                            September 30,
                                                            -------------
                                                         2004            2003
                                                         ----            ----

Net income                                            $ 239,874       $ 248,586

Other comprehensive income (loss)
     Unrealized holding gains and (losses) on
       available-for-sale securities                    120,845         (98,745)
     Tax effect                                         (41,087)         33,574
                                                      ---------       ---------
         Other comprehensive income (loss)               79,758         (65,171)
                                                      ---------       ---------

Comprehensive income                                  $ 319,632       $ 183,415
                                                      =========       =========

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

          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,
                                                                     -------------
                                                                2004              2003
                                                                ----              ----
<S>                                                        <C>                <C>
Balance, beginning of period                               $ 17,430,913       $ 17,384,280

Net income for period                                           239,874            248,586

Cash dividends, $.14 and $.13 per share for the three
  months ended September 30, 2004 and 2003                     (191,895)          (177,472)

Commitment to release 2,944 and 3,091 employee stock
  ownership plan shares for the three months ended
  September 30, 2004 and 2003, at fair value                     47,331             42,045

Change in fair value on securities available for
  sale, net of tax                                               79,758            (65,171)
                                                           ------------       ------------

Balance, end of period                                     $ 17,605,981       $ 17,432,268
                                                           ============       ============
</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,
                                                                                   -------------
                                                                               2004              2003
                                                                               ----              ----
<S>                                                                       <C>                <C>
Cash flows from operating activities
     Net income                                                           $    239,874       $    248,586
     Adjustments to reconcile net income to net cash from
       operating activities
         Depreciation                                                           43,876             44,779
         Provision for loan losses                                              26,769             14,051
         FHLB stock dividends                                                  (17,100)           (15,500)
         Compensation expense for ESOP shares                                   47,331             42,045
         Change in:
              Accrued interest receivable and other assets                     110,262             86,677
              Accrued expense and other liabilities                           (160,415)          (204,556)
              Deferred loan fees                                                  (701)            20,265
                                                                          ------------       ------------
                  Net cash from operating activities                           289,896            236,347

Cash flows from investing activities
     Proceeds from maturities/calls of securities available for sale                --          4,000,000
     Net change in loans                                                    (1,307,145)        (1,651,496)
     Premises and equipment expenditures                                        (9,296)          (390,023)
                                                                          ------------       ------------
         Net cash from investing activities                                 (1,316,441)         1,958,481

Cash flows from financing activities
     Net change in deposits                                                   (558,847)        (2,182,972)
     Repayments of long-term FHLB advances                                    (474,810)          (528,131)
     Cash dividends paid                                                      (191,895)          (177,472)
                                                                          ------------       ------------
         Net cash from financing activities                                 (1,225,552)        (2,888,575)
                                                                          ------------       ------------

Net change in cash and cash equivalents                                     (2,252,097)          (693,747)

Cash and cash equivalents at beginning of period                            10,033,688         12,300,598
                                                                          ------------       ------------

Cash and cash equivalents at end of period                                $  7,781,591       $ 11,606,851
                                                                          ============       ============

Supplemental disclosures of cash flow information
     Cash paid during the period for
         Interest                                                         $    783,897       $    947,180
         Income taxes                                                           15,000             15,000
</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, 2004
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, 2004,  included in the  Corporation's  2004 Annual Report on Form 10-KSB for
the  fiscal  year  ended  June 30,  2004.  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") is 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. Management recognition plan ("MRP") shares
are considered outstanding as they become vested. Diluted EPS shows the dilutive
effect of additional common shares upon exercise of stock options.

Stock-Based Compensation: Employee compensation expense under stock option plans
is reported using the intrinsic value method.  No stock-based  compensation cost
is reflected in net income,  as all options  granted had an exercise price equal
to or greater than the market price of the  underlying  common stock at the date
of grant.  All outstanding  options  finished vesting during the year ended June
30, 2003.

NOTE 2 - SECURITIES AVAILABLE FOR SALE

Securities available for sale were as follows.

<TABLE>
<CAPTION>
                                                                         Gross            Gross
                                                       Fair           Unrealized        Unrealized
                                                      Value              Gains            Losses
                                                      -----              -----            ------
<S>                                               <C>                <C>              <C>
September 30, 2004
------------------
    U.S. Government agencies                      $   5,409,215      $     17,518     $    (105,668)
                                                  =============      ============     =============

June 30, 2004
-------------
    U.S. Government agencies                      $   5,288,280      $     13,280     $    (222,275)
                                                  =============      ============     =============
</TABLE>

Contractual  maturities of  securities  available for sale at September 30, 2004
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               $    2,517,035
           Due after five years through ten years                   2,892,180
                                                               --------------

                                                               $    5,409,215
                                                               ==============

There were no sales of  securities  during the three months ended  September 30,
2004 or 2003. No securities  were pledged as collateral at September 30, 2004 or
June 30, 2004.

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

                                   (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,  2004,   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>
U.S. Government agencies        $         --   $    (--)     $  2,892,180    $  (105,668)    $  2,892,180     $  (105,668)
                                ============   ========      ============    ===========     ============     ===========
</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.

<TABLE>
<CAPTION>
                                                  September 30,          June 30,
                                                      2004                 2004
                                                      ----                 ----
<S>                                               <C>                 <C>
      Mortgage loans:
           1-4 family residential                 $  90,081,060       $  89,974,734
           Multi-family residential                   1,322,455           1,330,844
           Commercial real estate                    11,573,548          11,847,794
           Real estate construction and
             development                              4,348,435           3,056,172
           Land                                       1,067,179           1,694,844
                                                  -------------       -------------
               Total mortgage loans                 108,392,677         107,904,388
      Consumer loans                                  4,553,271           4,211,193
      Commercial loans                                5,136,179           4,662,070
                                                  -------------       -------------
               Total loans                          118,082,127         116,777,651
      Less:
           Allowance for loan losses                   (777,000)           (752,900)
           Deferred loan fees                          (372,140)           (372,841)
                                                  -------------       -------------

                                                  $ 116,932,987       $ 115,651,910
                                                  =============       =============
</TABLE>

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

                                   (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.

<TABLE>
<CAPTION>
                                                                               Three Months Ended
                                                                                  September 30,
                                                                                  -------------
                                                                              2004            2003
                                                                              ----            ----
<S>                                                                        <C>             <C>
        Balance at beginning of period                                     $ 752,900       $ 766,000
        Provision for losses                                                  26,769          14,051
        Charge-offs                                                           (2,669)        (30,490)
        Recoveries                                                                --             439
                                                                           ---------       ---------

        Balance at end of period                                           $ 777,000       $ 750,000
                                                                           =========       =========
</TABLE>

Impaired loans were as follows.

<TABLE>
<CAPTION>
                                                                         September 30,      June 30,
                                                                             2004             2004
                                                                             ----             ----
<S>                                                                        <C>             <C>
Period-end impaired loans with no allowance for loan losses allocated      $      --       $      --
Period-end impaired loans with allowance for loan losses allocated           129,000         129,000
Amount of the allowance allocated to impaired loans                          129,000         129,000

<CAPTION>
                                                                               Three Months Ended
                                                                                  September 30,
                                                                                  -------------
                                                                              2004            2003
                                                                              ----            ----
<S>                                                                        <C>             <C>
Average of impaired loans during the period                                $ 129,000       $      --
Interest income recognized during the period                                   3,182              --
Cash-basis interest income recognized                                            530              --
</TABLE>

Nonperforming loans were as follows.

<TABLE>
<CAPTION>
                                                                         September 30,      June 30,
                                                                              2004            2004
                                                                              ----            ----
<S>                                                                        <C>             <C>
      Loans past due over 90 days still on accrual                         $ 835,000       $ 587,000
      Nonaccrual loans                                                       705,000         624,000
</TABLE>

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

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

                                   (Continued)


                                                                             11.
<PAGE>

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

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

NOTE 4 - BORROWED FUNDS

At September 30, 2004 and June 30, 2004, 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 no  outstanding  borrowings  on this line of credit at September  30,
2004 and June 30, 2004.

As a member  of the FHLB  system,  the  Association  has the  ability  to obtain
borrowings up to a maximum total of $66.1 million  including the cash management
line of credit. Advances from the Federal Home Loan Bank were as follows.

<TABLE>
<CAPTION>
                                                                September 30,       June 30,
                                                                     2004             2004
                                                                     ----             ----
<S>                                                              <C>              <C>
      6.13% FHLB fixed-rate advance, due June 25, 2008           $ 7,000,000      $ 7,000,000
      6.00% FHLB convertible advance, fixed-rate until
        June 2004, due June 11, 2009                               5,000,000        5,000,000
      6.27% FHLB convertible advance, fixed-rate until
        September 2006, due September 8, 2010                      5,000,000        5,000,000
      5.30% select pay mortgage-matched advance, final
        maturity May 1, 2011                                       1,054,733        1,087,505
      5.35% select pay mortgage-matched advance, final
        maturity July 1, 2011                                      2,154,704        2,466,217
      3.92% select pay mortgage-matched advance, final
        maturity November 1, 2012                                    802,467          823,214
      3.55% select pay mortgage-matched advance, final
        maturity March 1, 2013                                       871,636          893,507
      4.09% select pay mortgage-matched advance, final
        maturity November 1, 2017                                    817,208          828,866
      3.31% select pay mortgage-matched advance, final
        maturity April 1, 2019                                       978,393          991,393
      4.72% select pay mortgage-matched advance, final
        maturity November 1, 2022                                  2,685,784        2,709,021
      4.38% select pay mortgage-matched advance, final
        maturity December 1, 2022                                    895,946          903,923
      3.92% select pay mortgage-matched advance, final
        maturity December 1, 2022                                    846,271          854,173
      3.64% select pay mortgage-matched advance, final
        maturity March 1, 2023                                     2,558,436        2,582,569
                                                                 -----------      -----------

                                                                 $30,665,578      $31,140,388
                                                                 ===========      ===========
</TABLE>

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

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.

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

                                   (Continued)


                                                                             12.
<PAGE>

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

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

NOTE 4 - BORROWED FUNDS (Continued)

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

             Year ended September 30,
                      2005                          $  1,971,183
                      2006                             1,761,721
                      2007                             1,576,525
                      2008                             8,412,778
                      2009                             6,268,005
                   Thereafter                         10,675,366
                                                    ------------

                                                    $ 30,665,578
                                                    ------------

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,
                                                         2004            2004
                                                         ----            ----

1-4 family residential real estate - fixed rate      $     66,000    $   299,000
1-4 family residential real estate - variable rate        631,000        212,000
Commercial real estate - variable rate                         --        265,000
Commercial lines of credit                              2,863,000      3,186,000
Home equity lines of credit                               835,000        823,000

The interest rate on fixed-rate  commitments was 6.00% at September 30, 2004 and
ranged  from  5.88% to 6.75% at June 30,  2004.  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.

At September 30, 2004 and June 30, 2004,  the  Corporation  was required to have
$2,793,000  and  $3,454,000  on  deposit  with  its  correspondent  banks  as  a
compensating clearing requirement.

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

                                   (Continued)


                                                                             13.
<PAGE>

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

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

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

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,
                                                                -------------
                                                           2004               2003
                                                           ----               ----
<S>                                                     <C>               <C>
      Basic Earnings Per Common Share

            Net income                                  $   239,874       $   248,586
                                                        ===========       ===========

            Weighted average common shares
              outstanding                                 1,432,648         1,439,501
            Less: Average unallocated ESOP shares           (60,494)          (72,785)
                                                        -----------       -----------
            Weighted average common shares
              outstanding for basic earnings
              per common share                            1,372,154         1,366,716
                                                        ===========       ===========

            Basic earnings per common share             $      0.17       $      0.18
                                                        ===========       ===========

      Diluted Earnings Per Common Share

            Net income                                  $   239,874       $   248,586
                                                        ===========       ===========

            Weighted average common shares
              outstanding for basic earnings
              per common share                            1,372,154         1,366,716
            Add:  Dilutive effects of assumed
               exercises of stock options                       542                --
                                                        -----------       -----------
            Weighted average common shares
               and dilutive potential common
              shares outstanding                          1,372,696         1,366,716
                                                        ===========       ===========

            Diluted earnings per common share           $      0.17       $      0.18
                                                        ===========       ===========
</TABLE>

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

                                   (Continued)


                                                                             14.
<PAGE>

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

NOTE 6 - EARNINGS PER SHARE (Continued)

1,245 of the outstanding  stock options at September 30, 2004 were  antidilutive
for the three months  ended  September  30, 2004 as the exercise  price of those
options was  greater  than the average  market  price for the period.  All stock
options outstanding at September 30, 2003 were antidilutive for the three months
ended  September  30,  2003 as the  exercise  price of  outstanding  options was
greater than the average market price for the period.

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

                                   (Continued)


                                                                             15.
<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, 2004,  compared to
June 30, 2004,  and results of operations  for the three months ended  September
30, 2004,  compared with the same period in 2003. 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.

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.

Financial Condition

Total  assets at  September  30,  2004 were  $134.8  million  compared to $135.8
million at June 30,  2004,  a decrease of $1.0  million.  The  decrease in total
assets was  primarily due to a decrease in cash and cash  equivalents  resulting
from a decrease in deposits and FHLB advances.

As the  economy  begins  to slowly  recover  and  interest  rates  move  upward,
Management  will  continue  to focus on  interest  rate  spread.  Loan demand is
gradually increasing, however, the refinancing activity which occurred last year
when interest rates reached their lowest levels has now subsided.  Loan activity
for the purchase or construction of single family dwellings is increasing, as is
activity  for  development  loans  for  extensions  of  existing   subdivisions.
Management  continues to anticipate an increase in deposit  balances as interest
rates  begin to rise and  customers  begin to move  funds into  higher  yielding
certificates of deposit versus the more liquid types of accounts.

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

                                   (Continued)


                                                                             16.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Cash and cash equivalents  decreased $2.2 million from $10.0 million at June 30,
2004 to $7.8 million at September 30, 2004.  These funds were used to offset the
decrease in deposits and borrowed money and fund the increase in loans.

The securities  portfolio,  which is classified as available for sale, increased
$0.1  million,  from $5.3  million at June 30, 2004 to $5.4 million at September
30, 2004. The increase is related to an increase in the fair market value of the
securities during the reporting period as no securities transactions occurred.

Loans  increased  $1.3  million  from $115.6  million at June 30, 2004 to $116.9
million at September 30, 2004.  The most  significant  change was in real estate
construction  and  development  loans which  increased  $1.3  million  from $3.0
million at June 30, 2004 to $4.3 million at September  30, 2004.  This  increase
resulted as the borrowers of the related  construction  projects requested funds
from the previously  undrawn amounts of existing loans.  Consumer and commercial
loans also  provided  increases  to the loan  portfolio  with  increases of $0.3
million and $0.5 million  respectively from June 30, 2004 to September 30, 2004.
Significant  decreases in the loan portfolio were in land loans which  decreased
$0.6 million from $1.7 million at June 30, 2004 to $1.1 million at September 30,
2004 and  commercial  real estate loans which  decreased $0.3 million during the
same period. Other loan categories had nominal changes.

Premises and  equipment  decreased  $35,000 from  $2,125,000 at June 30, 2004 to
$2,090,000  at  September  30,  2004.  This  decrease  resulted  from the normal
depreciation of existing assets.

Total  deposits  decreased  $0.6 million from $86.8  million at June 30, 2004 to
$86.2 million at September 30, 2004 due to decreases in  certificates of deposit
and money  market  accounts,  partially  offset by  increases  in  savings,  NOW
accounts and non-interest  bearing  commercial demand accounts.  Certificates of
deposit decreased $1.4 million resulting from matured  certificates,  which were
not renewed due to the low interest  rate  environment.  This prompted a partial
shift of funds to more liquid savings and NOW accounts, which increased $271,000
and  $362,000,   respectively   from  June  30,  2004  to  September  30,  2004.
Non-interest  bearing  commercial demand increased $248,000 since June 30, 2004.
The overall  decrease in deposits  occurred  as  customers  searched  for higher
returns or elected to spend rather than save or invest.

Borrowed  funds  decreased  $475,000  from  $31,140,000  at  June  30,  2004  to
$30,665,000  at September  30, 2004.  This  decrease was the result of scheduled
repayments of the long-term advances.

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.  Lending  activities are influenced by demand
for real  estate  loans and other  types of loans,  which in turn is affected by
interest  rates at which such loans are made,  general  economic  conditions and
availability of funds for lending activities.

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, 2004 Compared to the Three Months Ended
September 30, 2003

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

                                   (Continued)


                                                                             17.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Net Income.  The Corporation  earned net income of $240,000 for the three months
ended  September  30,  2004  compared  to $249,000  for the three  months  ended
September 30, 2003. The decrease of $9,000 in net income was primarily due to an
increase in  noninterest  expense  coupled with an increase in the provision for
loan  losses  partially  offset by an  increase  in net  interest  income  and a
decrease in income tax expense.

Net Interest Income. Net interest income totaled $1,131,000 for the three months
ended  September  30, 2004  compared to  $1,119,000  for the three  months ended
September 30, 2003,  representing  an increase of $12,000.  The increase was the
result of a larger  decrease in interest  expense on deposits and borrowed money
compared  to the  decline  in  interest  income on loans and  other  sources  of
interest income.

Interest and fees on loans decreased  $114,000,  or 5.8% from $1,952,000 for the
three months ended  September 30, 2003 to $1,838,000  for the three months ended
September 30, 2004. The decrease in interest income was due primarily to a lower
average  yield  earned  on loans  due to the  lower  interest  rate  environment
partially  offset by an  increase  in the  average  balance.  The yield on loans
declined  from 6.75% for the three months ended  September 30, 2003 to 6.30% for
the three months ended September 30, 2004.

Interest on securities  decreased $25,000 due to a lower average balance for the
current  three-month  period  partially  offset  by a  slightly  higher  average
interest rate.

Interest  paid on deposits  decreased  $139,000,  or 27.4% from $509,000 for the
three  months  ended  September  30, 2003 to $370,000 for the three months ended
September 30, 2004.  The decrease  resulted  from a lower average  interest rate
coupled with a lower average  balance of deposits.  The average cost of deposits
declined  from 2.21% for the three months ended  September 30, 2003 to 1.73% for
the three months ended September 30, 2004.

Interest  paid on borrowed  funds  totaled  $411,000  for the three months ended
September 30, 2004 compared to $426,000 for the three months ended September 30,
2003.  The  decrease  in  interest  expense on borrowed  funds  resulted  from a
decrease in the average balance of borrowed funds.

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, 2004
totaled  $27,000  compared to $14,000 for the three months ended  September  30,
2003. The increase of $13,000 in the provision for losses was due to an increase
in  the  total  outstanding   balance  of  loans  coupled  with  an  increae  in
nonperforming  loans during the current  three-month period compared to the same
period a year ago. The allowance for loan losses totaled  $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,  compared with $753,000,  or 0.65% of
gross loans receivable, net of deferred loan origination fees and 62.2% of total
nonperforming  loans at June 30, 2004.  The  Corporation  experienced  $3,000 in
charge offs during the

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

                                   (Continued)


                                                                             18.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

current period primarily related to consumer loans. 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  includes  service  fees  and  other
miscellaneous  income and  decreased  $2,000 from  $34,000 for the three  months
ended  September  30, 2003 to $32,000 for the three months ended  September  30,
2004.

Noninterest  expense.  Noninterest expense totaled $760,000 for the three months
ended  September  30,  2004  compared  to $744,000  for the three  months  ended
September 30, 2003,  an increase of $16,000.  This increase was partially due to
normal increases in compensation plus the impact of the Corporation's  increased
stock price on the ESOP plan. Also affecting the increase in compensation  was a
$21,000  decrease in the amount of  compensation  expense  that was deferred for
loan origination costs during the current quarter as compared to the same period
a year ago due to the slowdown of mortgage loan refinancings.

Income Tax  Expense.  Income tax expense  totaled  $135,000 for the three months
ended  September  30,  2004  compared  to $147,000  for the three  months  ended
September 30, 2003,  representing a decrease of $12,000.  The decrease in income
tax expense is reflective of the decrease in net income before income taxes. The
effective tax rate was 36.1% and 37.1% for the three months ended  September 30,
2004 and 2003 respectively.

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

                                   (Continued)


                                                                             19.
<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, 2004 and 2003.

                                                              Three Months
                                                           Ended September 30,
                                                           -------------------
                                                          2004           2003
                                                          ----           ----
                                                         (Dollars in thousands)

Net income                                              $    240       $    249
Adjustments to reconcile net income to net cash from
  operating activities                                        50            (13)
                                                        --------       --------
Net cash from operating activities                           290            236
Net cash from investing activities                        (1,316)         1,958
Net cash from financing activities                        (1,226)        (2,888)
                                                        --------       --------
Net change in cash and cash equivalents                   (2,252)          (694)
Cash and cash equivalents at beginning of period          10,034         12,301
                                                        --------       --------

Cash and cash equivalents at end of period              $  7,782       $ 11,607
                                                        ========       ========

The  Corporation's  principal  sources of funds are deposits,  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 $66.1 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, 2004.

At September 30, 2004, the Corporation  had commitments to originate  fixed-rate
residential  real estate loans totaling  $66,000 and  variable-rate  residential
real estate loans totaling $631,000. 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,  2004.  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 initiate regulatory action.

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

                                   (Continued)


                                                                             20.
<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, 2004 and June 30, 2004,  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, 2004 and
June 30, 2004.  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, 2004 and June 30,  2004,  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, 2004
------------------
Total capital (to risk-
  weighted assets)               $  15,791         20.3%      $  6,219          8.0%       $    7,774          10.0%
Tier 1 (core) capital (to
  risk-weighted assets)             15,158         19.5          3,110          4.0             4,664           6.0
Tier 1 (core) capital (to
  adjusted total assets)            15,158         11.2          5,401          4.0             6,751           5.0
Tangible capital (to
  adjusted total assets)            15,158         11.2          2,025          1.5               N/A

June 30, 2004
-------------
Total capital (to risk-
  weighted assets)               $  15,448         20.0%      $  6,176          8.0%       $    7,720          10.0%
Tier 1 (core) capital (to
  risk-weighted assets)             14,855         19.2          3,088          4.0             4,632           6.0
Tier 1 (core) capital (to
  adjusted total assets)            14,855         10.9          5,440          4.0             6,801           5.0
Tangible capital (to
  adjusted total assets)            14,855         10.9          2,040          1.5               N/A
</TABLE>

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

                                   (Continued)


                                                                             21.
<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 and Procedures

The Corporation's management,  with the participation of the Corporation's Chief
Executive Officer and Chief Financial  Officer,  has evaluated the effectiveness
of its  disclosure  controls  and  procedures  (as such term is defined in Rules
13a-15(e)  and 15d-15(e)  under the  Securities  Exchange Act of 1934  (Exchange
Act))  as of the  end of the  period  covered  by  this  report.  Based  on such
evaluation,  the  Corporation's  Chief  Executive  Officer  and Chief  Financial
Officer have  concluded  that, as of the end of such period,  the  Corporation's
disclosure  controls and  procedures  are  effective in  recording,  processing,
summarizing  and  reporting,  on a  timely  basis,  information  required  to be
disclosed by the  Corporation  in the reports that it files or submits under the
Exchange Act.

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.

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

                                   (Continued)


                                                                             22.
<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
            -----------------------------------------------------------

            None.

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 and Reports on Form 8-K
            --------------------------------

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

                  (2) Exhibit 32: Section 906 Certifications

            (b)   Form 8-K was  furnished on July 21, 2004.  Under Item 5, Other
                  Events,  the  Corporation  reported  the  issuance  of a press
                  release to announce the  quarterly  and year to date  earnings
                  for the  period  ending  June 30,  2004 and  declare a regular
                  dividend.  The Coporation  also announced the date of the 2004
                  Annual Meeting of Shareholders.

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


                                                                             23.
<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 15, 2004                    /s/ Douglas Stewart
      --------------------                 -------------------------------------
                                           Douglas Stewart
                                           President and Chief Executive Officer


Date: November 15, 2004                    /s/ Debra Geuy
      --------------------                 -------------------------------------
                                           Debra Geuy
                                           Chief Financial Officer

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                                                                             24.
<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
            Peoples-Sidney Financial Corporation          Statement  on Form S-1  filed by  Peopl(e)s-Sidney
                                                          Financial  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
            Douglas Stewart                               the S-1  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
            David R. Fogt,  Gary N. Fullenkamp and        the S-1  filed  with  the SEC on March  12,  1997,
            Debra A. Geuy                                 Exhibit 10.3


  10.4      Form of Severance Agreement with Steve        Incorporated by  Pre-Effective  Amendment No. 1 to
            Goins                                         the S-1  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
            Amended and Restated 1998 Stock Option        Report on Form  10-KSB for the  fiscal  year ended
            and Incentive Plan                            June 30, 1999 (File No.  0-22223) and  incorporate
                                                          herein by reference.

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

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

  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>

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                                                                             25.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                                INDEX TO EXHIBITS
--------------------------------------------------------------------------------

 EXHIBIT
  NUMBER    DESCRIPTION
  ------    -----------

  32        Certifications  of the Chief Executive
            Officer   and  the   Chief   Financial
            Officer Pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002

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                                                                             26.