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 March 31, 2002

[ ] 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)


As of May 7, 2002, the latest practicable date, 1,475,038 shares of the issuer's
common shares, $.01 par value, were issued and outstanding.


Transitional Small Business Disclosure Format (Check One):

Yes [ ]    No [X]


                      PEOPLES-SIDNEY FINANCIAL CORPORATION


<PAGE>


                                      INDEX







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


Part II - Other Information

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

  Item 2.     Changes in Securities.................................................     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 and Reports on Form 8-K......................................     22


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

</TABLE>

                                       2

<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
--------------------------------------------------------------------------------


Item 1.  Financial Statements
<TABLE>
<CAPTION>
                                                                                    March 31,            June 30,
                                                                                      2002                 2001
                                                                                      ----                 ----
<S>                                                                             <C>                <C>
ASSETS
Cash and due from financial institutions                                        $       980,293    $      1,015,400
Interest-bearing deposits in other financial institutions                             2,844,530           4,335,495
Overnight deposits                                                                    5,500,000           1,000,000
                                                                                ---------------    ----------------
     Total cash and cash equivalents                                                  9,324,823           6,350,895

Securities available for sale                                                         3,956,710           3,001,715
Federal Home Loan Bank stock                                                          1,457,400           1,397,200
Loans, net                                                                          120,226,322         120,481,894
Accrued interest receivable                                                             911,358             921,864
Premises and equipment, net                                                           2,059,864           1,977,435
Other assets                                                                            195,394             173,398
                                                                                ---------------    ----------------
     Total assets                                                               $   138,131,871    $    134,304,401
                                                                                ===============    ================


LIABILITIES
Deposits                                                                        $    95,665,582    $     91,341,201
Borrowed funds                                                                       25,125,839          25,474,596
Accrued interest payable and other liabilities                                          264,157             338,991
                                                                                ---------------    ----------------
     Total liabilities                                                              121,055,578         117,154,788

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
Paid-in capital                                                                      10,690,833          10,705,048
Retained earnings                                                                    11,261,261          11,150,845
Treasury stock, 310,337 and 271,829 shares, at cost                                  (3,579,097)         (3,178,640)
Unearned employee stock ownership plan shares                                        (1,063,567)         (1,182,471)
Unearned management recognition plan shares                                            (222,420)           (365,394)
Accumulated other comprehensive income (loss)                                           (28,571)              2,371
                                                                                ---------------    ----------------
     Total shareholders' equity                                                      17,076,293          17,149,613
                                                                                ---------------    ----------------
     Total liabilities and shareholders' equity                                 $   138,131,871    $    134,304,401
                                                                                ===============    ================

</TABLE>

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

          See accompanying notes to consolidated financial statements.

                                                                              3.


<PAGE>


                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                          Three Months Ended                Nine Months Ended
                                                               March 31,                        March 31,
                                                               ---------                        ---------
                                                          2002            2001             2002            2001
                                                          ----            ----             ----            ----
<S>                                                 <C>              <C>             <C>             <C>
Interest income
     Loans, including fees                          $   2,291,218    $   2,411,347   $   7,046,789   $    7,078,150
     Securities                                            57,924          108,847         170,244          406,109
     Demand, time and overnight deposits                   22,209           22,670          87,047           54,264
     Dividends on FHLB Stock                               15,995           24,103          60,357           67,863
                                                    -------------    -------------   -------------   --------------
         Total interest income                          2,387,346        2,566,967       7,364,437        7,606,386

Interest expense
     Deposits                                             969,725        1,178,081       3,203,298        3,573,629
     Borrowed funds                                       378,758          398,636       1,154,377        1,144,711
                                                    -------------    -------------   -------------   --------------
         Total interest expense                         1,348,483        1,576,717       4,357,675        4,718,340
                                                    -------------    -------------   -------------   --------------

Net interest income                                     1,038,863          990,250       3,006,762        2,888,046

Provision for loan losses                                  13,658           19,443          39,341           55,958
                                                    -------------    -------------   -------------   --------------
Net interest income after provision for loan losses     1,025,205          970,807       2,967,421        2,832,088

Noninterest income
     Service fees and other charges                        29,325           24,982          97,694           78,543
     Net realized gain (loss) on sale of
       available for sale securities                           --           98,912              --           98,912
                                                    -------------    -------------   -------------   --------------
         Total noninterest income                          29,325          123,894          97,694          177,455

Noninterest expense
     Compensation and benefits                            412,830          394,134       1,232,757        1,148,451
     Director fees                                         24,300           24,300          72,900           80,500
     Occupancy and equipment                              115,883           86,399         329,304          248,836
     Computer processing expense                           68,722           58,613         194,695          170,084
     State franchise taxes                                 45,137           47,570         140,296          137,020
     Professional fees                                     19,631           27,539          74,056           79,713
     Other                                                 86,551           83,535         257,172          236,614
                                                    -------------    -------------   -------------   --------------
         Total noninterest expense                        773,054          722,090       2,301,180        2,101,218
                                                    -------------    -------------   -------------   --------------
Income before income taxes                                281,476          372,611         763,935          908,325

Income tax expense                                        107,200          142,050         291,100          345,950
                                                    -------------    -------------   -------------   --------------
Net income                                          $     174,276    $     230,561   $     472,835   $      562,375
                                                    =============    =============   =============   ==============

Earnings per common share - basic                   $        0.13    $       0.16    $        0.34   $        0.40
                                                    =============    =============   =============   ==============
Earnings per common share - diluted                 $        0.13    $       0.16    $        0.34   $        0.40
                                                    =============    =============   =============   ==============

</TABLE>


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

          See accompanying notes to consolidated financial statements.


                                                                              4.


<PAGE>


                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                          Three Months Ended                Nine Months Ended
                                                               March 31,                        March 31,
                                                               ---------                        ---------
                                                          2002            2001             2002            2001
                                                          ----            ----             ----            ----


<S>                                                 <C>              <C>             <C>             <C>
Net income                                          $     174,276    $     230,561   $     472,835   $      562,375

Other comprehensive income (loss)
     Unrealized holding gains and (losses) on
       available-for-sale securities                      (42,588)          63,685         (46,883)         321,334
     Reclassification adjustments for (gains)
       and losses later realized as income                     --          (98,912)             --          (98,912)
                                                    -------------    -------------   -------------   --------------
     Net unrealized gains and (losses)                    (42,588)         (35,227)        (46,883)         222,422
                                                    -------------    -------------   -------------   --------------
     Tax effect                                            14,480           11,977          15,941          (75,624)
         Other comprehensive income (loss)                (28,108)         (23,250)        (30,942)         146,798
                                                    -------------    -------------   -------------   --------------
Comprehensive income                                $     146,168    $     207,311   $     441,893   $      709,173
                                                    =============    =============   =============   ==============
</TABLE>


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

          See accompanying notes to consolidated financial statements.


                                                                              5.

<PAGE>

                 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
                              SHAREHOLDERS' EQUITY
                                   (Unaudited)

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

<TABLE>
<CAPTION>
                                                          Three Months Ended                Nine Months Ended
                                                               March 31,                        March 31,
                                                               ---------                        ---------
                                                          2002            2001             2002            2001
                                                          ----            ----             ----            ----


<S>                                                 <C>              <C>             <C>             <C>
Balance, beginning of period                        $  17,035,495    $  17,234,364   $  17,149,613   $   16,959,798

Net income for period                                     174,276          230,561         472,835          562,375

Cash dividends, $.09 and $.08 per share for
  the three months ended March 31, 2002
  and 2001, $.26 and $.23 per share for the nine
  months ended March 31, 2002 and 2001                   (124,223)        (114,316)       (362,419)        (333,234)

Purchase of 6,000 and 33,140 shares of
  treasury stock for the three months
  ended March 31, 2002 and 2001; and
  38,508 and 53,340 shares of treasury stock
  for the nine months ended March 31, 2002
  and 2001, at cost                                       (65,400)        (279,987)       (400,457)        (437,381)

Commitment to release 2,856 management
  recognition plan shares for the three months
  ended March 31, 2002 and 2001 and 8,568
  management recognition plan shares for the
  nine months ended March 31, 2002 and 2001                47,658           47,658         142,974          142,974

Commitment to release 3,378 and 3,522
  employee stock ownership plan shares for the
  three months ended March 31, 2002 and 2001
  and 10,134 and 10,566 employee stock
  ownership plan shares for the nine months
  ended March 31, 2002 and 2001, at fair value             36,595           29,827         104,689           83,527

Change in fair value on securities available for
  sale, net of tax                                        (28,108)         (23,250)        (30,942)         146,798
                                                    -------------    -------------   -------------   --------------
Balance, end of period                              $  17,076,293    $  17,124,857   $  17,076,293   $   17,124,857
                                                    =============    =============   =============   ==============

</TABLE>




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

          See accompanying notes to consolidated financial statements.


                                                                              6.

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

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          Nine Months Ended
                                                                                               March 31,
                                                                                       2002               2001
<S>                                                                               <C>               <C>
Cash flows from operating activities
     Net income                                                                   $      472,835    $       562,375
     Adjustments to reconcile net income to net cash from
       operating activities
         Depreciation                                                                    157,307            121,314
         Provision for loan losses                                                        39,341             55,958
         FHLB stock dividends                                                            (60,200)           (67,700)
         Net realized (gain) loss on sale of securities                                       --            (98,912)
         Compensation expense on ESOP shares                                             104,689             83,527
         Compensation expense on MRP shares                                              142,974            142,974
         Change in
              Accrued interest receivable and other assets                               (13,368)           (84,828)
              Accrued expense and other liabilities                                      (58,893)           (59,025)
              Deferred loan fees                                                          51,295              3,402
                                                                                  --------------    ---------------
                  Net cash from operating activities                                     835,980            659,085

Cash flows from investing activities
     Proceeds from maturities/calls of securities available for sale                   1,500,000          2,000,000
     Proceeds from sale of securities available for sale                                      --          4,408,534
     Principal repayments on mortgage-backed securities                                       --            339,731
     Purchases of securities available for sale                                       (2,500,000)        (1,500,000)
     Purchases of time deposits in other financial institutions                         (300,000)                --
     Maturities of time deposits in other financial institutions                         300,000                 --
     Net change in loans                                                                 164,936         (4,042,304)
     Premises and equipment expenditures                                                (239,736)          (103,603)
     Purchases of FHLB stock                                                                  --           (281,700)
                                                                                  --------------    ---------------
         Net cash from investing activities                                           (1,074,800)           820,658

Cash flows from financing activities
     Net change in deposits                                                            4,324,381         (1,847,822)
     Repayments of long-term FHLB borrowings                                            (348,757)                --
     Proceeds from long-term borrowings                                                       --          5,000,000
     Cash dividends paid                                                                (362,419)          (333,234)
     Purchase of treasury stock                                                         (400,457)          (437,381)
                                                                                  --------------    ---------------
         Net cash from financing activities                                            3,212,748          2,381,563
                                                                                  --------------    ---------------
Net change in cash and cash equivalents                                                2,973,928          3,861,306
Cash and cash equivalents at beginning of period                                       6,350,895          2,205,993
                                                                                  --------------    ---------------
Cash and cash equivalents at end of period                                        $    9,324,823    $     6,067,299
                                                                                  ==============    ===============

Supplemental disclosures of cash flow information
     Cash paid during the period for
         Interest                                                                 $    4,336,668    $     4,688,363
         Income taxes                                                                    281,000            310,000

Noncash transactions
         Transfer from loans to other real estate owned                           $           --    $       137,814


</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

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 March 31, 2002 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 of
Form  10-QSB  and,  therefore,  do not  purport  to  contain  all the  necessary
financial  disclosures  required by accounting  principals 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, 2001,  included in the  Corporation's  2001 Annual Report on Form 10-KSB for
the  fiscal  year  ended  June 30,  2001.  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.

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 real estate. Commercial loans are
expected to be repaid from cash flow from operations of businesses.  Real estate
loans are secured by both residential and commercial real estate.  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.

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 future results could differ. The allowance for loan losses,  fair
values of financial  instruments and status of  contingencies  are  particularly
subject to change.

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.

Basic  earnings per share ("EPS") is based on net income divided by the weighted
average number of 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 MRP shares and
the additional common shares issuable under stock options.


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

                                  (Continued)

                                                                              8.


<PAGE>

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

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Standards ("SFAS") No. 141, "Business  Combinations." SFAS No. 141
requires all business  combinations  within its scope to be accounted  for using
the purchase method, rather than the pooling-of-interests method. The provisions
of this Statement  apply to all business  combinations  initiated after June 30,
2001.  The  adoption  of  this  statement  will  only  have  an  impact  on  the
Corporation's financial statements if it enters into a business combination.

Also in June 2001,  FASB  issued SFAS No. 142,  "Goodwill  and Other  Intangible
Assets,"  which  addresses the accounting for such assets arising from prior and
future  business  combinations.  Upon the adoption of this  Statement,  goodwill
arising from business combinations will no longer be amortized,  but rather will
be assessed regularly for impairment,  with any such impairment  recognized as a
reduction  to earnings in the period  identified.  Other  identified  intangible
assets,  such as core deposit intangible  assets,  will continue to be amortized
over their  estimated  useful lives.  The  Corporation is required to adopt this
Statement  on July 1, 2002.  The  adoption  of this  Statement  will not have an
impact  on the  Corporation's  financial  statements,  as it does  not  have any
intangible assets.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived Assets," which amends SFAS No. 121 by addressing business
segments accounted for as a discontinued  operation under Accounting  Principles
Board  Opinion No. 30. This  Statement is effective  for fiscal years  beginning
after December 15, 2001. The effect of this Statement on the financial  position
and results of operations of the Corporation is not expected to be material.


NOTE 2 - SECURITIES AVAILABLE FOR SALE

Securities available for sale were as follows:

<TABLE>
<CAPTION>
                                                                Gross           Gross          Estimated
                                               Amortized     Unrealized      Unrealized          Fair
                                                 Cost           Gains          Losses            Value
                                                 ----           -----          ------            -----
<S>                                        <C>                <C>           <C>             <C>
March 31, 2002
    U.S. Government agencies               $     4,000,000    $    5,470    $   (48,760)    $    3,956,710
                                           ===============    ==========    ===========     ==============

June 30, 2001
    U.S. Government agencies               $     2,998,122    $   18,288    $   (14,695)    $    3,001,715
                                           ===============    ==========    ===========     ==============

</TABLE>

Contractual  maturities of securities  available for sale at March 31, 2002 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.

<TABLE>
<CAPTION>
                                                                                            Estimated
                                                               Amortized                      Fair
                                                                 Cost                         Value
                                                             -------------               ---------------
           <S>                                              <C>                          <C>

           Due after one year through five years            $    3,000,000               $     2,953,740
           Due after five years through ten years                1,000,000                     1,002,970
                                                            --------------               ---------------
                                                            $    4,000,000               $     3,956,710
                                                            ==============               ===============
</TABLE>

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

                                  (Continued)

                                                                              9.


<PAGE>


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

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

NOTE 2 - SECURITIES AVAILABLE FOR SALE (Continued)

No securities  were sold during the  three-month  and  nine-month  periods ended
March 31, 2002.  Proceeds from the sale of a mortgage-backed  security available
for sale during the three and nine months  ended March 31, 2001 were  $4,408,534
resulting in gross  realized  gains of $98,912.  No  securities  were pledged as
collateral at March 31, 2002 or June 30, 2001.


NOTE 3 - LOANS

Loans were as follows:

                                                 March 31,         June 30,
                                                   2002              2001
                                                   ----              ----
      Mortgage loans:
           1-4 family residential          $    97,187,908   $     96,717,463
           Multi-family residential              1,258,738          1,239,141
           Commercial real estate               10,240,562         10,025,284
           Real estate construction and
             development                         5,783,964          6,131,040
           Land                                    966,348          1,370,376
                                            --------------    ---------------
               Total mortgage loans            115,437,520        115,483,304
      Consumer loans                             4,393,938          4,657,828
      Commercial loans                           3,738,715          3,629,987
                                            --------------    ---------------
               Total loans                     123,570,173        123,771,119
      Less:
           Allowance for loan losses              (695,000)          (660,800)
           Loans in process                     (2,336,593)        (2,367,462)
           Deferred loan fees                     (312,258)          (260,963)
                                            --------------    ---------------
                                            $  120,226,322    $   120,481,894
                                            ==============    ===============


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

<TABLE>
<CAPTION>
                                                          Three Months Ended                Nine Months Ended
                                                               March 31,                        March 31,
                                                               ---------                        ---------
                                                          2002            2001             2002            2001
                                                          ----            ----             ----            ----

        <S>                                         <C>              <C>             <C>             <C>
        Balance at beginning of period              $     685,000    $     623,500   $     660,800   $      591,350
        Provision for losses                               13,658           19,443          39,341           55,958
        Charge-offs                                        (4,140)              --          (5,941)          (4,563)
        Recoveries                                            482               57             800              255
                                                    -------------    -------------   -------------   --------------
        Balance at end of period                    $     695,000    $     643,000   $     695,000   $      643,000
                                                    =============    =============   =============   ==============

</TABLE>


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

                                  (Continued)

                                                                             10.


<PAGE>



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

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

NOTE 3 - LOANS (Continued)

Nonperforming loans were as follows:

<TABLE>
<CAPTION>
                                                              March 31,           June 30,
                                                                2002                2001
                                                                ----                ----

         <S>                                              <C>               <C>
         Loans past due over 90 days still on accrual     $       513,000   $        498,000
         Nonaccrual loans                                         335,000            764,000

</TABLE>

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

As of March 31, 2002 and June 30, 2001 and for the three  months and nine months
ended March 31, 2002 and 2001,  loans required to be evaluated for impairment on
an individual loan basis were not material.


NOTE 4 - BORROWED FUNDS

At March 31, 2002 and June 30, 2001, 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. No borrowings
were outstanding on this line of credit at March 31, 2002 and June 30, 2001.

As a member  of the FHLB  system,  the  Association  has the  ability  to obtain
borrowings up to a maximum total of  $29,148,000,  including the cash management
line-of-credit  based  upon its  current  FHLB  stock  ownership.  However,  the
Association  can  obtain  advances  up to the lower of 50% of the  Association's
total assets or 80% of the  Association's  pledgable  residential  mortgage loan
portfolio by  purchasing  more FHLB stock.  Advances  from the Federal Home Loan
Bank at March 31, 2002 and June 30, 2001 were as follows:

<TABLE>
<CAPTION>
                                                                            March 31,          June 30,
                                                                              2002               2001
                                                                              ----               ----

         <S>                                                           <C>                <C>
         7.40% FHLB fixed-rate advance, due May 2, 2002                $     2,500,000    $      2,500,000
         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 2003, due September 8, 2010                             5,000,000           5,000,000
         5.30% select pay mortgage-matched advance, final
           maturity May 1, 2011                                              1,857,463           1,974,596
         5.35% select pay mortgage-matched advance, final
           maturity July 1, 2011                                             3,768,376           4,000,000
                                                                       ---------------    ----------------
                                                                       $    25,125,839    $     25,474,596
                                                                       ===============    ================
</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)

                                                                             11.


<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 penalty. The
select pay  mortgage-matched  advances  require  monthly  principal and interest
payments and annual additional principal payments.

Maturities of FHLB advances for the next fives years and thereafter were:

                  Year ended March  31,
                           2003                           $    3,501,061
                           2004                                  878,677
                           2005                                  769,661
                           2006                                  672,623
                           2007                                  586,308
                        Thereafter                            18,717,509
                                                          --------------
                                                          $   25,125,839
                                                          ==============


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 to 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:

<TABLE>
<CAPTION>
                                      March 31,                     June 30,
                                        2002                          2001
                                        ----                          ----
                                Fixed          Variable        Fixed          Variable
                                 Rate            Rate           Rate            Rate
                                 ----            ----           ----            ----

<S>                          <C>             <C>             <C>             <C>
Nonresidential               $       --      $  709,000      $  412,000      $  113,000
Residential real estate       2,181,000         751,000              --         600,000
Interest rates               6.75-7.00%      5.50-7.50%      7.00-7.25%      7.00 -7.50%

</TABLE>

Commitments  to make loans are  generally  made for a period of 30 days or less.
The maximum maturity for fixed-rate loan commitments was 20 years.

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


                                  (Continued)
                                                                             12.

<PAGE>


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

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

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

The  Corporation  also had unused  commercial  and home  equity  lines of credit
approximating $2,922,000 and $2,539,000 at March 31, 2002 and June 30, 2001.

At March 31,  2002 and June 30,  2001,  the  Association  was  required  to have
$1,569,000  and  $698,000  on  deposit  with  its   correspondent   banks  as  a
compensating clearing requirement.

The Association entered into employment  agreements with certain officers of the
Corporation.  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.

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


                                  (Continued)
                                                                             13.

<PAGE>



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

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

NOTE 6 - EARNINGS PER COMMON SHARE

A reconciliation  of the numerators and denominators  used in the computation of
the basic  earnings  per common  share and diluted  earnings per common share is
presented below:

<TABLE>
<CAPTION>
                                                               Three Months Ended            Nine Months Ended
                                                               ------------------            -----------------
                                                                    March 31,                    March 31,
                                                                    ---------                    ---------
                                                               2002            2001         2002           2001
                                                               ----            ----         ----           ----
     <S>                                                    <C>           <C>            <C>            <C>
     Basic Earnings Per Common Share
       Numerator
         Net income                                         $  174,276    $   230,561    $   472,835    $   562,375
                                                            ==========    ===========    ===========    ===========
       Denominator
         Weighted average common shares
           outstanding                                       1,476,971      1,539,839      1,491,641      1,561,814
         Less:  Average unallocated ESOP shares                (92,329)      (106,059)       (95,707)      (109,581)
         Less:  Average unearned MRP shares                    (14,757)       (26,182)       (17,613)       (29,038)
                                                             ---------      ---------      ---------      ---------
         Weighted average common shares
           outstanding for basic earnings per
           common share                                      1,369,885      1,407,598      1,378,321      1,423,195
                                                            ==========    ===========    ===========    ===========
       Basic earnings per common share                      $    0.13     $      0.16    $      0.34    $     0.40
                                                            ==========    ===========    ===========    ===========
     Diluted Earnings Per Common Share
       Numerator
         Net income                                         $  174,276    $   230,561    $   472,835    $   562,375
                                                            ==========    ===========    ===========    ===========
       Denominator
         Weighted average common shares
           outstanding for basic earnings per
           common share                                      1,369,885      1,407,598      1,378,321      1,423,195
         Add:  Dilutive effects of average unearned
           MRP shares                                               --             --             --             --
         Add:  Dilutive effects of assumed exercises
           of stock options                                         --             --             --             --
                                                             ---------      ---------      ---------      ---------
         Weighted average common shares and
           dilutive potential common shares
           outstanding                                       1,369,885      1,407,598      1,378,321      1,423,195
                                                            ==========    ===========    ===========    ===========
       Diluted earnings per common share                    $    0.13     $      0.16    $      0.34    $      0.40
                                                            ==========    ===========    ===========    ===========
</TABLE>

Unearned MRP shares and stock options  granted did not have a dilutive effect on
EPS for the  three and nine  months  ended  March 31,  2002 and 2001 as the fair
value  of the  MRP  shares  on the  date of  grant  and the  exercise  price  of
outstanding  options was greater than the average  market price for the periods.
As of March 31, 2002 and 2001, there were 140,824 options  outstanding that were
not dilutive.

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


                                  (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 March 31, 2002,  compared to June
30, 2001,  and results of  operations  for the three and nine months ended March
31, 2002, compared with the same periods in 2001. 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.

When used in this  discussion  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 March 31, 2002 were $138.1 million compared to $134.3 million at
June 30,  2001,  an increase of $3.8  million,  or 2.8%.  The  increase in total
assets was due to an increase in cash and cash equivalents funded by an increase
in deposits.

Cash and cash  equivalents  increased $3.0 million at March 31, 2002 as compared
to June 30, 2001. The increased cash and cash equivalent  amount was invested in
overnight  deposits as a temporary earning source until loan growth utilizes the
funds provided from deposit growth.  Additionally,  the Corporation increased it
available for sale security portfolio by $1.0 as a higher earning alternative to
overnight deposits to compensate for the slow down in loan growth.

Loans decreased  $300,000 from $120.5 million at June 30, 2001 to $120.2 million
at March 31, 2002.  The decrease was  primarily in land loans,  which  decreased
$404,000 and real estate  construction  and development  loans,  which decreased
$347,000.  This decrease was partially  offset by an increase of $470,000 in 1-4
residential  loans and an increase of $215,000 in commercial  real estate loans.
The overall  decrease in total mortgage loans is reflective of a slowing economy
marked by fewer new housing starts.



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


                                  (Continued)
                                                                             15.

<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

The  Corporation's   consumer  loan  portfolio   decreased  $264,000  while  the
commercial loan portfolio increased $109,000 between June 30, 2001 and March 31,
2002.  The net decrease in these loan  categories  is also due to a general slow
down in the economy.  Non-mortgage  loans  remain a small  portion of the entire
loan portfolio,  representing 6.6% and 6.7% of gross loans at March 31, 2002 and
June 30, 2001.

Premises and  equipment  increased  $83,000 from  $1,977,000 at June 30, 2001 to
$2,060,000 at March 31, 2002. The increase  resulted from the  Association's new
branch located in the new Wal-Mart Superstore in Sidney.

Total  deposits  increased  $4.3 million from $91.3  million at June 30, 2001 to
$95.6  million at March 31, 2002.  The increase was primarily due to an increase
of $3.5 million in savings accounts. The Corporation also had increases in other
deposit  categories as money market accounts  increased  $280,000,  NOW accounts
increased $753,000, and noninterest-bearing  demand deposits increased $393,000.
The exception was a decrease in  certificates  of deposit of $601,000 since June
30, 2001.  Recent  declines in the stock market have prompted some  investors to
seek financial institution deposit products. Customers seeking more liquidity in
the  current  low  interest  rate  environment  have  shifted  their  funds into
transaction accounts. Additionally, the Corporation has generated deposit growth
at its new branch located in the new Wal-Mart Superstore in Sidney.

Borrowed funds were $25.1 million at March 31, 2002 compared to $25.5 million at
June 30, 2001.  Borrowings at March 31, 2002  consisted of long-term  fixed-rate
advances,  convertible  fixed-rate  advances  and  select  pay  mortgage-matched
advances.  The  only  activity  during  the nine  months  related  to  scheduled
principal repayments on select pay mortgage-matched  advances. Based on the FHLB
stock  owned by the  Association  at March 31,  2002,  the  Association  had the
ability to obtain  borrowings up to a maximum total of $29.1  million.  However,
the Association can obtain advances up to the lower of 50% of the  Association's
total assets or 80% of the  Association's  pledgable  residential  mortgage loan
portfolio  by  purchasing  more FHLB stock.  Based upon the 50% of total  assets
limitation, management estimates the maximum borrowing capacity from the FHLB to
be approximately $68.6 million at March 31, 2002.


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.


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


                                  (Continued)
                                                                             16.

<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Three Months  Ended March 31, 2002  Compared to the Three Months Ended March 31,
2001

Net Income.  The Corporation  earned net income of $174,000 for the three months
ended March 31, 2002  compared to $231,000  for the three months ended March 31,
2001.  The decrease in net income was  primarily due to a gain on the sale of an
available  for sale  security  realized  during the three months ended March 31,
2001 and an increase in noninterest  expense  partially offset by an increase in
net interest income.

Net Interest Income. Net interest income totaled $1,039,000 for the three months
ended March 31, 2002  compared to $990,000  for the three months ended March 31,
2001.  The increase of $49,000 was the result of a decrease in interest  expense
on deposits and borrowings  partially offset by a decrease in interest income on
securities and loans.

Interest and fees on loans  decreased  $120,000  from  $2,411,000  for the three
months ended March 31, 2001 to  $2,291,000  for the three months ended March 31,
2002. The decrease in interest and fee income occurred  primarily as a result of
a  decrease  in the  average  interest  yield on loans  partially  offset  by an
increase in the average balance.

Interest on  securities  decreased  $51,000 for the three months ended March 31,
2002 compared to the three months ended March 31, 2001. The decrease was largely
due to a decline in the average  balance of securities  which  resulted from the
sale of a  mortgage-backed  security  during the third  quarter of fiscal  2001,
coupled with a decrease in the average interest rate.

Interest  paid on deposits  decreased  $208,000 for the three months ended March
31,  2002  compared  to the three  months  ended March 31,  2001.  Beginning  in
October, 2001 the Association  significantly adjusted the interest rates offered
on all deposit  accounts to  appropriately  reflect  the current  interest  rate
environment.  This  resulted in a decrease in the average  interest rate paid on
deposits during the current quarter somewhat offset by a higher average balance.

Interest  paid on borrowed  funds  totaled  $379,000  for the three months ended
March 31,  2002  compared to $399,000  for the three ended March 31,  2001.  The
decrease  of $20,000 in  interest  expense on  borrowed  funds  resulted  from a
decrease in the average rate paid for  borrowings  despite a slight  increase in
the average balance.

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 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.


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


                                  (Continued)
                                                                             17.
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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


The  provision for loan losses for the three months ended March 31, 2002 totaled
$14,000  compared to $19,000 for the three  months  ended  March 31,  2001.  The
allowance for loan losses totaled  $695,000,  or 0.56% of gross loans receivable
and  82.0%  of  total  nonperforming  loans at March  31,  2002,  compared  with
$661,000,  or 0.53% of gross loans  receivable and 52.3% of total  nonperforming
loans  at  June  30,  2001.  Charge-offs  experienced  by the  Corporation  have
primarily related to consumer and other non-real estate loans. The Corporation's
low  historical  charge-off  history 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 totaled  $29,000 for the three  months ended March 31,
2002 and $124,000  for the three  months ended March 31, 2001.  The decrease was
primarily due to a gain on the sale of an available for sale security during the
three  months  ended March 31,  2001  offset  slightly by an increase in service
charges on deposit accounts.

Noninterest  expense.  Noninterest expense totaled $773,000 for the three months
ended March 31, 2002  compared to $722,000  for the three months ended March 31,
2001,  an increase of $51,000.  The  increase  was the result of the  additional
personnel, occupancy and advertising costs associated with the new branch office
in the new Wal-Mart Superstore in Sidney, which opened in June 2001.

Income  Tax  Expense.   The  volatility  of  income  tax  expense  is  primarily
attributable  to the  change in income  before  income  taxes and the impact the
Corporation's stock price has on the stock-based  employee benefit plans. Income
tax expense totaled  $107,000 for the three months ended March 31, 2002 compared
to $142,000 for the three months ended March 31, 2001,  representing  a decrease
of $35,000.  The  effective  tax rate was 38.1% for the three months ended March
31, 2002 and 2001.

Nine Months  Ended March 31,  2002  Compared to the Nine Months  Ended March 31,
2001

Net Income.  The  Corporation  earned net income of $473,000 for the nine months
ended March 31, 2002  compared to $562,000  for the nine months  ended March 31,
2001.  The decrease of $89,000 in net income was  primarily due to a gain on the
sale of an available for sale  security  during the third quarter of fiscal 2001
and an increase in noninterest  expense  partially  offset by an increase in net
interest income.

Net Interest Income.  Net interest income totaled $3,007,000 for the nine months
ended March 31, 2002 compared to $2,888,000  for the nine months ended March 31,
2001. The increase of $119,000 was the result of a decrease in interest  expense
on deposits  coupled  with an increase  in interest  income on demand,  time and
overnight  deposits  offset by a decrease in interest  earned on securities  and
loans.

Interest and fees on loans  decreased  $31,000 to $7,047,000 for the nine months
ended March 31, 2002 from  $7,078,000  for the nine months ended March 31, 2001.
Even though the  Association  realized an increase in the average balance of the
loan portfolio,  the average interest yield has decreased compared to a year ago
and more than offset the increase in average loan balance.  Partially offsetting
the decrease in the interest yield was an increase in fee income  resulting from
increased   refinancing  activity  brought  on  by  a  declining  interest  rate
environment.

Interest earned on securities decreased $236,000 for the nine months ended March
31, 2002 compared to the same period last year. The decrease is largely due to a
decrease  in the  average  balance  of  securities  resulting  from  the sale of
mortgage-backed  security during the third quarter of the fiscal year ended June
30, 2001.  Additionally,  the average  interest rate earned on  securities  also
decreased as compared to the same period a year ago.


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


                                  (Continued)
                                                                             18.
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Interest paid on deposits decreased $371,000 for the nine months ended March 31,
2002 compared to the nine months ended March 31, 2001.  Due to a declining  rate
environment,  the  Association  adjusted the rates  offered on deposit  accounts
resulting  in a decrease  in the average  interest  rate paid during the current
nine month period.  However,  despite  declining  interest rates the Association
experienced  an  increase in the average  balance of  deposits  which  partially
offset the effect of lower rates.

Provision  for Loan Losses.  The  provision  for loan losses for the nine months
ended March 31,  2002  totaled  $39,000  compared to $56,000 for the nine months
ended March 31, 2001.

Noninterest   income.   Noninterest  income  includes  service  fees  and  other
miscellaneous  income and totaled  $98,000  for the nine months  ended March 31,
2002 and $177,000  for the nine months  ended March 31,  2001.  The decrease was
primarily due to a gain on the sale on an available for sale security during the
nine  months  ended  March 31,  2001  offset  slightly by an increase in service
charges on transaction accounts.

Noninterest expense.  Noninterest expense totaled $2,301,000 for the nine months
ended March 31, 2002 compared to $2,101,000  for the nine months ended March 31,
2001,  an  increase  of  $200,000.  The  increase  was  directly  related to the
additional  cost of personnel,  occupancy and  advertising  associated  with the
opening of a new branch office  during June 2001 in the new Wal-Mart  Superstore
in Sidney.

Income  Tax  Expense.   The  volatility  of  income  tax  expense  is  primarily
attributable  to the  change in income  before  income  taxes and the impact the
Corporation's stock price has on the stock-based  employee benefit plans. Income
tax expense  totaled  $291,000 for the nine months ended March 31, 2002 compared
to $346,000 for the nine months ended March 31, 2001, representing a decrease of
$55,000.  The  effective  tax rate was 38.1% for the nine months ended March 31,
2002 and 2001.

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 nine months ended March 31, 2002 and 2001.

<TABLE>
<CAPTION>
                                                                    Nine Months
                                                                  Ended March 31,
                                                                  ---------------
                                                                2002            2001
                                                                ----            ----
                                                              (Dollars in thousands)

<S>                                                        <C>              <C>
Net income                                                 $        473     $        562
Adjustments to reconcile net income to net cash from
  operating activities                                              363               97
                                                           ------------     ------------
Net cash from operating activities                                  836              659
Net cash from investing activities                               (1,075)             821
Net cash from financing activities                                3,213            2,381
                                                           ------------     ------------
Net change in cash and cash equivalents                           2,974            3,861
Cash and cash equivalents at beginning of period                  6,351            2,206
                                                           ------------     ------------
Cash and cash equivalents at end of period                 $      9,325     $      6,067
                                                           ============     ============
</TABLE>


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


                                  (Continued)
                                                                             19.
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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


The  Corporation's  principal  sources of funds are deposits,  loan  repayments,
maturities of securities and other funds provided by operations. The Association
also has the ability to borrow from the FHLB.  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  Association  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.

At March 31, 2002,  the  Corporation  had  commitments  to originate  fixed-rate
commercial  and   residential   real  estate  loans   totaling   $2,181,000  and
variable-rate  commercial and  residential  real estate  mortgage loans totaling
$1,460,000.  Loan  commitments  are  generally  for  30  days.  The  Corporation
considers its liquidity and capital reserves  sufficient to meet its outstanding
short and long-term  needs.  See Note 5 of the Notes to  Consolidated  Financial
Statements.

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.  The  Association's
capital amounts and classifications are also subject to qualitative judgments by
the regulators  about the  Association's  components,  risk weightings and other
factors.  Failure to meet minimum  capital  requirements  can  initiate  certain
mandatory  actions that, if undertaken,  could have a direct  material effect on
the  Corporation's  financial  statements.  At March 31, 2002 and June 30, 2001,
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 March 31, 2002 and June 30, 2001.  No  conditions or events have occurred
subsequent to the last notification by regulators that management believes would
have changed the Association's category.


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


                                  (Continued)
                                                                             20.
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

At March 31, 2002 and June 30, 2001, the Association's actual capital levels and
minimum required levels were:

<TABLE>
<CAPTION>
                                                                                              To Be Well
                                                                                           Capitalized Under
                                                                 For Capital               Prompt Corrective
                                         Actual               Adequacy Purposes           Action Regulations
                                         ------               -----------------           ------------------
                                  Amount         Ratio      Amount         Ratio         Amount          Ratio
                                  ------         -----      ------         -----         ------          -----
                                                             (Dollars in Thousands)
<S>                            <C>               <C>      <C>               <C>      <C>                 <C>
March 31, 2002
Total capital (to risk-
  weighted assets)             $  14,730         16.6%    $  7,092          8.0%     $    8,865          10.0%
Tier 1 (core) capital (to
  risk-weighted assets)           14,038         15.8        3,546          4.0           5,319           6.0
Tier 1 (core) capital (to
  adjusted total assets)          14,038         10.2        5,529          4.0           6,911           5.0
Tangible capital (to
  adjusted total assets)          14,038         10.2        2,073          1.5                           N/A

June 30, 2001
Total capital (to risk-
  weighted assets)             $  13,934         15.6%    $  7,168          8.0%     $    8,961          10.0%
Tier 1 (core) capital (to
  risk-weighted assets)           13,277         14.8        3,584          4.0           5,376           6.0
Tier 1 (core) capital (to
  adjusted total assets)          13,277          9.9        5,374          4.0           6,718           5.0
Tangible capital (to
  adjusted total assets)          13,277          9.9        2,015          1.5                           N/A

</TABLE>

On October 16, 2001,  the Board of Directors  announced  the  completion  of the
Corporation's  fourth stock repurchase  program through purchasing 78,915 shares
in the open market  over the past  several  months.  In  addition,  the Board of
Directors   authorized  the  commencement  of  the  Corporation's   fifth  stock
repurchase  program  whereby a total of 74,800  shares will be  purchased in the
open market as  conditions  permit over the next twelve  months.  Through May 7,
2002, 21,000 shares have been repurchased.


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


                                  (Continued)
                                                                             21.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           PART II - OTHER INFORMATION

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

Item 1.    Legal Proceedings
           -----------------
           None.

Item 2.    Changes in Securities
           ---------------------
           None.

Item 3.    Defaults Upon Senior Securities
           -------------------------------
           Not applicable.

Item 4.    Submission of Matters to a Vote of Security Holders
           ---------------------------------------------------
           No matters were brought before the shareholders for a vote during
           the quarter.

Item 5.    Other Information
           -----------------
           None.

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

          (a)  Form 8-K was  filed on  January  16,  2002  under  Item 5,  Other
               Events', the Corporation reported the issuance of a press release
               to announce the quarterly earnings and declare a dividend.


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


                                  (Continued)
                                                                             22.
<PAGE>

                                   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:    May 9, 2002                         /s/ Douglas Stewart
         -----------                         --------------------
                                             Douglas Stewart
                                             President





Date:    May 9, 2002                         /s/ Debra Geuy
         -----------                         --------------
                                             Debra Geuy
                                             Chief Financial Officer