FORM 10-QSB

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

 (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, 2000

[   ]     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 5, 2000, the latest practicable date, 1,581,391 shares of the issuer's
common shares, $.01 par value, were issued and outstanding.


Transitional Small Business Disclosure Format (Check One):

Yes   [  ]      No   [ X ]




<PAGE>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION

                                      INDEX

PART I - FINANCIAL INFORMATION

  Item 1. Financial Statements (Unaudited)

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

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

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

          Condensed Consolidated Statements of Changes in Shareholders' Equity..

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

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

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


PART II - OTHER INFORMATION

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

  Item 2. Changes in Securities and Use of Proceeds.............................

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

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

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

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


SIGNATURES .....................................................................


<PAGE>
<TABLE>
<CAPTION>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

Item 1.  Financial Statements
                                                                                     March 31,         June 30,
                                                                                       2000              1999
                                                                                       ----              ----
<S>                                                                             <C>                    <C>
ASSETS
Cash and due from banks                                                         $       774,038        1,298,357
Interest-bearing deposits in other financial institutions                               846,135          634,621
                                                                                        -------          -------
     Total cash and cash equivalents                                                  1,620,173        1,932,978

Time deposits in other financial institutions                                           100,000          400,000
Securities available for sale                                                         8,522,085        7,858,111
Federal Home Loan Bank stock                                                            967,800          907,700
Loans receivable, net                                                               112,815,372      102,802,845
Accrued interest receivable                                                             898,435          759,913
Premises and equipment, net                                                           1,920,461        1,985,608
Other assets                                                                            307,578          235,104
                                                                                        -------          -------

     Total assets                                                               $   127,151,904      116,882,259
                                                                                    ===========      ===========

LIABILITIES
Deposits                                                                        $    92,016,217       84,310,492
Borrowed funds                                                                       18,000,000       14,800,000
Accrued interest payable and other liabilities                                          191,344          409,550
                                                                                        -------          -------
     Total liabilities                                                              110,207,561       99,520,042

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                                                           10,760,636       10,779,941
Retained earnings                                                                    10,725,514       10,643,040
Treasury stock, 186,453 and 120,753 shares at cost                                   (2,417,461)      (1,766,399)
Unearned employee stock ownership plan shares                                        (1,390,893)      (1,520,139)
Unearned management recognition plan shares                                            (603,718)        (746,692)
Accumulated other comprehensive income (loss)                                          (147,589)         (45,388)
                                                                                       --------          -------
     Total shareholders' equity                                                      16,944,343       17,362,217
                                                                                     ----------       ----------

     Total liabilities and shareholders' equity                                 $   127,151,904      116,882,259
                                                                                    ===========      ===========
</TABLE>
          See accompanying notes to consolidated financial statements.



<PAGE>
<TABLE>
<CAPTION>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)



                                                     Three Months Ended                   Nine Months Ended
                                                          March 31,                           March 31,
                                                          ---------                           ---------
                                                   2000               1999              2000             1999
                                                   ----               ----              ----             ----
<S>                                         <C>                <C>                <C>               <C>
Interest income
     Loans, including fees                  $     2,133,063    $    1,917,451     $    6,217,853    $     5,719,497
     Securities                                     149,033            49,287            426,047            170,829
     Interest-bearing deposits and
       overnight deposits                            11,538            24,829             72,295             98,807
     Dividends on Federal Home
       Loan Bank stock                               16,557            15,139             49,451             45,815
                                                     ------            ------             ------             ------
         Total interest income                    2,310,191         2,006,706          6,765,646          6,034,948

Interest expense
     Deposits                                     1,085,584           956,098          3,164,062          2,912,512
     Other borrowings                               262,097           114,437            773,810            334,589
                                                    -------           -------            -------            -------
         Total interest expense                   1,347,681         1,070,535          3,937,872          3,247,101
                                                  ---------         ---------          ---------          ---------

Net interest income                                 962,510           936,171          2,827,774          2,787,847
Provision for loan losses                            16,042           (12,001)            44,041             40,918
                                                     ------           -------             ------             ------
Net interest income after
  provision for loan losses                         946,468           948,172          2,783,733          2,746,929

Noninterest income
     Service charges and other fees                  20,711            18,495             63,124             52,909
     Net realized gain (loss) on sale of
       available for sale securities                (15,781)               --            (15,781)                --
                                                    -------           -------            -------            -------
         Total noninterest income                     4,930            18,495             47,343             52,909
Noninterest expense
     Compensation and benefits                      376,664           337,570          1,134,793          1,125,934
     Director fees                                   30,000            30,000             90,000             90,000
     Occupancy and equipment                         80,600            83,484            234,310            204,134
     Computer processing expense                     54,927            49,385            152,188            133,570
     FDIC premiums                                    4,774            12,256             29,754             35,590
     State franchise taxes                           44,726            69,704            194,392            214,160
     Professional fees                               19,281            25,241             76,700             85,407
     Other                                           75,421            79,230            232,297            263,562
                                                     ------            ------            -------            -------
         Total noninterest expense                  686,393           686,870          2,144,434          2,152,357
                                                    -------           -------          ---------          ---------

Income before income tax expense                    265,005           279,797            686,642            647,481

Income tax expense                                  108,844           100,860            283,553            233,657
                                                    -------           -------            -------            -------

Net income                                  $       156,161    $      178,937     $      403,089    $       413,824
                                                    =======           =======            =======            =======

Earnings per common share - basic           $         0.10     $         0.11     $         0.27    $         0.26
                                                      ====               ====               ====              ====

Earnings per common share - diluted         $         0.10     $         0.11     $         0.27    $         0.26
                                                      ====               ====               ====              ====
</TABLE>

          See accompanying notes to consolidated financial statements.



<PAGE>
<TABLE>
<CAPTION>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)

                                                             Three Months Ended             Nine Months Ended
                                                                  March 31,                     March 31,
                                                                  ---------                     ---------
                                                           2000           1999            2000           1999
                                                           ----           ----            ----           ----

<S>                                                    <C>             <C>             <C>             <C>
Net income                                             $ 156,161       $ 178,937       $ 403,089       $ 413,824

Other comprehensive income (loss)
     Unrealized holding gains and (losses)
       on available for sale securities                  (26,347)        (19,112)       (170,630)        (23,475)
         Reclassification adjustments for (gains)
       and losses later realized as income                15,781              --          15,781              --
                                                       ---------       ---------       ---------       ---------
     Net unrealized gains and (losses)                   (10,566)        (19,112)       (154,849)        (23,475)
     Tax effect                                            3,592           6,498          52,648           7,982
                                                       ---------       ---------       ---------       ---------
         Other comprehensive income (loss)                (6,974)        (12,614)       (102,201)        (15,493)
                                                       ---------       ---------       ---------       ---------

Comprehensive income                                   $ 149,187       $ 166,323       $ 300,888       $ 398,331
                                                       =========       =========       =========       =========
</TABLE>


          See accompanying notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
                              SHAREHOLDERS' EQUITY
                                   (Unaudited)

                                                                                       Nine Months
                                                                                     Ended March 31,
                                                                                2000                1999
                                                                                ----                ----
<S>                                                                        <C>                <C>
Balance, beginning of period                                               $ 17,362,217       $ 19,626,016

Net income for period                                                           403,089            413,824

Cash dividends, $.21 per share in 2000 and 1999                                (320,615)          (335,841)

Purchase of 65,700 and 32,141 shares of treasury stock in 2000 and
  1999, at cost                                                                (651,062)          (611,400)

Establish 57,128 shares for management recognition plan                              --           (953,293)

Commitment to release 8,568 and 9,523 management recognition
  plan shares in 2000 and 1999                                                  142,974            158,910

Commitment to release 11,015 and 11,436 employee stock ownership plan
  shares in 2000 and 1999, at fair value                                        109,941            197,725

Change in fair value on securities available for sale, net of tax              (102,201)           (15,493)
                                                                           ------------       ------------

Balance, end of period                                                     $ 16,944,343       $ 18,480,448
                                                                           ============       ============
</TABLE>


          See accompanying notes to consolidated financial statements.



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


                                                                                Nine Months Ended
                                                                                     March 31,
                                                                             2000               1999
                                                                             ----               ----
<S>                                                                   <C>                <C>
Cash flows from operating activities
     Net income                                                       $    403,089       $    413,824
     Adjustments to reconcile net income to net cash from
     operating activities                                                  116,910             84,844
     Depreciation
     Provision for loan losses                                              44,041             40,918
     Gain on sale of other real estate owned                                    --             (3,086)
     FHLB stock dividends                                                  (49,300)           (45,700)
     Net realized loss on sale of securities                                15,781                 --
     Compensation expense for ESOP shares                                  109,941            197,725
     Compensation expense for MRP shares                                   142,974            158,910
     Change in
       Accrued interest receivable and other assets                       (259,266)           (63,245)
       Accrued expense and other liabilities                              (120,068)            53,295
       Deferred loan fees                                                   21,718             17,022
                                                                      ------------       ------------
                  Net cash from operating activities                       425,820            854,507

Cash flows from investing activities
     Purchases of securities available for sale                         (2,997,813)        (1,999,844)
     Maturities of securities available for sale                         1,000,000          2,000,000
     Proceeds from sale of securities available for sale                   984,219                 --
     Principal repayments on mortgage-backed securities                    181,770                 --
     Purchases of time deposits in other financial institutions         (1,000,000)          (500,000)
     Maturities of time deposits in other financial institutions         1,300,000            500,000
     Net increase in loans                                             (10,078,286)        (5,977,698)
     Premises and equipment expenditures                                   (51,763)        (1,134,482)
     Purchase of FHLB stock                                                (10,800)                --
     Proceeds from sale of real estate owned                                    --             65,530
                                                                      ------------       ------------
              Net cash from investing activities                       (10,672,673)        (7,046,494)

Cash flows from financing activities
     Net increase in deposits                                            7,705,725          4,625,918
     Net change in short-term borrowing                                 (1,800,000)                --
     Proceeds from long-term borrowing                                   5,000,000                 --
     Cash dividends paid                                                  (320,615)          (335,841)
     Purchase of treasury stock                                           (651,062)          (611,400)
     Purchase of shares for management recognition plan                         --           (953,293)
                                                                       -----------        -----------
         Net cash from financing activities                              9,934,048          2,725,384
                                                                       -----------        -----------

Net change in cash and cash equivalents                                   (312,805)        (3,466,603)

Cash and cash equivalents at beginning of period                         1,932,978          4,947,253
                                                                       -----------        -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                   <C>                <C>
Cash and cash equivalents at end of period                             $ 1,620,173        $ 1,480,650
                                                                       ===========        ===========

Supplemental disclosures of cash flow information
     Cash paid during the period for
         Interest                                                      $ 3,945,813        $ 3,242,250
         Income taxes                                                      428,000             91,000

     Noncash transactions
         Transfer from loans to real estate owned                               --             62,444
</TABLE>

          See accompanying notes to comsolidated financial statements.



<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, 2000 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 generally accepted accounting principles 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, 1999, included in its 1999 Annual
Report.  Reference  is  made  to the  accounting  policies  of  the  Corporation
described in the notes to  consolidated  financial  statements  contained in its
1999 Annual 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 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.

To prepare financial statements in conformity with generally accepted accounting
principles,  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 bases 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 net income  divided by the weighted  average
number of shares outstanding during the period.  Unallocated ESOP shares are not
considered outstanding for this calculation. 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)



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


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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,
                                                              ---------                      ---------
                                                         2000           1999           2000            1999
                                                         ----           ----           ----            ----
<S>                                                  <C>             <C>            <C>            <C>
     Basic Earnings Per Common Share
       Numerator
         Net income                                  $   156,161     $   178,937    $   403,089    $   413,824
                                                         =======         =======        =======        =======
       Denominator
         Weighted average common shares
           outstanding                                 1,628,203       1,755,987      1,652,244      1,788,751
         Less:  Average unallocated ESOP shares         (120,372)       (135,269)      (124,044)      (139,081)
         Less:  Average nonvested MRP shares             (37,607)        (49,035)       (40,463)       (51,891)
                                                         -------         -------        -------        -------
         Weighted average common shares
           outstanding for basis earnings per
           common share                                1,470,224       1,571,683      1,487,737      1,597,779
                                                       =========       =========      =========      =========

       Basic earnings per common share               $      0.10     $     0.11     $      0.27    $      0.26
                                                      ===========     ===========    ===========    ===========

     Diluted Earnings Per Common Share
       Numerator
         Net income                                  $   156,161     $   178,937    $   403,089    $   413,824
                                                     ===========     ===========    ===========    ===========
       Denominator
         Weighted average common shares
           outstanding for basic earnings per
           common share                                1,470,224       1,571,683      1,487,737      1,597,779
         Add:  Dilutive effects of average
           nonvested MRP shares                               --              --             --            233
         Add:  Dilutive effects of assumed
           exercises of stock options                         --              --             --          5,632
                                                           -----           -----          -----          -----
         Weighted average common shares
           and dilutive potential common
           shares outstanding                          1,470,224       1,571,683      1,487,737      1,603,644
                                                       =========       =========      =========      =========

       Diluted earnings per common share             $      0.10     $     0.11     $      0.27    $      0.26
                                                      ===========     ===========    ===========    ===========
</TABLE>
<PAGE>

Unearned MRP shares and stock options  granted did not have a dilutive effect on
EPS for the three and nine  months  ended  March 31,  2000 and the three  months
ended  March 31,  1999 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 period.

                                   (Continued)


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


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Statement of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for
Derivative  Instruments  and Hedging  Activities"  requires  companies to record
derivatives  on the  balance  sheet as assets or  liabilities,  measured at fair
value. Gains or losses resulting from changes in the values of those derivatives
would be accounted  for  depending on the use of the  derivative  and whether it
qualifies for hedge  accounting.  The key criterion for hedge accounting is that
the  hedging  relationship  must be highly  effective  in  achieving  offsetting
changes  in fair  value or cash  flows.  SFAS 133 does not  allow  hedging  of a
security which is classified as held to maturity.  Accordingly, upon adoption of
SFAS 133,  companies  may  reclassify  any  security  from held to  maturity  to
available  for sale if they wish to be able to hedge the security in the future.
SFAS 133, as amended by SFAS 137, is effective for fiscal years  beginning after
June 15, 2000 with early adoption  encouraged  for any fiscal quarter  beginning
July 1, 1998 or later,  with no  retroactive  application.  Management  does not
expect the adoption SFAS 133 to have a significant  impact on the  Corporation's
financial statements.


 NOTE 2 - SECURITIES

Securities were as follows:
<TABLE>
<CAPTION>
                                                      Gross            Gross             Estimated
                                   Amortized       Unrealized       Unrealized             Fair
                                     Cost             Gains           Losses               Value
                                     ----             -----           ------               -----
<S>                                <C>             <C>               <C>              <C>
March 31, 2000
Securities available for sale
   U.S. Government agencies        $3,996,530      $         --      $ (111,680)      $3,884,850
   Mortgage-backed securities       4,749,174                --        (111,939)       4,637,235
                                    ---------       -----------     -----------       ----------

                      Total        $8,745,704      $         --      $ (223,619)      $8,522,085
                                   ==========      ============      ==========       ==========

June 30, 1999
Securities available for sale
   U.S. Government agencies        $2,998,229      $         --      $  (41,509)      $2,956,720
   Mortgage-backed securities       4,928,652                --         (27,261)       4,901,391
                                    ---------       -----------     -----------       ----------


                      Total        $7,926,881      $         --      $  (68,770)      $7,858,111
                                   ==========      ============      ==========       ==========
</TABLE>

                                   (Continued)

                                       10.

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

NOTE 2 - SECURITIES (Continued)

Contractual  maturities of securities at March 31, 2000 were as follows.  Actual
maturities could differ from contractual  maturities  because borrowers may have
the right to call or  prepay  obligations  with or  without  call or  prepayment
penalties.  Securities not due at a single maturity,  primarily  mortgage-backed
securities, are shown separately.
<TABLE>
<CAPTION>
                                                                             Estimated
                                                           Amortized            Fair
                                                              Cost             Value
        Securities available for sale
<S>                                                    <C>               <C>
           Due after one year through five years       $    2,998,681    $     2,907,350
           Due after five years through ten years             997,849            977,500
           Mortgage-backed securities                       4,749,174          4,637,235
                                                            ---------          ---------

                                                       $    8,745,704    $     8,522,085
                                                       ==============    ===============
</TABLE>
Proceeds  from the sale of a  security  during the three and nine  months  ended
March 31, 2000 were $984,219.  A gross loss of $15,781 was realized on the sale.
No securities were sold during the three or nine months ended March 31, 1999. No
securities were pledged as collateral at March 31, 2000 or June 30, 1999.


NOTE 3 - LOANS RECEIVABLE

Loans receivable were as follows:
<TABLE>
<CAPTION>
                                                           March 31,         June 30,
                                                             2000              1999
                                                             ----              ----
<S>                                                    <C>               <C>
           Mortgage loans:
                1-4 family residential                 $    90,801,663   $     84,165,483
                Multi-family residential                     1,314,746          1,358,906
                Commercial real estate                       9,967,294          9,407,998
                Real estate construction and
                  development                                7,690,812          5,930,241
                Land                                           968,604            866,988
                                                               -------            -------
                    Total mortgage loans                   110,743,119        101,729,616
           Consumer and other loans                          5,319,693          4,131,469
                                                             ---------          ---------
                    Total loans receivable                 116,062,812        105,861,085
           Less:
                Allowance for loan losses                     (573,519)          (528,898)
                Loans in process                            (2,434,230)        (2,311,369)
                Deferred loan fees                            (239,691)          (217,973)
                                                              --------           --------

                                                       $   112,815,372   $    102,802,845
                                                       ===============   ================
</TABLE>
                                   (Continued)

                                       11.

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


NOTE 3 - LOANS RECEIVABLE (Continued)

Activity in the allowance for loan losses was as follows:
<TABLE>
<CAPTION>
                                                 Three Months Ended             Nine Months Ended
                                                      March 31,                      March 31,
                                                     ---------                       ---------
                                                   2000           1999           2000          1999
                                                   ----           ----           ----          ----
<S>                                          <C>            <C>             <C>            <C>
        Balance at beginning of period       $    557,407   $    456,502    $   528,898    $    425,642
        Provision for losses                       16,042        (12,001)        44,041          40,918
        Charge-offs                                    --             --             --         (22,621)
        Recoveries                                     70         19,561            580          20,123
                                             ------------   ------------   ------------    ------------

        Balance at end of period             $    573,519   $    464,062   $    573,519    $    464,062
                                             ============   ============   ============    ============
</TABLE>

As of and for the three and nine months  ended  March 31,  2000 and 1999,  loans
considered impaired within the scope of SFAS No. 114 were not material.


NOTE 4 - BORROWED FUNDS

At March 31, 2000 and June 30, 1999, the  Association had a cash management line
of credit enabling it to borrow up to $8,000,000 and $5,360,000 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.  $1,000,000  borrowings were  outstanding on this line of credit at March
31, 2000, with an interest rate of 6.28%. Borrowings outstanding on this line of
credit at June 30, 1999 were $2,800,000 with interest rates of 4.90% and 6.02%.

As a member  of the FHLB  system,  the  Association  has the  ability  to obtain
borrowings up to a maximum total of $19,356,000 at March 31, 2000, including the
cash  management  line-of-credit.  Advances  from the Federal  Home Loan Bank at
March 31, 2000 and June 30, 1999 were as follows:
<TABLE>
<CAPTION>
                                                              March 31,           June 30,
                                                                2000               1999
                                                                ----               ----
<S>                                                      <C>               <C>
         4.90% FHLB cash management advance,
           due September 17, 1999                        $          --     $   2,300,000
         4.90% FHLB cash management advance,
           due September 22, 1999                                   --           300,000
         6.02% FHLB cash management advance,
           due September 28, 1999                                   --           200,000
         Variable-rate FHLB cash management advances,
           6.28% at March 31, 2000                           1,000,000                --
         5.84% FHLB advance, due April 4, 2000               5,000,000                --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                      <C>               <C>
         6.13% FHLB advance, due June 25, 2008               7,000,000         7,000,000
         6.00% FHLB advance, due June 11, 2009               5,000,000         5,000,000
                                                             ---------         ---------

                                                         $  18,000,000     $  14,800,000
                                                         =============     =============
</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)



<PAGE>

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

NOTE 5 - COMMITMENTS, CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH
 OFF-BALANCE-SHEET RISK

Various  contingent  liabilities are not reflected in the financial  statements,
including  claims and legal actions  arising in the ordinary course of business.
In the opinion of management,  the ultimate  disposition of these matters is not
expected  to have a  material  effect  on  financial  condition  or  results  of
operations.

Some  financial  instruments  are used in the normal  course of business to meet
financing needs of customers and reduce exposure to interest rate changes. These
financial  instruments include commitments to extend credit,  standby letters of
credit and financial guarantees.  These involve, to varying degrees,  credit and
interest rate risk in excess of amounts reported in the financial statements.

Exposure to credit loss if the other  party does not perform is  represented  by
the  contractual  amount for  commitments to extend credit,  standby  letters of
credit and financial  guarantees written.  The same credit policies are used for
commitments  and  conditional  obligations as are used for loans.  The amount of
collateral  obtained,  if deemed  necessary,  on extension of credit is based on
management's   credit  evaluation  and  generally  consists  of  residential  or
commercial real estate.

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there  is  no  violation  of  any  condition   established  in  the  commitment.
Commitments  generally have fixed expiration dates or other termination  clauses
and may require  payment of a fee. Since many of the commitments are expected to
expire without being used, the total  commitments do not  necessarily  represent
future cash requirements.

As of March 31, 2000 and June 30, 1999, the  Corporation had commitments to make
fixed-rate  commercial  and  residential  real estate  mortgage loans at current
market rates approximating $518,000 and $375,000,  and variable-rate  commercial
and residential real estate mortgage loans at current market rates approximating
$847,000 and $394,000.  Loan commitments are generally for 30 days. The interest
rates on fixed-rate commitments ranged from 8.50% to 8.75% at March 31, 2000 and
7.00% to 7.75% at June 30, 1999. The interest rates on variable-rate commitments
ranged  from  8.00% to 10.00%  at March 31,  2000 and 7.00% to 7.75% at June 30,
1999.

The  Corporation  also had unused lines of credit  approximating  $2,095,000 and
$1,434,000 at March 31, 2000 and June 30, 1999.

At March 31,  2000 and June 30,  1999,  the  Association  was  required  to have
$408,000 and $532,000 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

<PAGE>

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)



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


NOTE 6 - EMPLOYEE STOCK OWNERSHIP PLAN

The  Corporation  offers an employee stock ownership plan (ESOP) for the benefit
of substantially  all employees of the  Corporation.  During July 1997, the ESOP
received a favorable  determination  letter from the Internal Revenue Service on
the  qualified  status of the ESOP under  applicable  provisions of the Internal
Revenue Code.

The ESOP  borrowed  funds  from  Peoples in order to  acquire  common  shares of
Peoples.  The loan is secured by the shares purchased with the loan proceeds and
will be repaid  by the ESOP  with  funds  from the  Association's  discretionary
contributions  to the  ESOP  and  earnings  on ESOP  assets.  All  dividends  on
unallocated shares received by the ESOP are used to pay debt service.  When loan
payments are made, ESOP shares are allocated to  participants  based on relative
compensation.

During  fiscal  1998,  the  Corporation  declared  and  paid a $4.00  per  share
distribution of which $3.99 was a tax-free return of capital  distribution.  The
ESOP  received  approximately  $539,000 on 134,262  unallocated  shares from the
return of capital  distribution.  The ESOP used the proceeds to purchase  26,000
additional  shares.  The additional shares are held in suspense and allocated to
participants in a manner similar to the shares originally in the ESOP.

Shares  pledged as  collateral  are  reported  as  unearned  ESOP  shares in the
Consolidated  Balance  Sheets.  As shares  are  released  from  collateral,  the
Corporation  reports  compensation  expense equal to the current market price of
the  shares   and  the  shares   become   outstanding   for   earnings-per-share
computations.  Dividends on allocated ESOP shares are recorded as a reduction of
retained  earnings;  dividends  on  unallocated  ESOP  shares are  recorded as a
reduction of debt and accrued interest.  ESOP  compensation  expense was $35,950
and  $109,941  for the  three  and  nine  months  ended  March  31,  2000.  ESOP
compensation  expense  was $57,246  and  $197,725  for the three and nine months
ended March 31, 1999.

ESOP shares as of March 31, 2000 and June 30, 1999 were as follows:
<TABLE>
<CAPTION>
                                                                      March 31,        June 30,
                                                                        2000            1999
                                                                        ----            ----
<S>                                                               <C>             <C>
       Allocated shares                                                 39,279          39,279
       Shares committed to be released for allocation                   11,015              --
       Unreleased shares                                               118,536         129,551
                                                                       -------         -------
           Total ESOP shares                                           168,830         168,830
                                                                  ============    ============

       Fair value of unreleased shares                            $  1,274,262    $  1,295,510
                                                                  ============    ============
</TABLE>


                                   (Continued)



<PAGE>

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



NOTE 7 - STOCK OPTION AND INCENTIVE PLAN

The Stock  Option and  Incentive  Plan was approved by the  shareholders  of the
Corporation  on May 22,  1998.  The Board of  Directors  has granted  options to
purchase shares of common stock at exercise prices ranging from $16.01 to $18.75
to certain  employees,  officers and directors of the Corporation.  The exercise
price for options  granted  prior to June 10,  1998,  were  reduced by the $3.99
return of capital  distribution.  One-fifth of the options  awarded become first
exercisable on each of the first five  anniversaries  of the date of grant.  The
option period expires 10 years from the date of grant. 140,824 and 141,824 stock
options  were  outstanding  at March 31,  2000 and June 30,  1999.  1,000  stock
options were forfeited  during the nine months ended March 31, 2000.  28,165 and
28,365 stock  options were  exercisable  at March 31, 2000 and June 30, 1999. In
addition, 37,714 and 36,714 stock options to purchase common stock were reserved
for future grants at March 31, 2000 and June 30, 1999.


NOTE 8 - MANAGEMENT RECOGNITION PLAN

A Management  Recognition  Plan (MRP) was adopted by the Board of Directors  and
approved  by the  shareholders  of the  Corporation  on May 22, 1998 to purchase
71,415  common  shares,  which  is  equal  to 4% of the  common  shares  sold in
connection  with the  conversion.  The MRP will be used as a means of  providing
directors  and  certain  key  employees  of the  Corporation  with an  ownership
interest in the  Corporation in a manner  designed to compensate  such directors
and key employees for services to the Corporation.

In  conjunction  with the  adoption  of the MRP on May 22,  1998,  the  Board of
Directors awarded 57,128 shares to certain directors,  officers and employees of
the Corporation. No shares had been previously awarded. One-fifth of such shares
will be earned and nonforfeitable on each of the first five anniversaries of the
date of the award.  At March 31,  2000 and June 30,  1999,  11,429  shares  have
vested.  In the event of the death or disability of a participant or a change in
control of the Corporation,  the participant's  shares will be deemed earned and
nonforfeitable  upon such  date.  At June 30,  1999,  there were  14,287  shares
reserved  for future  awards and held as treasury  stock.  Compensation  expense
related to MRP shares is based upon the cost of the shares,  which  approximates
fair value at the date of grant.  For the three and nine months  ended March 31,
2000,  compensation expense totaled $47,658 and $142,974. For the three and nine
months ended March 31, 1999, compensation expense totaled $18,910 and $138,910.




<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, 2000,  compared to June
30, 1999,  and results of  operations  for the three and nine months ended March
31, 2000, compared with the same periods in 1999. 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  which  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, 2000 were $127.2 million compared to $116.9 million at
June 30,  1999,  an increase of $10.3  million,  or 8.8%.  The increase in total
assets was due to increases in loans and securities available for sale funded by
proceeds from increased deposits and borrowings.

Loans receivable increased $10.0 million from $102.8 million at June 30, 1999 to
$112.8  million at March 31, 2000.  The  increase  was  primarily in real estate
construction  and  development  loans which  increased  $1.8 million and one- to
four-family  residential  loans which  increased $6.6 million.  Changes in other
types of mortgage  loans were not  significant.  The  overall  increase in total
mortgage loans is reflective of a strong local economy  coupled with  attractive
loan rates and products compared to local competition. Expansion into new market
areas  through  the  Association's  two  new  branch  banking   facilities  also
contributed to the growth.

The Corporation's  consumer and other loan portfolio increased $1.2 between June
30, 1999 and March 31,  2000.  The increase  was  primarily  related to new auto
loans and commercial business loans. Even with the increase,  consumer and other
loans remain a small portion of the entire loan portfolio and  represented  only
4.6% and 3.9% of gross loans at March 31, 2000 and June 30, 1999.

Securities  available for sale increased $664,000 primarily as temporary earning
sources until loan growth utilizes all the funds provided from deposit growth.

Total  deposits  increased  $7.7 million from $84.3  million at June 30, 1999 to
$92.0  million at March 31,  2000.  The  deposit  growth was the result of a new
15-month certificate of deposit. This product totaled $15.6 million at March 31,
2000. Other  certificates of deposit accounts declined $8.0 million.  Changes in
other deposit  categories  offset each other. NOW accounts  increased  $817,000,
savings accounts  declined  $687,000 and money market accounts declined $274,000
since June 30, 1999.  Noninterest-bearing  demand  deposits  increased  $225,000
since June 30, 1999.


<PAGE>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS


Borrowed funds were $18.0 million at March 31, 2000 compared to $14.8 million at
June 30, 1999.  Borrowings  at March 31, 2000  consisted  primarily of long-term
fixed-rate  advances.  Borrowings were increased to accelerate the Corporation's
growth and leverage the Corporation's capital position.


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 other  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 March 31, 2000 Compared to Three Months Ended March 31, 1999

Net Income. Income before income taxes was $265,000 for the quarter ending March
31, 2000, compared to $280,000 for the same period in 1999, a 5.3% decrease. Net
income for the three  months  ended  March 31,  2000 was  $156,000  compared  to
$179,000 in 1999. The decrease in net income for the quarter primarily  resulted
from a loss on the sale of an  available  for sale  security  during the current
quarter  coupled  with a  negative  provision  for loan  losses  during the same
quarter a year  ago.  The  Corporation  received  a  significant  recovery  of a
previously charged-off loan which positively impacted management's allowance for
loan losses analysis in the prior quarter.

Net Interest  Income.  Net interest income totaled $963,000 for the three months
ended March 31, 2000  compared to $936,000  for the three months ended March 31,
1999.  The slight  increase  was due to an  increase in average  earning  assets
offset by a decrease in the net interest margin.

Interest and fees on loans increased $216,000,  or 11.2% from $1,917,000 for the
three months ended March 31, 1999 to $2,133,000 for the three months ended March
31, 2000. The increase in interest income was due to a higher average balance of
loans partially offset by a decline in the yield earned on loans.

Interest  earned on  securities  increased  $100,000  for the three months ended
March 31, 2000 as compared  to the same period in the prior year.  The  increase
was the  result  of  having a higher  balance  in  securities  than a year  ago.
Securities   were   increased  and  funded  with   borrowings  to  leverage  the
Corporation's capital position.

Interest  earned  on  interest-bearing   demand,  time  and  overnight  deposits
decreased $13,000 due to lower average balances.

Interest  paid on deposits  increased  $129,000 for the three months ended March
31, 2000  compared to the three months  ended March 31,  1999.  The average rate
paid on deposits increased slightly.  However, the change was more influenced by
an increase in the average balance of deposits.

Interest  paid on borrowed  funds  totaled  $262,000  for the three months ended
March 31, 2000  compared to $114,000  for the three months ended March 31, 1999.
The  increase  in  interest  expense on borrowed  funds  resulted  from a higher
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


<PAGE>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS


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  which 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.

The  provision for loan losses for the three months ended March 31, 2000 totaled
$16,000  compared to $(12,000)  for the three  months ended March 31, 1999.  The
provision  for loan losses for the three  months ended March 31, 2000 was fairly
consistent  with prior quarters.  The negative  provision for loan losses in the
prior year was due to a recovery of $16,000  during  March 1999  quarter  from a
previously  charged-off  loan  account.  Past  charge- offs  experienced  by the
Corporation have primarily  related to consumer and other non-real estate loans.
As  indicated  previously,  such loans make up an  insignificant  portion of the
Corporation's total loan portfolio.  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 90% 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.  The
allowance for loan losses totaled $574,000, or .50% of loans receivable,  net of
loans in process,  at March 31,  2000  compared  to  $529,000,  or .51% of loans
receivable, net of loan in process, at June 30, 1999.

Noninterest   income.   Noninterest  income  includes  service  fees  and  other
miscellaneous  income and totaled  $5,000 for the three  months  ended March 31,
2000 and $18,000 for the three  months  ended March 31,  1999.  The  decrease of
$13,000 is  primarily  the result of a $16,000  loss on the sale of an available
for sale  security  during the  current  quarter.  Management  elected to sell a
security  and  replace it with a higher  yielding  security  to  improve  future
interest earned on the security portfolio.

Noninterest  expense.  Noninterest expense totaled $686,000 for the three months
ended March 31, 2000  compared to $687,000  for the three months ended March 31,
1999. Increases in salaries and
benefits  were offset by decreases in FDIC premiums and state  franchise  taxes.
Salaries and benefits increased as a result of the MRP. Management had estimated
the expense  associated  with the MRP during the first half of fiscal 1999 based
upon what they  anticipated the cost of the shares to be that they purchased for
the plan.  The accrual was adjusted in the third  quarter  after the shares were
purchased  which  resulted in expense  being  $18,910 for the three months ended
March 31, 1999.  MRP expense of $47,658 for the quarter  ended March 31, 2000 is
consistent  with prior  quarters.  FDIC premiums  declined due to lower premiums
which started January 1, 2000.  State franchise tax expense  declined due to the
lower capital levels  maintained at the Association as of June 30, 1999 compared
to June 30, 1998. The Association  pays state franchise taxes based upon its net
worth as of its last fiscal year end for each calendar year.

Income  Tax  Expense.   The  volatility  of  income  tax  expense  is  primarily
attributable  to the change in income before  income  taxes.  Income tax expense
totaled  $109,000 for the three months ended March 31, 2000 compared to $101,000
for the three months ended March 31, 1999,  representing  an increase of $8,000,
or 7.9%. This increase is due to an increase in the effective tax rate primarily
relating to the Corporation's  stock-based benefit plans. The effective tax rate
was 41.1% and 36.0% for the three months ended March 31, 2000 and 1999.

Nine Months Ended March 31, 2000 Compared to Nine Months Ended March 31, 1999

Net Income.  Income  before income taxes was $687,000 for the nine months ending
March 31,  2000,  compared  to  $647,000  for the same  period  in 1999,  a 6.0%
increase.  Net income for the nine  months  ended  March 31,  2000 was  $403,000
compared  to $414,000  in 1999.  The  decrease in net income for the nine months
represents  an increase in federal  income tax expense due to an increase in the
effective tax rate primarily relating to the Corporation's  stock- based benefit
plans.

Net Interest Income.  Net interest income totaled $2,828,000 for the nine months
ended March 31, 2000 compared to $2,788,000  for the nine months ended March 31,
1999.  The slight  increase  was due to an  increase in average  earning  assets
offset by a decrease in the net interest margin.

Interest and fees on loans increased  $498,000,  or 8.7% from $5,719,000 for the
nine months ended March 31, 1999 to  $6,218,000  for the nine months ended March
31, 2000. The increase in interest income was due to a higher average balance of
loans partially offset by a decline in the yield earned on loans.

Interest earned on securities increased $255,000 for the nine months ended March
31, 2000 as compared to the same period in the prior year.  The increase was the
result of having a much higher balance in securities than a year ago. Securities
were increased and funded with borrowings to leverage the Corporation's  capital
position.

Interest  earned  on  interest-bearing   demand,  time  and  overnight  deposits
decreased $27,000 due to lower average balances.



<PAGE>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS


Interest paid on deposits increased $252,000 for the nine months ended March 31,
2000 compared to the nine months ended March 31, 1999.  The average rate paid on
deposits declined.  However, the effect of an increase in the average balance of
deposits offset the decrease in the average cost.

Interest paid on borrowed funds totaled $774,000 for the nine months ended March
31, 2000  compared to $335,000  for the nine months  ended March 31,  1999.  The
increase in interest  expense on borrowed  funds  resulted from a higher average
balance of borrowed funds.

Provision  for Loan Losses.  The  provision  for loan losses for the nine months
ended March 31,  2000  totaled  $44,000  compared to $41,000 for the nine months
ended March 31, 1999.

Noninterest   income.   Noninterest  income  includes  service  fees  and  other
miscellaneous  income and totaled  $47,000  for the nine months  ended March 31,
2000 and $53,000 for the nine months ended March 31, 1999.

Noninterest expense.  Noninterest expense totaled $2,144,000 for the nine months
ended March 31, 2000 compared to $2,152,000  for the nine months ended March 31,
1999.  Increases  in occupancy  and  equipment  expense and computer  processing
expense were offset by decreases in state  franchise  taxes and other  expenses.
Occupancy and equipment  expense and computer  processing  expense increased due
the opening of two new branches in the early part of fiscal  1999.  The decrease
in state franchise taxes was discussed previously.  Other expenses decreased due
to lower  advertising  and office  supplies.  These two items were higher in the
prior  year  due to the  costs  associated  with  the  start-up  of the  two new
branches.

Income  Tax  Expense.   The  volatility  of  income  tax  expense  is  primarily
attributable  to the change in income before  income  taxes.  Income tax expense
totaled  $284,000 for the nine months ended March 31, 2000  compared to $234,000
for the nine months ended March 31, 1999,  representing  an increase of $50,000,
or  21.4%.  This  increase  is due to an  increase  in the  effective  tax  rate
primarily relating to the Corporation's stock-based benefit plans. The effective
tax rate was 41.3% and 36.1% for the nine months ended March 31, 2000 and 1999.

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, 2000 and 1999.
<PAGE>

<TABLE>
<CAPTION>

                                                                      Nine Months
                                                                     Ended March 31,
                                                                  2000            1999
                                                                  ----            ----
                                                                 Dollars in thousands)
<S>                                                       <C>                   <C>
Net income                                                     403               $   414
Adjustments to reconcile net income to net cash from
  operating activities                                          23                   441
                                                          --------             ---------
Net cash from operating activities                             426                   855
Net cash from investing activities                         (10,673)               (7,046)
Net cash from financing activities                           9,934                 2,725
                                                          --------             ---------
Net change in cash and cash equivalents                       (313)               (3,466)
Cash and cash equivalents at beginning of period             1,933                 4,947
                                                          --------              --------
Cash and cash equivalents at end of period                $  1,620              $  1,481
                                                          ========              ========
</TABLE>

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.


<PAGE>
                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS


OTS regulations  presently  require the Association to maintain an average daily
balance of investments in United States Treasury, federal agency obligations and
other  investments  in an  amount  equal  to 4% of the sum of the  Association's
average  daily  balance of net  withdrawable  deposit  accounts  and  borrowings
payable in one year or less.  The  liquidity  requirement,  which may be changed
from  time to  time  by the OTS to  reflect  changing  economic  conditions,  is
intended to provide a source of relatively liquid funds on which the Association
may rely, if necessary,  to fund deposit withdrawals or other short-term funding
needs. At March 31, 2000, the Association's  regulatory  liquidity was 11.8%. At
such date, the Corporation had  commitments to originate  fixed-rate  commercial
and residential real estate loans totaling $518,000 and variable-rate commercial
and residential real estate mortgage loans totaling  $847,000.  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, 2000 and June 30, 1999,
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, 2000 and June 30, 1999.  No  conditions or events have occurred
subsequent to the last notification by regulators that management believes would
have changed the Association's category.

At March 31, 2000 and June 30, 1999, the Association's actual capital levels and
minimum required levels were:
<TABLE>
<CAPTION>
                                                                   Minimum                      Minimum
                                                               Required To Be               Required To Be
                                                           Adequately Capitalized          Well Capitalized
                                                           Under Prompt Corrective      Under Prompt Corrective
                                         Actual              Action Regulations           Action Regulations
                                  Amount         Ratio      Amount         Ratio         Amount          Ratio
                                  ------         -----      ------         -----         ------          -----
                                                             (Dollars in Thousands)
<S>                            <C>               <C>      <C>               <C>      <C>                 <C>
March 31, 2000
Total capital (to risk-
  weighted assets)             $  14,428         17.1%    $  6,755          8.0%     $    8,443          10.0%
Tier 1 (core) capital (to
  risk-weighted assets)           13,856         16.4        3,377          4.0           5,066           6.0
Tier 1 (core) capital (to
  adjusted total assets)          13,856         10.9        5,097          4.0           6,371           5.0
Tangible capital (to
  adjusted total assets)          13,856         10.9        1,911          1.5             N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                            <C>               <C>      <C>               <C>      <C>                 <C>
June 30, 1999
Total capital (to risk-
  weighted assets)             $  13,634         18.0%    $  6,069          8.0%     $    7,586          10.0%
Tier 1 (core) capital (to
  risk-weighted assets)           13,152         17.3        3,035          4.0           4,552           6.0
Tier 1 (core) capital (to
  adjusted total assets)          13,152         11.2        4,677          4.0           5,847           5.0
Tangible capital (to
  adjusted total assets)          13,152         11.2        1,754          1.5             N/A
</TABLE>




<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION

                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings
          None

Item 2. Changes in 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
           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) Exhibit No. 11.  Statement regarding Computation of Earnings Per
                                Share
           (b) Exhibit No. 27:  Financial Data Schedule

           (c) 8-K was filed on January 27, 2000.  Under Item 5, Other  Events,
               the   Corporation   issued  a  press  release   announcing   the
               Corporation's second quarter earnings for the fiscal year ending
               June 30, 2000 and the declaration of a cash dividend.





<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:      May 12, 2000                       /s/ Douglas Stewart
                                              -------------------
                                              Douglas Stewart
                                              President





Date:      May 12, 2000                       /s/ Debra Geuy
                                              -----------------
                                              Debra Geuy
                                              Chief Financial Officer






<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION

                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>

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



<S>          <C>                                                            <C>
11           Statement regarding Computation of Earnings Per Share          Refer to Note 1 of the Notes to
                                                                            Consolidated Financial Statements for
                                                                            computation of earnings per share.

27           Financial Data Schedule                                                    25
</TABLE>