<PAGE>

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

                                    FORM 10-Q

(Mark One)
[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2002

                                       or

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from ______________________ to _______________________

Commission File Number:  0-22399

                            WAYPOINT FINANCIAL CORP.
                            ------------------------
             (Exact name of registrant as specified in its charter)

                  PENNSYLVANIA                           25-1872581
                 -------------                           ----------
         (State or other jurisdiction of                (IRS Employer
         incorporation or organization)              Identification No.)

  235 North Second Street, P.O. Box 1711, Harrisburg, Pennsylvania      17105
 -----------------------------------------------------------------      -----
                   (Address of principal executive offices)           (Zip Code)

                                  717-236-4041
                                  ------------
              (Registrant's telephone number, including area code)

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

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X   No
                                              ---     ---

     Indicate the number of shares outstanding of each of the Bank's classes of
common stock, as of the latest practicable date. 37,880,446 shares of stock, par
                                                 -------------------------------
value of $.01 per share, outstanding at March 31, 2002.
-------------------------------------------------------

                                        1

<PAGE>

Part I.  Financial Information.


Part 1, Item 1    Financial Statements.


               (Balance of this page is intentionally left blank)

                                        2

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                         March 31,         December 31,
                                                                            2002               2001
                                                                      ----------------   ----------------
                                                                       (In thousands, except share data)
                                                                                  (Unaudited)
<S>                                                                   <C>                <C>
Assets
------
Cash and cash equivalents                                                  $    75,022        $   116,583
Marketable securities available-for-sale                                     2,567,573          2,552,360
Loans receivable, net                                                        2,378,293          2,462,218
Loans held for sale, net                                                        39,679             42,453
Loan servicing rights                                                            4,815              4,782
Investment in real estate and other joint ventures                              13,374             12,813
Premises and equipment, net of accumulated
   depreciation of $38,179 and $37,534                                          42,942             43,931
Accrued interest receivable                                                     23,071             28,298
Intangible assets                                                               13,077             13,564
Deferred tax asset, net                                                          3,791              1,516
Other assets                                                                    95,066             95,225
                                                                      ----------------   ----------------
    Total assets                                                          $  5,256,703       $  5,373,743
                                                                      ================   ================

Liabilities and Stockholders' Equity
------------------------------------
Deposits                                                                  $  2,570,907       $  2,537,269
Other borrowings                                                             2,158,313          2,291,987
Escrow                                                                           5,757              4,662
Accrued interest payable                                                        14,451             12,620
Postretirement benefit obligation                                                2,844              2,809
Income taxes payable                                                             1,616                380
Other liabilities                                                               33,647             37,801
                                                                      ----------------   ----------------
    Total liabilities                                                        4,787,535          4,887,528
                                                                      ----------------   ----------------

Preferred stock, 10,000,000 shares authorized but unissued
Common stock, $ .01 par value, authorized 100,000,000
   shares, 40,227,503 shares issued and 37,880,446 outstanding
   at March 31, 2002, 40,163,477 shares issued and 39,176,840
   shares outstanding at December 31, 2001                                         402                402
Paid in capital                                                                312,207            312,009
Retained earnings                                                              223,369            215,600
Accumulated other comprehensive loss                                            (3,831)              (280)
Employee stock ownership plan                                                  (15,640)           (15,640)
Recognition and retention plans                                                (10,089)            (9,954)
Treasury stock, 2,347,057 shares at March 31, 2002
   and 986,637 shares at December 31, 2001                                     (37,250)           (15,922)
                                                                      ----------------   ----------------
    Total stockholders' equity                                                 469,168            486,215
                                                                      ----------------   ----------------
    Total liabilities and stockholders' equity                            $  5,256,703       $  5,373,743
                                                                      ================   ================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        3

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                        Consolidated Statements of Income
<TABLE>
<CAPTION>
                                                                              Three Months Ended March 31,
                                                                        -----------------------------------------
                                                                                2002                 2001
                                                                        --------------------- -------------------
                                                                            (In thousands, except share data)
                                                                                       (Unaudited)
<S>                                                                   <C>                    <C>
Interest Income:
  Loans                                                                         $  43,224          $  51,527
  Marketable securities and interest-earning cash                                  28,559             33,608
                                                                        ------------------    ---------------
       Total interest income                                                       71,783             85,135
                                                                        ------------------    ---------------
Interest Expense:
  Deposits and escrow                                                              18,968             31,855
  Borrowed funds                                                                   21,171             26,222
                                                                        ------------------    ---------------
       Total interest expense                                                      40,139             58,077
                                                                        ------------------    ---------------
       Net interest income                                                         31,644             27,058
Provision for loan losses                                                           2,085              1,599
                                                                        ------------------    ---------------
       Net interest income after provision for loan losses                         29,559             25,459
                                                                        ------------------    ---------------
Noninterest Income:
  Service charges on deposits                                                       1,651              1,531
  Other service charges, commissions, fees                                          3,167              2,339
  Loan servicing, net                                                                (244)               207
  Gain on securities                                                                  324                415
  Gain on sale of loans                                                               946                119
  Other                                                                             1,370              1,230
                                                                        ------------------    ---------------
       Total noninterest income                                                     7,214              5,841
                                                                        ------------------    ---------------
Noninterest Expense:
  Salaries and benefits                                                            11,078              9,315
  Equipment expense                                                                 1,770              1,748
  Occupancy expense                                                                 1,567              1,670
  Advertising and public relations                                                    998                751
  FDIC insurance                                                                      112                132
  Income from real estate operations                                                 (115)              (403)
  Amortization of intangibles                                                         490                751
  Professional fees and outside services                                              819                624
  Supplies, telephone and postage                                                   1,222              1,819
  Other                                                                             2,777              2,373
                                                                        ------------------    ---------------
     Total noninterest expense                                                     20,718             18,780
                                                                        ------------------    ---------------
  Income before income taxes                                                       16,055             12,520
  Income tax expense                                                                4,558              3,947
                                                                        ------------------    ---------------
      Net income                                                                $  11,497          $   8,573
                                                                        ==================    ===============
  Basic earnings per share                                                      $    0.31          $    0.23
                                                                        ==================    ===============
  Diluted earnings per share                                                    $    0.30          $    0.23
                                                                        ==================    ===============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                        4

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                  For the Three Months Ended
                                                                                          March 31,
                                                                            ---------------------------------------
                                                                                  2002                 2001
                                                                            -----------------   -------------------
                                                                                        (In thousands)
                                                                                         (Unaudited)
<S>                                                                         <C>                 <C>
Cash flows from operating activities:
   Net income                                                                 $       11,497       $         8,573
   Adjustments to reconcile net income to net cash provided by operating
     activities:
        Provision for loan losses                                                      2,085                 1,599
        Net depreciation, amortization and accretion                                   1,780                 2,088
        Loans originated for sale                                                   (109,180)              (38,011)
        Proceeds from sales of loans originated for sale                             112,901                36,110
        Origination of loan servicing rights                                            (706)                   (2)
        Net gain on loans and securities                                              (1,270)                 (534)
        Gain on the sale of foreclosed real estate                                      (168)                 (444)
        Loss (income) from joint ventures                                                160                  (241)
        Decrease in accrued interest receivable                                        5,227                 1,726
        Increase in accrued interest payable                                           1,831                 2,957
        Amortization of intangibles                                                      490                   747
        Earned ESOP shares                                                               407                   257
        Earned RRP shares                                                                869                     2
        Loss (gain) on the sale of premises and equipment                                 65                  (572)
        (Benefit) provision for deferred income tax                                   (2,275)                6,974
        Increase in income taxes payable                                               1,236                 3,576
        Other, net                                                                     7,088               (14,887)
                                                                            -----------------   -------------------
            Net cash provided by operating activities                                 32,037                 9,918
                                                                            -----------------   -------------------

Cash flows from investing activities:
   Proceeds from maturities, sales, and principal reductions
      of marketable securities                                                       596,919               229,699
   Purchase of marketable securities                                                (626,182)             (411,470)
   Loan originations less principal payments on loans                                 79,901               (16,717)
   Investments in real estate held for investment and other joint ventures              (477)                  404
   Proceeds on real estate and premises and equipment                                    672                 3,029
   Purchases of premises and equipment, net                                             (627)               (1,519)
                                                                            -----------------   -------------------
      Net cash provided by (used in) investing activities                             50,206              (196,574)
</TABLE>

                                        5

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (continued)

<TABLE>
<CAPTION>
                                                                                  For the Three Months Ended
                                                                                          March 31,
                                                                            ---------------------------------------
                                                                                  2002                 2001
                                                                            -----------------   -------------------
                                                                                        (In thousands)
                                                                                         (Unaudited)
<S>                                                                         <C>                 <C>
Cash flows from financing activities:

   Net increase (decrease) in deposits                                                33,638               (87,980)
   Net (decrease) increase in other borrowings                                      (133,674)              258,440
   Net increase in escrow                                                              1,095                   791
   Dividend reinvestment plan                                                            (89)                   65
   Cash dividends                                                                     (3,868)               (3,309)
   Payments to acquire treasury stock                                                (21,328)                    -
   Proceeds from the exercise of stock options                                           422                   709
                                                                            -----------------   -------------------
      Net cash (used in) provided by financing activities                           (123,804)              168,716
                                                                            -----------------   -------------------
      Net increase (decrease) in cash and cash equivalents                           (41,561)              (17,940)
Cash and cash equivalents at beginning of period                                     116,583                99,837
                                                                            -----------------   -------------------
Cash and cash equivalents at end of period                                        $   75,022           $    81,897
                                                                            =================   ===================

Supplemental disclosures:

Cash paid during the period for:
    Interest on deposits, advances and other borrowings
       (includes interest credited to deposit accounts)                           $   38,307           $    54,168
    Income taxes                                                                       3,363                   392
Non-cash investing activities:
      Transfers from loans to foreclosed real estate                              $      691           $       166
</TABLE>


                See accompanying notes to financial statements.

                                        6

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
    (All dollar amounts presented in the tables are in thousands, except per
                                  share data)
                                   (Unaudited)

(1)  Summary of Significant Accounting Policies
     ------------------------------------------

The Consolidated Financial Statements include the accounts of Waypoint Financial
Corp. ("the Registrant") and its wholly-owned subsidiaries Waypoint Bank,
Waypoint Financial Investment Corporation, New Service Corporation, Waypoint
Service Corporation, Waypoint Brokerage Services, Inc., Waypoint Insurance
Services, Inc., Owen Insurance Inc., Advanced Real Estate Associates, and
Lenders Support Group Inc. Waypoint Bank is the sole owner of the following
subsidiaries: Waypoint Investment Corporation, H.S. Service Corporation, First
Harrisburg Service Corporation, and C.B.L. Service Corporation. All significant
intercompany transactions and balances are eliminated in consolidation.

The accompanying interim financial statements have been prepared in accordance
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments, consisting of normal recurring
accruals necessary for a fair presentation of the results of interim periods,
have been made. Operating results for the three-month period ended March 31,
2002 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2002 or any other interim period.

The accounting policies followed in the presentation of interim financial
results are consistent with those followed on an annual basis. These policies
are presented on pages 58 through 91 of the 2001 Annual Report on Form 10-K.

(2)  Recently Issued Accounting Guidance
     -----------------------------------

On January 1, 2002, Waypoint Financial adopted Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 142
requires the use of a non-amortization approach to account for goodwill and
certain intangibles. As of January 1, 2002, Waypoint Financial ceased the
amortization of goodwill that was recorded in past business combinations.
Waypoint Financial will assess goodwill for potential impairment during the
three-month period ending June 30, 2002 and has not yet determined whether or
the extent to which it will affect the financial statements. Goodwill
amortization totaled $261,000 during the three months ended March 31, 2001.

On January 1, 2002, Waypoint Financial adopted SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 establishes
criteria beyond that previously specified in SFAS 121 to determine when a
long-lived asset is held for sale. The adoption of SFAS 144 had no impact on
Waypoint Financial's financial condition or results of operations.

(3)  Completion of Stock Conversion, Stock Offering, and Acquisition by Merger
     -------------------------------------------------------------------------

On October 17, 2000, Harris Financial, MHC, the parent mutual holding company
for Harris Financial, Inc. completed a mutual-to-stock conversion. As a result
of this conversion, Harris Financial, MHC ceased to exist and Waypoint Financial
became the successor to Harris Financial, Inc. The merger of Waypoint Financial
and York Financial has been accounted for under the pooling-of-interests method
of accounting.

Waypoint Financial recorded certain liabilities associated with merger-related
costs. Remaining merger liabilities totaled $1,205,000 at March 31, 2002 and
$1,811,000 at December 31, 2001, and consisted entirely of compensation and
benefit plan costs. Waypoint Financial expects to settle through payment
substantially all remaining accrued merger costs during 2002.

                                        7

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
    (All dollar amounts presented in the tables are in thousands, except per
                                   share data)
                                   (Unaudited)


(4)  Earnings Per Share
     -------------------

The following table shows the allocation of earnings per share to basic earnings
per share and diluted earnings per share.

<TABLE>
<CAPTION>
                                                                                            Per Share
                                                                Income          Shares        Amount
                                                              ---------------------------------------
<S>                                                           <C>            <C>            <C>
For the three months ended March 31, 2002
   Basic earnings per share:

   Income available to common shareholders                     $   11,497      36,897,000     $  0.31
   Dilutive effect of management and director stock options                       819,000       (0.01)
                                                              ---------------------------------------
   Diluted earnings per share:
   Income available to common shareholders
      plus assumed conversions                                 $   11,497      37,716,000     $  0.30
                                                              =======================================
For the three months ended March 31, 2001
   Basic earnings per share:

   Income available to common shareholders                     $    8,573      37,369,000     $  0.23
   Dilutive effect of management and director stock options                       316,000           -
                                                              ---------------------------------------
   Diluted earnings per share:
   Income available to common shareholders
      plus assumed conversions                                 $    8,573      37,685,000     $  0.23
                                                              =======================================
</TABLE>


                                        8

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
    (All dollar amounts presented in the tables are in thousands, except per
                                  share data)
                                  (Unaudited)

(5)    Marketable Securities
       ---------------------

The amortized cost, gross unrealized holding gains, gross unrealized holding
losses and fair value for marketable securities by major security type were as
follows:

<TABLE>
<CAPTION>
                                                                   As of March 31, 2002
                                              ---------------------------------------------------------------
                                                                   Gross           Gross
                                                                Unrealized      Unrealized
                                                 Amortized        Holding         Holding          Fair
                                                   Cost            Gains          Losses           Value
                                               --------------------------------------------------------------
<S>                                            <C>              <C>            <C>             <C>
    Available for sale:
      U.S. Government and agencies                $  345,961       $     567      $  (4,702)     $   341,826
      Corporate bonds                                 80,835              51         (8,924)          71,962
      Municipal securities                           102,576           1,738         (1,654)         102,660
      FHLB stock                                      90,096               -              -           90,096
      Equity securities                               91,737           5,565           (246)          97,056
      Mortgage-backed securities:
        Agency PC's & CMO's                          909,092           3,455         (1,365)         911,182
        Private issue CMO's                          953,066           4,909         (5,184)         952,791
                                               --------------  --------------  --------------  --------------
          Total mortgage-backed securities         1,862,158           8,364         (6,549)       1,863,973
                                               --------------  --------------  --------------  --------------
          Total securities available for sale     $2,573,363       $  16,285      $ (22,075)     $ 2,567,573
                                               ==============  ==============  ==============  ==============
</TABLE>

<TABLE>
<CAPTION>
                                                                 As of December 31, 2001
                                              ---------------------------------------------------------------
                                                                   Gross           Gross
                                                                Unrealized      Unrealized
                                                 Amortized        Holding         Holding          Fair
                                                   Cost            Gains          Losses           Value
                                               --------------------------------------------------------------
<S>                                           <C>             <C>             <C>             <C>
    Available for sale:
      U.S. Government and agencies                $  522,531       $   4,329      $  (1,502)     $   525,358
      Corporate bonds                                 89,788             109         (7,222)          82,675
      Municipal securities                            82,734           1,962         (1,049)          83,647
      FHLB stock                                      92,147               -              -           92,147
      Equity securities                              118,392           6,110           (152)         124,350
      Mortgage-backed securities:
        Commercial                                    10,002               -             (2)          10,000
        Agency PC's & CMO's                          852,239             816         (6,335)         846,720
        Private issue CMO's                          784,491           6,491         (3,519)         787,463
                                               --------------  --------------  ------------    --------------
          Total mortgage-backed securities         1,646,732           7,307         (9,856)       1,644,183
                                               --------------  --------------  ------------    --------------
          Total securities available for sale     $2,552,324       $  19,817      $ (19,781)      $2,552,360
                                               ==============  ==============  ============    ==============
</TABLE>


                                        9

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
    (All dollar amounts presented in the tables are in thousands, except per
                                  share data)
                                   (Unaudited)

(6)  Loans Receivable, Net
     ---------------------

The following table presents the composition of loans receivable, net, as of the
dates indicated:

<TABLE>
<CAPTION>
                                                                  March 31,            December 31,
                                                                     2002                  2001
                                                               -----------------     -----------------
<S>                                                            <C>                   <C>
     Residential mortgage loans (principally conventional):
        Secured by 1-4 family residences                           $    918,181          $  1,025,688
        Construction (net of undistributed
           portion of $26,683 and $34,676)                               28,814                36,040
                                                               -----------------     -----------------
                                                                        946,995             1,061,728
     Less:
        Unearned discount                                                   145                   159
        Net deferred loan origination fees                                4,861                 5,116
                                                               -----------------     -----------------
              Total residential mortgage loans                          941,989             1,056,453
                                                               -----------------     -----------------

     Commercial loans:
        Commercial real estate                                          495,192               484,894
        Commercial business                                             277,226               272,389
        Construction and site development
           (net of undistributed portion of
           $26,102 and $26,015)                                          24,617                25,428
                                                               -----------------     -----------------
                                                                        797,035               782,711
     Less:
        Net deferred loan origination fees                                1,045                 1,171
                                                               -----------------     -----------------
              Total commercial loans                                    795,990               781,540
                                                               -----------------     -----------------

     Consumer and other loans:
        Manufactured housing                                             98,104                97,243
        Home equity and second mortgage                                 331,437               322,182
        Indirect automobile                                             135,924               127,258
        Other                                                            76,011                78,075
                                                               -----------------     -----------------
                                                                        641,476               624,758
     Plus:
        Net deferred loan origination fees                               (2,500)               (2,185)
        Dealer reserve                                                   25,012                24,721
                                                               -----------------     -----------------
           Total consumer and other loans                               663,988               647,294
                                                               -----------------     -----------------
     Less: Allowance for loan losses                                     23,674                23,069
                                                               -----------------     -----------------
     Loans receivable, net                                         $  2,378,293          $  2,462,218
                                                               =================     =================
</TABLE>

Loans having a carrying value of $1,265,494,000 were pledged as collateral for
FHLB advances at March 31, 2002.

Waypoint Financial conducts certain residential mortgage banking activities
including the origination of mortgage loans for securitization or sale to
investors and the servicing of mortgage loans for investors. Waypoint Financial
also occasionally sells loans from its portfolio in the ordinary course of
business.

Mortgage loans serviced for others are not included in the accompanying
consolidated statements of financial condition. The unpaid principal balances of
these loans totaled $625,749,000 at March 31, 2002 and $633,138,000 at December
31, 2001. Investor custodial balances maintained in connection with the
foregoing mortgage servicing rights totaled $11,206,000 at March 31, 2002 and
$17,367,000 at December 31, 2001.

                                       10

<PAGE>

                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
    (All dollar amounts presented in the tables are in thousands, except per
                                   share data)
                                   (Unaudited)

Waypoint Financial's investment in loan servicing rights is included in the
accompanying consolidated statement of financial condition. Waypoint Financial
did not purchase or sell any mortgage servicing rights during the three-month
periods ended March 31, 2002 and 2001.

Waypoint Financial sold mortgage loans totaling $111,954,000 and $35,991,000
during the three-month periods ended March 31, 2002 and March 31, 2001,
respectively. Waypoint Financial did not exchange loans for mortgage-backed
securities during the three-month periods ended March 31, 2002 and 2001.

(7) Deposits
    --------

The following table presents the composition of deposits, as of the dates
indicated:

                                          March 31,              December 31,
                                            2002                    2001
                                     ------------------       ------------------
Savings                                    $   236,052              $   220,344
Time                                         1,520,245                1,444,723
Transaction                                    350,544                  340,568
Money market                                   464,066                  531,634
                                     ------------------       ------------------
     Total deposits                        $ 2,570,907              $ 2,537,269
                                     ==================       ==================




(8) Other Borrowings
    ----------------

The following table presents the composition of Waypoint Financial's other
borrowings as of the dates indicated:

                                         March 31,                December 31,
                                           2002                       2001
                                     -----------------         -----------------
  FHLB advances                           $ 1,781,263               $ 1,842,170
  Repurchase agreements                       377,003                   449,770
  Other                                            47                        47
                                     -----------------         -----------------
    Total other borrowings                $ 2,158,313               $ 2,291,987
                                     =================         =================



(9) Derivative Instruments
    ----------------------

During the three-month period ended March 31, 2002, Waypoint Financial invested
in an interest rate swap that does not qualify for hedge accounting treatment.
This swap has a notional amount of $100,000,000 and was acquired to manage
interest rate risk associated with deposit liabilities. As of March 31, 2002,
Waypoint recognized a valuation loss of $1,759,000 in other liabilities related
to this instrument, with a corresponding charge reported in net gain on
securities.

                                       11

<PAGE>

Item 2 Management's Discussion and Analysis of Financial Condition and Results
       of Operations

The following is management's discussion and analysis of the significant changes
in the results of operations, capital resources and liquidity presented in its
accompanying interim consolidated financial statements for Waypoint Financial
Corp. and Subsidiaries. This discussion should be read in conjunction with the
2001 Annual Report on Form 10-K. Current performance does not guarantee and may
not be indicative of similar performance in the future.

I.   Forward-Looking Statements

In addition to historical information, this report contains forward-looking
statements. The forward-looking statements contained in the following sections
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those projected in the forward-looking statements.
Important factors that might cause such a difference include, but are not
limited to, interest rate trends, the general economic climate in Waypoint
Financial's market area and the country as a whole, Waypoint Financial's ability
to control costs and expenses, competitive products and pricing, loan
delinquency rates and changes in federal and state regulation. Readers should
not place undue reliance on these forward-looking statements, as they reflect
management's analysis only as of the date of this report. Waypoint Financial has
no obligation to update or revise these forward-looking statements to reflect
events or circumstances that occur after the date of this report. Readers should
carefully review the risk factors described in other documents that Waypoint
Financial files periodically with the Securities and Exchange Commission.

II.  Financial Review

Waypoint Financial's assets consist primarily of 100% of the outstanding shares
of Waypoint Bank and various financial services subsidiaries. Waypoint Bank is
primarily engaged in the business of attracting deposits and investing these
deposits into loans secured by residential and commercial real property,
commercial business loans, consumer loans, and investment securities.

Waypoint Financial conducts its business through fifty-eight offices, including
fifty offices located in the five county south-central region of Pennsylvania
that includes Dauphin, York, Cumberland, Lancaster and Lebanon Counties, and
eight offices in Maryland. In addition, Waypoint Financial maintains an
operations center, a commercial services center, various loan production
offices, a commissioned mortgage origination staff, and, to a lesser extent, a
correspondent mortgage origination network. Waypoint Financial's wholly-owned
insurance agency Owen Insurance Inc. operates its main office in York,
Pennsylvania and a second office in Camp Hill, Pennsylvania.

Waypoint Financial's net income depends primarily on its net interest income,
which is the difference between interest income on loans and investments and
interest expense on deposits and borrowings. Net interest income is a function
of Waypoint Financial's interest rate spread, which is the difference between
the average yield earned on interest-earning assets and the average rate paid on
interest-bearing liabilities, as well as a function of the average balance of
interest-earning assets as compared to interest-earning liabilities. Because of
this reliance on net interest income, Waypoint Financial's net income is
affected by changes in market interest rates and prevailing economic conditions.
The volatility of net interest income due to changes in market interest rates is
often referred to as "interest rate risk". Financial institutions that accept
and manage substantial degrees of interest rate risk are generally susceptible
to larger net interest income fluctuations when compared to peer institutions
that accept less interest rate risk. Accordingly, managing interest rate risk
successfully has a significant impact on Waypoint Financial's return on equity.

Waypoint Financial also generates non-interest income from fees and commissions
charged on customers' accounts, sales of brokerage and insurance products, trust
and asset management services, and mortgage banking activities including the
servicing of loans for others. Noninterest income also includes income on
bank-owned life insurance, gains and losses on sales of securities available for
sale, gains and losses on sales of real estate, equity in earnings of limited
partnership interests, and fees and service charges assessed on loan and deposit
transactions. Waypoint Financial's non-interest expenses primarily consist of
employee compensation and benefits, occupancy and equipment expense, advertising
and other operating expenses. Waypoint Financial's results of operations also
are affected by general economic and competitive conditions, notably changes in
market interest rates, government policies and regulations.

                                       12

<PAGE>

III. Market Risk and Interest Rate Sensitivity Management

Market risk is the risk of loss from adverse changes in market prices and rates.
In an effort to maintain control over such risks, management of Waypoint
Financial focuses its attention on managing the interest rate sensitivity of
assets and liabilities and controlling the volume of lending, securities,
deposit and borrowing activities. By managing the ratio of interest sensitive
assets to interest sensitive liabilities repricing in the same periods, Waypoint
Financial seeks to control the adverse effect of interest rate fluctuations.
Waypoint Financial's assets and liabilities are not directly exposed to foreign
currency or commodity price risk.

Waypoint Financial's Asset/Liability Committee monitors interest rate risk by
utilizing simulation analysis. Net interest income fluctuations and the net
portfolio value ratio are determined in various interest rate scenarios and
monitored against acceptable limitations established by management and approved
by the Board of Directors. Such rate scenarios include rate shocks adjusting
rates in +/- 100 basis point (bp) increments (ramped over the next 12 months)
resulting in projected changes to net interest income over the next 12 months
and projected net portfolio value ratios as indicated in the following table.

Following is an analysis of hypothetical changes in interest rates as of the
dates indicated:

<TABLE>
<CAPTION>
                                            As of March 31, 2002                 As of December 31, 2001
                                       ----------------------------------   -----------------------------------
             Change in                 Percent change          Net           Percent change         Net
           interest rates              in net interest      portfolio       in net interest      portfolio
         (In basis points)                income (1)        ratio (2)          income (1)        ratio (2)
    --------------------------        ----------------  ----------------   -----------------  ----------------
             <S>                           <C>              <C>                <C>               <C>
                +300                          7.51%             5.43%              1.73%             5.61%
                +200                          2.41              6.48               0.95              6.58
                +100                          1.02              7.21               0.71              7.21
                   0                             -              7.85                  -              7.77
                (100)                        (1.74)             7.77              (0.96)             7.59
                (200)                        (3.61)             6.51              (2.26)             6.99
</TABLE>

--------
          (1) The percentage change in this column represents an increase
          (decrease) in net interest income for 12 months in a stable interest
          rate environment versus net interest income for 12 months in the
          various rate scenarios.
          (2) The net portfolio value ratio in this column represents net
          portfolio value of Waypoint Financial in various rate scenarios,
          divided by the present value of expected net cash flows from existing
          assets in those same scenarios. Net portfolio value is defined as the
          present value of expected net cash flows from existing assets, minus
          the present value of expected net cash flows from existing
          liabilities, plus or minus the present value of expected net cash
          flows from existing off-balance-sheet contracts.

Simulation results are influenced by a number of estimates and assumptions with
regard to embedded options, prepayment behaviors, pricing strategies and
cashflows. At March 31, 2002 and December 31, 2001, both net interest income
variability and net portfolio ratio results were within limits established by
the Board of Directors. Also, as of these dates, the net portfolio ratio fell
within the "minimal risk" category established under OTS guidelines for interest
rate risk measurement. Assumptions and estimates used in simulation analysis are
inherently subjective and, as a consequence, results will neither precisely
estimate net interest income or net portfolio value nor precisely measure the
impact of higher or lower interest rates on net interest income or net portfolio
value ratio. The results of these simulations are reported to Waypoint
Financial's Board of Directors on a monthly basis.

Waypoint Financial also uses certain derivative financial instruments from time
to time to manage interest rate risk associated with certain financial assets
and liabilities that Waypoint Financial places in its portfolios in the ordinary
course of business. A detailed discussion of Waypoint Financial's derivative
financial instruments is contained in the Notes to Consolidated Financial
Statements.

                                       13

<PAGE>

IV.  Liquidity

The primary purpose of asset/liability management is to maintain adequate
liquidity and a desired balance between interest sensitive assets and
liabilities. Liquidity management focuses on the ability to meet the cash flow
requirements of customers wanting to withdraw or borrow funds for their personal
or business needs. Interest rate sensitivity management focuses on consistent
growth of net interest income in times of fluctuating interest rates. Management
must coordinate its management of liquidity and interest rate sensitivity
because decisions involving one may influence the other.

Waypoint Financial meets its liquidity needs by either reducing its assets or
increasing its liabilities. Sources of asset liquidity include short-term
investments, securities available for sale, maturing and repaying loans, and
monthly cash flows from mortgage-backed securities. The loan portfolio provides
an additional source of liquidity due to Waypoint Financial's participation in
the secondary mortgage market and resulting ability to sell loans as necessary.
Waypoint Financial also meets its liquidity needs by attracting deposits and
utilizing borrowing arrangements with the FHLB of Pittsburgh and the Federal
Reserve Bank of Philadelphia for short- and long-term loans as well as other
short-term borrowings.

Deposits represent Waypoint Financial's primary source of funds. Waypoint
Financial occasionally uses brokered deposits to supplement other sources of
funds to the extent such deposits are determined to have more favorable interest
cost and risk characteristics at the time of purchase relative to other sources
of funding. During the three months ended March 31, 2002, Waypoint Financial's
deposits increased $33.6 million. At March 31, 2002, Waypoint Financial also had
brokered deposits of $181.4 million outstanding at an average interest rate of
2.45% as compared to $205.0 million outstanding at December 31, 2001 at an
average interest rate of 2.64%. To supplement deposit-gathering efforts,
Waypoint Financial borrows from the FHLB of Pittsburgh. At March 31, 2002,
Waypoint Financial had $1,781.3 million in FHLB loans outstanding at a weighted
average interest rate of 4.27%, a decrease of $60.9 million from $1,842.2
million at a weighted average interest rate of 4.11% on December 31, 2001.
Waypoint Financial redeemed FHLB stock totaling $2.1 million due to a decrease
in FHLB loans outstanding during the three months ended March 31, 2002. For
additional details of FHLB loans and other borrowings, see the Notes to
Consolidated Financial Statements.

Proceeds from loan and securities sales represent a substantial source of funds
to Waypoint Financial. These sources amounted to $323.5 million and $195.0
million during the three-month periods ended March 31, 2002 and 2001,
respectively.

Generally, Waypoint Financial's principal use of funds is to invest in
commercial and consumer loans. In addition, during the three months ended March
31, 2002, Waypoint Financial utilized leverage strategies to deploy available
capital. These strategies resulted in expansion of the investment portfolio
through the purchase of available for sale securities. The carrying value of
securities available for sale increased $15.2 million to $2,567.6 million at
March 31, 2002 from $2,552.4 million at December 31, 2001.

Loan demand resulted in total originations of $330.3 million in the three months
ended March 31, 2002. Waypoint Financial's local economic environment has
remained resilient in 2002 and this has had a favorable effect on the volume of
originations. During the period, the loan portfolio decreased by $83.9 million
to $2,378.3 million at March 31, 2002 from $2,462.2 million at December 31,
2001. The loan decrease resulted from mortgage loan repayments and prepayments,
which offset growth in commercial and consumer loans.

Waypoint Bank is required by OTS regulations to maintain sufficient liquidity to
ensure its safe and sound operation. Waypoint Bank had sufficient liquidity
during the quarters ended March 31, 2002 and March 31, 2001. The sources of
liquidity previously discussed are deemed by management to be sufficient to fund
outstanding loan commitments and meet other obligations.

                                       14

<PAGE>

V. Capital Resources

Stockholders' equity at March 31, 2002, totaled $469.2 million compared to
$486.2 million at December 31, 2001, a decrease of $17.0 million. Stockholders'
equity was increased by net income of $11.5 million and by various other net
increases totaling $.3 million. Offsetting these increases were cash dividends
of $3.9 million, an increase in Waypoint Financial's unrealized losses on
available for sale securities, net of tax effect, of $3.6 million, and treasury
stock purchases of $21.3 million.

Under OTS regulations a savings association must satisfy three minimum capital
requirements: core capital, tangible capital and risk-based capital. Savings
associations must meet all of the standards in order to comply with the capital
requirements. At March 31, 2002, and December 31, 2001, Waypoint Bank met all
three minimum capital requirements to be well capitalized.

Risk-based Capital Ratios and Leverage Ratios

<TABLE>
<CAPTION>
      WAYPOINT BANK                                      Minimum Requirement     Minimum Requirement to
                                      Actual            for Capital Adequacy     be "Well Capitalized"
                               ---------------------    ---------------------    ----------------------
   As of March 31, 2002            Amount      Ratio        Amount      Ratio        Amount       Ratio
   --------------------            ------      -----        -------     -----        -------      -----
                               (in thousands)           (in thousands)           (in thousands)
<S>                                  <C>       <C>            <C>        <C>           <C>        <C>
Total Capital
 (to Risk Weighted Assets)           $422,185  14.5%          $232,596   8.0%          $290,745   10.0%
Tier 1 Capital
 (to Risk Weighted Assets)            396,122  13.6            116,298   4.0            174,447    6.0
Tier 1 Capital
 (to Average Assets)                  396,122   7.5            210,611   4.0            263,264    5.0

 As of December 31, 2001
 -----------------------
Total Capital
 (to Risk Weighted Assets)           $434,847  14.6%          $238,377   8.0%          $297,971   10.0%
Tier 1 Capital
 (to Risk Weighted Assets)            409,125  13.7            119,189   4.0            178,783    6.0
Tier 1 Capital
 (to Average Assets)                  409,125   8.1            202,703   4.0            253,379    5.0
</TABLE>

     A reconciliation of Waypoint Bank's regulatory capital to capital using
accounting principles generally accepted in the United States (GAAP) as of March
31, 2002 follows:

<TABLE>
<CAPTION>
                                                                                              Tier 1
                                                                                Tangible       (Core)      Risk-based
                                                                                Capital       Capital       Capital
                                                                                --------      --------     ----------
<S>                                                                             <C>           <C>            <C>
GAAP capital at Waypoint Financial                                              $469,168      $469,168       $469,168
Capital attributed to affiliates                                                 (65,023)      (65,023)       (65,023)
                                                                                --------      --------     ----------
GAAP capital at Waypoint Bank                                                    404,145       404,145        404,145

Capital adjustments:
    Unrealized losses, net of taxes, on securities available for sale              3,837         3,837          3,837
    Allowance for loan losses                                                          -             -         23,674
    Certain intangible assets                                                    (11,370)      (11,370)       (11,370)
    Disallowed servicing assets                                                     (490)         (490)          (490)
    Allowable unrealized gains, net of taxes, on equity securities available
       for sale                                                                        -             -          2,389
                                                                                --------      --------     ----------
    Regulatory capital at Waypoint Bank                                         $396,122      $396,122       $422,185
                                                                                ========      ========     ==========
</TABLE>

                                       15

<PAGE>

X.   Results of Operations

Comparison for the Three-Month Periods Ended March 31, 2002 and March 31, 2001

Net Income
Net income for the three months ended March 31, 2002 was $11,497,000, which
represented an increase of $2,924,000 or 34.1% from $8,573,000 reported for the
three months ended March 31, 2001. The increase in net income included an
increase of $4,100,000 in net interest income after provision for loan losses
and an increase of $1,373,000 in noninterest income. These increases in income
were offset by an increase of $1,938,000 in noninterest expense and an increase
of $611,000 in income tax expense. The following paragraphs include a discussion
of the components of net income.

Net Interest Income
Waypoint Financial's principle source of revenue is net interest income, which
represents the difference between interest income generated by earning assets
such as loans and marketable securities and interest expense on interest-bearing
liabilities such as deposits and borrowings. Net interest income can be
significantly impacted by movements in market interest rates.

Net interest income before provision for loan losses totaled $31,644,000 for the
three months ended March 31, 2002, which represents an increase of $4,586,000 or
16.9% from $27,058,000 for the three months ended March 31, 2001. Provision
expense for loan losses increased $486,000 or 30.4% to $2,085,000 for the three
months ended March 31, 2002 from $1,599,000 for the comparable prior period. The
paragraphs below present an analysis of the components of net interest income on
a tax-equivalent basis.

Table 1 presents, on a tax-equivalent basis, Waypoint Financial's average asset
and liability balances, interest rates, interest income and interest expense for
each of the three-month periods ended March 31, 2002 and March 31, 2001. Table 2
presents a rate-volume analysis of changes in net interest income on a
tax-equivalent basis for the three-month periods ended March 31, 2002 and March
31, 2001.

Net interest income before provision expense for loan losses, on a tax
equivalent basis, totaled $32,495,000 for the three months ended March 31, 2002,
which represents an increase of $4,667,000 or 16.8%, from $27,828,000 for the
three months ended March 31, 2001. This increase reflected a favorable volume
variance of $230,000 and a favorable rate variance of $4,437,000 for the three
months ended March 31, 2002 versus the comparable prior period.

For the three months ended March 31, 2002, the yield on interest-earning assets
was 5.77%, representing a 156 basis points decrease from the comparable prior
period. At same time, the cost of funds decreased 193 basis points to 3.40% for
the three months ended March 31, 2002. As a result, the interest spread
increased by 29 basis points to 2.37% and the net interest margin ratio
increased by 21 basis points to 2.58% during the three months ended March 31,
2002 versus the comparable prior period.

The improvement in Waypoint Financial's net interest margin resulted primarily
from a substantial increase in the mix of higher-yielding commercial and
consumer loans within the loan portfolio. Also, an increasingly-disciplined
deposit pricing strategy and aggressive funds management practices have
augmented the decrease in liability rates during the five-quarter period ended
March 31, 2002. Net interest income was also significantly enhanced by a
substantial increase in Waypoint Financial's leveraged investment portfolio.

                                       16

<PAGE>

Table 1 Average Balance Sheets, Rates and Interest Income and Expense Summary

<TABLE>
<CAPTION>
                                                                          For the three months ended,
                                                       -------------------------------------------------------------------
                                                               March 31, 2002                     March 31, 2001
                                          Rate         -------------------------------------------------------------------
                                          As of                                 Average                           Average
                                        March 31,       Average      (1) (2)     Yield/    Average     (1) (2)     Yield/
                                           2002         Balance     Interest     Cost      Balance     Interest    Cost
                                        ----------     -----------------------------------------------------------------
                                                                     (All dollar amounts are in thousands)
<S>                                    <C>          <C>             <C>         <C>     <C>            <C>         <C>
Assets:
Interest-earning assets:
  Loans                                       6.86%    $ 2,484,813    $ 43,389      6.98% $ 2,649,962   $ 51,766    7.81%
  Marketable securities - taxable             4.53       2,402,896      27,024      4.50    1,927,935     32,052    6.65
  Marketable securities - tax-free            8.33          94,387       1,960      8.31       71,502      1,515    8.48
  Other interest-earning assets               1.88          56,002         261      1.86       41,011        572    5.58
                                        ----------     -----------------------------------------------------------------
Total interest-earning assets                 5.72       5,038,098      72,634      5.77    4,690,410     85,905    7.33
                                        ----------                ----------------------             -------------------
Noninterest-earning assets                                 206,519                            169,098
                                                       -----------                      -------------
Total assets                                           $ 5,244,617                        $ 4,859,508
                                                       ===========                      =============
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
  Savings deposits                            1.27     $   224,220         696      1.24  $   210,860      1,470    2.79
  Time deposits                               4.37       1,502,267      16,217      4.32    1,551,968     22,880    5.90
  NOW and money market accounts               0.92         811,871       2,047      1.01      802,766      7,496    3.74
  Escrow                                      0.58           5,811           8      0.55        6,707          9    0.54
  Borrowed funds                              4.37       2,179,470      21,171      3.89    1,784,372     26,222    5.88
                                        ----------     -----------------------------------------------------------------
Total interest-bearing liabilities            3.62       4,723,639      40,139      3.40    4,356,673     58,077    5.33
                                        ----------                ----------------------             -------------------
Noninterest-bearing liabilities                             37,910                             51,121
                                                       -----------                      -------------
Total liabilities                                        4,761,549                          4,407,794
Stockholders' equity                                       483,068                            451,714
                                                       -----------                      -------------
Total liabilities and
  stockholders' equity                                 $ 5,244,617                        $ 4,859,508
                                                       ===========                      =============

Net interest income, tax-equivalent                                     32,495                            27,828
Interest rate spread,
  tax-equivalent(3)                          2.10%                                 2.37%                            2.00%
                                        ==========                            ==========                            ====
Net interest-earning assets                            $   314,459                        $   333,737
                                                       ===========                      =============
Net interest margin, tax-equivalent (4)                                            2.58%                            2.37%
                                                                                                                    ====
Ratio of interest-earning assets
  to interest-bearing liabilities                             1.07 x                             1.08 x
                                                       ===========                      =============
Adjustment to reconcile tax-equivalent
  net interest income to net interest
  income                                                                  (851)                             (770)
Net interest income before provision                              ------------                       -----------
  for loan losses                                                     $ 31,644                          $ 27,058
                                                                  ============                       ===========
</TABLE>

(1)  Includes net expense recognized on deferred loan fees and costs of $262,000
     for the three months ended March 31, 2002, and $568,000 for the three
     months ended March 31, 2001.
(2)  Interest income and yields are shown on a tax-equivalent basis using an
     effective tax rate of 35%.
(3)  Represents the difference between the average yield on interest-earning
     assets and the average cost on interest-bearing liabilities.
(4)  Represents the annualized net interest income before the provision for loan
     losses divided by average interest-earning assets.

                                       17

<PAGE>

Table 2 Rate/Volume Analysis of Changes in Net Interest Income

<TABLE>
<CAPTION>
                                                                     Three Months Ended March 31, 2002
                                                                                Compared to
                                                                     Three Months Ended March 31, 2001
                                                                            Increase (Decrease)
                                                               -----------------------------------------------
                                                                  Volume            Rate             Net
                                                               --------------  ---------------  --------------
                                                                       (Dollar amounts in thousands)
 <S>                                                           <C>             <C>              <C>
       Interest-earning assets:
         Loans, net                                                $  (2,618)       $ (5,759)       $ (8,377)
         Marketable securities - taxable                               6,788         (11,816)         (5,028)
         Marketable securities - tax-free                                476             (31)            445
         Other interest-earning assets                                   160            (471)           (311)
                                                               --------------  ---------------  --------------
         Total interest-earning assets                                 4,806         (18,077)        (13,271)
                                                               --------------  ---------------  --------------

       Interest-bearing liabilities:
         Savings deposits                                                 88            (862)           (774)
         Time deposits                                                  (712)         (5,951)         (6,663)
         NOW and money market deposits                                    78          (5,527)         (5,449)
         Escrow                                                           (1)              -              (1)
         Borrowed funds                                                5,123         (10,174)         (5,051)
                                                               --------------  ---------------  --------------
         Total interest-bearing liabilities                            4,576         (22,514)        (17,938)
                                                               --------------  ---------------  --------------
       Net change in interest income                               $     230        $  4,437        $  4,667
                                                               ==============  ===============  ==============
</TABLE>

Waypoint Financial's average loan balances decreased $165.2 million or 6.2% to
$2.485 billion during the three months ended March 31, 2002 from $2.650 billion
for the comparable prior period. This decrease came primarily in mortgage loans,
which were partially offset by increases in commercial and consumer loans. This
change in the loan mix is a result of Waypoint Financial's emphasis on
increasing its investment in higher-yielding commercial and consumer loans.
Waypoint Financial also continued to decrease its investment in mortgage loans
by selling most of its residential mortgage loan originations into the secondary
market and by reallocating cash inflows from residential mortgage loan
repayments and prepayments toward funding other loans. (Note 6 in the Notes to
Consolidated Financial Statements presents comparative loan balances as of March
31, 2002 and December 31, 2001.) The yield on average loans decreased 83 basis
points to 6.98% for the three months ended March 31, 2002 versus the comparable
prior quarter. Average loan yields decreased primarily due to aggressive
reductions in short-term interest rates by the Federal Reserve Bank (FRB) during
the five-quarter period ended March 31, 2002. Throughout this period, yields on
Waypoint Financial's variable and adjustable rate loans in portfolio decreased
as benchmark rate indices reset with each FRB rate decrease. Also, rates on new
commercial and consumer loan products decreased in step with the market rate
decreases. These rate decreases were partially offset by improvements in the
loan portfolio mix toward higher-yielding loans.

Waypoint Financial's marketable securities increased $497.9 million or 24.9% to
$2.497 billion during the three months ended March 31, 2002 from $1.999 billion
for the comparable prior period. This increase resulted from increased leveraged
investments and from the redeployment of cash inflows from residential mortgage
loan repayments and prepayments that were not required for other loan investing.
Yields on marketable securities decreased 207 basis points to 4.65% for the
three months ended March 31, 2002 versus the comparable prior period primarily
due to the decrease in market rates as described above in the loan discussion.

Average deposits decreased $27.2 million or 1.1% to $2.538 billion during the
three-month period ending March 31, 2002 from $2.566 billion for the comparable
prior quarter. The cost of average deposits decreased 198 basis points to 2.99%
during the three months ended March 31, 2002 primarily due to the decrease in
market rates during the five-quarter period ended March 31, 2002. Increases in
lower-cost savings, checking, and money market accounts also enhanced the
reduction in deposit funding costs as Waypoint Financial continued to enhance
its sales and marketing focus on these products.

                                       18

<PAGE>

For a comprehensive discussion on qualitative and quantitative disclosures
regarding market risk, refer to Management's Discussion and Analysis included in
the 2001 Annual Report on Form 10-K.

Provision for Loan Losses
Waypoint Financial recognized provision for loan losses totaling $2,085,000 for
the three months ended March 31, 2002, which represents an increase of $486,000
or 30.4%, from the $1,599,000 provision recorded for the three months ended
March 31, 2001. Waypoint Financial's provision expense and allowance for loan
losses are discussed in further detail in the Asset Quality section of this
report.

Noninterest Income

The table below presents noninterest income for the three months ended March 31,
2002 and 2001.

Table 3 Changes in Noninterest Income

<TABLE>
<CAPTION>
                                                                        Three months ended March 31
                                                           ------------------------------------------------------
                                                              2002          2001         Change           %
                                                           ------------  ------------  ------------  ------------
                                                                       (Dollar amounts in thousands)
     <S>                                                   <C>           <C>           <C>           <C>
     Service charges on deposits                              $  1,651      $  1,531       $   120           7.8
     Other service charges, commissions, fees                    3,167         2,339           828          35.4
     Loan servicing, net                                          (244)          207          (451)       (217.9)
     Gain on securities                                            324           415           (91)        (21.9)
     Gain on sale of loans                                         946           119           827         695.0
     Other                                                       1,370         1,230           140          11.4
                                                           ------------  ------------  ------------  ------------
     Total                                                    $  7,214      $  5,841       $ 1,373          23.5
                                                           ============  ============  ============  ============
</TABLE>

Total noninterest income increased $1,373,000 or 23.5% to $7,214,000 for the
three months ended March 31, 2002 compared to $5,841,000 for the three months
ended March 31, 2001 as a result of the following:

     .    Service charges on deposits totaled $1,6851,000, up $120,000 or 7.8%
          from the comparable prior quarter due to an increase in collected
          overdraft fees.

     .    Other service charges, commissions and fees increased $828,000 or
          35.4% to $3,167,000 from the comparable prior quarter. Within this
          income category, ATM fees were $886,000 (up $145,000), fees from
          insurance services were $944,000 (up $347,000), brokerage fees were
          $841,000 (up $315,000), and trust fees were $201,000 (up $78,000).

     .    Net mortgage loan servicing resulted in a loss of $244,000, a decrease
          in income of $451,000, primarily due to continued accelerated
          prepayment activity in Waypoint's portfolio of mortgage loans serviced
          for others. This resulted primarily from the effects of changes in
          general interest rates during the five-quarter period ended March 31,
          2002. During this period, market interest rates on mortgage loans
          generally decreased, which in turn increased market prepayment speeds,
          thereby reducing loan servicing revenue and increasing amortization
          expense on loan servicing rights and valuation adjustments.

     .    Net gains on the sale of loans totaled $946,000, up $827,000 in large
          part due to a significant increase in mortgage banking volume due in
          part to a favorable rate environment for mortgage loan originating and
          selling. Also, Waypoint Financial hedged its residential mortgage
          construction loans during the three-month period ended March 31, 2001
          due to anticipated rising interest rates, which had the effect of
          diminishing net gains on sales of related loans upon their conversion
          to permanent mortgage loans. No hedging was done on construction loans
          during the current period.

     .    Gains on securities totaled $324,000, down $91,000. This income
          category includes net gains and losses on security sales and net
          valuation gains and losses on derivative instruments that do not
          qualify for full hedge accounting treatment. During the quarter ended
          March 31, 2002, Waypoint Financial recognized a valuation loss of
          $1,759,000 on an interest rate swap that does not qualify for hedge
          accounting treatment.

     .    Other income totaled $1,370,000, up $140,000 from the comparable prior
          quarter. Within this income category, income from Bank Owned Life
          Insurance (BOLI) totaled $1,203,000, an increase of $1,024,000 due to
          an increased BOLI investment of $60 million in July, 2001. Offsetting
          this increase was a decrease of $427,000 in net gains on fixed asset
          sales and a decrease of $255,000 in income from joint venture
          investments to $0 for the quarter ended March 31, 2002.

                                       19

<PAGE>

Noninterest Expense

Noninterest expense for the three months ended March 31, 2002 and 2001 is
presented in the following table:

Table 4  Changes in Noninterest Expense

<TABLE>
<CAPTION>
                                                                        Three months ended March 31
                                                           ------------------------------------------------------
                                                              2002          2001         Change           %
                                                           ------------  ------------  ------------  ------------
                                                                       (Dollar amounts in thousands)
<S>                                                       <C>           <C>           <C>            <C>
     Salaries and benefits                                    $ 11,078      $  9,315      $  1,763          18.9
     Equipment expense                                           1,770         1,748            22           1.3
     Occupancy expense                                           1,567         1,670          (103)         (6.2)
     Advertising and public relations                              998           751           247          32.9
     FDIC insurance                                                112           132           (20)        (15.2)
     Income from real estate operations                           (115)         (403)          288          71.5
     Amortization of intangibles                                   490           751          (261)        (34.8)
     Professional fees and outside services                        819           624           195          31.3
     Supplies, telephone and postage                             1,222         1,819          (597)        (32.8)
     Other                                                       2,777         2,373           404          17.0
                                                           ------------  ------------  ------------  ------------
     Total                                                    $ 20,718      $ 18,780      $  1,938          10.3
                                                           ============  ============  ============  ============
</TABLE>

Total noninterest expense increased $1,938,000 or 10.3% to $20,718,000 for the
three months ended March 31, 2002 from $18,780,000 for the three months ended
March 31, 2001. The net increase in noninterest expense is attributable to the
following:

     .    Salaries and benefits expense totaled $11,078,000, up $1,763,000 or
          18.9% from the comparable prior quarter. Within this expense category,
          salaries and wages totaled $6,170,000 (up $408,000 due to staff
          additions in various business lines and annual merit increases),
          incentive and bonus compensation totaled $1,775,000 (up $730,000 on
          increased product sales and the continued enhancement of "pay for
          performance" compensation practices), stock compensation from the
          Recognition and Retention Plan (RRP) totaled $614,000 (due to the
          December, 2001 adoption of the RRP), ESOP expense totaled $407,000 (up
          $200,000 due to the December, 2001 adoption of the Waypoint ESOP), and
          payroll taxes and employee benefits totaled $2,112,000 (down $182,000
          due to the streamlining of benefit plans during 2001).

     .    Advertising and public relation expense totaled $998,000, up $247,000
          on increased media advertising.

     .    Income from real estate operations exceeded expenses by $115,000, down
          from income of $403,000. During the first quarter of 2001, Waypoint
          Financial sold a historically high number of foreclosed properties as
          part of its post-merger assimilation activities.

     .    Amortization of intangibles was $490,000, down $261,000 due to the
          elimination of goodwill amortization in connection with the adoption
          of SFAS 142 effective January 1, 2002.

     .    Professional fees and outside services were $819,000, up $195,000
          primarily due to information technology services.

     .    Supplies, telephone, and postage expenses totaled $1,222,000, down
          $597,000 as the comparable prior quarter included additional expense
          for post-merger integration activities.

     .    Other noninterest expense totaled $2,777,000, up $404,000 from the
          comparable prior quarter. This expense category included customer
          account servicing expenses of approximately $1,000,000 (up $100,000 on
          volume), OTS fees of $195,000 (up $20,000), director fees of $213,000
          (up $60,000), director RRP grants of $256,000 (up $256,000),
          charitable contributions of $241,000 (down $47,000), and various other
          expenses totaling $872,000 (stable).

Provision for Income Taxes

Income tax expense totaled $4,558,000 for the three months ended March 31, 2002,
which resulted in an effective tax rate of 28.4% on income before taxes of
$16,055,000. During the three months ended March 31, 2001, Waypoint Financial
recorded $3,947,000 of income tax expense resulting in an effective tax rate of
31.5% on income before taxes of $12,520,000. The effective tax rate decreased
in the current quarter primarily due to an increase in tax-exempt income from
loans and securities, an increase in the deduction for dividends received, and
an increase in BOLI income.

                                       20

<PAGE>

X. Financial Condition

Marketable Securities
Marketable securities, excluding the Federal Home Loan Bank cash account,
totaled $2.568 billion at March 31, 2002 and $2.552 billion at December 31,
2001. The decrease of $15.2 million during the three months ended March 31, 2002
resulted primarily from a reallocation of net security cash inflows to pay down
certain borrowings. Note (5) of the Notes to Consoldiated Financial Statements
presents the composition of the marketable securities portfolio as of March 31,
2002 and December 31, 2001.

Loans Receivable, Net
Loans receivable, net, totaled $2.378 billion at March 31, 2002 and $2.462
billion at December 31, 2001. The decrease of $83.9 million for the three months
ended March 31, 2002, reflects a reduction in first mortgage loans totaling
$114.7 million, which was offset by growth in commercial loans totaling $14.5
million and an increase in consumer and other loans totaling $16.7 million. Net
loans was also impacted by a reduction of $.2 million in net deferred loan fees
and an increase of $.6 million in the allowance for loan losses. The loan
activity in 2002 reflects Waypoint Financial's continued focus on expanding its
commercial and consumer loan portfolios and reducing its relative investment in
residential mortgage loans through mortgage banking activities and the
reallocation of cash inflows from repayments and prepayments. A summary of loan
composition is included in Note (6) of the accompanying Notes to Consolidated
Financial Statements.

Loan Commitments. Waypoint Financial issues loan commitments to prospective
borrowers conditioned on the occurrence of certain events. Commitments are made
in writing on specified terms and conditions and are generally honored for up to
60 days from approval. At March 31, 2002, Waypoint Financial had loan
commitments and unadvanced loans and lines of credit totaling $494.5 million.

Loan Quality. Waypoint Financial has maintained excellent credit quality in its
loan portfolio. Management attributes this performance to strong underwriting
standards and credit and collections management, as well as a resilient economy
in its local market area. Waypoint Financial follows a comprehensive loan policy
that details credit underwriting, credit management and loan loss provisioning
techniques.

Non-Performing Assets. The following table sets forth information regarding
non-accrual loans, loans delinquent 90 days or more and still accruing, and
other non-performing assets as of the dates indicated:

<TABLE>
<CAPTION>
                                                               As of                     As of
                                                          March 31, 2002           December 31, 2001
                                                        -----------------------------------------------
                                                                    (Amounts in thousands)
<S>                                                     <C>                      <C>

Non-accrual residential mortgage loans                       $          641               $      1,345
Non-accrual commercial loans                                          7,300                      6,185
Non-accrual other loans                                                 524                        706
                                                        --------------------      ---------------------
     Total non-accrual loans                                          8,465                      8,236
Loans 90 days or more delinquent and still accruing                  11,085                     14,660
                                                        --------------------      ---------------------
     Total non-performing loans                                      19,550                     22,896
Total foreclosed other assets                                           433                        666
Total foreclosed real estate                                          1,043                        804
                                                        --------------------      ---------------------
     Total non-performing assets                             $       21,026               $     24,366
                                                        ====================      =====================
     Total non-performing loans to total loans                         0.81%                      0.92%
                                                        ====================      =====================
     Allowance for loan losses to non-performing loans               121.09%                    100.76%
                                                        ====================      =====================
     Total non-performing assets to total assets                       0.40%                      0.45%
                                                        ====================      =====================
</TABLE>

                                       21

<PAGE>

Allowance for Loan Losses. The following table summarizes the activity in
Waypoint Financial's allowance for loan losses for the periods indicated:

<TABLE>
<CAPTION>
                                                        As of or for the       As of or for the          As of or for the
                                                       three months ended     three months ended        twelve months ended
             Allowance for Loan Losses                   March 31, 2002         March 31, 2001           December 31, 2001
------------------------------------------------------------------------------------------------------------------------------
                                                                            (Amounts in thousands)
<S>                                                   <C>                     <C>                      <C>
Balance at beginning of period                               $      23,069           $      22,586             $       22,586
Provision for loan losses                                            2,085                   1,599                      6,996

Charge-offs:
   Residential mortgage loans                                         (368)                   (121)                      (739)
   Commercial loans                                                   (395)                   (850)                    (2,770)
   Consumer and other loans                                         (1,128)                 (1,174)                    (4,545)
                                                      ---------------------  ----------------------   ------------------------
      Total charge-offs                                             (1,891)                 (2,145)                    (8,054)
                                                      ---------------------  ----------------------   ------------------------
Recoveries:
   Residential mortgage loans                                           32                      20                         50
   Commercial loans                                                    155                      27                        465
   Consumer and other loans                                            224                     132                      1,026
                                                      ---------------------  ----------------------   ------------------------
      Total recoveries                                                 411                     179                      1,541
                                                      ---------------------  ----------------------   ------------------------
            Net charge-offs                                         (1,480)                 (1,966)                    (6,513)
                                                      ---------------------  ----------------------   ------------------------

Balance at the end of period                                 $      23,674           $      22,219             $       23,069
                                                      =====================  ======================   ========================
Annualized net charge-offs
   to average loans outstanding                                       0.24%                   0.30%                      0.25%
                                                      =====================  ======================   ========================
Allowance for loan losses as
   a percentage of total loans                                        0.99%                   0.84%                      0.93%
                                                      =====================  ======================   ========================
</TABLE>

Allocation of the Allowance for Loan Losses. The following table sets forth the
composition of the allowance for loan losses as of the dates indicated:

<TABLE>
<CAPTION>
                                               As of March 31, 2002              As of December 31, 2001
                                        ---------------------------------------------------------------------
                                                            (Dollar amounts in thousands)
                                                            % of Total                         % of Total
                                            Amount           Reserves          Amount           Reserves
                                        ---------------   ---------------   --------------   ----------------
<S>                                     <C>               <C>               <C>              <C>
Residential mortgage loans                   $   1,594              6.73%       $   1,867               8.09%
Commercial loans                                15,598             65.90           15,722              68.15
Consumer and other loans                         4,729             19.97            4,529              19.64
General                                          1,753              7.40              951               4.12
                                        ---------------   ---------------   --------------   ----------------
     Total                                   $  23,674            100.00%       $  23,069             100.00%
                                        ===============   ===============   ==============   ================
</TABLE>

Deposits
During the three months ended March 31, 2002, deposits increased $33.6 million
to $2.571 billion from $2.537 billion at December 31, 2001. Within the deposit
portfolio, savings accounts increased $15.7 million to $236.1 million and
transaction accounts increased $10.0 million to $350.5 million. Offsetting this
favorable trend, money market accounts decreased $67.5 million to $464.1 million
as customers shifted these funds to higher-rate time deposits, which increased
$75.5 million. Management attributes this shift to customer desire to enhance
returns relative to historically low short-term interest rates, which continue
to dampen customer returns on money market accounts and other short-term deposit
products.

                                       22

<PAGE>

Other Borrowings
Note (8) of the Notes to Consolidated Financial Statements presents the
composition of borrowings as of March 31, 2002 and December 31, 2001. Waypoint
Financial had available FHLB lines of credit totaling $825.0 million as of March
31, 2002 versus $875.8 million as of December 31, 2001.

                                       23

<PAGE>

     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.
                        None.

          Item 4.       Submission of Matters to a Vote of Security Holders.
                        None.

          Item 5.       Other information.
                        None.

          Item 6.       Exhibits and Reports on Form 8-K.
                        None.

                                       24

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                            WAYPOINT FINANCIAL CORP.
                                  (Registrant)


                       By       /s/ Charles C. Pearson, Jr.
                                ---------------------------
                                 Charles C. Pearson, Jr.,
                                 Chairman, President and
                                 Chief Executive Officer

                       By             /s/ James H. Moss
                                      -----------------
                                        James H. Moss,
                                  Executive Vice President
                                and Chief Financial Officer

Dated:  May 14, 2002

                                       25