<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, 2003

                                       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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act.) 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. 32,665,309 shares of stock, par
value of $.01 per share, outstanding at March 31, 2003.
<PAGE>
                                    CONTENTS

<TABLE>
<S>                                                                                                <C>
Part I. Financial Information
   Item 1. Financial Statements
     Consolidated Statements of Financial Condition ............................................       4
     Consolidated Statements of Income .........................................................       5
     Consolidated Statements of Shareholders' Equity ...........................................       6
     Consolidated Statements of Cash Flows .....................................................     7-8
     Notes to Consolidated Financial Statements ................................................    9-14

   Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
       I.   Forward-Looking Statements .........................................................      15
       II.  Critical Accounting Policies .......................................................   15-16
       III. Market Risk and Interest Rate Sensitivity Management ...............................      16
       IV.  Liquidity ..........................................................................      17
       V.   Capital Resources ..................................................................   17-18
       VI.  Results of Operations
              Comparison for the Three-Month Periods Ended March 31, 2003 and March 31, 2002
                Net Income .....................................................................      18
                Net Interest Income ............................................................   18-20
                Noninterest Income .............................................................      21
                Noninterest Expense ............................................................   21-22
                Provision for Income Taxes .....................................................      22
       VII. Financial Condition
                Marketable Securities ..........................................................      22
                Loans Receivable, Net ..........................................................      23
                Loan Commitments ...............................................................      23
                Loan Quality ...................................................................      23
                Non-Performing Assets ..........................................................      23
                Allowance for Loan Losses ......................................................      24
                Allocation of the Allowance for Loan Losses ....................................      24
                Deposits .......................................................................      25
                Other Borrowings ...............................................................      25

   Item 3. Quantitative and Qualitative Disclosures about Market Risk ..........................      25

   Item 4. Controls and Procedures .............................................................      25

Part II. Other Information .....................................................................      26
   Item 1. Legal Proceedings
   Item 2. Changes in Securities and Use of Proceeds
   Item 3. Defaults Upon Senior Securities
   Item 4. Submission of Matters to a Vote of Security Holders
   Item 5. Other Information
   Item 6. Exhibits and Reports on Form 8-K

Signatures .....................................................................................      27

Exhibits 99.1 through 99.4 - Certifications ....................................................   28-31
</TABLE>


                                       2
<PAGE>
Part I. Financial Information.

Part 1, Item 1 Financial Statements.

               (Balance of this page is intentionally left blank)


                                       3
<PAGE>
                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                       March 31,         December 31,
                                                                          2003               2002
                                                                     --------------     --------------
                                                                     (In thousands, except share data)
                                                                                (Unaudited)
<S>                                                                  <C>                <C>
Assets
Cash and cash equivalents                                             $    118,989       $     96,088
Marketable securities available-for-sale                                 2,913,329          2,792,112
Loans receivable, net                                                    2,338,478          2,310,106
Loans held for sale, net                                                    33,666             30,328
Loan servicing rights                                                        2,389              3,167
Investment in real estate and other joint ventures                          18,381             14,811
Premises and equipment, net of accumulated
   depreciation of $40,984 and $41,062                                      48,837             48,826
Accrued interest receivable                                                 25,598             26,585
Goodwill                                                                    10,302             10,302
Other intangible assets                                                      1,556              1,676
Income taxes receivable                                                         --                 72
Other assets                                                                91,213             90,940
                                                                      ------------       ------------
   Total assets                                                       $  5,602,738       $  5,425,013
                                                                      ============       ============

Liabilities and Stockholders' Equity
Deposits                                                              $  2,452,834       $  2,453,390
Other borrowings                                                         2,531,514          2,414,480
Escrow                                                                       4,239              3,348
Accrued interest payable                                                    12,524             10,295
Postretirement benefit obligation                                            2,309              2,310
Deferred tax liability                                                       3,420              6,106
Income taxes payable                                                         3,815                 --
Other liabilities                                                          125,773             49,311
                                                                      ------------       ------------
   Total liabilities                                                     5,136,428          4,939,240
                                                                      ------------       ------------

Company-obligated mandatorily redeemable preferred securities
   of subsidiary trust holding junior subordinated debentures of
   Waypoint ("Trust Preferred Securities")                                  43,829             29,102

Preferred stock,  10,000,000 shares authorized but unissued
Common stock, $ .01 par value, authorized 100,000,000 shares,
   40,677,839 shares issued and 32,665,309 outstanding
   at March 31, 2003, 40,502,372 shares issued
   and 34,702,206 shares outstanding at December 31, 2002                      406                404
Paid in capital                                                            317,557            315,636
Retained earnings                                                          256,848            249,177
Accumulated other comprehensive income                                       7,781             11,710
Employee stock ownership plan                                              (14,460)           (14,460)
Recognition and retention plans                                             (6,977)            (6,977)
Treasury stock, 8,012,530 shares at March 31, 2003
   and 5,800,166 shares at December 31, 2002                              (138,674)           (98,819)
                                                                      ------------       ------------
    Total stockholders' equity                                             422,481            456,671
                                                                      ------------       ------------
    Total liabilities and stockholders' equity                        $  5,602,738       $  5,425,013
                                                                      ============       ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                        Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31,
                                                                   ---------------------------------
                                                                       2003                 2002
                                                                   ------------         ------------
                                                                   (In thousands, except share data)
                                                                              (Unaudited)
<S>                                                                <C>                  <C>
Interest Income:
  Loans                                                             $   37,394           $   43,224
  Marketable securities and interest-earning cash                       28,415               28,559
                                                                    ----------           ----------
       Total interest income                                            65,809               71,783
                                                                    ----------           ----------
Interest Expense:
  Deposits and escrow                                                   14,484               18,968
  Borrowed funds                                                        20,853               21,171
                                                                    ----------           ----------
       Total interest expense                                           35,337               40,139
                                                                    ----------           ----------
       Net interest income                                              30,472               31,644
Provision for loan losses                                                2,421                2,085
                                                                    ----------           ----------
       Net interest income after provision for loan losses              28,051               29,559
                                                                    ----------           ----------
Noninterest Income:
  Banking service and account fees                                       3,389                2,830
  Financial services fees                                                2,045                1,987
  Residential mortgage banking                                           1,303                  702
  Bank-owned life insurance                                              1,146                1,203
  Gain on securities and derivatives, net                                1,873                  324
  Other                                                                   (327)                 168
                                                                    ----------           ----------
      Total noninterest income                                           9,429                7,214
                                                                    ----------           ----------
Noninterest Expense:
  Salaries and benefits                                                 11,317               11,047
  Equipment expense                                                      1,771                1,770
  Occupancy expense                                                      1,922                1,562
  Marketing                                                              1,091                  998
  Amortization of intangible assets                                        120                  490
  Outside services                                                       1,267                1,080
  Communications and supplies                                            1,326                1,222
  Other                                                                  2,953                2,549
                                                                    ----------           ----------
     Total noninterest expense                                          21,767               20,718
                                                                    ----------           ----------
  Income before income taxes                                            15,713               16,055
  Income tax expense                                                     4,331                4,558
                                                                    ----------           ----------
      Net income                                                    $   11,382           $   11,497
                                                                    ==========           ==========

  Basic earnings per share                                          $     0.35           $     0.31
                                                                    ==========           ==========
  Diluted earnings per share                                        $     0.34           $     0.31
                                                                    ==========           ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>
                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                 Consolidated Statements of Shareholders' Equity

<TABLE>
<CAPTION>
                                                                                                        EMPLOYEE      RECOGNITION
                                                                                        ACCUMULATED       STOCK           AND
                                                COMMON        PAID IN       RETAINED   COMPREHENSIVE    OWNERSHIP      RETENTION
                                                STOCK         CAPITAL       EARNINGS   INCOME (LOSS)       PLAN        PLAN (RRP)
                                               --------       --------      --------   -------------    ---------      -----------
                                                                       (IN THOUSANDS, EXCEPT SHARE DATA)
                                                                                   (UNAUDITED)
<S>                                            <C>            <C>           <C>        <C>              <C>           <C>
Balance at December 31, 2001                   $    402       $312,009      $215,600      $   (280)      $(15,640)      $ (9,954)

 Net income                                                                   11,497
 Dividends paid at $.10 per share                                             (3,728)
 Exercised stock options (64,026 shares)                           287
 Unrealized losses on securities, net of
   income tax of $(2,355)                                                                   (3,551)
 Comprehensive income
 Earned portion of RRP                                                                                                      (135)
 Treasury stock purchased (1,360,420
   shares)
Dividend reinvestment plan, net                                    (89)
                                               --------       --------      --------      --------       --------       --------
Balance at March 31, 2002                      $    402       $312,207      $223,369      $ (3,831)      $(15,640)      $(10,089)
                                               ========       ========      ========      ========       ========       ========

Balance at December 31, 2002                   $    404       $315,636      $249,177      $ 11,710       $(14,460)      $ (6,977)

 Net income                                                                   11,382
 Dividends paid at $.11 per share                                             (3,711)
 Exercised stock options (175,467 shares)             2          1,522
 Unrealized losses on securities, net of
   income tax of $(2,664)                                                                  (3,929)
 Comprehensive income
 Tax benefit on exercised options                                  497
 Treasury stock purchased (2,212,364
   shares)
 Dividend reinvestment plan, net                                   (98)
                                               --------       --------      --------      --------       --------       --------
 Balance at March 31, 2003                     $    406       $317,557      $256,848      $  7,781       $(14,460)      $ (6,977)
                                               ========       ========      ========      ========       ========       ========
</TABLE>

<TABLE>
<CAPTION>
                                               TREASURY                     COMPREHENSIVE
                                                 STOCK          TOTAL          INCOME
                                               ---------      ---------     -------------
<S>                                            <C>            <C>           <C>
Balance at December 31, 2001                   $ (15,922)     $ 486,215

 Net income                                                      11,497       $  11,497
 Dividends paid at $.10 per share                                (3,728)
 Exercised stock options (64,026 shares)                            287
 Unrealized losses on securities, net of
   income tax of $(2,355)                                        (3,551)         (3,551)
                                                                              ---------
 Comprehensive income                                                         $   7,946
                                                                              =========
 Earned portion of RRP                                             (135)
 Treasury stock purchased (1,360,420
   shares)                                      (21,328)        (21,328)
Dividend reinvestment plan, net                                     (89)
                                              ---------       ---------
Balance at March 31, 2002                     $ (37,250)      $ 469,168
                                              =========       =========

Balance at December 31, 2002                  $ (98,819)      $ 456,671
 Net income                                                      11,382       $  11,382
 Dividends paid at $.11 per share                                (3,711)
 Exercised stock options (175,467 shares)                         1,524
 Unrealized losses on securities, net of
   income tax of $(2,664)                                        (3,929)         (3,929)
                                                                              ---------
 Comprehensive income                                                         $   7,453
                                                                              =========
 Tax benefit on exercised options                                   497
 Treasury stock purchased (2,212,364
   shares)                                      (39,855)        (39,855)
 Dividend reinvestment plan, net                                    (98)
                                              ---------       ---------
 Balance at March 31, 2003                    $(138,674)      $ 422,481
                                              =========       =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6
<PAGE>
                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                 For the Three Months Ended
                                                                                          March 31,
                                                                                -----------------------------
                                                                                    2003              2002
                                                                                -----------       -----------
                                                                                       (In thousands)
                                                                                         (Unaudited)
<S>                                                                             <C>               <C>
Cash flows from operating activities:
   Net income                                                                   $    11,382       $    11,497
   Adjustments to reconcile net income to net cash provided by
     operating activities:
        Provision for loan losses                                                     2,421             2,085
        Net depreciation, amortization and accretion                                  1,864             1,780
        Loans originated for sale                                                  (129,021)         (109,180)
        Proceeds from sales of loans originated for sale                            127,565           112,901
        Origination of loan servicing rights                                           (161)             (706)
        Net gain on loans and securities                                             (3,755)           (1,270)
        Gain on the sale of foreclosed real estate                                      (96)             (168)
        Loss from joint ventures                                                      1,007               160
        Decrease in accrued interest receivable                                         987             5,227
        Increase in accrued interest payable                                          2,229             1,831
        Amortization of intangibles                                                     120               490
        Earned ESOP expense                                                             447               407
        Earned RRP expense                                                              621               869
        Loss on the sale of premises and equipment                                       --                65
        Benefit for deferred income tax                                              (2,686)           (2,275)
        Increase in income taxes payable                                              3,887             1,236
        Other, net                                                                    2,315             6,948
                                                                                -----------       -----------
            Net cash provided by operating activities                                19,126            31,897
                                                                                -----------       -----------

Cash flows from investing activities:
   Proceeds from maturities, sales, and principal reductions
      of marketable securities                                                      891,145           386,328
   Proceeds from sales of marketable securities                                     124,511           210,591
   Purchase of marketable securities                                             (1,039,847)         (626,182)
   Loan originations less principal payments on loans                               (56,526)           79,901
   Investments in real estate held for investment and other joint ventures           (4,469)             (477)
   Proceeds on real estate and premises and equipment                                   699               672
   Purchases of premises and equipment, net                                          (1,579)             (627)
                                                                                -----------       -----------
      Net cash (used in) provided by investing activities                           (86,066)           50,206
</TABLE>


                                       7
<PAGE>
                    WAYPOINT FINANCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (continued)

<TABLE>
<CAPTION>
                                                                 For the Three Months Ended
                                                                          March 31,
                                                                 ---------------------------
                                                                    2003             2002
                                                                 ----------       ----------
                                                                       (In thousands)
                                                                         (Unaudited)
<S>                                                              <C>              <C>
Cash flows from financing activities:
   Net (decrease) increase in deposits                                 (556)          33,638
   Proceeds from other borrowings                                   265,000          249,000
   Payments and maturities of other borrowings                     (200,008)        (470,000)
   Net increase in other short term borrowings                       51,935           87,326
   Net increase in escrow                                               891            1,095
   Net proceeds from issuance of Trust Preferred Securities          14,719               --
   Dividend reinvestment plan                                           (98)             (89)
   Cash dividends                                                    (3,711)          (3,728)
   Payments to acquire treasury stock                               (39,855)         (21,328)
   Proceeds from the exercise of stock options                        1,524              422
                                                                 ----------       ----------
      Net cash provided by (used in) financing activities            89,841         (123,664)
                                                                 ----------       ----------

      Net increase (decrease) in cash and cash equivalents           22,901          (41,561)

Cash and cash equivalents at beginning of period                     96,088          116,583
                                                                 ----------       ----------

Cash and cash equivalents at end of period                       $  118,989       $   75,022
                                                                 ==========       ==========

Supplemental disclosures:

Cash paid during the period for:
    Interest on deposits, advances and other borrowings
       (includes interest credited to deposit accounts)          $   33,108       $   38,307
    Income taxes                                                        246            3,363

Cash received during the period for:
    Income taxes                                                        253               --

Non-cash investing activities:
      Transfers from loans to foreclosed real estate                    493              691
</TABLE>

See accompanying notes to financial statements.


                                       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)

(1) Summary of Significant Accounting Policies

The Consolidated Financial Statements include the accounts of Waypoint Financial
Corp. ("Waypoint Financial", "the Company", or "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 Group, Inc., 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,
2003 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2003 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 50 through 80 of the 2002 Annual Report on Form 10-K.

(2) Recently Issued Accounting Guidance

In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107
and a rescission of FASB Interpretation No. 34. This Interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. The Interpretation
also clarifies that a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation undertaken. The
initial recognition and measurement provisions of the Interpretation are
applicable to guarantees issued or modified after December 31, 2002 and the
disclosure requirements are effective for financial statements of interim or
annual periods ending after December 15, 2002. Waypoint Financial adopted the
recognition and measurement provisions of this Interpretation effective on
January 1, 2003, with immaterial impact on Waypoint Financial's financial
condition or results of operations.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51. This Interpretation
addresses the consolidation by business enterprises of variable interest
entities as defined in the Interpretation. The Interpretation applies
immediately to interests in variable interest entities created after January 31,
2003, and to interests in variable interest entities obtained after January 31,
2003. For public enterprises such as Waypoint Financial, with an interest in a
variable interest entity created before February 1, 2003, the Interpretation is
applied to the enterprise no later than the end of the first annual reporting
period beginning after June 15, 2003. The Interpretation requires certain
disclosures in financial statements issued after January 31, 2003 if it is
reasonably possible that an enterprise will consolidate or disclose information
about variable interest entities when the Interpretation becomes effective. The
application of this Interpretation has not had and is not expected to have a
material effect on Waypoint Financial's financial condition or results of
operations.


                                       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)

(3) Stock-Based Compensation

In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure" (SFAS 148). SFAS 148 amends SFAS 123,
"Accounting for Stock-Based Compensation" (SFAS 123) to provide alternative
methods of transition for an entity that voluntarily changes to the fair
value-based method of accounting for stock-based employee compensation. It also
amends the disclosure provisions of SFAS 123 to require prominent disclosure
about the effects on reported net income of an entity's accounting policy
decisions with respect to stock-based employee compensation. Waypoint Financial
has not elected to change to the fair-value method of accounting for stock-based
compensation but has complied with the disclosure requirements herein.

Waypoint Financial accounts for the Option Plans under Accounting Principles
Board Opinion No. 25, and, accordingly, compensation expense generally has not
been recognized in the accompanying financial statements. Had compensation
expense for these plans been recorded in the financial statements of Waypoint
Financial consistent with the fair value provisions of Statement 123, net income
and net income per share would have been reduced to the following pro-forma
amounts (in thousands, except per-share data):

<TABLE>
<CAPTION>
                                   For the three     For the three
                                   Months ended      Months ended
                                  March 31, 2003    March 31, 2002
                                  --------------    --------------
<S>                               <C>               <C>
    Net Income:
        As reported                     $ 11,382          $ 11,497
        Pro forma                       $ 11,054          $ 10,908
    Basic earnings per share
        As reported                     $   0.35          $   0.31
        Pro forma                       $   0.34          $   0.30
    Diluted earnings per share
        As reported                     $   0.34          $   0.31
        Pro forma                       $   0.33          $   0.29
</TABLE>

(4) Earnings Per Share

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

<TABLE>
<CAPTION>
                                                                                                     Per Share
                                                                   Income           Shares            Amount
                                                                 -----------       ----------       -----------
<S>                                                              <C>               <C>              <C>
For the three months ended March 31, 2003
   Basic earnings per share                                      $    11,382       32,193,000       $      0.35
   Dilutive effect of management and director stock options                           920,000             (0.01)
                                                                 -----------       ----------       -----------
   Diluted earnings per share                                    $    11,382       33,113,000       $      0.34
                                                                 ===========       ==========       ===========
For the three months ended March 31, 2002
   Basic earnings per share                                      $    11,497       36,897,000       $      0.31
   Dilutive effect of management and director stock options                           819,000                --
                                                                 -----------       ----------       -----------
   Diluted earnings per share                                    $    11,497       37,716,000       $      0.31
                                                                 ===========       ==========       ===========
</TABLE>

Excluded from the computation of diluted earnings per share were anti-dilutive
options of 79,068 shares at March 31, 2003 and 165,087 shares at March 31, 2002
because the exercise prices were greater than the average market price of the
common shares during the respective period.

                                       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)

(5) Marketable Securities

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

<TABLE>
<CAPTION>
                                                                As of March 31, 2003
                                             -----------------------------------------------------------
                                                               Gross           Gross
                                                             Unrealized      Unrealized
                                             Amortized        Holding         Holding            Fair
                                                Cost           Gains           Losses           Value
                                             ----------      ----------      ----------       ----------
<S>                                          <C>             <C>             <C>              <C>
U.S. Government and agencies                 $  294,811      $    6,460      $       --       $  301,271
Corporate bonds                                  78,088              81          (9,921)          68,248
Municipal securities                             93,281           4,458            (175)          97,564
FHLB stock                                      114,665              --              --          114,665
Equity securities                               137,503           4,534              --          142,037
Asset-backed securities                          58,628           1,108              --           59,736
Mortgage-backed securities:
  Commercial                                     25,029              13              --           25,042
  Agency PC's & CMO's                           982,894           5,969            (956)         987,907
  Private issue CMO's                         1,114,025           4,739          (1,905)       1,116,859
                                             ----------      ----------      ----------       ----------
    Total mortgage-backed securities          2,121,948          10,721          (2,861)       2,129,808
                                             ----------      ----------      ----------       ----------
    Total securities available for sale      $2,898,924      $   27,362      $  (12,957)      $2,913,329
                                             ==========      ==========      ==========       ==========
</TABLE>

<TABLE>
<CAPTION>
                                                             As of December 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               $  337,316      $    7,469      $      (16)      $  344,769
  Corporate bonds                                78,089              78         (10,951)          67,216
  Municipal securities                           94,235           4,475              --           98,710
  FHLB stock                                    109,807              --              --          109,807
  Equity securities                             125,173           6,260            (507)         130,926
  Asset-backed securities                        43,677           1,167              --           44,844
  Mortgage-backed securities:
    Commercial                                   23,599             803              --           24,402
    Agency PC's & CMO's                       1,054,131           7,948          (1,229)       1,060,850
    Private issue CMO's                         905,110           5,976            (498)         910,588
                                             ----------      ----------      ----------       ----------
      Total mortgage-backed securities        1,982,840          14,727          (1,727)       1,995,840
                                             ----------      ----------      ----------       ----------
      Total securities available for sale    $2,771,137      $   34,176      $  (13,201)      $2,792,112
                                             ==========      ==========      ==========       ==========
</TABLE>


                                       11
<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,
                                                                2003               2002
                                                            ------------       ------------
<S>           <C>                                           <C>                <C>
Residential mortgage loans (principally conventional):
   Secured by 1-4 family residences                         $    568,914       $    697,505
   Construction (net of undistributed
      Portion of $26,750 and $27,535)                             19,576             23,636
                                                            ------------       ------------
                                                                 588,490            721,141
Less:
   Unearned discount                                                  81                 95
   Net deferred loan origination fees                              3,394              3,616
                                                            ------------       ------------
         Total residential mortgage loans                        585,015            717,430
                                                            ------------       ------------

Commercial loans:
   Commercial real estate                                        600,529            563,138
   Commercial business                                           352,662            332,253
   Construction and site development
      (net of undistributed portion of
      $14,538 and $15,974)                                        24,048             23,724
                                                            ------------       ------------
                                                                 977,239            919,115
Less:
   Net deferred loan origination fees                              1,753              1,308
                                                            ------------       ------------
         Total commercial loans                                  975,486            917,807
                                                            ------------       ------------

Consumer and other loans:
   Manufactured housing                                          102,627            106,098
   Home equity and second mortgage                               463,920            360,102
   Indirect automobile                                           145,140            138,530
   Other                                                          70,660             74,289
                                                            ------------       ------------
                                                                 782,347            679,019
Plus:
   Net deferred loan origination fees                             (1,667)            (2,489)
   Dealer reserve                                                 25,195             25,845
                                                            ------------       ------------
      Total consumer and other loans                             805,875            702,375
                                                            ------------       ------------
Less: Allowance for loan losses                                   27,898             27,506
                                                            ------------       ------------
Loans receivable, net                                       $  2,338,478       $  2,310,106
                                                            ============       ============
</TABLE>

Loans having a carrying value of $1,024,719,000 were pledged as collateral for
FHLB advances at March 31, 2003.

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 $427,023,000 at March 31, 2003 and $476,990,000 at December
31, 2002.


                                       12
<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, 2003 and 2002.

Waypoint Financial sold mortgage loans totaling $125,683,000 and $111,954,000
during the three-month periods ended March 31, 2003 and March 31, 2002,
respectively. Waypoint Financial did not exchange loans for mortgage-backed
securities during the three-month periods ended March 31, 2003 and 2002.

Investor custodial balances maintained in connection with the foregoing mortgage
servicing rights totaled $8,772,000 at March 31, 2003 and $10,831,000 at
December 31, 2002.

(7) Deposits

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

<TABLE>
<CAPTION>
                                 March 31,       December 31,
                                   2003              2002
                               ------------      ------------
<S>                            <C>               <C>
Savings                        $    261,686      $    250,780
Time                              1,374,499         1,452,973
Transaction                         469,287           379,211
Money market                        347,362           370,426
                               ------------      ------------
     Total deposits            $  2,452,834      $  2,453,390
                               ============      ============
</TABLE>

(8) Other Borrowings

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

<TABLE>
<CAPTION>
                                 March 31,       December 31,
                                   2003              2002
                               ------------      ------------
<S>                            <C>               <C>
FHLB advances                  $  2,181,658      $  2,041,558
Repurchase agreements               344,832           372,897
Other                                 5,024                25
                               ------------      ------------
  Total other borrowings       $  2,531,514      $  2,414,480
                               ============      ============
</TABLE>

(9) Other Liabilities

Other liabilities includes securities in process of $100,899,000 as of March 31,
2003 and no corresponding amount as of December 31, 2002. Securities in process
represent securities acquired in the ordinary course of business that have not
settled as of the dates presented.


                                       13
<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)

(10) Supplemental Schedule of Noninterest Income and Noninterest Expense

During the current quarter, Waypoint Financial revised certain categories of
noninterest income as they appear on the Consolidated Statements of Income to
more effectively differentiate the primary sources of Waypoint's revenue. Also,
Waypoint Financial revised certain categories of noninterest expense to refine
the aggregation of certain expense classifications. Amounts have been
reclassified for all periods presented in this report. The schedule below
presents the components of noninterest income and noninterest expense under the
revised classifications for the three month periods noted.

<TABLE>
<CAPTION>
                                                                           Three months ended
                                              -------------------------------------------------------------------------------
                                                March 31,      December 31,     September 30,      June 30,        March 31,
                                                  2003             2002             2002             2002            2002
                                              ------------     ------------     -------------    ------------    ------------
                                                                      (Dollar amounts in thousands)
<S>                                           <C>              <C>              <C>              <C>             <C>
Noninterest Income:
   Banking service and account fees           $      3,389     $      3,576     $      3,403     $      3,156    $      2,830
   Financial services fees                           2,045            1,751            1,806            1,649           1,987
   Residential mortgage banking                      1,303            1,455              (61)           1,143             702
   Bank-owned life insurance                         1,146            1,183            1,126            1,178           1,203
   Gain on securities and derivatives, net           1,873              469            4,352            3,952             324
   Other                                              (327)            (722)             699            1,667             168
                                              ------------     ------------     ------------     ------------    ------------
        Total noninterest income              $      9,429     $      7,712     $     11,325     $     12,745    $      7,214
                                              ============     ============     ============     ============    ============

Noninterest Expense:
   Salaries and benefits                      $     11,317     $     11,613     $     11,173     $     10,999    $     11,047
   Equipment expense                                 1,771            1,716            1,780            1,789           1,770
   Occupancy expense                                 1,922            1,792            1,641            1,574           1,562
   Marketing                                         1,091              969            1,097            1,183             998
   Amortization of intangible assets                   120              120              490              490             490
   Outside services                                  1,267            1,207            1,203            1,177           1,080
   Communications and supplies                       1,326            1,377            1,185            1,102           1,222
   Other                                             2,953            3,648            3,007            2,973           2,549
                                              ------------     ------------     ------------     ------------    ------------
        Total noninterest expense             $     21,767     $     22,442     $     21,576     $     21,287    $     20,718
                                              ============     ============     ============     ============    ============
</TABLE>

(11) Acquisition

On April 1, 2003, Waypoint Financial announced the acquisition of privately-held
e3 Consulting, Inc. based in Mechanicsburg, Pennsylvania. This company develops
custom-tailored executive and employee benefit programs and qualified retirement
plans for businesses throughout the Mid-Atlantic region. Following the
acquisition, this company is doing business as Waypoint Benefits Consulting. The
price for this purchase acquisition totaled $6,000,000 paid on April 1, 2003
plus earn-out consideration to be paid annually through the five-year period
ended March 31, 2008 if certain financial performance targets are achieved.


                                       14
<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
2002 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. Critical Accounting Policies

This section describes Waypoint Financial's critical accounting policies which
involve accounting estimates that: a) require assumptions about highly uncertain
matters, and b) could vary sufficiently to cause a material effect on Waypoint
Financial's financial condition or results of operations.

Allowance for Loan Losses. In originating loans, Waypoint Financial recognizes
that losses will be experienced on loans and that the risk of loss will vary
with, among other things, the type of loan being made, the creditworthiness of
the borrower over the term of the loan, general economic conditions and, in the
case of a secured loan, the quality of the security for the loan. Waypoint
Financial maintains an allowance for loan losses to absorb losses inherent in
the loan portfolio. The allowance for loan losses represents management's
estimate of probable losses based on information available as of the date of the
financial statements. The allowance for loan losses is based on management's
evaluation of the collectibility of the loan portfolio, including past loan loss
experience, known and inherent losses, information about specific borrower
situations and estimated collateral values, and economic conditions.

The loan portfolio and other credit exposures are regularly reviewed by
management in its determination of the allowance for loan losses. The
methodology for assessing the appropriateness of the allowance includes a review
of historical losses, peer group comparisons, industry data and economic
conditions. In addition, the regulatory agencies, as an integral part of their
examination process, periodically review Waypoint Financial's allowance for loan
losses and may require Waypoint Financial to make additional provisions for
estimated losses based upon judgments different from those of management.

In establishing the allowance for loan losses, loss factors are applied to
various pools of outstanding loans. Waypoint Financial segregates the loan
portfolio according to risk characteristics (i.e., mortgage loans, home equity
and consumer). Loss factors are derived using Waypoint Financial's historical
loss experience and may be adjusted for significant factors that, in
management's judgment, affect the collectibility of the portfolio as of the
evaluation date. Commercial loans are evaluated individually to determine the
required allowance for loan losses and to evaluate for potential impairment of
such loans under SFAS 114.

Although management believes that it uses the best information available to
establish the allowance for loan losses, future adjustments to the allowance for
loan losses may be necessary and results of operations could be adversely
affected if circumstances differ substantially from the assumptions used in
making the determinations. Furthermore, while Waypoint Financial believes it has
established its existing allowance for loan losses in conformity with generally
accepted accounting principles, there can be no assurance that regulators, in
reviewing Waypoint Financial's loan


                                       15
<PAGE>
portfolio, will not request Waypoint Financial to increase its allowance for
loan losses. In addition, because future events affecting borrowers and
collateral cannot be predicted with certainty, there can be no assurance that
the existing allowance for loan losses is adequate or that increases will not be
necessary should the quality of any loans deteriorate as a result of the factors
discussed above. Any material increase in the allowance for loan losses may
adversely affect Waypoint Financial's financial condition and results of
operations.

The allowance review methodology is based on information known at the time of
the review. Changes in factors underlying the assessment could have a material
impact on the amount of the allowance that is necessary and the amount of
provision to be charged against earnings. Such changes could impact future
results.

Goodwill. Waypoint Financial has goodwill that is subject to annual impairment
evaluation under SFAS 142. Waypoint Financial applies the market approach under
SFAS 142 for impairment measurement which is highly sensitive to underlying
assumptions. Changes in assumptions and results due to economic conditions,
industry factors and reporting unit performance and cash flow projections could
result in different assessments of the fair values of reporting units and could
result in impairment charges in the future.

III. Market Risk and Interest Rate Sensitivity Management

Waypoint Financial monitors its interest rate risk position 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 "ramped" rate changes adjusting
rates in +/- 100 basis point (bp) increments resulting in projected changes to
net interest income over the next 12 months and immediate rate shocks resulting
in projected net portfolio value ratios as indicated in the following table:

<TABLE>
<CAPTION>
                                 As of March 31, 2003                      As of December 31, 2002
                      ----------------------------------------     ----------------------------------------
    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                   3.26%                  4.78%                 6.95%                  5.29%
      +200                   2.39                   5.57                  5.22                   5.91
      +100                   1.30                   6.10                  3.62                   6.20
         0                     --                   6.01                    --                   6.30
      (100)                 (2.72)                  5.28                 (3.45)                  5.27
      (200)                 (5.55)                  3.93                 (6.74)                  3.72
</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, 2003 and December 31, 2002, 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.


                                       16
<PAGE>
IV. Liquidity

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. Waypoint Financial also 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, 2003, securities available for sale
increased $121.2 million and loans receivable, net increased by $28.4 million.
Within securities available for sale, $100.9 million of securities were acquired
on a trade date basis but did not settle as of March 31, 2003, and therefore
such amounts were offset by securities in process, which is included in other
liabilities. Funding for Waypoint Financial's asset growth was provided by
growth in borrowings totaling $117.0 million as deposits decreased by $.6
million. Waypoint Financial also acquired treasury stock totaling $39.9 million,
which was funded by growth in borrowings and in part by $14.7 million of
proceeds from the issuance of additional trust preferred securities. At March
31, 2003, Waypoint Financial had $2,181.7 million in FHLB loans outstanding, an
increase of $140.1 million during the three months then ended.

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, 2003 and March 31, 2002. The sources of
liquidity previously discussed are deemed by management to be sufficient to fund
outstanding loan commitments and meet other obligations.

V. Capital Resources

Stockholders' equity at March 31, 2003, totaled $422.5 million compared to
$456.7 million at December 31, 2002, a decrease of $34.2 million. Stockholders'
equity was increased by net income of $11.4 million and by stock option
exercises totaling $1.9 million. Offsetting these increases were cash dividends
of $3.7 million, a decrease in Waypoint Financial's unrealized losses on
available for sale securities of $3.9 million, net of tax, and treasury stock
purchases of $39.9 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, 2003, and December 31, 2002, 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, 2003           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)        $435,734        12.6%    $277,009         8.0%    $346,262        10.0%
 Tier 1 Capital
   (to Risk Weighted Assets)         405,796        11.7      138,505         4.0      207,757         6.0
 Tier 1 Capital
   (to Average Assets)               405,796         7.6      214,495         4.0      268,119         5.0
</TABLE>


                                       17
<PAGE>
<TABLE>
<CAPTION>
    As of December 31, 2002
    -----------------------
<S>                                 <C>             <C>      <C>              <C>     <C>             <C>
 Total Capital
    (to Risk Weighted Assets)       $441,066        13.7%    $257,395         8.0%    $321,744        10.0%
 Tier 1 Capital
   (to Risk Weighted Assets)         410,953        12.8      128,697         4.0      193,046         6.0
 Tier 1 Capital
   (to Average Assets)               410,953         7.8      210,333         4.0      262,916         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, 2003 follows:

<TABLE>
<CAPTION>
                                                                                          TIER 1
                                                                          TANGIBLE        (CORE)       RISK-BASED
                                                                          CAPITAL        CAPITAL        CAPITAL
                                                                         ----------     ----------     ----------
<S>                                                                      <C>            <C>            <C>
GAAP capital at Waypoint Financial                                       $  422,481     $  422,481     $  422,481
Capital attributed to affiliates                                              2,008          2,008          2,008
                                                                         ----------     ----------     ----------
GAAP capital at Waypoint Bank                                               424,489        424,489        424,489
Capital adjustments:
     Unrealized gains, net of taxes, on securities available for sale        (8,505)        (8,505)        (8,505)
     Allowance for loan losses                                                   --             --         27,898
     Certain intangible assets                                              (10,152)       (10,152)       (10,152)
     Disallowed servicing assets                                                (36)           (36)           (36)
     Allowable unrealized gains, net of taxes, on equity securities
      available for sale                                                         --             --          2,040
                                                                         ----------     ----------     ----------
     Regulatory capital at Waypoint Bank                                 $  405,796     $  405,796     $  435,734
                                                                         ==========     ==========     ==========
</TABLE>

VI. Results of Operations

COMPARISON FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2003 AND MARCH 31, 2002

NET INCOME

Net income for the three months ended March 31, 2003 was $11.4 million or $.34
per share as compared to $11.5 million or $.31 per share for the three months
ended March 31, 2002. The increase in net income per share of $.03 resulted from
treasury stock repurchases during 2002 and the first quarter of 2003, which
substantially reduced the amount of equivalent shares outstanding. The
calculation of earnings per share is presented in Note 4 of the accompanying
Notes to Consolidated Financial Statements. 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 $30.5 million for
the three months ended March 31, 2003, which represents a decrease of $1.1
million or 3.5% from $31.6 million for the three months ended March 31, 2002.
Provision expense for loan losses increased $.3 million to $2.4 million for the
three months ended March 31, 2003 from $2.1 million for the comparable prior
period. Waypoint Financial's provision expense and allowance for loan losses are
discussed in further detail in the Asset Quality section of this report.

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, 2003 and March 31, 2002. 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, 2003 and March
31, 2002.


                                       18
<PAGE>
TABLE 1  AVERAGE BALANCE SHEETS, RATES AND INTEREST INCOME AND EXPENSE SUMMARY

<TABLE>
<CAPTION>
                                                                            For the three months ended,
                                                       --------------------------------------------------------------------------
                                                                   March 31, 2003                        March 31, 2002
                                             Rate      --------------------------------------------------------------------------
                                            as of                                   Average                              Average
                                           March 31,    Average                      Yield/     Average                   Yield/
                                             2003       Balance     Interest (2)      Cost      Balance    Interest (2)    Cost
                                          ----------   ----------   ------------    -------   ----------   ------------  --------
                                                                   (All dollar amounts are in thousands)
<S>                                       <C>          <C>          <C>             <C>       <C>          <C>           <C>
Assets:
Interest-earning assets:
  Loans, net (1) (5)                            6.25%  $2,361,672    $   37,394        6.39%  $2,484,813    $   43,389       6.98%
  Marketable securities - taxable               4.20    2,625,689        27,082        4.33    2,402,896        27,024       4.50
  Marketable securities - tax-free              7.34       93,157         1,800        7.73       94,387         1,960       8.31
  Other interest-earning assets                 1.19       64,155           163        1.19       56,002           261       1.86
                                          ----------   ----------    ----------      ------   ----------    ----------    -------
Total interest-earning assets                   5.23    5,144,673        66,439        5.24    5,038,098        72,634       5.77
                                          ----------                 ----------      ------                 ----------    -------
Noninterest-earning assets                                207,778                                206,519
                                                       ----------                             ----------
Total assets                                           $5,352,451                             $5,244,617
                                                       ==========                             ==========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
  Savings deposits                              0.50   $  257,399           314        0.45   $  224,220           696       1.24
  Time deposits                                 3.59    1,398,769        13,020        3.78    1,502,267        16,217       4.32
  Transaction and money market deposits         0.64      766,422         1,141        0.60      811,871         2,047       1.01
  Escrow                                        0.87        3,866             9        0.89        5,811             8       0.55
  Borrowed funds                                3.64    2,437,649        20,853        3.41    2,179,470        21,171       3.89
                                          ----------   ----------    ----------      ------   ----------    ----------    -------
Total interest-bearing liabilities              2.97    4,864,105        35,337        2.92    4,723,639        40,139       3.40
                                          ----------                 ----------      ------                 ----------    -------
Noninterest-bearing liabilities                            37,910                                 37,910
                                                       ----------                             ----------
Total liabilities                                       4,902,015                              4,761,549
Stockholders' equity                                      450,436                                483,068
                                                       ----------                             ----------
Total liabilities and
  stockholders' equity                                 $5,352,451                             $5,244,617
                                                       ==========                             ==========

Net interest income, tax-equivalent                                     31,102                                  32,495
Interest rate spread, tax-equivalent (3)        2.26%                                  2.32%                                 2.37%
                                          ==========                                 ======                               =======
Net interest-earning assets                            $  280,568                             $  314,459
                                                       ==========                             ==========
Net interest margin, tax-equivalent (4)                                                2.47%                                 2.58%
                                                                                     ======                               =======
Ratio of interest-earning assets
  to interest-bearing liabilities                            1.06x                                  1.07x
                                                       ==========                             ==========

Adjustment to reconcile tax-equivalent
   net interest income to net interest income                              (630)                                  (851)

Net interest income before                                           ----------                             ----------
   provision for loan losses                                         $   30,472                             $   31,644
                                                                     ==========                             ==========
</TABLE>

(1)   Includes net income (expense) recognized on deferred loan fees and costs
      of $633,000 for the three months ended March 31, 2003, and $(262,000) for
      the three months ended March 31, 2002.

(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.


(5)   Includes loans on nonaccrual status and loans held for sale.


                                       19
<PAGE>
TABLE 2  RATE/VOLUME ANALYSIS OF CHANGES IN NET INTEREST INCOME

<TABLE>
<CAPTION>
                                               Three Months Ended March 31, 2003
                                                         Compared to
                                               Three Months Ended March 31, 2002
                                                      Increase (Decrease)
                                            ---------------------------------------
                                              Volume         Rate            Net
                                            ---------      ---------      ---------
                                                 (Dollar amounts in thousands)
<S>                                         <C>            <C>            <C>
Interest-earning assets:
  Loans, net                                $  (2,082)     $  (3,913)     $  (5,995)
  Marketable securities - taxable               2,387         (2,329)            58
  Marketable securities - tax-free                (25)          (135)          (160)
  Other interest-earning assets                    33           (131)           (98)
                                            ---------      ---------      ---------
  Total interest-earning assets                   313         (6,508)        (6,195)
                                            ---------      ---------      ---------
Interest-bearing liabilities:
  Savings deposits                                 90           (472)          (382)
  Time deposits                                (1,060)        (2,137)        (3,197)
  Transaction and money market deposits          (110)          (796)          (906)
  Escrow                                           (3)             4              1
  Borrowed funds                                2,379         (2,696)          (317)
                                            ---------      ---------      ---------
  Total interest-bearing liabilities            1,296         (6,097)        (4,801)
                                            ---------      ---------      ---------
Change in net interest income               $    (983)     $    (411)     $  (1,394)
                                            =========      =========      =========
</TABLE>

As presented in Table 1, the net interest margin ratio on a tax-equivalent basis
was 2.47% for the quarter ended March 31, 2003 as compared to 2.58% for the
quarter ended March 31, 2002. During 2002 and the first quarter of 2003,
historically-low mortgage loan interest rates prompted rapid mortgage loan
refinancing. This lowering rate environment, along with an asset-sensitive
interest rate risk position, resulted in asset yield decreases that outpaced
decreases in deposit and borrowing rates. Although Waypoint Financial
experienced excellent growth in commercial and consumer loans during 2002 and
the first quarter of 2003, total average loans decreased $123.1 million as
mortgage loans continued to refinance rapidly and Waypoint Financial sold most
of its residential mortgage loan originations into the secondary market at
gains. The portion of the mortgage loan asset decrease not offset by commercial
and consumer loan growth was replaced with comparatively lower yielding
marketable securities, lowering the net interest margin. Also, as Waypoint
Financial continued to execute disciplined pricing in its gathering of deposits,
total average deposits decreased $115.8 million, with replacement funding coming
primarily from borrowings. Waypoint Financial believes this disciplined deposit
pricing and a focus on increasing lower-cost core deposits is essential to long
term profitable growth.


                                       20
<PAGE>
NONINTEREST INCOME

As discussed in Note 10 of the accompanying Notes to Consolidated Financial
Statements, Waypoint Financial revised certain categories of noninterest income
as they appear on the Consolidated Statements of Income. The table below
presents a comparison of noninterest income for the three month periods ended
March 31, 2003 and 2002.

TABLE 3  CHANGES IN NONINTEREST INCOME

<TABLE>
<CAPTION>
                                                     Three months ended March 31
                                            -------------------------------------------------
                                              2003          2002        Change           %
                                            --------      --------     --------      --------
                                                     (Dollar amounts in thousands)
<S>                                         <C>           <C>          <C>           <C>
Banking services and account fees           $  3,389      $  2,830     $    559          19.8%
Financial services fees                        2,045         1,987           58           2.9
Residential mortgage banking                   1,303           702          601          85.6
Bank-owned life insurance                      1,146         1,203          (57)         (4.7)
Gain on securities and derivatives, net        1,873           324        1,549         478.1
Other                                           (327)          168         (495)       (294.6)
                                            --------      --------     --------      --------
Total                                       $  9,429      $  7,214     $  2,215          30.7%
                                            ========      ========     ========      ========
</TABLE>

Noninterest income was $9.4 million for the quarter ended March 31, 2003, up
$2.2 million or 30.6% from $7.2 million for the quarter ended March 31, 2002.
Notable changes in the quarter ended March 31, 2003 versus the quarter ended
March 31, 2002 included:

      -     Banking service and account fees totaled $3.4 million, up $.6
            million on increased monthly service charges, commercial deposit
            fees and increased overdraft and NSF fees.

      -     Financial services fees totaled $2.0 million, up $.1 million. Within
            this category, insurance fees were $1.2 million, up $.3 million on
            increased title insurance and property and casualty insurance sales.
            Trust fee income also increased $.1 million. These increases were
            partially offset by a decrease of $.3 million in retail brokerage
            fees on decreased sales of alternative investment products.

      -     Residential mortgage banking income totaled $1.3 million, up $.6
            million. Within this category, net gains on the sale of loans
            totaled $1.9 million, up $.9 million on historically-high
            refinancing activity during the current quarter. Increases in loan
            selling gains were partially offset by a $.3 million increase in net
            loss on loan servicing. The rapid refinancing of mortgage loans
            serviced for others resulted in decreased servicing revenue and
            increased expense from the amortization of capitalized loan
            servicing rights. Waypoint also recorded negative adjustments of $.2
            million in the current quarter due to a decline in the fair value of
            mortgage loan servicing rights.

      -     Gains on securities and derivatives were $1.9 million in the current
            quarter, up $1.5 million. During the comparable prior quarter,
            Waypoint Financial recognized a $1.8 million loss on the fair value
            of an interest rate swap that did not qualify for hedge accounting
            treatment.

      -     Other noninterest income totaled a net loss of $.3 million, down $.5
            million. Losses from low income housing partnerships increased $.9
            million, although these partnership losses were substantially offset
            by tax credits and deductions totaling $.7 million that were applied
            to reduce corporate income tax expense during the quarter.

NONINTEREST EXPENSE

As discussed in Note 10 of the accompanying Notes to Consolidated Financial
Statements, Waypoint Financial revised certain categories of noninterest expense
as they appear on the Consolidated Statements of Income. The following table
presents a comparison of noninterest expense for the three month periods ended
March 31, 2003 and 2002.


                                       21
<PAGE>
TABLE 4 CHANGES IN NONINTEREST EXPENSE

<TABLE>
<CAPTION>
                                                 Three months ended March 31
                                      ------------------------------------------------
                                        2003         2002        Change          %
                                      --------     --------     --------      --------
                                                (Dollar amounts in thousands)
<S>                                   <C>          <C>          <C>           <C>
Salaries and benefits                 $ 11,317     $ 11,047     $    270           2.4%
Equipment expense                        1,771        1,770            1           0.1
Occupancy expense                        1,922        1,562          360          23.0
Marketing                                1,091          998           93           9.3
Amortization of intangible assets          120          490         (370)        (75.5)
Outside services                         1,267        1,080          187          17.3
Communications and supplies              1,326        1,222          104           8.5
Other                                    2,953        2,549          404          15.8
                                      --------     --------     --------      --------
Total                                 $ 21,767     $ 20,718     $  1,049           5.1%
                                      ========     ========     ========      ========
</TABLE>

Noninterest expense was $21.8 million for the quarter ended March 31, 2003, up
$1.1 million or 5.3% from $20.7 million for the quarter ended March 31, 2002.
Notable changes in the quarter ended March 31, 2003 relative to the quarter
ended March 31, 2002 included:

      -     Salaries and benefits expense totaled $11.3 million, up $.2 million.
            Increases for annual merit raises, staffing increases in the banking
            group and increased benefits expense for health insurance and
            employer matching contributions for Waypoint's defined contribution
            retirement plan ("401K plan") were partially offset by increased
            cost deferrals on higher consumer loan origination volume.

      -     Occupancy expense increased $.4 million on increase utilities,
            repairs and maintenance expenses associated with the recent harsh
            winter conditions.

      -     Amortization of other intangible assets was down $.3 million as
            identified intangible assets associated with certain Maryland
            branches became fully amortized in September, 2002.

      -     Other noninterest expense totaled $3.0 million, up $.4 million from
            the comparable prior quarter. Loan expenses were up $.2 million on
            increased portfolio and origination volume and charitable
            contributions were also up $.2 million. Waypoint received
            educational tax credits in the current quarter to offset most of the
            increase in contributions expense.

PROVISION FOR INCOME TAXES

Income tax expense for the current quarter totaled $4.3 million, or an effective
tax rate of 27.6% on income before taxes of $15.7 million. This compares to
income taxes of $4.6 million and an effective tax rate of 28.4% for the
comparable prior quarter. The improvement in the effective tax rate resulted
primarily from increased tax credits recognized on low income housing
partnership investments and educational contributions.

VII. Financial Condition

MARKETABLE SECURITIES

Marketable securities, excluding the Federal Home Loan Bank cash account,
totaled $2.913 billion at March 31, 2003 and $2.792 billion at December 31,
2002. This increase of $121.2 million during the three months ended March 31,
2003 included advance purchases of securities totaling $100.9 million that were
made to partly offset anticipated prepayments on mortgage backed securities and
a related tightening of supply for acceptable investment instruments. Note (5)
of the Notes to Consolidated Financial Statements presents the composition of
the marketable securities portfolio as of March 31, 2003 and December 31, 2002.


                                       22
<PAGE>
LOANS RECEIVABLE, NET

Waypoint Financial continued to increase the weighting of commercial and
consumer loans in the loan portfolio during the quarter ended March 31, 2003.
Commercial loans increased $58.1 million or 6.3% and consumer and other loans
increased $103.3 million or 15.2%. Waypoint Financial attributes the substantial
growth in the consumer loan portfolio primarily to a special program for home
equity loans that was implemented to mitigate the effects of rapid mortgage
prepayments. Residential mortgage loans decreased $132.6 million or 18.4% as
Waypoint Financial continued to sell substantially all residential mortgage
originations and prepayments continued at a historically high level on mortgage
loans held in portfolio. The composition of loans receivable, net 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. Waypoint Financial had loan commitments and unadvanced loans and lines
of credit totaling $689.8 million at March 31, 2003 and $638.5 million at
December 31, 2002.

LOAN QUALITY

Despite continuing uncertainty with respect to the national economy during the
quarter ended March 31, 2003, Waypoint Financial continued to maintain excellent
credit quality in its loan portfolio. Management attributes this performance to
strong underwriting standards and credit and collections management, as well as
a diversified 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, 2003     December 31, 2002
                                                            --------------     -----------------
                                                                  (Amounts in thousands)
<S>                                                         <C>                <C>
Non-accrual residential mortgage loans                          $    736           $    792
Non-accrual commercial loans                                       8,078              9,331
Non-accrual other loans                                              117                126
                                                                --------           --------
     Total non-accrual loans                                       8,931             10,249
Loans 90 days or more delinquent and still accruing                8,891              9,743
                                                                --------           --------
     Total non-performing loans                                   17,822             19,992

Total foreclosed other assets                                        442                505
Total foreclosed real estate                                         512                492
                                                                --------           --------
     Total non-performing assets                                $ 18,776           $ 20,989
                                                                ========           ========

     Total non-performing loans to total loans                      0.79%              0.86%
                                                                ========           ========

     Allowance for loan losses to non-performing loans            156.54%            137.59%
                                                                ========           ========

     Total non-performing assets to total assets                    0.34%              0.39%
                                                                ========           ========
</TABLE>


                                       23
<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
                                        March 31, 2003        March 31, 2002       December 31, 2002
                                      ------------------    ------------------    -------------------
                                                          (Amounts in thousands)
<S>                                   <C>                   <C>                   <C>
Balance at beginning of period             $ 27,506              $ 23,069              $ 23,069
Provision for loan losses                     2,421                 2,085                10,840

Charge-offs:
   Residential mortgage loans                  (220)                 (368)                 (853)
   Commercial loans                            (977)                 (395)               (2,766)
   Consumer and other loans                  (1,275)               (1,128)               (4,257)
                                           --------              --------              --------
      Total charge-offs                      (2,472)               (1,891)               (7,876)
                                           --------              --------              --------
Recoveries:
   Residential mortgage loans                    13                    32                   275
   Commercial loans                             263                   155                   374
   Consumer and other loans                     167                   224                   824
                                           --------              --------              --------
      Total recoveries                          443                   411                 1,473
                                           --------              --------              --------
            Net charge-offs                  (2,029)               (1,480)               (6,403)
                                           --------              --------              --------

Balance at end of period                   $ 27,898              $ 23,674              $ 27,506
                                           ========              ========              ========
Annualized net charge-offs
   to average loans outstanding                0.34%                 0.24%                 0.27%
                                           ========              ========              ========
Allowance for loan losses as
   a percentage of total loans                 1.18%                 0.99%                 1.18%
                                           ========              ========              ========
</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, 2003             As of December 31, 2002
                                ---------------------------------------------------------------
                                                (Dollar amounts in thousands)

                                                 % of Total                         % of Total
                                  Amount          Reserves           Amount          Reserves
                                -----------      -----------       -----------      -----------
<S>                             <C>              <C>               <C>              <C>
Residential mortgage loans      $       997             3.57%      $     1,201             4.37%
Commercial loans                     18,667            66.91            19,235            69.93
Consumer and other loans              5,303            19.01             4,424            16.08
General                               2,931            10.51             2,646             9.62
                                -----------      -----------       -----------      -----------
     Total                      $    27,898           100.00%      $    27,506           100.00%
                                ===========      ===========       ===========      ===========
</TABLE>


                                       24
<PAGE>
DEPOSITS

Waypoint Financial's deposit portfolio remained at approximately $2.453 billion
as of March 31, 2003. Within the deposit portfolio, Waypoint Financial
experienced substantial growth in its lower-cost savings and transaction
deposits, which increase a combined $101.0 million or 16.0%. Time deposits and
money market accounts decreased a combined $101.5 million or 5.6% as Waypoint
Financial continued to manage its cost of funds by allowing these higher cost
retail deposits to run off. The composition of the deposit portfolio is included
in Note (7) of the accompanying Notes to Consolidated Financial Statements.

OTHER BORROWINGS

Other borrowings increased to $2.532 billion as of March 31, 2003, up $117.0
million from $2.414 billion as of December 31, 2002. This increase came
primarily in FHLB advances, which increased $140.1 million to $2.182 billion as
of March 31, 2003. Note (8) of the accompanying Notes to Consolidated Financial
Statements presents the composition of borrowings as of March 31, 2003 and
December 31, 2002.

Item 3 Quantitative and Qualitative Disclosures about Market Risk

Reference Item 2, Section III.

Item 4 Controls and Procedures

(a)   Evaluation of Disclosure Controls and Procedures

      Waypoint Financial's Chief Executive Officer and Chief Financial Officer
      have concluded that Waypoint Financial's disclosure controls and
      procedures (as defined in Rule 13a-14(C) under the Securities Excnange Act
      of 1934, as amended), based on their evaluation of these controls and
      procedures as of a date within (90) days prior to the filing date of this
      Form 10-Q, are effective.

(b)   Changes in Internal Controls

      There have been no significant changes in Waypoint Financial's internal
      controls or in other factors that could significantly affect these
      controls subsequent to the date of the evaluation thereof, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.


                                       25
<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

              (a) Exhibits



                  99.1  Certification of the Company's Chief Executive Officer
                        pursuant to 18 U. S. C. Section 1350, as adopted
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002.

                  99.2  Certification of the Company's Chief Financial Officer
                        pursuant to 18 U. S. C. Section 1350, as adopted
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002.

                  99.3  Certification of the Company's Chief Executive Officer
                        pursuant to Rule 13a-14 or 15d-14 of the Securities
                        Exchange Act of 1934, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

                  99.4  Certification of the Company's Chief Financial Officer
                        pursuant to Rule 13a-14 or 15d-14 of the Securities
                        Exchange Act of 1934, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

              (b) Reports on Form 8-K

                  1.    Incorporated by reference, the Company's Report on Form
                        8-K dated January 29, 2003, reported the completion of
                        its third stock repurchase program and announced the
                        initiation of repurchases under a fourth stock
                        repurchase program.

                  2.    Incorporated by reference, the Company's Report on Form
                        8-K dated February 11, 2003, reported the completion of
                        its fourth stock repurchase program and presented
                        information pursuant to Regulation FD with respect to an
                        analyst presentation by Charles C. Pearson, Jr.,
                        Chairman and Chief Executive Officer and David E. Zuern,
                        President and Chief Operating Officer.

                  3.    Incorporated by reference, the Company's Report on Form
                        8-K dated February 20, 2003, announced the authorization
                        of a fifth stock repurchase program.

                  4.    Incorporated by reference, the Company's Report on Form
                        8-K dated March 13, 2003, announced the issuance of
                        Trust Preferred Securities.


                                       26
<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 and
                                            Chief Executive Officer


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

Dated: May 14, 2003


                                       27