<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB

  [X]   ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
        OF 1934
        For the Fiscal Year Ended December 31, 2004

  [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
        ACT OF 1934
        FOR THE TRANSITION PERIOD FROM _________ to __________

                         Commission File Number: 0-31847


                        LAWRENCE FINANCIAL HOLDINGS, INC.
                 (Name of small business issuer in its charter)

    ------------------------------------------------------------------------
                   MARYLAND                           31-1724442
       (state or other jurisdiction of     (IRS employer identification no.)
         incorporation ororganization)

    ------------------------------------------------------------------------
     311 SOUTH FIFTH STREET, IRONTON, OHIO              45638
    (address of principal executive offices)          (zip code)

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

         Issuer's telephone number, including area code: (740) 532-0263
        Securities registered pursuant to Section 12(b) of the Act: NONE
           Securities registered pursuant to Section 12(g) of the Act:

    COMMON STOCK, PAR VALUE $.01 PER SHARE
    (Title of Class)

        Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (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
    ------       -----

        Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of the Form 10-KSB
or any amendment to this Form 10-KSB.   X
                                      -----

        The issuer's gross revenues for the fiscal year ended December 31, 2004
were $6,856,000.

        The aggregate market value of the voting and non-voting common equity
held by non-affiliates was $15,342,596 based upon the average of the bid and
asked price ($23.60 per share) as quoted on the OTC-Bulletin Board on February
28, 2005. Solely for purposes of this calculation, the shares held by the
directors and officers of the registrant are deemed to be held by affiliates.

        The number of shares outstanding of the registrant's common stock as of
February 28, 2004 was 650,110.

        DOCUMENTS INCORPORATED BY REFERENCE: None.

Transitional Small Business Disclosure Format (check one):   Yes        No   X
                                                                 -----     -----

<PAGE>

INDEX

Part I

                                                                            Page

Item 1.   Description of Business...........................................   3
Item 2.   Description of Property...........................................  29
Item 3.   Legal Proceedings.................................................  29
Item 4.   Submission of Matters to a Vote of Security Holders...............  29

Part II

Item 5.   Market for Common Equity, Related Stockholder Matters and
             Small Business Issuer Purchases of Equity Securities...........  30
Item 6.   Management's Discussion and Analysis or Plan of Operation.........  31
Item 7.   Financial Statements..............................................  42
Item 8.   Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure........................................  42
Item 8a.  Controls and Procedures...........................................  42
Item 8b.  Other Information.................................................  42

Part III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act...............  43
Item 10.  Executive Compensation............................................  45
Item 11.  Security Ownership of Certain Beneficial Owners and Management
            and Related Stockholder Matters.................................  49
Item 12.  Certain Relationships and Related Transactions....................  51
Item 13.  Exhibits..........................................................  52
Item 14.  Principal Accountant Fees and Services............................  53

                                       2
<PAGE>

        THIS REPORT CONTAINS CERTAIN "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE FEDERAL SECURITIES LAWS. THESE STATEMENTS ARE NOT HISTORICAL
FACTS, RATHER STATEMENTS BASED ON LAWRENCE FINANCIAL HOLDINGS, INC.'S CURRENT
EXPECTATIONS REGARDING ITS BUSINESS STRATEGIES, INTENDED RESULTS AND FUTURE
PERFORMANCE. FORWARD-LOOKING STATEMENTS ARE PRECEDED BY TERMS SUCH AS "EXPECTS,"
"BELIEVES," "ANTICIPATES," "INTENDS" AND SIMILAR EXPRESSIONS.

        MANAGEMENT'S ABILITY TO PREDICT RESULTS OR THE EFFECT OF FUTURE PLANS OR
STRATEGIES IS INHERENTLY UNCERTAIN. FACTORS WHICH COULD AFFECT ACTUAL RESULTS
INCLUDE INTEREST RATE TRENDS, THE GENERAL ECONOMIC CLIMATE IN THE MARKET AREA IN
WHICH LAWRENCE FINANCIAL HOLDING'S, INC. OPERATES, AS WELL AS NATIONWIDE,
LAWRENCE FINANCIAL HOLDINGS, INC.'S ABILITY TO CONTROL COSTS AND EXPENSES,
COMPETITIVE PRODUCTS AND PRICING, LOAN DELINQUENCY RATES AND CHANGES IN FEDERAL
AND STATE LEGISLATION AND REGULATION. THESE FACTORS SHOULD BE CONSIDERED IN
EVALUATING THE FORWARD-LOOKING STATEMENTS AND UNDUE RELIANCE SHOULD NOT BE
PLACED ON SUCH STATEMENTS. LAWRENCE FINANCIAL HOLDINGS, INC. ASSUMES NO
OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS.


                                     PART I

ITEM 1.    DESCRIPTION OF BUSINESS

GENERAL

        Lawrence Financial Holdings, Inc.("Lawrence Financial"), headquartered
in Ironton, Ohio, was organized as a Maryland business corporation in August
2000 to become the holding company for Lawrence Federal Savings Bank("Lawrence
Federal") in connection with the conversion of Lawrence Federal from mutual to
stock form of ownership. The conversion was completed on December 28, 2000. As a
result of the conversion, Lawrence Federal is a wholly owned subsidiary of
Lawrence Financial and all of the issued and outstanding capital stock of
Lawrence Federal is owned by Lawrence Financial.

        Lawrence Federal operates as a community-oriented financial institution,
specializing in the acceptance of retail deposits from the general public in the
areas surrounding its five full-service banking offices and using those funds,
together with funds generated from operations and borrowings, to originate
loans. The principal lending activity of Lawrence Federal is the origination of
mortgage loans for the purpose of purchasing or refinancing one- to four-family
residential property. Lawrence Federal also originates a variety of consumer
loans and multi-family and commercial real estate loans. Lawrence Federal
originates loans primarily for long-term investment purposes. Lawrence Federal's
revenues are derived principally from the generation of interest and fees on
loans originated and, to a lesser extent, interest and dividends on investments.
Lawrence Federal's primary sources of funds are deposits, principal and interest
payments on loans and investments and advances from the Federal Home Loan Bank
of Cincinnati.

MERGER WITH OAK HILL FINANCIAL, INC.

        On October 12, 2004, Oak Hill Financial, Inc. ("Oak Hill Financial"),
the parent company of Oak Hill Banks, and Lawrence Financial entered into an
Agreement and Plan of Merger pursuant to which Lawrence Financial will merge
with and into Oak Hill Financial. Concurrently with the merger, it is expected
that Lawrence Federal will merge with Oak Hill Banks.

                                       3
<PAGE>

Under the terms of the agreement, Lawrence Financial shareholders may elect to
receive either $23.75 of Oak Hill Financial common stock or $23.75 in cash in
exchange for their shares of Lawrence Financial common stock. The elections of
Lawrence Financial shareholders will be subject to the requirement that the
stock portion of the merger consideration be at least 50% of the aggregate
merger consideration and no more than 52% of the aggregate merger consideration.
To the extent they receive shares of Oak Hill Financial, the transaction is
expected to be tax-free to Lawrence Financial shareholders.

        The transaction was approved by the shareholders of Lawrence Financial
at a meeting held on February 16, 2005 and has received all requisite regulatory
approvals. The transaction is expected to close on April 1, 2005.

MARKET AREA

        Lawrence Federal conducts business in southern Ohio from five
full-service offices. Lawrence Federal's main office is in Ironton, Ohio.
Ironton is in Lawrence County, which is the southernmost county in Ohio. Located
on the Ohio River in the heart of the tri-state area of Ohio, Kentucky and West
Virginia, Ironton is the county seat of Lawrence County. Four of Lawrence
Federal's branch offices are also in Lawrence County and the fifth is in
adjacent Scioto County. Lawrence and Scioto Counties, Ohio constitute Lawrence
Federal's primary market area. Lawrence Federal also serves depositors and
borrowers in Greenup and Boyd Counties, Kentucky and Cabell and Wayne Counties,
West Virginia.

        Lawrence Federal's market area is predominantly rural. The largest
employment sectors in this area are services, wholesale retail sales and
manufacturing. Lawrence Federal's market area has a lower per capita median
household income when compared to Ohio and the United States. While the economy
in Lawrence County has been stable over the last two years, plant closings in
2000 and 2002 have resulted in job losses. Over the past several years,
unemployment in Lawrence County has been greater than the state and national
rate.

COMPETITION

        Lawrence Federal faces intense competition for the attraction of
deposits and origination of loans in its market area. Its most direct
competition for deposits has historically come from the several financial
institutions operating in Lawrence Federal's market area and, to a lesser
extent, from other financial service companies, such as brokerage firms, credit
unions and insurance companies. Lawrence Federal's competition for loans comes
primarily from financial institutions in its market area, and to a lesser extent
from other financial service providers, such as mortgage companies and mortgage
brokers. At June 30, 2004, which is the most recent date for which data is
available from the FDIC, Lawrence Federal held 20% of the deposits in Lawrence
County, which is the second highest market share out of nine financial
institutions with offices in the county. However, banks owned by U.S. Bancorp
and National City Corporation, both of which are large regional bank holding
companies, also operate in Lawrence County and have significant market share.
Additionally, competition for loans may increase due to the increasing number of
non-depository financial service companies entering the mortgage market, such as
insurance companies, securities companies and specialty finance companies.
Lawrence Federal expects competition to increase in the future as a result of
legislative, regulatory and technological changes and the continuing trend of
consolidation in the financial services industry. Technological advances, for
example, have lowered barriers to entry, allowed banks to expand their
geographic reach by providing services over the Internet and made it possible
for non-depository institutions to offer products and services that
traditionally have been provided by banks. Some of the institutions with which
Lawrence Federal competes are significantly larger

                                       4
<PAGE>

than Lawrence Federal and, therefore, have significantly greater resources. Due
to its relatively small size, Lawrence Federal has fewer resources to devote to
marketing and is less able to take advantage of technological advancements.
Competition for deposits and the origination of loans could limit Lawrence
Federal's growth in the future.

LENDING ACTIVITIES

        GENERAL. Lawrence Federal's loan portfolio primarily consists of one- to
four-family mortgage loans, and a variety of consumer loans. To a lesser degree,
Lawrence Federal's loan portfolio includes multi-family and commercial real
estate loans.

        Lawrence Federal's loans are subject to federal laws and regulations.
Interest rates charged by Lawrence Federal on loans are affected principally by
Lawrence Federal's current asset/liability strategy, the demand for various
types of loans, the supply of money available for lending purposes and the rates
offered by competitors. These factors are, in turn, affected by general and
economic conditions, monetary policies of the federal government, including the
Federal Reserve Board, legislative tax policies and governmental budgetary
matters.

        LOAN PORTFOLIO ANALYSIS. The following table presents the composition of
Lawrence Federal's loan portfolio at the dates indicated. Lawrence Federal had
no concentration of loans exceeding 10% of total loans receivable other than as
disclosed below.

                                   ---------------------------------------------
                                                  AT DECEMBER 31,
                                   ---------------------------------------------
                                           2004                    2003
                                   ---------------------   ---------------------
                                    AMOUNT     PERCENT       AMOUNT    PERCENT
                                              OF TOTAL                 OF TOTAL
                                   ---------- ----------   ---------- ----------
                                              (DOLLARS IN THOUSANDS)

Real estate loans:
   One- to four-family               $36,788      49.3%     $40,001      50.0%
   Multi-family and commercial         9,479      12.7        9,001      11.3
                                      ------    ------       ------     ------
      Total real estate loans         46,267      62.0       49,002      61.3
Consumer loans:
Automobile                            22,910      30.7       14,786      18.5
   Other                               5,399       7.2        3,765       4.7
                                      ------    ------       ------     ------
      Total consumer loans            74,576      99.9       18,551      23.2
                                      ------    ------       ------     ------
Mobile home loans                        100       0.1       12,289      15.5
                                      ------    ------       ------     ------
      Total loans                     74,676     100.0%      79,842     100.0%
                                                ======                  ======
Less:
   Net deferred loan origination
      costs                              124                  2,055
   Allowance for loan losses            (707)                (1,014)
                                     -------                -------
   Total loans, net                  $74,093                $80,883
                                     =======                =======

        The following table presents certain information at December 31, 2004
regarding the dollar amount of loans maturing in Lawrence Federal's portfolio
based on their contractual terms to maturity or scheduled amortization, but does
not include potential prepayments. Demand loans, loans having no stated schedule
of repayments and no stated maturity, and overdrafts are reported as becoming
due in one year or less. Loan balances do not include undisbursed loan proceeds,
net deferred loan origination costs and allowance for loan losses.

                                       5
<PAGE>

<TABLE>
<CAPTION>
                                    ----------------------------------------------------------
                                                         AT DECEMBER 31, 2005
                                    ----------------------------------------------------------
                                                      MULTI-
                                       ONE- TO      FAMILY AND      CONSUMER
                                        FOUR-       COMMERCIAL         &             TOTAL
                                        FAMILY      REAL ESTATE    MOBILE HOME       LOANS
                                    -------------  -------------  -------------  -------------
                                                         (IN THOUSANDS)
                                    ----------------------------------------------------------
<S>                                      <C>            <C>           <C>           <C>
Amounts due in:
   One year or less                     $4,281           $832         $8,706        $13,819
   After one year:
   More than one year to three years     4,068          2,835         11,813         18,716
   More than three years to five years   3,926          1,910          5,648         11,484
   More than five years to 10 years      8,930          3,079          1,099         13,108
   More than 10 years to 15 years        6,205            745             94          7,044
   More than 15 years                    9,378             78          1,049         10,505
                                       -------         ------        -------        -------
      Total amount due                 $36,788         $9,479        $28,409        $74,676
                                       =======         ======        =======        =======
</TABLE>

        Scheduled contractual principal repayments of loans do not reflect the
actual life of the loans. The average life of a loan is substantially less than
its contractual term because of prepayments. In addition, due- on-sale clauses
on loans generally give Lawrence Federal the right to declare loans immediately
due and payable if, among other things, the borrower sells the real property
with the mortgage and the loan is not repaid. The average life of a mortgage
loan tends to increase, however, when current mortgage loan market rates are
substantially higher than rates on existing mortgage loans and, conversely,
tends to decrease when rates on existing mortgage loans are substantially higher
than current mortgage loan market rates.

        The following table sets forth, at December 31, 2004, the dollar amount
of loans contractually due after December 31, 2004, and whether such loans have
fixed interest rates or adjustable interest rates.

                                         --------------------------------------
                                                DUE AFTER DECEMBER 31, 2005
                                         --------------------------------------
                                            FIXED      ADJUSTABLE      TOTAL
                                         ----------- ------------- ------------
                                                     (IN THOUSANDS)
                                         --------------------------------------
Real estate loans:
   One- to four-family                      $21,666      $10,841      $32,507
   Multi-family and commercial                2,557        6,090        8,647
                                            -------      -------      -------
      Total real estate loans                24,223       16,931       41,154
Consumer and mobile home loans               18,404        1,299       19,703
                                            -------      -------      -------
      Total loans                           $42,627      $18,230      $60,857
                                            =======      =======      =======

        ONE- TO FOUR-FAMILY REAL ESTATE LOANS. Lawrence Federal's primary
lending activity is the origination of loans secured by one- to four-family
residences located in its market area. Lawrence Federal offers one-year
adjustable-rate mortgage loans and fixed-rate mortgage loans. Historically,
Lawrence Federal has found that borrowers in its market area have a preference
for fixed-rate mortgage loans. At December 31, 2004, approximately 61% of
Lawrence Federal's residential mortgage loans had fixed interest rates and 39%
had adjustable interest rates.

                                       6
<PAGE>

        Lawrence Federal offers fixed-rate loans with terms up to 20 years.
Lawrence Federal's adjustable-rate mortgage loans are based on an amortization
schedule of up to 30 years. The loan fees charged, interest rates and other
provisions of Lawrence Federal's mortgage loans are determined by Lawrence
Federal on the basis of its own pricing criteria and market conditions. Interest
rates and payments on Lawrence Federal's adjustable-rate mortgage loans are
adjusted annually based on the Federal Housing Finance Board's national average
mortgage contract rate for major lenders on the purchase of previously occupied
homes. The maximum amount by which the interest rate may be increased or
decreased on Lawrence Federal's adjustable-rate mortgage loans is generally 1%
per year and the lifetime interest rate cap is generally 6% over the initial
interest rate of the loan. Lawrence Federal qualifies the borrower based on the
borrower's ability to repay the loan based on the current index rate plus the
applicable margin. Lawrence Federal's adjustable-rate mortgage loans typically
include a prepayment penalty if the loan is paid off within three years. The
terms and conditions of the adjustable-rate mortgage loans offered by Lawrence
Federal, including the index for interest rates, may vary from time to time.

        Lawrence Federal occasionally makes loans to individuals for the
construction of their principal residence. These loans are structured as
permanent mortgage loans. Upon the closing of the loan, the proceeds are
disbursed into an escrow account at Lawrence Federal. Funds are disbursed from
the escrow as the house is built following review of the construction project by
an independent inspector.

        Adjustable-rate mortgage loans help reduce Lawrence Federal's exposure
to changes in interest rates. There are, however, unquantifiable credit risks
resulting from the potential of increased costs due to changed rates to be paid
by the borrower. During periods of rising interest rates, the risk of default on
adjustable-rate mortgage loans may increase as a result of repricing and the
increased payments required by the borrower. In addition, although
adjustable-rate mortgage loans help make Lawrence Federal's asset base more
responsive to changes in interest rates, the extent of this interest sensitivity
is limited by the annual and lifetime interest rate adjustment limits. Because
of these considerations, yields on adjustable-rate mortgage loans may not be
sufficient to offset increases in Lawrence Federal's cost of funds during
periods of rising interest rates.

        MULTI-FAMILY AND COMMERCIAL REAL ESTATE LOANS. Lawrence Federal
originates both fixed- and adjustable-rate mortgage loans for the acquisition
and refinancing of multi-family and commercial real estate properties. In
addition, Lawrence Federal occasionally participates in commercial real estate
loans with other financial institutions in its market area. Nearly all of the
properties securing Lawrence Federal's multi- family and commercial real estate
loans are located in Lawrence Federal's market area.

        Most of the multi-family loans and commercial real estate loans
originated by Lawrence Federal are fully amortizing loans with a term of ten
years. Generally, the maximum loan-to-value ratio for a multi- family or
commercial real estate loan is 70%. Lawrence Federal requires written appraisals
prepared by an approved independent appraiser of all properties securing
multi-family or commercial real estate loans.

        At December 31, 2004, Lawrence Federal's commercial real estate loans
were secured by a variety of properties, including retail and small office
properties, hotels and churches. At December 31, 2004, Lawrence Federal's
largest commercial real estate loan had an outstanding balance of $1,547,000.
The loan is secured by a real estate mortgage and personal guarantees. At
December 31, 2004, this loan was performing according to its original terms.

        Multi-family and commercial real estate lending affords Lawrence Federal
an opportunity to receive interest at rates higher than those generally
available from one- to four-family residential lending. However, loans secured
by these properties usually are greater in amount and are more difficult to
evaluate and monitor and, therefore, involve a greater degree of risk than one-
to four-family residential mortgage loans.

                                       7
<PAGE>

Because payments on loans secured by income producing properties are often
dependent on the successful operation and management of the properties,
repayment of these loans may be affected by adverse conditions in the real
estate market or the economy. Lawrence Federal seeks to minimize these risks by
generally limiting the maximum loan-to-value ratio to 70% for multi-family and
commercial real estate loans and by strictly scrutinizing the financial
condition of the borrower, the cash flow of the project, the quality of the
collateral and the management of the property securing the loan. Lawrence
Federal also attempts to minimize credit risk by lending almost solely on local
properties to businesses with which Lawrence Federal is familiar. Lawrence
Federal also generally obtains personal loan guarantees from financially capable
parties.

        MOBILE HOME LOANS. From 1976 through April 2002, Lawrence Federal
originated mobile home loans on an indirect basis through Lanco Services, Inc.,
a company that specializes in mobile home lending. Increasing delinquency trends
and an overall decline in the market for the resale of used mobile homes lead
Lawrence Federal to cease originating direct and indirect mobile home loans. In
the 4th Quarter of 2004, the mobile home loan portfolio was sold as a condition
of the plan of merger with Oak Hill Financial, Inc.


        CONSUMER LOANS. Lawrence Federal offers a variety of consumer loans,
including automobile loans, other secured loans, home equity credit lines,
second mortgage loans, and unsecured personal loans. Lawrence Federal sold its
credit card portfolio in November 2002.

        Lawrence Federal offers fixed-rate automobile loans with terms of up to
72 months. Loan-to-value ratios and maximum loan terms vary depending on the age
of the vehicle. Lawrence Federal originates automobile loans through
approximately 15 automobile dealers in southern Ohio, western West Virginia and
northeastern Kentucky. These dealers provide Lawrence Federal applications to
finance new and used vehicles sold by their dealerships. Lawrence Federal has
the opportunity to accept or reject each loan. Generally, Lawrence Federal makes
automobile loans only to borrowers who have higher credit ratings. Lawrence
Federal does not make automobile loans that would be considered "sub-prime."
Lawrence Federal pays a fee to the automobile dealer based on the interest rate
on the loan. This fee, or dealer reserve, is deposited into an account at
Lawrence Federal and paid to the dealer monthly. If a loan is paid off or
charged off within a specified time period, Lawrence Federal is credited with a
portion of the dealer reserve, which it may withhold from the dealer's account
or credit against future payments to the dealer. At December 31, 2004, Lawrence
Federal held $13.7 million of indirect auto loans.

        Lawrence Federal also originates consumer loans secured by boats,
motorcycles, campers, motor homes and other recreational vehicles. These loans
have fixed interest rates and terms of up to five years. At December 31, 2004,
Lawrence Federal had $8.2 million of such loans.

        Lawrence Federal offers home equity lines of credit and second mortgage
loans. At December 31, 2004, these loans totaled $2.2 million. The underwriting
standards applicable to these loans generally are the same as for one- to
four-family first mortgage loans, except that the combined loan-to-value ratio,
including the balance of the first mortgage, cannot exceed 89% of the appraised
value of the property.

        Lawrence Federal makes unsecured personal loans in amounts generally not
in excess of $10,000. Lawrence Federal also provides overdraft protection on
checking accounts. At December 31, 2004, unsecured loans totaled $585,000.

                                       8
<PAGE>

        Lawrence Federal believes that it will benefit from the higher yields
earned on consumer loans and that the shorter duration of consumer loans will
improve Lawrence Federal's interest rate risk position. However, consumer loans
entail greater risk than do residential mortgage loans, particularly in the case
of loans that are unsecured or secured by rapidly depreciating assets such as
automobiles. In these cases, any repossessed collateral for a defaulted consumer
loan may not provide an adequate source of repayment of the outstanding loan
balance as a result of the greater likelihood of damage, loss or depreciation.
The remaining deficiency often does not warrant further substantial collection
efforts against the borrower beyond obtaining a deficiency judgment. In
addition, consumer loan collections are dependent on the borrower's continuing
financial stability, and thus are more likely to be adversely affected by job
loss, divorce, illness or personal bankruptcy.

        LOANS TO ONE BORROWER. The maximum amount that Lawrence Federal may lend
to one borrower is limited by regulation. At December 31, 2004, Lawrence
Federal's regulatory limit on loans to one borrower was $2.18 million. At that
date, Lawrence Federal's largest amount of loans to one borrower, including the
borrower's related interests, was approximately $1.5 million and consisted of
commercial real estate loans. These loans were performing according to their
original terms at December 31, 2004.

                                       9
<PAGE>

        LOAN ORIGINATIONS, PURCHASES AND SALES. Lawrence Federal's lending
activities are conducted by its employees operating through Lawrence Federal's
offices. Except in connection with its indirect automobile lending, Lawrence
Federal relies on advertising, referrals from realtors and customers, and
personal contact by Lawrence Federal's staff to generate loan originations.
Lawrence Federal occasionally purchases participation interests in commercial
mortgage loans through other financial institutions in its market area. Lawrence
Federal's ability to originate adjustable-rate and fixed-rate loans is dependent
upon the relative customer demand for such loans, which is affected by the
current and expected future level of interest rates.

        The following table presents activity in the loan portfolio during the
periods indicated.

                                                     -----------------------
                                                              YEAR
                                                       ENDED DECEMBER 31,
                                                     -----------------------
                                                        2004        2003
                                                     ------------ ----------
                                                         (IN THOUSANDS)
                                                     -----------------------

Loans at beginning of period                           $79,842    $94,925
Originations:
Real estate loans:
One- to four-family                                      7,608      6,360
Multi-family and commercial                              1,814      3,464
                                                       -------    -------
       Total real estate loans                           9,422      9,824
Consumer:
   Automobile                                            4,657      5,456
   Other                                                 5,714      2,209
                                                       -------    -------
       Total loans originated                           19,793     17,489

Automobile  loans purchased                              5,080         --
Participation loans purchased                            1,422      2,251
Deduct:
      Principal loan repayments
      and prepayments                                   19,689     34,575
      Sale of Mobile Home Loans                         11,557         --
      Transfers to REO                                     215        248
                                                       -------    -------
       Sub-total                                        31,461     34,823
                                                       -------    -------
Net loan activity                                      (5,166)   (15,083)
                                                       -------    -------
      Loans at end of period                           $74,676    $79,842
                                                       =======    =======

                                       10
<PAGE>

        NONPERFORMING ASSETS AND DELINQUENCIES. The following table presents
information with respect to Lawrence Federal's nonperforming assets at the dates
indicated.

                                                  ------------------------
                                                            AT
                                                        DECEMBER 31,
                                                  ------------------------
                                                      2004         2003
                                                  ------------   ---------

                                                  (DOLLARS IN THOUSANDS)
                                                  ------------------------
Accruing loans past due 90 days or more:
   One- to four-family real estate                      $104        $111
   Multi-family and commercial real estate               554         574
   Automobile                                             36          53
   Other consumer                                         59         185
   Mobile home                                            --         569
                                                      ------      ------
         Total                                           753       1,492
Nonaccruing loans:
   One- to four-family real estate                       192          50
   Multi-family and commercial real estate               269          --
   Automobile                                             --          61
   Other consumer                                         18          --
   Mobile home                                           100         229
                                                      ------      ------
         Total                                           579         340
Real estate owned (REO)                                  215         234
                                                      ------      ------
         Total nonperforming assets                    1,547       2,066
Troubled debt restructurings                              --          --
                                                      ------      ------
Troubled debt restructurings and
   total nonperforming assets                         $1,547      $2,066
                                                      ======      ======
Total nonperforming loans and
   troubled debt restructurings as a                   2.07%       2.59%
   percentage of total loans
Total nonperforming assets and
   troubled debt restructurings as a                   1.30%       1.65%
   percentage of total assets


        Interest income that would have been recorded for the year ended
December 31, 2004 had nonaccruing loans been current according to their original
terms amounted to approximately $18,400. No interest related to these loans was
included in interest income for the year ended December 31, 2004.

        Lawrence Federal ceases accruing interest on loans when principal or
interest payments are delinquent 120 days or more unless the loan is adequately
collateralized and in the process of collection. Once the accrual of interest on
a loan is discontinued, all interest previously accrued is reversed against
current period interest income once management determines that interest is
uncollectible.

                                       11
<PAGE>

        The following table sets forth the delinquencies in Lawrence Federal's
loan portfolio as of the dates indicated.

<TABLE>
<CAPTION>
<S>                                                                            <C>
                                          AT DECEMBER 31, 2004                          AT DECEMBER 31, 2003
                                 ---------------------------------------------------------------------------------------
                                    60-89 DAYS           90 DAYS OR MORE           60-89 DAYS          90 DAYS OR MORE
                                 ------------------    --------------------    -------------------    ------------------
                                           PRINCIPAL             PRINCIPAL              PRINCIPAL             PRINCIPAL
                                  NUMBER    BALANCE    NUMBER     BALANCE      NUMBER    BALANCE    NUMBER     BALANCE
                                   OF         OF        OF          OF          OF         OF        OF          OF
                                  LOANS      LOANS     LOANS       LOANS       LOANS      LOANS     LOANS       LOANS
                                 -------    -------   -------     -------     -------    -------   -------     -------
                                                                (DOLLARS IN THOUSANDS)
Real estate loans:
   One- to four-family                5      $442          6         $296           8       $635         4        $159
   Multi-family and                  --        --          4          823          --         --         1         574
      commercial
Consumer loans:
   Automobile                         5        18          6           36           6         41        14         110
   Other                              4        36         14           77           9         47        28         174
Mobile home loans                    --        --          5          100          20        390        32         815
                                 -------   -------                -------      -------   -------               -------
      Total                          14      $496         35       $1,332          43     $1,113        79      $1,832
                                 =======   =======                =======      =======   =======               =======
Delinquent loans to
   total gross loans                         .66%                   1.78%                  1.39%                 2.29%
</TABLE>

        REAL ESTATE OWNED. Real estate acquired by Lawrence Federal as a result
of foreclosure or by deed- in-lieu of foreclosure is classified as real estate
owned until sold. When property is acquired it is recorded at the lower of its
cost, which is the unpaid principal balance of the loan plus foreclosure costs,
or fair market value at the date of foreclosure, establishing a new cost basis.
Holding costs and declines in fair value after acquisition of the property
result in charges against income. At December 31, 2004, Lawrence Federal had
$215,000 in real estate owned.

        ASSET CLASSIFICATION. Federal banking regulators have adopted various
regulations and practices regarding problem assets of savings institutions.
Under such regulations, examiners have authority to identify problem assets
during examinations and, if appropriate, require them to be classified. There
are three classifications for problem assets: substandard, doubtful and loss.
Substandard assets have one or more defined weaknesses and are characterized by
the distinct possibility that the insured institution will sustain some loss if
the deficiencies are not corrected. Doubtful assets have the weaknesses of
substandard assets with the additional characteristic that the weaknesses make
collection or liquidation in full on the basis of currently existing facts,
conditions and values questionable, and there is a high possibility of loss. An
asset classified as loss is considered uncollectible and of such little value
that continuance as an asset of the institution is not warranted. If an asset or
portion thereof is classified as loss, the insured institution establishes
specific allowances for loan losses for the full amount of the portion of the
asset classified as loss. All or a portion of general loan loss allowances
established to cover probable losses related to assets classified substandard or
doubtful can be included in determining an institution's regulatory capital,
while specific valuation allowances for loan losses generally do not qualify as
regulatory capital. Assets that do not currently expose the insured institution
to sufficient risk to warrant classification in one of the aforementioned
categories but possess weaknesses are designated "special mention." Lawrence
Federal monitors "special mention" assets.

                                       12
<PAGE>

        ALLOWANCE FOR LOAN LOSSES. In originating loans, Lawrence Federal
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. Lawrence Federal maintains an allowance for loan losses related to
losses incurred in the loan portfolio. The allowance for loan losses represents
management's estimate of probable and incurred 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, probable and estimable losses,
information about specific borrower situations and estimated collateral values,
economic conditions and other factors.

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

        In connection with assessing the allowance, loss factors are applied to
various pools of outstanding loans. Lawrence Federal segregates the loan
portfolio according to risk characteristics (I.E., mortgage loans, consumer).
Loss factors are derived using Lawrence Federal'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. In addition,
management assesses the allowance using factors that cannot be associated with
specific credit or loan categories. These factors include management's
subjective evaluation of local and national economic and business conditions,
portfolio concentration and changes in the character and size of the loan
portfolio.

        At December 31, 2004, Lawrence Federal's allowance for loan losses
represented .95% of total gross loans and 45.69% of nonperforming loans.
Non-performing assets were $1.5 million at December 31, 2004 remaining unchanged
from the same time in 2002. The Company believes that continued efforts in the
collection process and loan underwriting standards are aiding in the level of
nonperforming loans remaining constant and not increasing as has been seen in
recent years.

        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 likely be necessary and results of operations could be
adversely affected. Furthermore, while Lawrence Federal 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 Lawrence Federal's loan portfolio, will not request Lawrence Federal
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 Lawrence Federal's financial condition and
results of operations.

        Management continues to monitor closely the risk characteristics of the
loan portfolio, local economic conditions and, as stated earlier, will consider
these factors when evaluating the appropriate amount of

                                       13
<PAGE>

provision and allowance for loan losses. Management believes the company to be
adequately reserved at December 31, 2004.

        The following table represents an analysis of Lawrence Federal's
allowance for loan losses. When comparing fiscal year 2004 to 2003 a decrease in
charged-off loans occurred overall, as a result of the continued efforts in the
collection department. Lawrence Federal reduced the provision for loan loss
expense in 2004 compared with 2003 to keep in line with current and projected
charge-off experiences. Total provision for loan losses taken in years 2003 and
2004 was $1.5 million and total net charge-offs taken during the same two year
period equaled $1.9 million. The result is a net decrease in allowance for loan
losses of $404,000 from January 1, 2003 to December 31, 2004. At December 31,
2004 compared to December 31, 2003, the relative risk in the portfolio decreased
due to Lawrence Federals Saving Bank's sale of the mobile home loan portfolio.


                                                       YEAR ENDED DECEMBER 31,
                                                     ---------------------------
                                                        2004           2003
                                                     ------------  -------------
                                                       (DOLLARS IN THOUSANDS)
                                                     ---------------------------
Allowance for loan losses, beginning of year            $1,014          $1,111
Charged-off loans:
   Real estate                                             (32)            (59)
   Consumer                                               (256)           (310)
   Mobile home                                            (643)           (689)
                                                        ------          ------
      Total charged-off loans                             (931)         (1,058)
Recoveries on loans previously charged off:
   Real estate                                               1               1
   Consumer                                                 22              23
   Mobile home                                              11              22
                                                        ------          ------
      Total recoveries                                      34              46
                                                        ------          ------
Net loans charged-off                                     (897)         (1,012)
Provision for loan losses                                  590             915
                                                        ------          ------

Allowance for loan losses, end of period                  $707          $1,014
                                                        ======          ======

Net loans charged-off to average loans                    1.11%           1.14%
Allowance for loan losses to total loans                   .95%           1.24%
Allowance for loan losses to nonperforming loans and     45.69%          49.08%
   troubled debt restructuring

                                       14
<PAGE>

        The following table presents the approximate allocation of the allowance
for loan losses by loan category at the dates indicated. Management believes
that the allowance can be allocated by category only on an approximate basis.
The allocation of the allowance to each category is not indicative of future
losses and does not restrict the use of any of the allowance to absorb losses in
any category.

<TABLE>
<CAPTION>
                                                  AT DECEMBER 31,
                     ---------------------------------------------------------------------------
                                    2004                                   2003
                     ------------------------------------  -------------------------------------
                                 PERCENT OF     PERCENT                 PERCENT OF    PERCENT
                                 ALLOWANCE      OF LOANS                ALLOWANCE     OF LOANS
                                  IN EACH       IN EACH                  IN EACH      IN EACH
                                  CATEGORY      CATEGORY                 CATEGORY     CATEGORY
                                  TO TOTAL      TO TOTAL                 TO TOTAL     TO TOTAL
                      AMOUNT      ALLOWANCE      LOANS       AMOUNT     ALLOWANCE      LOANS
                     ----------  -----------  -----------  ----------- ------------ ------------
                                               (DOLLARS IN THOUSANDS)
<S>                      <C>         <C>          <C>           <C>        <C>          <C>
Real estate             $239         33.8%        61.9%        $152        14.9%        58.1%
Consumer                 357         50.5         37.0          275        27.1         26.9
Mobile home              111         15.7          1.1          587        58.0         15.0
Unallocated               --           --          N/A           --          --          N/A
                       -----        ------                   ------       ------
   Total allowance
     for loan           $707        100.0%                   $1,014       100.0%
                       =====        ======                   ======       ======
losses
</TABLE>

INVESTMENT ACTIVITIES

        Under federal law, Lawrence Federal has authority to invest in various
types of liquid assets, including U.S. Government obligations, securities of
various federal agencies and of state and municipal governments, deposits at the
Federal Home Loan Bank of Cincinnati and certificates of deposit of federally
insured institutions. Within certain regulatory limits, Lawrence Federal may
also invest a portion of its assets in corporate securities, including
non-mortgage, asset-backed instruments. Savings institutions like Lawrence
Federal are also required to maintain an investment in Federal Home Loan Bank of
Cincinnati stock. Lawrence Federal is required under federal regulations to
maintain a minimum amount of liquid assets.

        The primary objectives of Lawrence Federal's investment portfolio are to
provide a source of liquidity sufficient to meet regulatory and operating
requirements, provide an alternative source of income through interest and
dividends, improve Lawrence Federal's interest rate risk position, diversify
Lawrence Federal's assets and provide collateral for pledging. Investment
decisions are made in accordance with Lawrence Federal's investment policy and
are based upon the quality of a particular investment, its inherent risks, the
composition of the balance sheet, market expectations, Lawrence Federal's
liquidity, income and collateral needs and how the investment fits within
Lawrence Federal's interest rate risk strategy.

                                       15
<PAGE>

        The investment portfolio consists primarily of debt issues. It is the
current practice of Lawrence Federal to invest in debt securities with
maturities of twenty years or less issued by the United States Treasury, United
States government agencies, or state and municipal governments. All of the
securities in the portfolio carry market risk, insofar as increases in market
interest rates may cause a decrease in market value.

        Generally accepted accounting principles require that securities be
categorized as either "held-to- maturity," "trading securities" or
"available-for-sale," based on management's intent as to the ultimate
disposition of each security. Debt securities may be classified as
"held-to-maturity" and reported in financial statements at amortized cost only
if the reporting entity has the positive intent and ability to hold those
securities to maturity. Securities that might be sold in response to changes in
market interest rates, changes in the security's prepayment risk, increases in
loan demand, or other similar factors cannot be classified as
"held-to-maturity." Debt and equity securities held for current resale are
classified as "trading securities." These securities are reported at fair value,
and unrealized gains and losses on the securities would be included in earnings.
Lawrence Federal does not currently use or maintain a trading account. Debt and
equity securities not classified as either "held-to-maturity" or "trading
securities" are classified as "available-for-sale." These securities are
reported at fair value, and unrealized gains and losses on the securities are
excluded from earnings and reported, net of deferred taxes, as a separate
component of equity. Lawrence Federal currently classifies all of its securities
as available-for-sale.

        At December 31, 2004, Lawrence Federal did not own any securities, other
than U.S. Government, agency securities and state or municipal government, that
had an aggregate book value in excess of 10% of Lawrence Federal's retained
earnings at that date.

        The following table presents the amortized cost and fair value of
Lawrence Federal's securities at the dates indicated.

<TABLE>
<CAPTION>
                                                                     AT DECEMBER 31,
                                                 --------------------------------------------------------
                                                            2004                         2003
                                                 ----------------------------  --------------------------
                                                   AMORTIZED        FAIR        AMORTIZED       FAIR
                                                     COST           VALUE         COST          VALUE
                                                 --------------  ------------  ------------  ------------
                                                                     (IN THOUSANDS)
<S>                                                  <C>            <C>           <C>           <C>
Obligations of State and Political Subdivisions     $ 3,719        $ 3,705       $ 3,233       $ 3,262
Obligations of U.S. government agencies               7,970          7,888         7,234         7,214
Mortgage backed securities                           10,727         10,565        15,913        15,771
                                                    -------        -------       -------       -------

            Total                                   $22,416        $22,158       $26,380       $26,247
                                                    =======        =======       =======       =======
</TABLE>

                                       16
<PAGE>

        The following presents the activity in the securities portfolio for the
periods indicated.

                                                      YEAR ENDED DECEMBER 31,
                                                     ------------------------
                                                         2004         2003
                                                     -----------  -----------
                                                           (IN THOUSANDS)
                                                     ------------------------

Investment securities, beginning of period              $26,247     $14,192
Purchases:
Investment securities - available-for-sale               11,193      38,457
Sales:
Investment securities - available-for-sale               (4,550)    (16,355)
Calls and maturities:
   Investment securities - available-for-sale           (10,542)     (9,490)
(Amortization) accretion of premium/discount               (141)       (200)
Increase (decrease) in unrealized
   appreciation/depreciation                                (49)       (357)
                                                        -------     -------
   Net increase (decrease) in investment
      securities                                         (4,089)     12,055
                                                        -------     -------
Investment securities, end of period                    $22,158     $26,247
                                                        =======     =======

        The table below sets forth certain information regarding the amortized
cost, weighted average yields and expected maturities of Lawrence Federal's debt
securities as of December 31, 2004.

<TABLE>
<CAPTION>
                                                                    AT DECEMBER 31, 2004
                         -----------------------------------------------------------------------------------------------------------
                                               MORE THAN ONE YEAR    MORE THAN FIVE YEARS
                         ONE YEAR OR LESS        TO FIVE YEARS        TO TEN YEARS        MORE THAN TEN YEARS          TOTAL
                         -------------------- --------------------- --------------------- --------------------- --------------------
                                     WEIGHTED              WEIGHTED             WEIGHTED              WEIGHTED              WEIGHTED
                         AMORTIZED   AVERAGE   AMORTIZED   AVERAGE   AMORTIZED  AVERAGE   AMORTIZED   AVERAGE    AMORTIZED  AVERAGE
                           COST      YIELD       COST       YIELD      COST      YIELD       COST      YIELD       COST      YIELD
                         --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
                                                                   (DOLLARS IN THOUSANDS)
<S>                         <C>      <C>        <C>         <C>       <C>        <C>          <C>      <C>         <C>       <C>
Obligations of U.S.         $503      3.41%     $2,000       4.03%    $4,969      5.19%       $498      6.31%      $7,970     4.86%
  Government agencies
Obligations of State
and Political                 --        --          --         --         --        --       3,719      4.20        3,719     4.20%
Subdivisions
Mortgage backed            3,940      2.03       5,643       2.87%       966      3.45%        178      3.94       10,727     2.85%
                          ------    ------      ------      -----     ------    ------      ------    ------       ------    ------
securities

   Total debt securities  $4,443     2.72%      $7,643       3.17%    $5,935      4.91%     $4,395      4.43%     $22,416     3.79%
                          ======    ======      ======      =====     ======     ======     ======    ======       =======   ======
   at fair value
</TABLE>

DEPOSIT ACTIVITIES AND OTHER SOURCES OF FUNDS

        GENERAL. Deposits are the major external source of funds for Lawrence
Federal's lending and other investment activities. In addition, Lawrence Federal
also generates funds internally from loan principal repayments and prepayments
and maturing securities. Scheduled loan repayments are a relatively stable
source of funds, while deposit inflows and outflows and loan prepayments are
influenced significantly by general interest rates and money market conditions.
Lawrence Federal may use borrowings from the Federal Home Loan Bank of
Cincinnati to compensate for reductions in the availability of funds from other

                                       17
<PAGE>

sources. Presently, Lawrence Federal has no other borrowing arrangements aside
from the Federal Home Loan Bank. Until recent years, Lawrence Federal relied
almost exclusively on deposits and internally generated funds as its source of
funds. Lawrence Federal anticipates that it will increase its use of borrowed
funds in the future, depending on market conditions and its need for funds.

        DEPOSIT ACCOUNTS. Nearly all of Lawrence Federal's depositors reside in
Ohio, Kentucky or West Virginia. Lawrence Federal offers a wide variety of
deposit accounts with a range of interest rates and terms. Lawrence Federal's
deposit accounts consist of a variety of savings accounts, checking and NOW
accounts, certificates of deposit, individual retirement accounts and money
market accounts. The maturities of Lawrence Federal's certificate of deposit
accounts range from 91 days to five years. Deposit account terms vary with the
principal differences being the minimum balance deposit, early withdrawal
penalties, limits on the number of transactions and the interest rate. Lawrence
Federal reviews its deposit mix and pricing weekly.

        Lawrence Federal believes it is competitive in the interest rates it
offers on its deposit products. Lawrence Federal determines the rates paid based
on a number of factors, including rates paid by competitors, Lawrence Federal's
need for funds and cost of funds, borrowing costs and movements of market
interest rates. Lawrence Federal does not utilize brokers to obtain deposits and
at December 31, 2004 had no brokered deposits.

        The following table shows the composition of Lawrence Federal's deposit
accounts at the dates indicated.

                                                     AT DECEMBER 31
                                             -----------------------------
                                                  2004            2003
                                             -------------   -------------
                                                     (IN THOUSANDS)
                                             -----------------------------

Noninterest-bearing accounts                      $8,890           $7,754
Savings accounts                                  26,978           29,070
Money market accounts                             19,892           19,260
Certificates of deposit                           52,187           54,912
                                                --------         --------
     Total deposits                             $107,947         $110,996
                                                ========         ========


        The following table presents the deposit activity of Lawrence Federal
for the periods indicated:

                                                        YEAR ENDED DECEMBER 31,
                                                       ------------------------
                                                           2004        2003
                                                       ------------  ----------
                                                           (IN THOUSANDS)
                                                       ------------------------

Beginning balance                                        $110,996     $118,926
Increase (decrease) before interest credited               (4,878)     (10,291)
Interest credited                                           1,829        2,361
                                                         --------     --------
Net increase (decrease)                                    (3,049)      (7,930)
                                                         --------     --------
      Ending balance                                     $107,947     $110,996
                                                         ========     ========

                                       18
<PAGE>

        At December 31, 2004, Lawrence Federal had $12.8 million in certificates
of deposit with principal balances of $100,000 or more maturing as follows:

              MATURITY PERIOD                   AMOUNT          WEIGHTED
                                                              AVERAGE RATE
-------------------------------------------  ------------  -------------------
                                                  (DOLLARS IN THOUSANDS)
Three months or less                             $2,042                1.71%
Over 3 through 6 months                             985                2.33%
Over 6 through 12 months                          1,949                2.85%
Over 12 months                                    7,772                4.24%
                                                -------
Total                                           $12,748                3.48%
                                                =======

        BORROWINGS. Lawrence Federal has the ability to use advances from the
Federal Home Loan Bank of Cincinnati to supplement its supply of lendable funds
and to meet deposit withdrawal requirements. The Federal Home Loan Bank of
Cincinnati functions as a central reserve bank providing credit for savings
banks and certain other member financial institutions. As a member of the
Federal Home Loan Bank of Cincinnati, Lawrence Federal is required to own
capital stock in the Federal Home Loan Bank of Cincinnati and is authorized to
apply for advances on the security of the capital stock and certain of its
mortgage loans and other assets, principally securities that are obligations of,
or guaranteed by, the U.S. Government or its agencies, provided certain
creditworthiness standards have been met. Advances are made under several
different credit programs. Each credit program has its own interest rate and
range of maturities. Depending on the program, limitations on the amount of
advances are based on the financial condition of the member institution and the
adequacy of collateral pledged to secure the credit. At December 31, 2004,
Lawrence Federal had arranged the ability to borrow a total of approximately $15
million from the Federal Home Loan Bank of Cincinnati.

SUBSIDIARIES

        Lawrence Federal has one subsidiary, Lawrence Financial Services Corp.
Federal savings associations generally may invest up to 3% of their assets in
service corporations, provided that any amount in excess of 2% is used primarily
for community, inner-city and community development projects. At December 31,
2004, Lawrence Federal's equity investment in its subsidiary was $5,000 or less
than 1.0% of total assets.

PERSONNEL

        As of December 31, 2004, Lawrence Federal had 50 full-time employees and
no part-time employees, none of whom is represented by a collective bargaining
unit. Lawrence Federal believes its relationship with its employees is good.

                                       19
<PAGE>

                           REGULATION AND SUPERVISION

GENERAL

        As a savings and loan holding company, Lawrence Financial is required by
federal law to report to and otherwise comply with, the rules and regulations of
the Office of Thrift Supervision. Lawrence Federal is subject to extensive
regulation, examination and supervision by the Office of Thrift Supervision, as
its primary federal regulator, and the Federal Deposit Insurance Corporation, as
the deposit insurer. Lawrence Federal is a member of the Federal Home Loan Bank
System and, with respect to deposit insurance, of the Savings Association
Insurance Fund managed by the Federal Deposit Insurance Corporation. Lawrence
Federal must file reports with the Office of Thrift Supervision and the Federal
Deposit Insurance Corporation concerning its activities and financial condition
in addition to obtaining regulatory approvals prior to entering into certain
transactions such as mergers with, or acquisitions of, other savings
institutions. The Office of Thrift Supervision and/or the Federal Deposit
Insurance Corporation conduct periodic examinations to test Lawrence Federal's
safety and soundness and compliance with various regulatory requirements. This
regulation and supervision establishes a comprehensive framework of activities
in which an institution can engage and is intended primarily for the protection
of the insurance fund and depositors. The regulatory structure also gives the
regulatory authorities extensive discretion in connection with their supervisory
and enforcement activities and examination policies, including policies with
respect to the classification of assets and the establishment of adequate loan
loss reserves for regulatory purposes. Any change in such regulatory
requirements and policies, whether by the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation or Congress, could have a material adverse
impact on Lawrence Financial, Lawrence Federal and their operations. Certain of
the regulatory requirements applicable to Lawrence Federal and to Lawrence
Financial are referred to below or elsewhere herein. The description of
statutory provisions and regulations applicable to savings institutions and
their holding companies set forth below does not purport to be a complete
description of such statutes and regulations and their effects on Lawrence
Federal and Lawrence Financial.

HOLDING COMPANY REGULATION

        Lawrence Financial is a nondiversified unitary savings and loan holding
company within the meaning of federal law. Under prior law, a unitary savings
and loan holding company, such as Lawrence Financial, was not generally
restricted as to the types of business activities in which it may engage,
provided that Lawrence Federal continued to be a qualified thrift lender. See
"FEDERAL SAVINGS INSTITUTION REGULATION - QTL TEST." The Gramm-Leach-Bliley Act
of 1999 provides that no company may acquire control of a savings institution
after May 4, 1999 unless it engages only in the financial activities permitted
for financial holding companies under the law or for multiple savings and loan
holding companies as described below. Further, the Gramm -Leach-Bliley Act
specifies that existing savings and loan holding companies may only engage in
such activities. The Gramm-Leach-Bliley Act, however, grandfathered the
unrestricted authority for activities with respect to unitary savings and loan
holding companies existing prior to May 4, 1999, so long as the holding
company's savings institution subsidiary continues to comply with the QTL Test.
Lawrence Financial does not qualify for the grandfathering. Upon any
nonsupervisory acquisition by Lawrence Financial of another savings institution
or savings bank that meets the qualified thrift lender test and is deemed to be
a savings institution by the Office of Thrift Supervision, Lawrence Financial
would become a multiple savings and loan holding company (if the acquired
institution is held as a separate subsidiary) and would generally be limited to
activities permissible for bank holding companies under Section 4(c)(8) of
Lawrence Federal Holding Company Act, subject to the prior approval of the
Office of Thrift Supervision, and certain activities authorized by Office of
Thrift Supervision regulation. However, OTS has issued an

                                       20
<PAGE>

interpretation concluding that multiple savings and loan holding companies may
also engage in activities permitted for financial holding companies.

        A savings and loan holding company is prohibited from, directly or
indirectly, acquiring more than 5% of the voting stock of another savings
institution or savings and loan holding company without prior written approval
of the Office of Thrift Supervision and from acquiring or retaining control of a
depository institution that is not insured by the Federal Deposit Insurance
Corporation. In evaluating applications by holding companies to acquire savings
institutions, the Office of Thrift Supervision considers the financial and
managerial resources and future prospects of Lawrence Financial and institutions
involved, the effect of the acquisition on the risk to the deposit insurance
funds, the convenience and needs of the community and competitive factors.

        The Office of Thrift Supervision may not approve any acquisition that
would result in a multiple savings and loan holding company controlling savings
institutions in more than one state, subject to two exceptions: (i) the approval
of interstate supervisory acquisitions by savings and loan holding companies and
(ii) the acquisition of a savings institution in another state if the laws of
the state of the target savings institution specifically permit such
acquisitions. The states vary in the extent to which they permit interstate
savings and loan holding company acquisitions.

        Although savings and loan holding companies are not currently subject to
specific capital requirements or specific restrictions on the payment of
dividends or other capital distributions, federal regulations do prescribe such
restrictions on subsidiary savings institutions as described below. Lawrence
Federal must notify the Office of Thrift Supervision 30 days before declaring
any dividend to Lawrence Financial. In addition, the financial impact of a
holding company on its subsidiary institution is a matter that is evaluated by
the Office of Thrift Supervision and the agency has authority to order cessation
of activities or divestiture of subsidiaries deemed to pose a threat to the
safety and soundness of the institution.

        ACQUISITION OF LAWRENCE FINANCIAL Under the Federal Change in Bank
Control Act, a notice must be submitted to the Office of Thrift Supervision if
any person (including a company), or group acting in concert, seeks to acquire
"control" of a savings and loan holding company. Under certain circumstances, a
change of control may occur, and prior notice is required, upon the acquisition
of 10% or more of Lawrence Financial's outstanding voting stock, unless the
Office of Thrift Supervision has found that the acquisition will not result in a
change of control of Lawrence Financial. Under the Change in Bank Control Act,
the Office of Thrift Supervision has 60 days from the filing of complete notice
to act, taking into consideration certain factors, including the financial and
managerial resources of the acquirer and the antitrust effects of the
acquisition. Any company that acquires control would then be subject to
regulation as a savings and loan holding company.

FEDERAL SAVINGS INSTITUTION REGULATION

        BUSINESS ACTIVITIES. The activities of federal savings banks are
governed by federal law and regulations. These laws and regulations delineate
the nature and extent of the activities in which federal savings banks may
engage. In particular, certain lending authority for federal savings banks,
E.G., commercial, non-residential real property loans and consumer loans, is
limited to a specified percentage of the institution's capital or assets.

                                       21
<PAGE>

        CAPITAL REQUIREMENTS. The Office of Thrift Supervision capital
regulations require savings institutions to meet three minimum capital
standards: a 1.5% tangible capital to total assets ratio, a 4% leverage ratio
(3% for institutions receiving the highest rating on the CAMELS examination
rating system) and an 8% risk-based capital ratio. In addition, the prompt
corrective action standards discussed below also establish, in effect, a minimum
2% tangible capital standard, a 4% leverage ratio (3% for institutions receiving
the highest rating on the CAMELS system), and, together with the risk-based
capital standard itself, a 4% Tier 1 risk-based capital standard. The Office of
Thrift Supervision regulations also require that, in meeting the tangible,
leverage and risk-based capital standards, institutions must generally deduct
investments in and loans to subsidiaries engaged in activities as principal that
are not permissible for a national bank.

        The risk-based capital standard for savings institutions requires the
maintenance of Tier 1 (core) and total capital (which is defined as core capital
and supplementary capital) to risk-weighted assets of at least 4% and 8%,
respectively. In determining the amount of risk-weighted assets, all assets,
including certain off-balance sheet assets, recourse obligations, residual
interests and direct credit substitutes, are multiplied by a risk-weight factor
of 0% to 100%, assigned by the Office of Thrift Supervision capital regulation
based on the risks believed inherent in the type of asset. Core (Tier 1) capital
is defined as common stockholders' equity (including retained earnings), certain
noncumulative perpetual preferred stock and related surplus and minority
interests in equity accounts of consolidated subsidiaries less intangibles other
than certain mortgage servicing rights and credit card relationships. The
components of supplementary capital currently include cumulative preferred
stock, long-term perpetual preferred stock, mandatory convertible securities,
subordinated debt and intermediate preferred stock, the allowance for loan and
lease losses limited to a maximum of 1.25% of risk-weighted assets and up to 45%
of unrealized gains on available-for-sale equity securities with readily
determinable fair market values. Overall, the amount of supplementary capital
included as part of total capital cannot exceed 100% of core capital.

        The Office of Thrift Supervision also has authority to establish
individual minimum capital requirements in appropriate cases upon a
determination that an institution's capital level is or may become inadequate in
light of the particular circumstances. At December 31, 2004, Lawrence Federal
met each of its capital requirements.

        The following table presents Lawrence Federal's capital position at
December 31, 2004.

<TABLE>
<CAPTION>
                                                                                            CAPITAL
                                                                             --------------------------------------
                         ACTUAL            REQUIRED           EXCESS              ACTUAL             REQUIRED
                         CAPITAL            CAPITAL           AMOUNT              PERCENT            PERCENT
                    ------------------   --------------  ------------------  ------------------ -------------------
                                                        (DOLLARS IN THOUSANDS)
<S>                             <C>              <C>                 <C>                  <C>                 <C>
Tangible                       $9,657           $4,775              $4,882                8.09%               4.00%
Core (Leverage)                 9,657            4,775               4,882                8.09                4.00
Risk-based                     10,346            6,892               3,454               12.01                8.00
</TABLE>

        PROMPT CORRECTIVE REGULATORY ACTION. The Office of Thrift Supervision is
required to take certain supervisory actions against undercapitalized
institutions, the severity of which depends upon the institution's degree of
undercapitalization. Generally, a savings institution that has a ratio of total
capital to risk weighted assets of less than 8%, a ratio of Tier 1 (core)
capital to risk-weighted assets of less than 4% or

                                       22
<PAGE>

a ratio of Tier 1 (core) capital to total assets of less than 4% (3% or less for
institutions with the highest examination rating) is considered to be
"undercapitalized." A savings institution that has a total risk-based capital
ratio less than 6%, a Tier 1 capital ratio of less than 3% or a leverage ratio
that is less than 3% is considered to be "significantly undercapitalized" and a
savings institution that has a tangible capital to assets ratio equal to or less
than 2% is deemed to be "critically undercapitalized." Subject to a narrow
exception, the Office of Thrift Supervision is required to appoint a receiver or
conservator for an institution that is "critically undercapitalized." The
regulation also provides that a capital restoration plan must be filed with the
Office of Thrift Supervision within 45 days of the date a savings institution
receives notice that it is "undercapitalized," "significantly undercapitalized"
or "critically undercapitalized." Compliance with the plan must be guaranteed by
any parent holding company. In addition, numerous mandatory supervisory actions
become immediately applicable to an undercapitalized institution, including, but
not limited to, increased monitoring by regulators and restrictions on growth,
capital distributions and expansion. The Office of Thrift Supervision could also
take any one of a number of discretionary supervisory actions, including the
issuance of a capital directive and the replacement of senior executive officers
and directors.

        INSURANCE OF DEPOSIT ACCOUNTS. Lawrence Federal is a member of the
Savings Association Insurance Fund. The Federal Deposit Insurance Corporation
maintains a risk-based assessment system by which institutions are assigned to
one of three categories based on their capitalization and one of three
subcategories based on examination ratings and other supervisory information. An
institution's assessment rate depends upon the categories to which it is
assigned. Assessment rates for Savings Association Insurance Fund member
institutions are determined semiannually by the Federal Deposit Insurance
Corporation and currently range from zero basis points for the healthiest
institutions to 27 basis points of assessable deposits for the riskiest.

        In addition to the assessment for deposit insurance, institutions are
required to make payments on bonds issued in the late 1980s by the Financing
Corporation to recapitalize the predecessor to the Savings Association Insurance
Fund.

        The Federal Deposit Insurance Corporation has authority to increase
insurance assessments. A significant increase in Savings Association Insurance
Fund insurance premiums would likely have an adverse effect on the operating
expenses and results of operations of Lawrence Federal. Management cannot
predict what insurance assessment rates will be in the future.

        Insurance of deposits may be terminated by the Federal Deposit Insurance
Corporation upon a finding that the institution has engaged in unsafe or unsound
practices, is in an unsafe or unsound condition to continue operations or has
violated any applicable law, regulation, rule, order or condition imposed by the
Federal Deposit Insurance Corporation or the Office of Thrift Supervision. The
management of Lawrence Federal does not know of any practice, condition or
violation that might lead to termination of deposit insurance.

        LOANS TO ONE BORROWER. Federal law provides that savings institutions
are generally subject to the limits on loans to one borrower applicable to
national banks. A savings institution may not make a loan or extend credit to a
single or related group of borrowers in excess of 15% of its unimpaired capital
and surplus. An additional amount may be lent, equal to 10% of unimpaired
capital and surplus, if secured by specified readily marketable collateral.

                                       23
<PAGE>

        QTL TEST. Federal Law requires savings institutions to meet a qualified
thrift lender test. Under the test, a savings association is required to either
qualify as a "domestic building and loan association" under the Internal Revenue
Code or maintain at least 65% of its "portfolio assets" (total assets less: (i)
specified liquid assets up to 20% of total assets; (ii) intangibles, including
goodwill; and (iii) the value of property used to conduct business) in certain
"qualified thrift investments" (primarily residential mortgages and related
investments, including certain mortgage-backed securities) in at least 9 months
out of each 12-month period.

        A savings institution that fails the qualified thrift lender test is
subject to certain operating restrictions and may be required to convert to a
bank charter. As of December 31, 2004, Lawrence Federal met the qualified thrift
lender test. Recent legislation has expanded the extent to which education
loans, credit card loans and small business loans may be considered "qualified
thrift investments."

        LIMITATIONS ON CAPITAL DISTRIBUTIONS. Office of Thrift Supervision
regulations impose limitations upon all capital distributions by a savings
institution, including cash dividends, payments to repurchase its shares and
payments to shareholders of another institution in a cash-out merger. Under the
regulations, an application to and the prior approval of the Office of Thrift
Supervision is required prior to any capital distribution if the institution
does not meet the criteria for "expedited treatment" of applications under
Office of Thrift Supervision regulations (I.E., generally, examination and
Community Reinvestment Act ratings in the two top categories), the total capital
distributions for the calendar year exceed net income for that year plus the
amount of retained net income for the preceding two years, the institution would
be undercapitalized following the distribution or the distribution would
otherwise be contrary to a statute, regulation or agreement with Office of
Thrift Supervision. If an application is not required, the institution must
still provide prior notice to Office of Thrift Supervision of the capital
distribution if, like Lawrence Federal, it is a subsidiary of a holding company.
In the event Lawrence Federal's capital fell below its regulatory requirements
or the Office of Thrift Supervision notified it that it was in need of increased
supervision, Lawrence Federal's ability to make capital distributions could be
restricted. In addition, the Office of Thrift Supervision could prohibit a
proposed capital distribution by any institution, which would otherwise be
permitted by the regulation, if the Office of Thrift Supervision determines that
such distribution would constitute an unsafe or unsound practice.

        ASSESSMENTS. Savings institutions are required to pay assessments to the
Office of Thrift Supervision to fund the agency's operations. The general
assessments, paid on a semi-annual basis, are computed upon the savings
institution's total assets, including consolidated subsidiaries, as reported in
Lawrence Federal's latest quarterly thrift financial report.

        TRANSACTIONS WITH RELATED PARTIES. Lawrence Federal's authority to
engage in transactions with "affiliates" (E.G., any company that controls or is
under common control with an institution, including Lawrence Financial and its
non-savings institution subsidiaries) is limited by federal law. The aggregate
amount of covered transactions with any individual affiliate is limited to 10%
of the capital and surplus of the savings institution. The aggregate amount of
covered transactions with all affiliates is limited to 20% of the savings
institution's capital and surplus. Certain transactions with affiliates are
required to be secured by collateral in an amount and of a type described in
federal law. The purchase of low quality assets from affiliates is generally
prohibited. The transactions with affiliates must be on terms and under
circumstances that are at least as favorable to the institution as those
prevailing at the time for comparable transactions with non-affiliated
companies. In addition, savings institutions are prohibited from lending to any
affiliate that is engaged in activities that are not permissible for bank
holding companies and no savings institution may purchase the securities of any
affiliate other than a subsidiary.

                                       24
<PAGE>

        The Sarbanes-Oxley Act of 2002 generally prohibits loans by Lawrence
Financial to its executive officers and directors. However, that act contains
specific exception for loans by Lawrence Federal to its executive officers and
directors in compliance with federal banking laws. Under such laws, Lawrence
Federal's authority to extend credit to executive officers, directors and 10%
shareholders ("insiders"), as well as entities such persons control, is limited.
The law limits both the individual and aggregate amount of loans Lawrence
Federal may make to insiders based, in part, on Lawrence Federal's capital
position and requires certain board approval procedures to be followed. Such
loans are required to be made on terms substantially the same as those offered
to unaffiliated individuals and not involve more than the normal risk of
repayment. An exception exists for loans made pursuant to a benefit or
compensation program that is widely available to all employees of the
institution and does not give preference to insiders over other employees.

        ENFORCEMENT. The Office of Thrift Supervision has primary enforcement
responsibility over savings institutions and has the authority to bring actions
against the institution and all institution-affiliated parties, including
stockholders, and any attorneys, appraisers and accountants who knowingly or
recklessly participate in wrongful action likely to have an adverse effect on an
insured institution. Formal enforcement action may range from the issuance of a
capital directive or cease and desist order to removal of officers and/or
directors to institution of receivership, conservatorship or termination of
deposit insurance. Civil penalties cover a wide range of violations and can
amount to $25,000 per day, or even $1 million per day in especially egregious
cases. The Federal Deposit Insurance Corporation has the authority to recommend
to the Director of the Office of Thrift Supervision that enforcement action to
be taken with respect to a particular savings institution. If action is not
taken by the Director, the Federal Deposit Insurance Corporation has authority
to take such action under certain circumstances. Federal law also establishes
criminal penalties for certain violations.

        STANDARDS FOR SAFETY AND SOUNDNESS. The federal banking agencies have
adopted Interagency Guidelines prescribing Standards for Safety and Soundness.
The guidelines set forth the safety and soundness standards that the federal
banking agencies use to identify and address problems at insured depository
institutions before capital becomes impaired. If the Office of Thrift
Supervision determines that a savings institution fails to meet any standard
prescribed by the guidelines, the Office of Thrift Supervision may require the
institution to submit an acceptable plan to achieve compliance with the
standard.

FEDERAL HOME LOAN BANK SYSTEM

        Lawrence Federal is a member of the Federal Home Loan Bank System, which
consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank
provides a central credit facility primarily for member institutions. Lawrence
Federal, as a member of the Federal Home Loan Bank, is required to acquire and
hold shares of capital stock in that Federal Home Loan Bank. Lawrence Federal
was in compliance with this requirement with an investment in Federal Home Loan
Bank stock at December 31, 2004 of $665,700.

        The Federal Home Loan Banks are required to provide funds for the
resolution of insolvent thrifts in the late 1980's and to contribute funds for
affordable housing programs. These requirements could reduce the amount of
dividends that the Federal Home Loan Banks pay to their members and could also
result in the Federal Home Loan Banks imposing a higher rate of interest on
advances to their members. If dividends were reduced, or interest on future
Federal Home Loan Bank advances increased, Lawrence Federal S net interest
income would likely also be reduced.

                                       25
<PAGE>

FEDERAL RESERVE SYSTEM

        The Federal Reserve Board regulations require savings institutions to
maintain non-interest-earning reserves against their transaction accounts
(primarily NOW and regular checking accounts). The regulations generally provide
that reserves be maintained against aggregate transaction accounts as follows: a
3% reserve ratio is assessed on net transaction accounts up to and including
$47.6 million: a 10% reserve ratio is applied above $47.6 million. The first
$7.0 million of otherwise reservable balances (subject to adjustments by the
Federal Reserve Board) are exempted from the reserve requirements. The amounts
are adjusted annually. Lawrence Federal complies with the foregoing
requirements.

PROSPECTIVE LEGISLATION

        Lawrence Federal and Lawrence Financial, as a savings and loan holding
company, are extensively regulated and supervised. Regulations, which affect
Lawrence Federal on a daily basis, may be changed at any time, and the
interpretation of the relevant law and regulations may also change because of
new interpretations by the authorities who administer those laws and
regulations. Any change in the regulatory structure or the applicable statutes
or regulations, whether by the Office of Thrift Supervision, the Federal Deposit
Insurance Corporation or the U.S. Congress, could have a material impact on
Lawrence Financial, Lawrence Federal or its operations.

        Legislation enacted several years ago provided that the Bank Insurance
Fund and the Savings Association Insurance Fund would have merged on January 1,
1999 if there had been no more savings associations as of that date. Congress
did not enact legislation eliminating the savings association charter by that
date. Lawrence Federal is unable to predict whether the Savings Association
Insurance Fund and Bank Insurance Fund will eventually be merged and what
effect, if any, that may have on its business.


FEDERAL AND STATE TAXATION

FEDERAL INCOME TAXATION

        GENERAL. Lawrence Financial and Lawrence Federal report their income on
a calendar year basis using the accrual method of accounting. The federal income
tax laws apply to Lawrence Financial and Lawrence Federal in the same manner as
to other corporations with some exceptions, including particularly Lawrence
Federal's reserve for bad debts discussed below. The following discussion of tax
matters is intended only as a summary and does not purport to be a comprehensive
description of the tax rules applicable to Lawrence Federal or Lawrence
Financial. Lawrence Federal's federal income tax returns have been either
audited or closed under the statute of limitations through tax year 1999. For
its 2004 year, Lawrence Federal's maximum federal income tax rate was 34%.

        BAD DEBT RESERVES. For fiscal years beginning before December 31, 1996,
thrift institutions that qualified under certain definitional tests and other
conditions of the Internal Revenue Code were permitted to use certain favorable
provisions to calculate their deductions from taxable income for annual
additions to their bad debt reserve. A reserve could be established for bad
debts on qualifying real property loans, generally secured by interests in real
property improved or to be improved, under the percentage of taxable income
method or the experience method. The reserve for nonqualifying loans was
computed using the experience method.

                                       26
<PAGE>

        Federal legislation enacted in 1996 repealed the reserve method of
accounting for bad debts and the percentage of taxable income method for tax
years beginning after 1995 and require savings institutions to recapture or take
into income certain portions of their accumulated bad debt reserves.
Approximately $1.5 million of Lawrence Federal accumulated bad debt reserves
would not be recaptured into taxable income unless Lawrence Federal makes a
"non-dividend distribution" to Lawrence Financial as described below.

        DISTRIBUTIONS. If Lawrence Federal makes "non-dividend distributions" to
Lawrence Financial, the distributions will be considered to have been made from
Lawrence Federal's unrecaptured tax bad debt reserves, including the balance of
its reserves as of December 31, 1988, to the extent of the "non-dividend
distributions," and then from Lawrence Federal's supplemental reserve for losses
on loans, to the extent of those reserves, and an amount based on the amount
distributed, but not more than the amount of those reserves, will be included in
Lawrence Federal's taxable income. Non-dividend distributions include
distributions in excess of Lawrence Federal's current and accumulated earnings
and profits, as calculated for federal income tax purposes, distributions in
redemption of stock, and distributions in partial or complete liquidation.
Dividends paid out of Lawrence Federal's current or accumulated earnings and
profits will not be so included in Lawrence Federal's taxable income.

        The amount of additional taxable income triggered by a non-dividend is
an amount that, when reduced by the tax attributable to the income, is equal to
the amount of the distribution. Therefore, if Lawrence Federal makes a
non-dividend distribution to Lawrence Financial, approximately one and one-half
times the amount of the distribution not in excess of the amount of the reserves
would be includable in income for federal income tax purposes, assuming a 34%
federal corporate income tax rate. Lawrence Federal does not intend to pay
dividends that would result in a recapture of any portion of its bad debt
reserves.

STATE TAXATION

        OHIO STATE TAXATION. Lawrence Financial is subject to the Ohio
corporation franchise tax, which, as applied to it, is a tax measured by both
net income and net worth. In general, the tax liability is the greater of 5.1%
on the first $50,000 of computed Ohio taxable income and 8.5% of computed Ohio
taxable income in excess of $50,000, or 0.40% of taxable net worth. Under these
alternative measures of computing the tax liability, complex formulas determine
the jurisdictions to which total net income and total net worth are apportioned
or allocated. The minimum tax is $50 per year and maximum tax liability as
measured by net worth is limited to $150,000 per year.

        A special litter tax also applies to all corporations, including
Lawrence Financial, subject to the Ohio corporation franchise tax. This litter
tax does not apply to "financial institutions." If a corporation pays franchise
tax on the basis of net income, the litter tax is equal to 0.11% of the first
$50,000 of computed Ohio taxable income and 0.22% of computed Ohio taxable
income in excess of $50,000. If a corporation pays franchise tax on the basis of
net worth, the litter tax is equal to 0.014% times taxable net worth.

        A statutory exemption from the net worth tax is available to Lawrence
Financial if certain conditions are satisfied. Lawrence Financial expects to
qualify for this exemption, which would restrict its tax liability to the tax
measured by net income.

        Lawrence Federal is a "financial institution" for Ohio tax purposes.
Accordingly, it must pay the Ohio corporate franchise tax on "financial
institutions," which is imposed annually at a rate of 1.4% of the Lawrence
Federal's apportioned book net worth, determined under generally accepted
accounting principles,

                                       27
<PAGE>

less any statutory deduction. As a "financial institution," Lawrence Federal
does not pay any Ohio tax based upon net income or net profits.

        MARYLAND STATE TAXATION. As a Maryland corporation not earning income in
Maryland, Lawrence Financial is exempt from Maryland corporate income tax.

                                       28
<PAGE>

ITEM 2.         DESCRIPTION OF PROPERTY

        Lawrence Federal currently conducts its business through its main office
located in Ironton, Ohio, and four other full-service banking offices, all of
which it owns.

                                                              NET BOOK VALUE
                                                               OF PROPERTY
LOCATION                                  ORIGINAL            OR LEASEHOLD
                                           YEAR              IMPROVEMENTS AT
                                          ACQUIRED          DECEMBER 31, 2004
MAIN/EXECUTIVE OFFICE:                                        (IN THOUSANDS)

311 South 5th Street                        1976                        $653
Ironton, Ohio  45638

DRIVE THROUGH FACILITY:

511 Vernon Street                           1997                         174
Ironton, Ohio  45638

BRANCH OFFICES:

401 2nd Avenue                              1960                         105
Chesapeake, Ohio  45619

7510 State Route 7                          1993                         125
Proctorville, Ohio  45669

404 Solida Road                             1975                         147
South Point, Ohio  45680

9000 Ohio River Road                        1998                         598
                                                                      ------
Wheelersburg, Ohio  45694

Total                                                                 $1,802
                                                                      ======

ITEM 3.   LEGAL PROCEEDINGS

        Periodically, there have been various claims and lawsuits involving
Lawrence Federal, such as claims to enforce liens, condemnation proceedings on
properties in which Lawrence Federal holds security interests, claims involving
the making and servicing of real property loans and other issues incident to
Lawrence Federal's business. Neither Lawrence Financial nor Lawrence Federal is
a party to any pending legal proceedings that it believes would have a material
adverse effect on the financial condition or operations of Lawrence Financial.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

                                       29
<PAGE>

PART II

ITEM 5.   MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
          BUSINESS ISSUER REPURCHASE OF EQUITY SECURITIES.

        Lawrence Financial's common stock is quoted on the OTC-Bulletin Board
under the symbol "LWFH". As of December 31, 2004, there were 650,110 shares of
common stock outstanding and 170 stockholders, excluding persons or entities who
hold stock in nominee or "street name."

        The following table shows the high and low sales price and dividends
paid on Lawrence Financial's common stock for the periods indicated.

QUARTER ENDED                HIGH          LOW        DIVIDENDS PAID
---------------------------------------------------------------------
March 31, 2003               18.95        15.95            0.07
June 30, 2003                23.50        18.70            0.07
September 30, 2003           23.30        22.05            0.07
December 31, 2003            27.50        22.80            0.07
March 31, 2004               28.50        22.50            0.07
June 30, 2004                23.00        21.25            0.07
September 30, 2004           23.00        21.40            0.07
December 31, 2004            23.55        22.00            0.07

        Dividend payments by Lawrence Financial are dependent primarily on
dividends received by Lawrence Financial from Lawrence Federal. Under federal
regulations, the dollar amount of dividends Lawrence Federal may pay is
dependent upon its capital position and recent net income. Generally, if
Lawrence Federal satisfies its regulatory capital requirements, it may make
dividend payments up to the limits prescribed by the OTS regulations. In
addition, institutions that have converted to the stock form of ownership are
prohibited from engaging in such activities if the effect thereof would cause
the regulatory capital of the institution to be reduced below the amount
required for the liquidation account which was established in the conversion in
accordance with the Office of Thrift Supervision regulations.

        On April 1, 2003, the Company terminated the Stock Repurchase Program
which was initially started on January 28, 2003. Under the terms of the
repurchase agreement, 55,000 total shares were authorized for repurchase of
which the entire authorized limit was fulfilled. On October 24, 2003, the
Company initiated a stock repurchase program for 15,000 shares. As of December
31, 2004, this plan was still open for the repurchase of the entire 15,000
shares.

                                       30
<PAGE>

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

        Lawrence Federal's results of operations depend primarily on its net
interest income, which is the difference between the interest income earned on
Lawrence Federal's interest-earning assets, such as loans and securities, and
the interest expense on its interest-bearing liabilities, such as deposits and
borrowings. Lawrence Federal also generates noninterest income primarily from
loan fees and service charges. Lawrence Federal's noninterest expenses primarily
consist of employee compensation and benefits, occupancy expense, data
processing costs, and other operating expenses. Lawrence Federal's results of
operations are also affected by general economic and competitive conditions,
notably changes in market interest rates, government policies and regulations.

OPERATING STRATEGY

        Lawrence Financial Holdings, Inc. (Company), through its wholly owned
subsidiary Lawrence Federal Savings Bank (Bank), operates as a
community-oriented financial institution focused on meeting the financial
service needs of consumers in its market area. To accomplish this objective,
Lawrence Federal offers a variety of mortgage and consumer loans and retail
deposit products. Lawrence Federal has historically extended its lending
activities outside of its market area through programs for originating mobile
home and automobile loans through a network of dealers. These indirect lending
programs have helped Lawrence Federal originate a larger amount of consumer
loans, which typically have shorter terms and higher yields than mortgage loans,
than the Bank would otherwise be able to originate. In addition, the origination
of shorter term consumer loans helps the Company manage it's interest rate risk.
However, indirect lending programs may result in greater risk and require
careful monitoring by management. Adverse developments with the mobile home loan
portfolio led to the termination of this program in 2002, and the eventual sale
of the majority of the portfolio in 2004.

CRITICAL ACCOUNTING POLICIES

        Accounting policies involving significant judgments and assumptions by
management that have, or could have, a material impact on the carrying value of
certain assets and impact income, are considered critical accounting policies.
Lawrence Federal considers the following to be its critical accounting policies:
allowance for loan losses and deferred income taxes. There have been no
significant changes in the methods or assumptions used in the accounting
policies that require material estimates and assumptions.

ALLOWANCE FOR LOAN LOSSES

        Arriving at an appropriate level of allowance for loan losses
necessarily involves a high degree of judgment. The ongoing evaluation process
includes a formal analysis of the allowance each quarter, which considers, among
other factors, the character and size of the loan portfolio, business and
economic conditions, loan growth, delinquency trends, nonperforming loans
trends, charge-off experience and other asset quality factors. Provisions for
losses on the loan portfolio are calculated by applying historical charge-off
and recovery experience to the current outstanding balance in each loan
category, with consideration given to loan growth over the preceding twenty four
months. Although management uses available information to establish the
appropriate level of the allowance for loan losses, future additions to the
allowance may be necessary based on estimates that are susceptible to change as
a result of changes in economic conditions and other factors. In addition,
various regulatory agencies, as an integral part of their examination process,

                                       31
<PAGE>

periodically review Lawrence Federal Savings Bank's allowance for loan losses.
Such agencies may require Lawrence Federal to recognize adjustments to the
allowance based on their judgments about information available to them at the
time of their examination.

DEFERRED INCOME TAXES

        Lawrence Federal uses the asset and liability method of accounting for
income taxes. Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. If current available information raises doubt as to
the realization of the deferred tax assets, a valuation allowance would be
established. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Management exercises
significant judgment in evaluating the amount and timing of recognition of the
resulting tax liabilities and assets, including projections of future taxable
income. These judgments and estimates are reviewed on a continual basis as
regulatory and business factors change.

COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2004 AND 2003

        During the fiscal year 2004, total assets decreased $6.3 million, or
5.0%, to $119.2 million at December 31, 2004. At December 31, 2004, cash and
cash equivalent balances had increased $2.7 million, or 25.7%, and securities
available for sale had decreased by $4.1 million, or 15.6%, when compared to the
same date in 2003. During the year ended December 31, 2004, gross loans
receivable decreased $6.8 million, or 8.4%. Consumer loans increased $8.9
million, or 48.2%, real estate loans decreased $3.4 million, or 8.4%, and mobile
home loans decreased $14.3 million. The majority of the increase in consumer
loans is primarily due to an increase in the number of indirect auto loans
originated in 2004, an increase in the origination of direct consumer loans, and
the purchase of $5 million of auto loans from a bank in northern Ohio, while
real estate loans decreased as a result of highly competitive fixed-rate,
long-term loans being offered by several regional banks and mortgage brokers.
Lawrence Federal's long term investments, held in the form of securities,
decreased by $4.1 million, or 15.6%, when compared to December 31, 2003. The
reason for the decrease in the long term investments was due to normal
maturities and calls of the individual investments held in the portfolio.

        During 2004, total deposits decreased $3.1 million, or 2.8%, to $107.9
million at December 31, 2004. The primary reason for this decrease was a result
of market competition with other local banks offering more competitive rates.

        Equity decreased $3.5 million or 24.8%, during fiscal year 2004 to $10.5
million at December 31, 2004. During the year ending December 31, 2004, retained
earnings decreased $3.4 million as a result of a net loss while accumulated
other comprehensive income decreased from an unrealized loss of $88,000 to an
unrealized loss of $170,000, primarily as a result of changes to the securities
available-for-sale portfolio arising during the period, and $179,000 of cash
dividends were paid to shareholders.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

        GENERAL. The Company's net income decreased to a net loss of $3.4
million for 2004 from net income of $477,000 for 2003. Return on average assets
was (2.78)% in 2004 and 0.36% in 2003, and return on average equity was (26.28)%
in 2004 and 3.40% in 2003. Net interest income decreased $577,000, or 12%, while
noninterest income, exclusive of sale of securities, decreased $172,000, or 23%.
The decrease in net

                                       32
<PAGE>

interest income was primarily the result of a decline of $10.6 million in
average earning asset balances during fiscal year 2004. In addition to the
decrease in net interest income was a $5.4 million increase in noninterest
expense. There are several causes for the increase in non-interest expense. The
Company recorded a $4.4 million loss on the sale of the mobile home loan
portfolio, professional fees increased $266,000 as a result of merger related
expenses and the Company incurred expenses of $988,000 for the termination costs
for employment agreements with executive officers and retirement plan
termination costs for the board of directors. The early extinguishment and
related cash payments in 2004 for these contracts was a condition of the pending
merger transaction with Oak Hill Financial, Inc. The Company has also
experienced: increased costs of employee benefits; decreased data processing
fees; and increased costs related to the collection of delinquent mobile home
loans.

        INTEREST INCOME. Interest income decreased $1.1 million, or 15%, in 2004
compared to 2003. Interest income on loans decreased $1.2 million, or 19%,
primarily as a result of decreasing interest rates and customers refinancing
loans with various local institutions with more favorable rates. Interest income
on securities increased $94,000, or 12%. The average yield on interest-earning
assets decreased to 5.45% in 2004 from 5.97% in 2003, as the loan portfolio
continued to shrink and loans being refinanced for more favorable rates.

        INTEREST EXPENSE. Interest expense decreased $531,000, or 22%, in 2004
compared to 2003. Interest paid on deposits decreased $531,000, or 22%, as a
result of a reduction of interest rates paid on the average balances of deposits
during the year. The average cost of interest-bearing liabilities decreased 28
basis points to 1.79% in 2004 from 2.07% in 2003, primarily as a result of
reduced market rates on certificates of deposit and savings accounts.

        PROVISION FOR LOAN LOSSES. Activity in the allowance for loan losses
consists of increases due to monthly provisions for loan losses and decreases
for periodic charge offs, net of recoveries. Management analyzes the adequacy of
the allowance balance quarterly by determining its estimate of probable losses
in the portfolio and comparing that estimate to the allowance balance.
Management calculates its estimate of probable losses primarily by applying loss
percentages to classified loans within the major loan categories.

        The provision for loan losses was $590,000 for 2004 compared to $915,000
for 2003. The provision for 2004 and 2003 reflected management's assessment of
probable losses, which is impacted by changes in the composition of the loan
portfolio. (See pages 13 through 16 of this filing for more information.)

        At December 31, 2004, the Company's allowance for loan losses as a
percentage of gross loans outstanding decreased by 29 basis points, to .95% from
1.24%, when compared to the same period in 2003. Allowance for loan losses
totaled $707,000 at December 31, 2004, a decrease of $308,000, or 30%, compared
to the same date in 2003. The mix of the allowance also changed with the portion
allocated to real estate loans increasing by $87,000, or 57%, the portion of the
allowance allocated to consumer loans increasing by $82,000, or 30%, mobile home
reserves decreasing by $476,000, or 81%, and commercial reserves increasing by
$93,000 or 232%. At December 31, 2004 compared to December 31, 2003, the
relative risk in the portfolio decreased due to Lawrence Federals Saving Bank's
sale of the mobile home loan portfolio.

        While management believes the existing level of reserves is adequate,
future adjustments to the allowance may be necessary due to economic, operating,
regulatory, and other conditions that may be beyond Lawrence Federal's control.

                                       33
<PAGE>

        NONINTEREST INCOME. The following table shows the components of
noninterest income and the dollar and percentage change from 2004 to 2003.

                            2004         2003        DOLLAR      PERCENTAGE
                                                     CHANGE        CHANGE
                         -----------  ------------ ------------ -------------
                                       (DOLLARS IN THOUSANDS)
Net securities gains            $75          $189       $(114)          (60)%
Service charges                 459           503         (44)           (9)
Other                           108           236        (128)          (54)
                               ----          ----       -----
      Total                    $642          $928       $(286)          (31)
                               ====          ====       =====

        Net securities gains decreased in fiscal year 2004 as Lawrence Federal
sold fewer securities. Service charges decreased in 2004 as a result of a
reduction in NSF and overdraft fees as a result of account holders maintaining
their accounts. Lawrence Federal will continue to monitor the fee schedules of
in-market competitors and adjust our products to reflect current market pricing.
Other income consists of decreases in the cash surrender value of bank owned
life insurance, loss on the sale of other real estate owned and other
miscellaneous items.

                                       34
<PAGE>

NONINTEREST EXPENSE. The following table shows the components of noninterest
expense and the dollar and percentage change from 2004 to 2003.

<TABLE>
<CAPTION>
                                                2004           2003          DOLLAR      PERCENTAGE
                                                                             CHANGE        CHANGE
                                            -------------  -------------  ------------- -------------
                                                             (DOLLARS IN THOUSANDS)
<S>                                                 <C>            <C>            <C>          <C>
Salaries and benefits                             $2,016         $1,963            $53            3%
Deposit insurance premiums                            16             19             (3)         (16)
Occupancy and equipment                              423            426             (3)          (1)
Data processing                                      376            625           (249)         (40)
Franchise tax                                        133            138             (5)          (4)
Professional fees                                    513            246            267          109
Advertising expense                                   80             80             --           --
Loss on sale of loans                              4,435             --          4,435          N/M
Employment agreement termination costs               813             --            813          N/M
Director retirement plan termination costs           175             --            175          N/M
Other                                                743            868           (125)         (14)
                                                  ------         ------         ------
      Total                                       $9,723         $4,365         $5,358           10
                                                  ======         ======         ======
</TABLE>

        Salaries and benefits increased as a result of: increases in premiums
paid for employee health care insurance and the recognition of the expense
related to employee stock ownership and incentive plans. Deposit insurance
premiums decreased as a result of the average balance of deposits decreased
during 2004. Data processing costs decreased as a result of the Company
realizing a full years savings under the new data processing contract as a
result of the data processing conversion which was completed in July 2003. The
loss on sale of loans was a result of the sale of the indirect mobile home loan
portfolio which occurred in the fourth quarter of 2004. The expenses related to
the termination costs for employment agreements and director retirement accounts
were cash payments made to executive management and current directors according
to plans that had been adopted by the Company in prior years. The sale of the
loan portfolio and the termination costs were incurred as a condition of the
Agreement and Plan of Merger with Oak Hill Financial, Inc. entered into on
October 12, 2004. Making up the bulk of the decrease in "Other" are expenses
related to the repossession of mobile home units and the expenses related to the
sale of other real estate owned which accounted for $47,000 of the increase. In
addition to this decrease, the Company experienced decreases in various other
expense items.

        INCOME TAX EXPENSE. The provision for income tax was a benefit of $1.8
million in 2004 compared to an expense of $132,000 in 2003. The provision
decreased as a result of declining taxable income and directly related to the
loss on the sale of the mobile home loan portfolio. The effective tax rate for
2004 was 34.9% compared with 21.7% for 2003.

                                       35
<PAGE>

AVERAGE BALANCES, INTEREST AND AVERAGE YIELDS/COST

        The following table presents certain information regarding average
balances of assets and liabilities, as well as the total dollar amounts of
interest income from average interest-earning assets and interest expense on
average interest-bearing liabilities and the resulting average yields and costs.
The yields and costs for the periods indicated are derived by dividing income or
expense by the average balances of assets or liabilities, respectively, for the
periods presented. Average balances were derived from daily balances.

<TABLE>
<CAPTION>
                                      ------------------------------------------------------------------
                                                           YEAR ENDED DECEMBER 31,
                                      -------------------------------- ---------------------------------
                                                   2004                              2003
                                      -------------------------------- ---------------------------------
                                                             AVERAGE                           AVERAGE
                                       AVERAGE                YIELD/     AVERAGE                YIELD/
                                       BALANCE   INTEREST     RATE       BALANCE   INTEREST     RATE
                                      ---------- --------- ----------- --------------------- -----------
                                                           (DOLLARS IN THOUSANDS)
<S>                                     <C>        <C>          <C>       <C>         <C>         <C>
Interest-earning assets:
   Loans (1)                            $79,819     $5,230       6.55%    $90,055     $6,433       7.14%
   Securities (2)                        24,925        901       3.83      23,559        816       3.68
   Interest-bearing deposits              7,871         73       1.00      10,092         73       0.73
   Interest-bearing time deposits           459         10       2.18          --         --         --
                                       --------     ------               --------     ------
  Total interest-earning assets         113,074      6,214       5.45     123,706      7,322       5.97
Non-interest-earning assets              11,039                            10,287
                                       --------                          --------
         Total assets                  $124,113                          $133,993
                                       ========                          ========

Interest-bearing liabilities:
   Deposits:
      Savings accounts                  $27,222        139       0.51     $31,688        293       0.92
      Money market/Now accounts          19,863        233       1.17      15,770        112       0.71
      Certificates of deposit            54,848      1,458       2.66      66,334      1,956       2.93
                                       --------     ------               --------     ------
         Total deposits                 101,933      1,830       1.79     113,792      2,361       2.07
   FHLB advances                             --         --         --          --         --         --
                                       --------     ------               --------     ------
         Total interest-bearing         101,933      1,830       1.79     113,792      2,361       2.07
                                                    ------                            ------
     liabilities
Non-interest-bearing liabilities          9,076                             6,166
                                       --------                          --------
         Total liabilities              111,009                           119,958
Total retained earnings                  13,104                            14,035
                                       --------                          --------
         Total liabilities and
            retained earnings          $124,113                          $133,993
                                       ========                          ========

   Net interest-earning assets          $11,141                             9,914
                                       ========                          ========
   Net interest income/interest
      rate spread (3)                               $4,384       3.66%                $4,961       3.90%
                                                    ======      =====                 ======      =====
   Net interest margin (4)                            3.83%                             4.01%
                                                    ======                            ======
   Ratio of interest-earning
       assets to interest-bearing
       liabilities                       110.93%                           108.71%
                                       ========                          ========
</TABLE>

(1)     Balances are net of deferred loan origination costs, undisbursed
        proceeds of construction loans in process, and include non- accrual
        loans.
(2)     Includes investment securities available-for-sale, stock in the Federal
        Home Loan Bank of Cincinnati and mutual funds.
(3)     Net interest rate spread represents the difference between the weighted
        average yield on interest-earning assets and the weighted average cost
        of interest-bearing liabilities.
(4)     Net interest margin represents net interest income as a percentage of
        average interest-earning assets.

                                       36
<PAGE>

RATE/VOLUME ANALYSIS

        The following table presents the effects of changing rates and volumes
on the interest income and interest expense of Lawrence Federal. The rate column
shows the effects attributable to changes in rate (changes in rate multiplied by
prior volume). The volume column shows the effects attributable to changes in
volume (changes in volume multiplied by prior rate). The net column represents
the sum of the prior columns. For purposes of this table, changes attributable
to changes in both rate and volume that cannot be segregated have been allocated
proportionately based on the absolute value of the change due to rate and the
change due to volume.

                                            ------------------------------------
                                               YEAR ENDED DECEMBER 31, 2004
                                                        COMPARED TO
                                               YEAR ENDED DECEMBER 31, 2003
                                            ------------------------------------
                                             INCREASE (DECREASE)
                                                   DUE TO
                                            ----------------------   -----------
                                               RATE       VOLUME         NET
                                            ----------  ----------   -----------
                                                  (DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS:
   Loans                                        $(587)      $(911)      $(1,498)
   Loans                                         (472)       (731)       (1,203)
   Securities                                      35          50            85
   Interest-earning deposits                       24         (12)           11
                                               ------      ------        ------
         Total interest-earning assets           (413)       (694)       (1,107)
INTEREST-BEARING LIABILITIES:
   Deposits:
      Passbook accounts                           (65)        (89)         (154)
      NOW accounts                                121          --           121
      Certificates of deposit                     (37)       (462)         (499)
                                               ------      ------        ------
         Total interest-bearing liabilities        19        (551)         (532)
                                               ------      ------        ------
Increase (decrease) in net interest income      $(432)      $(143)        $(575)
                                               ======      ======        ======

MANAGEMENT OF INTEREST RATE RISK AND MARKET RISK ANALYSIS

        QUALITATIVE ASPECTS OF MARKET RISK. Lawrence Federal's most significant
form of market risk is interest rate risk. The principal objectives of Lawrence
Federal's interest rate risk management are to evaluate the interest rate risk
inherent in certain balance sheet accounts, determine the level of risk
appropriate given Lawrence Federal's business strategy, operating environment,
capital and liquidity requirements and performance objectives, and manage the
risk consistent with the Board of Director's approved guidelines. Lawrence
Federal has an Asset/Liability Committee, responsible for reviewing its
asset/liability policies and interest rate risk position, which meets monthly
and reports trends and interest rate risk position to the Board of Directors
quarterly. The extent of the movement of interest rates is an uncertainty that
could have a negative impact on the earnings of Lawrence Federal.

        Lawrence Federal's assets include a high percentage of fixed-rate
mortgage loans. This exposes Lawrence Federal to the risk that during periods of
rising interest rates Lawrence Federal's interest expense will increase faster
than its interest income. In recent years, Lawrence Federal has used the
following strategies to manage interest rate risk: (1) emphasizing shorter term
consumer loans; (2) maintaining a high quality portfolio of short- to
intermediate-term securities; (3) maintaining high levels of liquidity; and (4)
emphasizing longer-term certificates of deposit to better structure maturities
of its interest rate sensitive

                                       37
<PAGE>

liabilities. Lawrence Federal intends to increase its emphasis on
adjustable-rate loans in order to help reduce its interest rate risk. Lawrence
Federal currently does not participate in hedging programs, interest rate swaps
or other activities involving the use of off-balance sheet derivative financial
instruments.

        QUANTITATIVE ASPECTS OF MARKET RISK. Lawrence Federal primarily utilizes
an interest sensitivity analysis prepared by the Office of Thrift Supervision to
review the level of interest rate risk. This analysis measures interest rate
risk by computing changes in the net portfolio value of Lawrence Federal's cash
flows from assets, liabilities and off-balance sheet items in the event of a
range of assumed changes in market interest rates. Net portfolio value
represents the market value of portfolio equity and is equal to the market value
of assets minus the market value of liabilities, with adjustments made for
off-balance sheet items. This analysis assesses the risk of loss in market risk
sensitive instruments in the event of a sudden and sustained 100 to 300 basis
point increase or decrease in market interest rates with no effect given to any
steps that management might take to counter the effect of that interest rate
movement. The following table, which is based on information provided to
Lawrence Federal by the Office of Thrift Supervision, presents the change in
Lawrence Federal's net portfolio value at September 30, 2004 (most recent data
available), that would occur upon an immediate change in interest rates based on
Office of Thrift Supervision assumptions, but without giving effect to any steps
that management might take to counteract that change.

                                                         NPV AS % OF PORTFOLIO
    CHANGE IN               NET PORTFOLIO VALUE             VALUE OF ASSETS
 INTEREST RATES    ----------------------------------   ----------------------
IN BASIS POINTS                    $                       NPV        CHANGE
  (RATE SHOCK)      AMOUNT       CHANGE      % CHANGE     RATIO        (1)
-----------------  --------     --------     --------   ---------  -----------
                        (DOLLARS IN THOUSANDS)

      300           $11,054     $(3,610)         (25)%     9.23%      (249)
      200            12,493      (2,172)         (15)     10.26       (146)
      100            13,748        (916)          (6)     11.12        (60)
     Static          14,665          --           --      11.72         --
     -100            14,906         241            2      11.83         11

----------------------------
(1) Expressed in basis points.

        The preceding table shows that in the event of a sudden and sustained
increase in market interest rates of 2% or more, the net portfolio value of
Lawrence Federal would decrease moderately.

        The Office of Thrift Supervision uses certain assumptions in assessing
the interest rate risk of savings associations. These assumptions relate to
interest rates, loan prepayment rates, deposit decay rates, and the market
values of certain assets under differing interest rate scenarios, among others.

        As with any method of measuring interest rate risk, certain shortcomings
are inherent in the method of analysis presented in the foregoing table. For
example, although certain assets and liabilities may have similar maturities or
periods to repricing, they may react in different degrees to changes in market
interest rates. Also,

                                       38
<PAGE>

the interest rates on certain types of assets and liabilities may fluctuate in
advance of changes in market interest rates, while interest rates on other types
may lag behind changes in market rates. Additionally, certain assets, such as
adjustable rate mortgage loans, have features which restrict changes in

                                       39
<PAGE>

interest rates on a short-term basis and over the life of the asset. Further, if
interest rates change, expected rates of prepayments on loans and early
withdrawals from certificates of deposit could deviate significantly from those
assumed in calculating the table.

LIQUIDITY AND CAPITAL RESOURCES

        Liquidity is the ability to meet current and future financial
obligations of a short-term nature. Lawrence Federal further defines liquidity
as the ability to respond to the needs of depositors and borrowers as well as
maintaining the flexibility to take advantage of investment opportunities.
Lawrence Federal's primary sources of funds consist of deposit inflows, loan
repayments, maturities and sales of investment securities and borrowings from
the Federal Home Loan Bank. While maturities and scheduled amortization of loans
and securities are predictable sources of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates, economic
conditions and competition.

        Liquidity management is both a daily and long-term responsibility of
management. Lawrence Federal adjusts its investments in liquid assets based upon
management's assessment of (1) expected loan demand, (2) expected deposit flows,
(3) yields available on interest-earning deposits and securities, and (4) the
objectives of its asset/liability management program. Excess liquid assets are
invested generally in interest-earning overnight deposits and short- and
intermediate-term U.S. Government and agency obligations.

        Lawrence Federal's most liquid assets are cash and short-term
investments (securities maturing in one year or less). The levels of these
assets are dependent on Lawrence Federal's operating, financing, lending and
investing activities during any given period. At December 31, 2004, cash and
short-term investments totaled $13.4 million. Securities classified as
available-for-sale totaled $22.2 million at December 31, 2004. In addition, at
December 31, 2004, Lawrence Federal had arranged the ability to borrow a total
of approximately $15.0 million from the Federal Home Loan Bank of Cincinnati.

        The primary investing activities of Lawrence Federal are the origination
of loans and the purchase of securities. In 2004, Lawrence Federal originated
$24.9 million of loans and purchased $11.2 million of securities. In 2003,
Lawrence Federal originated $17.5 million of loans and purchased $38.5 million
of securities.

        Financing activities consist primarily of activity in deposit accounts.
Lawrence Federal experienced a net decrease in total deposits of $3.1 million
and $7.9 million for 2004 and 2003, respectively. Deposit flows are affected by
the overall level of interest rates, the interest rates and products offered by
Lawrence Federal and its local competitors and other factors. Lawrence Federal
generally manages the pricing of its deposits to be competitive and to increase
core deposit relationships. Occasionally, Lawrence Federal offers promotional
rates on certain deposit products in order to attract deposits.

        At December 31, 2004, Lawrence Federal had outstanding commitments to
originate loans of $1,277,000. These loans are to be secured by properties
located in its market area. Lawrence Federal anticipates that it will have
sufficient funds available to meet its current loan commitments. Certificates of
deposit that are scheduled to mature in one year or less from December 31, 2004
totaled $27.9 million. Management believes, based on past experience, that a
significant portion of those deposits will remain with Lawrence Federal. Based
on the foregoing, Lawrence Federal considers its liquidity and capital resources
sufficient to meet its outstanding short-term and long- term needs.

                                       40
<PAGE>

        Lawrence Federal is subject to various regulatory capital requirements
administered by the Office of Thrift Supervision including a risk-based capital
measure. The risk-based capital guidelines include both a definition of capital
and a framework for calculating risk-weighted assets by assigning balance sheet
assets and off-balance sheet items to broad risk categories. At December 31,
2004, Lawrence Federal exceeded all of its regulatory capital requirements.
Lawrence Federal is considered "well capitalized" under regulatory guidelines.
See "REGULATION AND SUPERVISION--FEDERAL SAVINGS INSTITUTION REGULATION--CAPITAL
REQUIREMENTS" and note 11 of the notes to the financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

        In the normal course of operations, Lawrence Federal engages in a
variety of financial transactions that, in accordance with generally accepted
accounting principles, are not recorded in the financial statements, or are
recorded in amounts that differ from the notional amounts. These transactions
involve, to varying degrees, elements of credit, interest rate, and liquidity
risk. Such transactions are used by Lawrence Federal primarily to manage
customers' requests for funding.

        For the year ended December 31, 2004, Lawrence Federal engaged in no
off-balance sheet transactions reasonably likely to have a material effect on
its financial condition.

ADOPTION OF NEW ACCOUNTING STANDARDS

        In March 2004, the Emerging Issues Task Force (EITF) arrived at a
consensus regarding EITF 03-1, The Meaning of Other-Than-Temporary Impairment
and Application to Certain Investments. This consensus provides additional
guidance on when an investment is considered impaired, whether impairment is
other-than-temporary, and measurement of impairment loss. It also requires
additional disclosure for annual reporting periods ending after June 15, 2004
and for other reporting periods beginning after June 15, 2004. In September
2004, the Financial Accounting Standards Board (FASB) issued Staff Position
03-1-1 which delayed the effective date for measurement and recognition guidance
contained in paragraphs 10 through 20 of EITF 03-1 due to additional proposed
guidance. This delay does not suspend the requirement to recognize
other-than-temporary impairments as required by existing authoritative
literature. The Company currently has investments where the current market value
is less than the amortized cost. See Note 2 for further discussion and the
impact on the Company's financial position and results of operations.

        In December 2003, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 03-3, "Accounting for Certain Loans or Debt
Securities Acquired in a Transfer." This SOP addresses accounting for
differences between contractual cash flows and cash flows expected to be
collected from an investor's initial investment in loans or debt securities
(loans) acquired in a transfer if those differences are attributable, at least
in part, to credit quality. It includes such loans acquired in purchase business
combinations and applies to all non-governmental entities, including
non-for-profit organizations. This SOP does not apply to loans originated by the
entity. This SOP is effective for loans acquired in fiscal years beginning on or
before December 2004, and within the scope of Practice Bulletin 6, paragraphs 7
and 8 of this SOP, as they apply to decreases in cash flows expected to be
collected, should it be applied prospectively for fiscal years beginning after
December 15, 2004. The Company adopted this SOP as of January 1, 2005 with no
material impact on its financial position or results of operations.

In December 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46(R), "Consolidation of Variable Interest Entities," (FIN
46-R). FIN 46-R requires that subsidiaries and investments defined as variable
interest entities be consolidated by the enterprise that will absorb the

                                       41
<PAGE>

majority of the entities' expected losses if they occur, receive a majority of
the variable interest entities' residual returns if they occur, or both. The
Company's adoption of FIN 46-R had no impact on its financial position or
results of operations.

NEWLY ISSUED BUT NOT YET EFFECTIVE STANDARDS: FAS 123(R), "Share Based Payment"
is concerned with an entities expensing of stock options as an ordinary expense.
It becomes effective for the Company beginning July 1, 2005. To the extent the
Company makes future grants of stock options, compensation expense will increase
by the estimated fair value of options granted.

EFFECT OF INFLATION AND CHANGING PRICES

        The consolidated financial statements and related financial data
presented in this prospectus have been prepared following generally accepted
accounting principles, which require the measurement of financial position and
operating results in terms of historical dollars without considering the change
in the relative purchasing power of money over time due to inflation. The
primary impact of inflation is reflected in the increased cost of Lawrence
Federal's operations. Unlike most industrial companies, virtually all the assets
and liabilities of a financial institution are monetary in nature. As a result,
interest rates generally have a more significant impact on a financial
institution's performance than do general levels of inflation. Interest rates do
not necessarily move in the same direction or to the same extent as the prices
of goods and services.

                                       42
<PAGE>

ITEM 7.   FINANCIAL STATEMENTS

        The financial statements filed as part of this report are incorporated
by reference into this Item 7 of Part II of Form 10-KSB.


ITEM 8.   CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

        None.

ITEM 8A.  CONTROLS AND PROCEDURES

        The Company's management, including the Company's principal executive
officer and principal financial officer, have evaluated the effectiveness of the
Company's "disclosure controls and procedures," as such term is defined in Rule
13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended,
(the "Exchange Act"). Based upon their evaluation, the principal executive
officer and principal financial officer concluded that, as of the end of the
period covered by this report, the Company's disclosure controls and procedures
were effective for the purpose of ensuring that the information required to be
disclosed in the reports that the Company files or submits under the Exchange
Act with the Securities and Exchange Commission (the "SEC") (1) is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and (2) is accumulated and communicated to the Company's
management, including its principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required disclosure.

ITEM 8B.  OTHER INFORMATION

        None.

                                       43
<PAGE>

                                    PART III


ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

        DIRECTORS

        Lawrence Financial's Board of Directors consists of six members. Five
directors are independent, and one is a member of management. The Board is
divided into three classes with three-year staggered terms, with one-third of
the directors elected each year.

        Information regarding the Board of Directors is provided below. Unless
otherwise stated, each individual has held his current occupation for the last
five years. The age indicated for each individual is as of December 31, 2004.
The indicated period of service as a director includes the period of service as
a director of Lawrence Federal.

        The following directors have terms ending in 2005:

        CHARLES E. AUSTIN, II is a Vice President and General Manager of
Mid-Ohio Pipeline Company, Inc. Mr. Austin was a Vice President and General
Manager of C.J. Hughes Construction Co., Inc. until November 2002. Age 45.
Director since 1996.

        PHILLIP O. MCMAHON is a general dentist in private practice. Age 53.
Director since 1993.

        The following directors have terms ending in 2006:

        HERBERT J. KARLET is the Senior Vice President for Finance at Marshall
University, which is located in Huntington, West Virginia. Age 54. Director
since 1991.

        ROBERT N. TAYLOR is the owner and President of Ohio Big Birds, Inc.,
which raises and processes ostrich meat and leather products, and the owner and
operator of Taylor Farm, a grain and cattle farm. Age 60. Director since 1995.

        The following directors have terms ending in 2007:

        JACK L. BLAIR joined Lawrence Federal in 1994 as Executive Vice
President and Chief Executive Officer. Since 1996, he has served as President
and Chief Executive Officer. Age 57. Director since 2000.

        TRACEY E. BRAMMER, JR. is President and Funeral Director of Tracey
Brammer Funeral Home, Inc. Age 60. Director since 1984.

                                       44
<PAGE>

        EXECUTIVE OFFICERS

        ROBROY WALTERS has served as Executive Vice President and Chief
Financial Officer of Lawrence Federal Savings Bank since 2000. From 1989 until
joining Lawrence Federal Savings Bank, Mr. Walters was with Peoples Bank NA and
Peoples Bancorp, Inc. where he served in various capacities.

        MARY Y. CRONACHER has been associated with Lawrence Federal Savings Bank
for 28 years. She has served as Vice President, Secretary and Treasurer since
1996.

        MARK R. POTTER has been associated with Lawrence Federal Savings Bank
since 1990. He has served as Vice President since 1996.

        JOSEPH W. MARTIN has been associated with Lawrence Federal Savings Bank
since 2000. He was appointed Vice President effective January 14, 2004. Prior to
joining Lawrence Federal Savings Bank, Mr. Martin was with Fifth Third and Ohio
River Bank where he served in various capacities including branch manager and
Assistant Vice President.

        CAREY DUNFEE has been associated with Lawrence Federal Savings Bank
since 1994 and since that time has served as Controller.

        SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Based solely on the Lawrence Financial's review of copies of the reports
it has received, Lawrence Financial believes that each of its executive officers
and directors has complied with applicable reporting requirements for
transactions in Lawrence Financial's common stock during the year ended December
31, 2004.

        AUDIT COMMITTEE

        The Board of Directors has a separately-designated standing Audit
Committee established in accordance with Section 3(a)(58)(A) of the Securities
Exchange Act of 1934, as amended. The Audit Committee consists of Herbert J.
Karlet (Chairman), Tracey E. Brammer, Jr., Charles E. Austin, II, Phillip O.
McMahon, and Robert N. Taylor. The Board of Directors has determined that
Herbert J. Karlet is an audit committee financial expert under the rules of the
Securities and Exchange Commission.

        CODE OF ETHICS

        Lawrence Financial has adopted a Code of Ethics and Business Conduct, a
copy of which is available, without charge, upon written request to Mary Y.
Cronacher, Secretary, Lawrence Financial Holdings, Inc., 311 South Fifth Street,
Ironton, Ohio 45638.

                                       45
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

        The following information is furnished for Mr. Blair. No other executive
officer of Lawrence Financial or Lawrence Federal received a salary and bonus of
$100,000 or more during the year ended December 31, 2004.

<TABLE>
<CAPTION>
<S>                                                                            <C>
                              ----------------------------------------------- ----------------------------------
                                                                                          LONG-TERM
                                         ANNUAL COMPENSATION (2)                     COMPENSATION AWARDS
                              ----------------------------------------------- ----------------------------------
                                                                                                    SECURITIES    ALL OTHER
                                                                               RESTRICTED STOCK     UNDERLYING   COMPENSATION
     NAME AND POSITION             YEAR          SALARY (1)        BONUS          AWARDS (3)         OPTIONS         (4)
     -----------------             ----          ----------        -----          ----------         -------     ------------

Jack L. Blair                      2004           $121,004          $--               --               --          $441,283
President and                      2003            121,004           --               --               --            26,021
  Chief Executive Officer          2002            117,480        2,420               --               --            24,155
</TABLE>

(1)     Includes board of directors and board committee fees.
(2)     Does not include the aggregate amount of perquisites and other personal
        benefits, which was less than $50,000 or 10% of the total annual salary
        and bonus reported.
(3)     2Mr. Blair was granted 6,203 shares of restricted stock in 2001. The
        restricted stock award vests in four equal annual installments
        commencing on December 31, 2002. As of December 31, 2004, the market
        value of the unvested shares of restricted stock held by Mr. Blair was
        $36,340. Dividends, if any, are paid on the restricted stock.
(4)     For 2004, consists of employer contributions to the 401(k) plan of
        $6,320, an employer contribution to the employee stock ownership plan of
        $22,515 and payment for termination of employment contract of $412,448.


        FISCAL YEAR-END OPTION VALUES

        The following table provides certain information with respect to the
number of shares of Lawrence Financial common stock represented by outstanding
options held by Mr. Blair as of December 31, 2004. Mr. Blair did not exercise
any stock options during 2004.

<TABLE>
<CAPTION>
                         ---------------------------------------------- ----------------------------------------------
                          Number of Securities Underlying Unexercised         Value of Unxercised In-the-Money
                                Options/SARs at Fiscal Year-end               Options/sars At Fiscal Year-end(1)
                         ---------------------------------------------- ----------------------------------------------
<S>                             <C>                      <C>                   <C>                     <C>
NAME                          EXERCISABLE            UNEXERCISABLE           EXERCISABLE            UNEXERCISABLE
----                          -----------            -------------           -----------            -------------
Jack L. Blair                   15,517                   3,879                 $138,877                $34,717
</TABLE>

(1)     Value of unexercised in-the-money stock options equals the market value
        of shares covered by in-the-money options on December 31, 2004 less the
        option exercise price. Options are in-the-money if the market value of
        shares covered by the options is greater than the exercise price.

                                       46
<PAGE>

        LETTER AGREEMENTS WITH JACK BLAIR AND ROBROY WALTERS.

Prior to the execution of the merger agreement with Oak Hill Financial, both
Jack L. Blair, President and Chief Executive Officer of Lawrence Financial and
Lawrence Federal, and RobRoy Walters, Executive Vice President and Chief
Executive Officer of Lawrence Financial and Lawrence Federal, had employment
agreements with Lawrence Financial and Lawrence Federal. These employment
agreements provided that if the executive is terminated following a change in
control of Lawrence Financial and Lawrence Federal, each executive would receive
(i) a severance payment equal to three times the executive's average income over
the five taxable years prior to the change in control and (ii) continuation of
health and welfare benefits for a period of three years. In addition, Lawrence
Federal currently maintains a supplemental executive retirement plan ("SERP") in
which Mr. Blair and Mr. Walters are the only participants. The supplemental
executive retirement plan provides the executives with benefits otherwise lost
due to the early termination of the employee stock ownership plan.

        In connection with the merger, each executive entered into a letter
agreement with Oak Hill Financial. Provisions in the letter agreements provide
for the following, among other items:

o       In exchange for termination of the executive's employment agreements,
each executive will receive:

        o       no later than December 15, 2004, a lump sum cash payment equal
to theseverance payment that the executive is entitled to receive under the
employment agreements; and

        o       at the closing of the merger, a lump sum cash payment equal to
the estimated cost of the continued health and welfare benefits that the
executive is entitled to receive under the employment agreements

and

o       In exchange for termination of the supplemental executive retirement
plan, each executive will receive, at the closing of the merger, a lump sum cash
payment equal to the expected benefit that the executive is entitled to receive
under the supplemental executive retirement plan.

The following table sets forth the payments made or to be made to Jack L. Blair
and RobRoy Walters under the letter agreements.

<TABLE>
<CAPTION>
                          EMPLOYMENT                             PAYMENT FOR HEALTH
                      CONTRACT SEVERANCE     SERP TERMINATION       AND WELFARE
         NAME              PAYMENT               PAYMENT              BENEFITS        TOTAL PAYMENTS
         ----              -------               -------              --------        --------------
<S>                        <C>                   <C>                     <C>              <C>
Jack L. Blair              $412,448              $45,796                $72,692          $530,936
RobRoy Walters             400,270               35,537                  44,615           480,422
</TABLE>

                                       47
<PAGE>

DIRECTORS' COMPENSATION

        DIRECTORS' FEES. Lawrence Financial pays an annual retainer of $9,000 to
each non-employee member of its Board of Directors. Lawrence Federal pays an
annual retainer of $14,800 to each of its non-employee directors for service on
the Board of Directors of Lawrence Federal. Directors who serve on the Audit and
Compensation Committees receive an annual payment of $1,500 and $200,
respectively, for their services.

        DEFERRED COMPENSATION ARRANGEMENT. Lawrence Federal maintains a deferred
compensation arrangement for directors under which each director may elect on an
annual basis to defer up to 100% of his monthly Board remuneration. Upon the
director's attainment of age 68, Lawrence Federal will pay the balance of the
director's deferral account either in a lump sum or in monthly installments over
a period of 240 months. Over the deferral period, a director's account is
credited with interest with monthly compounding. In the event of a change in
control of Lawrence Financial (as defined in the program) followed by a
director's termination of service, each director will be entitled to begin to
receive his deferral account, and the interest rate will become fixed at the
time of the change in control. The arrangement with the directors also provides
each director with a death benefit. If a director dies while in active service
with Lawrence Federal, the director's beneficiary will receive an annual payment
in an amount specified in the director's individual agreement for a period of 20
years. Lawrence Federal has acquired life insurance on members of the Board to
provide informal funding for its obligations under the program. During the
fiscal year ended December 31, 2004, all directors participated in the director
deferral program except for Messrs. Blair and Brammer, who withdrew from the
program during 2003.

                                       48
<PAGE>

        NON-EMPLOYEE DIRECTOR RETIREMENT AGREEMENTS. Prior to the execution of
the merger agreement with Oak Hill Financial, each non-employee director of
4Lawrence Federal maintained a director retirement agreement with Lawrence
Federal. These agreements provided that, upon the director's attainment of age
68 and completion of 15 years of service as a director, Lawrence Federal would
pay the director $500 annually for each year of service, up to 50% of the board
fees at the retirement date, for a period of 15 years. In the event of a change
in control of Lawrence Federal or Lawrence Financial (as defined in the
program), each director would receive the present value of $500 for each year of
service as of the date of the change in control, multiplied by 15. In connection
with the merger, each of the non-employee directors entered into a letter of
agreement pursuant to which his director retirement agreement was canceled in
exchange for a lump sum cash payment equal to the change in control payment
provided for under the agreement. The following table sets forth the retirement
agreement termination payments paid to each non-employee director in the fourth
quarter of 2004.


                 NAME         DIRECTOR RETIREMENT AGREEMENT TERMINATION PAYMENT
                 ----         -------------------------------------------------
Tracy E. Brammer, Jr.                           $98,134.61
Herbert J. Karlet                                61,427.44
Phillip O. McMahon                               53,562.39
Robert N. Taylor                                 41,576.57
Charles E. Austin II                             38,579.85

                                       49
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

        5TOCK OWNERSHIP

        The following table provides information as of February 28, 2005 about
the persons known to Lawrence Financial to be the beneficial owners of more than
5% of the Company's outstanding common stock. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investing power.

                                                         PERCENT OF COMMON STOCK
         NAME AND ADDRESS        NUMBER OF SHARES OWNED         OUTSTANDING
         ----------------        ----------------------         -----------
Millenco, LLP                         59,752(1)                    9.2%
Millennium Management, L.L.C.
Israel A. Englander
666 Fifth Avenue
New York, New York  10103
Lawrence Federal Savings Bank         59,371(2)                    9.1%
Employee Stock Ownership Plan
311 South Fifth Street
Ironton, Ohio  45638
Tontine Financial Partners, L.P.      52,100(3)                    8.0%
Tontine Management, L.L.C.
Jeffrey L. Gendell
55 Railroad Avenue
Greenwich, Connecticut  06830
Jack L. Blair                         42,480(4)                    6.5%
311 South Fifth Street
Ironton, Ohio  45638

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

(1)     Based on information contained in Schedule 13G filed on February 14,
        2005 with the SEC. According to this filing, Millenco, a L.P, Millennium
        Management, L.L.C. and Israel A. Englander each have shared voting and
        dispositive power with respect to 59,752 shares.
(2)     Includes 37,244 shares that have not been allocated to participants'
        accounts and 22,127 shares that have been allocated to participants'
        accounts. Under the terms of the ESOP, the ESOP trustee will vote shares
        allocated to participants' accounts in the manner directed by the
        participants. Subject to its fiduciary responsibility, the trustee will
        vote unallocated shares and allocated shares for which voting
        instructions are not timely received in the same proportion as shares
        for which it has received timely voting instructions from participants.
        The trustee of the ESOP is First Bankers Trust Company, N.A.
(3)     Based on information contained in a Schedule 13D filed on June 20, 2003
        with the SEC. According to this filing, Tontine Financial Partners,
        L.P., Tontine Management, L.L.C. and Jeffrey L. Gendell each have shared
        voting and dispositive power with respect to 52,100 shares.
(4)     Includes 2,775 shares held by Mr. Blair's spouse. Also includes 15,517
        share that may be acquired upon the exercise of stock options, 3,241
        shares allocated to Mr. Blair's account under the employee stock
        ownership plan as to which Mr. Blair has voting power but not investment
        power and 3,800 shares held in Mr. Blair's 401(k) account.

                                       50
<PAGE>

        The following table provides information as of February 28, 2005 about
the shares of Lawrence Financial common stock that may be considered to be
beneficially owned by each director, by each nominee for director and by all
directors and executive officers of Lawrence Financial as a group. Unless
otherwise indicated, each of the named individuals has sole voting power and
sole investment power with respect to the number of shares shown.

<TABLE>
<CAPTION>

                                             NUMBER OF SHARES       NUMBER OF SHARES THAT MAY       PERCENT OF COMMON
                  NAME                       OWNED (EXCLUDING       BE ACQUIRED WITHIN 60 DAYS      STOCK OUTSTANDING(2)
                                                OPTIONS)(1)           BY EXERCISING OPTIONS
<S>                                              <C>                           <C>                          <C>
Charles E. Austin, II                            18,901(3)                      3,104                       3.2%
Jack L. Blair                                    26,962(4)                     15,517                       6.5%
Tracey E. Brammer, Jr.                           16,091(5)                      3,104                       2.8%
Herbert J. Karlet                                10,693(6)                      3,104                       2.0%
Phillip O. McMahon                               21,352(7)                      3,104                       3.6%
Robert N. Taylor                                  9,451                         3,104                       1.8%
All directors and executive officers as
a group (11 persons)                            128,166                        46,554                      26.9%
</TABLE>
-----------------------------

(1)     Includes unvested shares of restricted stock with respect to which the
        beneficial owner has voting but not investment power as follows: Messrs.
        Austin, Brammer, Karlet, McMahon and Taylor -- 310 shares each; and Mr.
        Blair -- 1,553 shares.
(2)     Based on 650,110 shares of common stock outstanding and entitled to vote
        as of February 28, 2005.
(3)     Includes 5,000 shares held by Mr. Austin's spouse.
(4)     Includes 2,775 shares held by Mr. Blair's spouse. Also includes 3,241
        shares allocated to Mr. Blair's account under the employee stock
        ownership plan as to which Mr. Blair has voting power but not investment
        power and 3,800 shares held in Mr. Blair's 401(k) account.
(5)     Includes 2,270 shares held by Mr. Brammer's spouse.
(6)     Includes 641 shares held by Mr. Karlet's spouse.
(7)     Includes 5,000 shares held by Mr. McMahon's spouse.

Equity Compensation Plan Information

<TABLE>
<CAPTION>
------------------------------ ------------------------ --------------------- ---------------------------------------

PLAN CATEGORY                  NUMBER OF SECURITIES     WEIGHTED-AVERAGE      NUMBER OF SECURITIES
                               TO BE ISSUED UPON        EXERCISE PRICE OF     REMAINING AVAILABLE FOR FUTURE
                               EXERCISE                 OUTSTANDING           ISSUANCE UNDER EQUITY
                               OF OUTSTANDING           OPTIONS,              COMPENSATION PLANS (EXCLUDING
                               OPTIONS,                 WARRANTS AND          SECURITIES REFLECTED IN COLUMN (A))
                               WARRANTS AND RIGHTS      RIGHTS
                               (A)                      (B)                   (C)
------------------------------ ------------------------ --------------------- ---------------------------------------
<S>                                    <C>                     <C>                            <C>
EQUITY COMPENSATION

PLANS APPROVED BY SECURITY             58,187                  $14.45                         14,739
HOLDERS
------------------------------ ------------------------ --------------------- ---------------------------------------

EQUITY COMPENSATION

PLANS NOT APPROVED BY
SECURITY HOLDERS                          --                      --                              --
------------------------------ ------------------------ --------------------- ---------------------------------------

TOTAL                                  58,187                  $14.45                         14,739
------------------------------ ------------------------ --------------------- ---------------------------------------
</TABLE>

                                       51
<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        TRANSACTIONS WITH MANAGEMENT

        The Sarbanes-Oxley Act of 2002 generally prohibits loans by the Company
to its executive officers and directors. However, the Sarbanes-Oxley Act
contains a specific exemption from such prohibition for loans by the Bank to its
executive officers and directors in compliance with federal banking regulations.
Federal regulations require that all loans or extensions of credit to executive
officers and directors must generally be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, unless the loan or extension of
credit is made under a benefit program generally available to all other
employees and does not give preference to any insider over any other employee,
and must not involve more than the normal risk of repayment or present other
unfavorable features. Lawrence Federal currently makes new loans and extensions
of credit to the Bank's executive officers, directors and employees at different
rates than those offered to the general public; however, the Bank does not give
preference to any director or officer over any other employee, and such loans do
not involve more than the normal risk of repayment or present other unfavorable
features. In addition, loans made to a director or executive officer in an
amount that, when aggregated with the amount of all other loans to the person
and his or her related interests, are in excess of the greater of $25,000 or 5%
of Lawrence Federal's capital and surplus, up to a maximum of $500,000, must be
approved in advance by a majority of the disinterested members of the board of
directors.

                                       52
<PAGE>

ITEM 13.        EXHIBITS.

        (a) (1) The following consolidated financial statements of Lawrence
        Federal are filed as part of this report.
                o       Report of Independent Auditors.
                o       Consolidated Balance Sheets for the years ended December
                        31, 2004 and 2003.
                o       Consolidated Statements of Income for the years ended
                        December 31, 2004 and 2003.
                o       Consolidated Statements of Comprehensive Income for the
                        years ended December 31, 2004 and 2003.
                o       Consolidated Statements of Equity for the years ended
                        December 31, 2004 and 2003.
                o       Consolidated Statements of Cash Flows for the years
                        ended December 31, 2004 and 2003.
                o       Notes to Consolidated Financial Statements

                (2) All financial statement schedules are omitted because they
                are not required or applicable, or the

                (3) Exhibits
                        2.1     Agreement and Plan of Merger, dated October 12,
                                2004, by and between Lawrence Financial
                                Holdings,Inc. and Oak Hill Financial, Inc. (4)
                        3.1     Articles of Incorporation of Lawrence Financial
                                Holdings, Inc.(1)
                        3.2     Bylaws of Lawrence Financial Holdings, Inc.(1)
                        4.0     Specimen Stock Certificate of Lawrence Financial
                                Holdings, Inc.(1)
                        10.1    Lawrence Federal Savings Bank Employment
                                Agreement with Jack L. Blair(2)
                        10.2    Lawrence Financial Holdings, Inc. Employment
                                Agreement with Jack L. Blair(2)
                        10.3    Lawrence Federal Savings Bank 401 (k) Savings
                                Plan(1)
                        10.4    Lawrence Federal Savings Bank Employee Severance
                                Compensation Plan(2)
                        10.5    Lawrence Federal Savings Bank Supplemental
                                Executive Retirement Plan(2)
                        10.6    Deferred Compensation Agreement dated as of June
                                25, 1996 between Lawrence Federal Savings Bank
                                and Jack L. Blair(1)
                        10.7    Form of Deferred Fee Agreement between Lawrence
                                Federal Savings Bank and individual directors(1)
                        10.8    Form of Amended and Restated Director Retirement
                                Agreement between Lawrence Federal Savings Bank
                                and individual directors. (5)
                        10.9    Lawrence Financial Holdings, Inc. 2001
                                Stock-Based Incentive Plan.(3)
                        10.10   Letter Agreement, dated October 12, 2004, by and
                                among Jack L. Blair, Lawrence Financial
                                Holdings, Inc., Lawrence Federal Savings Bank
                                and Oak Hill Financial, Inc. (4)
                        10.11   Letter Agreement, dated October 12, 2004, by and
                                among RobRoy Walters, Lawrence Financial
                                Holdings, Inc., Lawrence Federal Savings Bank
                                and Oak Hill Financial, Inc. (4)
                        21.0    Subsidiary information is incorporated herein by
                                reference to Part I, Item 1, "Description of
                                Business-Subsidiaries."
                        23.0    Consent of Crowe Chizek and Company LLC
                        31.1    Rule 13a-14(a)/15d-14(a) Certification of Chief
                                Financial Officer
                        31.2    Rule 13a-14(a)/15d-14(a) Certification of Chief
                                Executive Officer
                        32.1    Section 1350 Certification of Chief Financial
                                Officer
                        32.2    Section 1350 Certification of Chief Executive
                                Officer
                (1)     Incorporated herein by reference from the Exhibits to
                        Form SB-2, Registration Statement and amendments
                        thereto, initially filed on September 8, 2000,
                        Registration No. 333-45404.
                (2)     Incorporated herein by reference from the Exhibits to
                        the Company's Annual Report on Form 10-KSB for the year
                        ended December 31, 2000.
                (3)     Incorporated herein by reference to Appendix A to the
                        Company's Proxy Statement for its 2001 annual meeting of
                        shareholders filed on May 24, 2001.
                (4)     Incorporated herein by reference to the Exhibits to the
                        Current Report on Form 8-K filed on October 15, 2004.
                (5)     Incorporated herein by reference to thee Exhibits to the
                        Company's Annual Report on Form 10-KSB for the year
                        ended December 31, 2003.

                                       53
<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

        The following table sets forth the fees billed to the Company for the
fiscal years ending December 31, 2004 and 2003 by Crowe Chizek and Company LLC:

                                        2004           2003
                                        ----           ----
Audit fees....................        $72,050        $57,135
Audited related fees (1)......          1,000            800
Tax fees (2)..................         12,500          6,500

---------------------------
(1)     Includes assurance and related services that are reasonably related to
        the performance of the audit or review of the financial statements and
        are not reported as "Audit Fees".
(2)     For tax filing and tax related compliance and other advisory services.

        PRE-APPROVAL OF SERVICES BY THE INDEPENDENT AUDITOR

        The Audit Committee has adopted a policy for pre-approval of audit and
permitted non-audit services by the Company's independent auditor. The Audit
Committee will consider annually and, if appropriate, approve the provision of
audit services by its external auditor and consider and, if appropriate,
pre-approve the provision of certain defined audit and non-audit services. The
Audit Committee will also consider on a case-by-case basis and, if appropriate,
approve specific engagements that are not otherwise pre-approved.

        Any proposed engagement that does not fit within the definition of a
pre-approved service may be presented to the Audit Committee for consideration
at its next regular meeting or, if earlier consideration is required, to the
Audit Committee or one or more of its members. The member or members to whom
such authority is delegated shall report any specific approval of services at
its next regular meeting. The Audit Committee will regularly review summary
reports detailing all services being provided to the Company by its external
auditor

                                       54
<PAGE>

        In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                      LAWRENCE FINANCIAL HOLDINGS, INC.


Date: March 30, 2005                   By:  /s/ Jack L. Blair
                                          ---------------------------------
                                          Jack L. Blair
                                          President Chief Executive Officer
                                             and Director

        In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.

Name                             Title                            Date

/s/ Jack L. Blair                President, Chief Executive       March 30, 2005
----------------------------     Officer and Director
Jack L. Blair                    (principal executive officer)


/s/ Robroy Walters               Chief Financial Officer          March 30, 2005
----------------------------     (principal financial and
RobRoy Walters                   accounting officer)


/s/ Tracy E. Brammer, Jr.        Chairman of the Board            March 30, 2005
----------------------------
Tracy E. Brammer, Jr.


/s/ Charles E. Austin, II        Director                         March 30, 2005
----------------------------
Charles E. Austin, II


/s/ Herbert J. Karlet            Director                         March 30, 2005
----------------------------
Herbert J. Karlet


/s/ Phillip O. Mcmahon           Director                         March 30, 2005
----------------------------
Phillip O. McMahon


/s/ Robert N. Taylor             Director                         March 30, 2005
----------------------------
Robert N. Taylor

                                       55

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors
Lawrence Financial Holdings, Inc.
Ironton, Ohio


We have audited the accompanying consolidated balance sheets of Lawrence
Financial Holdings, Inc. as of December 31, 2004 and 2003, and related
consolidated statements of income, comprehensive income, changes in
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Lawrence Financial Holdings, Inc. as of December 31, 2004 and 2003, and the
consolidated results of its operations and its cash flows for the years then
ended in conformity with U.S. generally accepted accounting principles.


                                               /s/ Crowe Chizek and Company LLC

                                                   Crowe Chizek and Company LLC

Columbus, Ohio
January 27, 2005

<PAGE>

                       LAWRENCE FINANCIAL HOLDINGS, INC.
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 2004 and 2003

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------

                                                                                2004                 2003
                                                                                ----                 ----
<S>                                                                         <C>                  <C>
ASSETS
     Cash and due from banks                                          $       5,626,619    $      10,134,534
     Money market fund                                                          748,362              508,695
                                                                      -----------------    -----------------
         Total cash and cash equivalents                                      6,374,981           10,643,229
     Interest-earning time deposits with
         other financial institutions                                         7,000,000                   --
     Securities available for sale, at fair value                            22,158,485           26,247,238
     Loans, net of allowance of $706,855 in 2004
       and $1,014,448 in 2003                                                74,093,289           80,882,658
     Federal Home Loan Bank stock                                               665,700              639,100
     Premises and equipment, net                                              3,237,134            3,474,160
     Accrued interest receivable                                                501,609              566,309
     Cash surrender value of life insurance                                   2,373,057            2,284,990
     Other assets                                                             2,755,969              724,445
                                                                      -----------------    -----------------

     Total assets                                                     $     119,160,224    $     125,462,129
                                                                      =================    =================


LIABILITIES AND SHAREHOLDERS' EQUITY
     Liabilities
         Noninterest-bearing deposits                                 $       8,889,987    $       7,753,907
         Interest-bearing deposits                                           99,057,128          103,241,721
                                                                      -----------------    -----------------
              Total deposits                                                107,947,115          110,995,628
         Other liabilities                                                      664,483              441,248
                                                                      -----------------    -----------------
              Total liabilities                                             108,611,598          111,436,876

     Shareholders' Equity
         Common stock; par value $0.01 per share; shares
           authorized:  4,000,000; shares issued:  799,110                        7,991                7,991
         Additional paid-in capital                                           7,659,205            7,559,313
         Retained earnings                                                    6,157,905            9,781,499
         Treasury stock, at cost; shares: 149,000                            (2,728,688)          (2,728,688)
         Unearned ESOP shares; unearned shares: 31,044
           in 2004 and 37,251 in 2003                                          (310,440)            (372,510)
         Unearned restricted stock awards; unearned
           shares: 4,655 in 2004 and 9,310 in 2003                              (67,266)            (134,530)
         Accumulated other comprehensive income (loss),
           net of tax of $(87,620) in 2004 and $(45,242) in 2003               (170,081)             (87,823)
                                                                      -----------------    -----------------
              Total shareholders' equity                                     10,548,626           14,025,252
                                                                      -----------------    -----------------

                  Total liabilities and shareholders' equity          $     119,160,224    $     125,462,129
                                                                      =================    =================
-------------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.

                                                                              2.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                     Years ended December 31, 2004 and 2003

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

                                                         2004            2003
                                                         ----            ----
INTEREST INCOME
     Loans, including fees                          $  5,229,538   $   6,432,477
     Taxable securities                                  794,014         709,773
     Tax exempt securities                               116,392         106,412
     Overnight deposits                                   73,736          73,430
                                                    ------------   -------------
                                                       6,213,680       7,322,092
INTEREST EXPENSE
     Deposits                                          1,829,459       2,360,508
                                                    ------------   -------------

NET INTEREST INCOME                                    4,384,221       4,961,584

Provision for loan losses                                590,000         915,000
                                                    ------------   -------------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES    3,794,221       4,046,584

NONINTEREST INCOME
     Net securities gains                                 75,314         189,303
     Service charges                                     459,439         502,783
     Gain on disposal of premises and equipment               --             791
     Other                                               107,397         235,321
                                                    ------------   -------------
                                                         642,150         928,198
NONINTEREST EXPENSE
     Salaries and benefits                             2,016,136       1,962,989
     Deposit insurance premiums                           16,496          19,011
     Occupancy and equipment                             422,841         425,810
     Data processing                                     376,095         624,627
     Professional fees                                   512,175         245,716
     Franchise tax                                       133,339         138,453
     Loss on sale of loans                             4,434,905              --
     Advertising expense                                  80,291          80,135
     Employment agreement termination costs              812,718              --
     Director retirement plan termination costs          175,259              --
     Other                                               742,741         868,450
                                                    ------------   -------------
                                                       9,722,996       4,365,191
                                                    ------------   -------------

INCOME (LOSS) BEFORE INCOME TAX                       (5,286,625)        609,591

Provision (benefit) for income tax                    (1,842,455)        132,401
                                                    ------------   -------------

NET INCOME (LOSS)                                   $ (3,444,170)  $     477,190
                                                    ============   =============

Basic earnings per common share                     $      (5.66)  $        0.78
                                                    ============   =============

Diluted earnings per common share                   $      (5.66)  $        0.76
                                                    ============   =============

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

          See accompanying notes to consolidated financial statements.

                                                                              3.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                     Years ended December 31, 2004 and 2003

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

                                                     2004                2003
                                                     ----                ----

Net income (loss)                               $ (3,444,170)      $    477,190
Other comprehensive income:
     Unrealized losses arising during period         (49,322)          (167,642)
     Reclassification adjustment for gains
       included in income                            (75,314)          (189,303)
                                                ------------       ------------
                                                    (124,636)          (356,945)
     Income tax expense                              (42,378)          (121,361)
                                                ------------       ------------
         Other comprehensive loss, net of tax        (82,258)          (235,584)
                                                ------------       ------------

Comprehensive income (loss)                     $ (3,526,428)      $    241,606
                                                ============       ============

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

          See accompanying notes to consolidated financial statements.

                                                                              4.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                     Years ended December 31, 2004 and 2003

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------

                                                               Additional
                                                 Common         Paid-In        Retained       Treasury
                                                  Stock         Capital        Earnings         Stock
                                                  -----         -------        --------         -----
<S>                                                  <C>        <C>            <C>            <C>
Balance January 1, 2003                        $     7,991    $ 7,467,042    $ 9,485,971     $(1,683,600)

Net Income                                              --             --        477,190              --

Net unrealized depreciation on
  securities available for sale, net
  of tax of $(121,361)                                  --             --             --              --

Treasury stock acquired - 55,000 shares                 --             --             --      (1,045,088)

Cash dividend - $0.28 per share                         --             --       (181,662)             --

Stock based compensation - 4,655 stock
  awards earned and 6,207 shares
  committed to be released under ESOP                   --         92,271             --              --
                                               -----------    -----------    -----------     -----------

Balance December 31, 2003                            7,991      7,559,313      9,781,499      (2,728,688)

Net Loss                                                --             --     (3,444,170)             --

Net unrealized depreciation on
  securities available for sale, net
  of tax of $(42,378)                                   --             --             --              --

Cash dividend - $0.28 per share                         --             --       (179,424)             --

Stock based compensation - 4,655 stock
  awards earned and 6,207 shares
  committed to be released under ESOP                   --         99,892             --              --
                                               -----------    -----------    -----------     -----------

Balance December 31, 2004                      $     7,991    $ 7,659,205    $ 6,157,905     $(2,728,688)
                                               ===========    ===========    ===========     ===========

(CONTINUED)

                                                                Unearned       Accumulated
                                                 Unearned      Restricted         Other
                                                   ESOP           Stock       Comprehensive
                                                  Shares         Awards       Income (Loss)      Total
                                                  ------         ------       -------------      -----

Balance January 1, 2003                        $  (434,580)   $  (201,794)   $   147,761    $14,788,791

Net Income                                              --             --             --         477,190

Net unrealized depreciation on
  securities available for sale, net
  of tax of $(121,361)                                  --             --       (235,584)       (235,584)

Treasury stock acquired - 55,000 shares                 --             --             --      (1,045,088)

Cash dividend - $0.28 per share                         --             --             --        (181,662)

Stock based compensation - 4,655 stock
  awards earned and 6,207 shares
  committed to be released under ESOP               62,070         67,264             --         221,605
                                               -----------    -----------     -----------    ------------

Balance December 31, 2003                         (372,510)      (134,530)       (87,823)     14,025,252

Net Loss                                                --             --             --      (3,444,170)

Net unrealized depreciation on
  securities available for sale, net
  of tax of $(42,378)                                   --             --        (82,258)        (82,258)

Cash dividend - $0.28 per share                         --             --             --        (179,424)

Stock based compensation - 4,655 stock
  awards earned and 6,207 shares
  committed to be released under ESOP               62,070         67,264             --         229,226
                                               -----------    -----------    -----------    ------------

Balance December 31, 2004                      $  (310,440)   $   (67,266)   $  (170,081) $   10,548,626
                                               ===========    ===========    ===========  ==============

</TABLE>
--------------------------------------------------------------------------------

          See accompanying notes to consolidated financial statements.

                                                                              5.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2004 and 2003
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                                                 2004                2003
                                                                                 ----                ----
<S>                                                                            <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income (loss)                                                   $    (3,444,170)   $       477,190
     Adjustments to reconcile net income (loss) to net
       cash from operating activities
         Depreciation                                                            260,895            258,501
         Provision for loan losses                                               590,000            915,000
         Stock dividend on Federal Home Loan Bank stock                          (26,600)           (24,700)
         Premium amortization                                                    141,407            199,988
         Net securities gains                                                    (75,314)          (189,303)
         Loss on disposal of real estate owned                                    17,399             19,252
         Gain on disposal of premises and equipment                                   --               (791)
         Loss on sale of loans                                                 4,434,905                 --
         Deferred tax benefit                                                 (1,532,128)            43,375
         ESOP expense                                                            147,639            133,686
         Restricted stock award expense                                           67,264             67,264
         Change in other assets and liabilities                                1,613,172           (163,099)
                                                                         ---------------    ----------------
              Net cash from operating activities                               2,194,469          1,736,363
                                                                         ---------------    ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of:
         Interest-earning time deposits with other
              financial institutions                                          (7,000,000)                --
         Securities available for sale                                       (11,193,394)       (38,457,140)
         Automobile loans                                                     (5,080,000)                --
         Premises and equipment                                                  (23,869)          (396,532)
     Proceeds from:
         Sale of loans                                                         7,195,857                 --
         Sale of real estate owned                                               216,601            145,443
         Sale of securities available for sale                                 4,549,769         16,544,478
         Calls, maturities and principal repayments of securities
           available for sale                                                 10,541,649          9,490,164
         Sale of premises and equipment                                               --              5,550
     Net change in loans                                                        (441,393)        14,411,680
                                                                         ---------------    ---------------
              Net cash from investing activities                              (1,234,780)         1,743,643

CASH FLOWS FROM FINANCING ACTIVITIES
     Net change in deposits                                                   (3,048,513)        (7,930,527)
     Cash dividend paid                                                         (179,424)          (181,662)
     Purchase of treasury stock                                                       --         (1,045,088)
                                                                         ---------------    ---------------
              Net cash from financing activities                              (3,227,937)        (9,157,277)
                                                                         ---------------    ---------------

Net change in cash and cash equivalents                                        2,268,248         (5,677,271)

Cash and cash equivalents at beginning of year                                10,643,229         16,320,500
                                                                         ---------------    ---------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                 $     8,374,981    $    10,643,229
                                                                         ===============    ===============

SUPPLEMENTAL DISCLOSURES:
     Cash paid during the year for:
         Interest                                                        $     1,835,353    $     2,352,603
         Income taxes                                                            133,189            150,000
     Non-cash transactions
         Transfer of loans to real estate owned                          $       215,000    $       247,695
         Transfer of loans to loans held for sale                             11,505,762                 --

------------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.

                                                                              6.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
Lawrence Financial Holdings, Inc. and its wholly-owned subsidiary, Lawrence
Federal Savings Bank (the "Bank") and the Bank's wholly-owned subsidiary,
Lawrence Financial Services Company (together, the "Company"). Intercompany
transactions and balances are eliminated in consolidation.

NATURE OF OPERATIONS: The Company provides financial services through its
offices in Lawrence and Scioto Counties located in Southeastern Ohio. Its
primary deposit products are checking, savings, and term certificate accounts,
and its primary lending products are real estate mortgage and installment loans.
Substantially all loans are secured by specific items of collateral including
consumer assets and real estate. Lawrence Financial Services Company holds real
property for investment purposes. Management considers the Company to operate in
one segment, banking.

USE OF ESTIMATES: To prepare financial statements in conformity with accounting
principles generally accepted in the United States of America, management makes
estimates and assumptions based on available information. These estimates and
assumptions affect the amounts reported in the financial statements and the
disclosures provided, and future results could differ. The allowance for loan
losses, fair values of financial instruments and status of contingencies are
particularly subject to change.

CASH FLOWS: Cash and cash equivalents include cash on hand and deposits with
other financial institutions with original maturities of 90 days or less. Net
cash flows are reported for loan and deposit transactions and short-term
borrowings.

SECURITIES: Securities are classified as available for sale as they might be
sold before maturity. Securities available for sale are carried at fair value,
with unrealized holding gains and losses reported in other comprehensive income.
Other securities such as Federal Home Loan Bank stock are carried at cost.
Securities are written down to fair value when a decline in fair value is not
temporary. Gains and losses on sales are based on the amortized cost of the
security sold. Interest and dividend income, adjusted by amortization of
purchase premium or discount using the interest method, is included in earnings.

LOANS: Loans are reported at principal balances outstanding, net of unearned
interest, deferred loan fees and costs, and an allowance for loan losses.
Interest income is reported on the interest method and includes amortization of
net deferred loan fees and costs over contractual life of the loan.

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

                                   (Continued)

                                                                              7.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interest on real estate and certain consumer loans is accrued over the term of
the loans based on the principal balance outstanding. Where serious doubt exists
as to the collectibility of a loan, the accrual of interest is discontinued. The
carrying values of impaired loans are periodically adjusted to reflect cash
payments, revised estimates of future cash flows and increases in the present
value of expected cash flows due to the passage of time. Cash payments
representing interest income are reported as such. Other cash payments are
reported as reductions in carrying value, while increases or decreases due to
changes in estimates of future payments and due to the passage of time are
reported as adjustments to the allowance for loan losses. If these adjustments
cause the allowance for loan losses to require adjustment, such adjustment is
reported as an adjustment to the provision for loan losses.

ALLOWANCE FOR LOAN LOSSES: The allowance for loan losses is a valuation
allowance for probable incurred credit losses, increased by the provision for
loan losses and decreased by charge-offs less recoveries. Loan losses are
charged against the allowance when management believes the uncollectibility of a
loan balance is confirmed. Subsequent recoveries, if any, are credited to the
allowance. Management estimates the allowance balance required using past loan
loss experience, the nature and volume of the portfolio, information about
specific borrower situations and estimated collateral values, economic
conditions, and other factors. Allocations of the allowance may be made for
specific loans, but the entire allowance is available for any loan that, in
management's judgment, should be charged-off.

The allowance consists of specific and general components. The specific
component relates to loans that are individually classified as impaired or loans
otherwise classified as substandard or doubtful. The general component covers
non-classified loans and is based on historical loss experience adjusted for
current factors.

Loan impairment is reported when full payment under the loan terms is not
expected. Impairment is evaluated in total for smaller-balance loans of similar
nature such as residential mortgage, consumer, and credit card loans, and on an
individual loan basis for other loans. If a loan is impaired, a portion of the
allowance is allocated so that the loan is reported, net, at the present value
of estimated future cash flows using the loan's existing rate or at the fair
value of collateral if repayment is expected solely from the collateral. Loans
are evaluated for impairment when payments are delayed, typically 120 days or
more, or when it is probable that not all principal and interest amounts will be
collected according to the original terms of the loan. While the factors that
identify a credit for consideration for measurement of impairment or nonaccrual
are similar, the measurement considerations differ. A loan is impaired when
management believes it is probable that they will be unable to collect all
amounts due according to the contractual terms of the loan agreement. A loan is
placed on nonaccrual when payments are more than 120 days past due unless the
loan is adequately collateralized and in the process of collection.

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

                                   (Continued)

                                                                              8.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

PREMISES AND EQUIPMENT: Land is carried at cost. Premises and equipment are
stated at cost less accumulated depreciation. Depreciation is computed over the
useful lives of the respective premises and equipment, which are primarily 30 to
50 years for premises and 5 to 10 years for furniture, fixtures and equipment.
Maintenance and repairs are charged to expense as incurred and improvements that
extend the useful lives of assets are capitalized.

REAL ESTATE OWNED: Real estate properties acquired in collection of a loan are
recorded at the lower of cost, which is the unpaid balance plus foreclosure
costs or fair value at acquisition. Any reduction to fair value from the
carrying value of the related loan is accounted for as a loan loss. After
acquisition, a valuation allowance reduces the reported amount to the lower of
the initial amount or fair value less costs to sell. Expenses, gains and losses
on disposition, and changes in the valuation allowance are reported in other
expenses.

CASH SURRENDER VALUE OF LIFE INSURANCE: The Company has purchased life insurance
policies on certain key executives. Company owned life insurance is recorded at
its cash surrender value, or the amount that can be realized.

INCOME TAXES: Income tax expense is the sum of the current-year income tax due
or refundable and the change in deferred tax assets and liabilities. Deferred
tax assets and liabilities are the expected future tax consequences of temporary
differences between the carrying amounts and tax bases of assets and
liabilities, computed using enacted tax rates. A valuation allowance, if needed,
reduces deferred tax assets to the amount expected to be realized.

LONG-TERM ASSETS: Premises and equipment and other long-term assets are reviewed
for impairment when events indicate its carrying amount may not be recoverable
from future undiscounted cash flows. If impaired, the assets are recorded at
discounted amounts.

EMPLOYEE STOCK OWNERSHIP PLAN: The cost of shares issued to the ESOP, but not
yet allocated to participants, is shown as a reduction of shareholders' equity.
Compensation expense is based on the market price of shares as they are
committed to be released to participant accounts.

STOCK-BASED COMPENSATION: Employee compensation under the stock option plan is
reported if options are granted below market price at grant date. Pro forma
disclosures of compensation cost of stock-based awards have been determined
using the fair value method that considers the time value of the option
considering the volatility of the Company's stock, expected dividend yield, and
the risk-free interest rate over the expected life of the option using a
Black-Scholes valuation model.

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

                                   (Continued)

                                                                              9.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The options granted on December 31, 2001 have an exercise price of $14.45 and
expire in December 2011. One-fifth of the options vested on the date of grant;
the remaining options vest over four years. The fair value of options granted in
2001 was estimated using the following assumptions: Risk-free interest rate of
4.49%, expected life of 5 years, expected volatility of stock price of 27% and
expected dividend yield of 1.94%. Based on these assumptions, the estimated fair
value of options granted in 2001 was $3.77 per option.

The following pro forma information presents net income and earnings per common
share had the fair value of the options been used to measure compensation cost
for the stock option plan.

                                                    2004                2003
                                                    ----                ----

  Reported net income                          $  (3,444,170)    $     477,190
  Pro forma impact                                   (38,901)          (38,901)
                                               --------------    --------------
  Pro forma net income                         $  (3,483,071)    $     438,289
                                               ==============    ==============

  Reported basic earnings per common share     $       (5.66)    $        0.78
  Pro forma impact                                     (0.06)            (0.06)
                                               --------------    --------------
  Pro forma basic earnings per common share    $       (5.72)    $        0.72
                                               ==============    ==============

  Reported diluted earnings per common share   $       (5.66)    $       0.76
  Pro forma impact                                     (0.06)           (0.06)
                                               --------------    --------------
  Pro forma diluted earnings per common share  $       (5.72)    $       0.70
                                               ==============    ==============

COMPREHENSIVE INCOME: Comprehensive income consists of net income and other
comprehensive income. Other comprehensive income includes unrealized gains and
losses on securities available for sale, which are also recognized as a separate
component of equity.

EARNINGS PER COMMON SHARE: Basic earnings per common share is net income divided
by the weighted average number of common shares outstanding during the period.
ESOP shares are considered to be outstanding for this calculation unless they
are unearned. Restricted stock awards are considered outstanding as they are
earned. Diluted earnings per common share includes the dilutive effect of
additional potential common shares issuable under stock options and unearned
restrictive stock awards.

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

                                   (Continued)

                                                                             10.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The weighted average number of common shares outstanding for basic and diluted
earnings per share computations were as follows.

                                                          2004          2003
                                                          ----          ----

  Net weighted-average shares outstanding - Basic        608,576       608,873
  Effect of stock options                                     --        16,523
  Effect of non-vested stock awards                           --         2,394
                                                    ------------  ------------

  Weighted-average shares outstanding - Diluted          608,576       627,790
                                                    ============  ============

There were no antidilutive stock options at December 31, 2003. As a result of
the reported net loss, the stock options at December 31, 2004 were antidilutive.

ADOPTION OF NEW ACCOUNTING STANDARDS: In March 2004, the Emerging Issues Task
Force (EITF) arrived at a consensus regarding EITF 03-1, The Meaning of
Other-Than-Temporary Impairment and Application to Certain Investments. This
consensus provides additional guidance on when an investment is considered
impaired, whether impairment is other-than-temporary, and measurement of
impairment loss. It also requires additional disclosure for annual reporting
periods ending after June 15, 2004 and for other reporting periods beginning
after June 15, 2004. In September 2004, the Financial Accounting Standards Board
(FASB) issued Staff Position 03-1-1 which delayed the effective date for
measurement and recognition guidance contained in paragraphs 10 through 20 of
EITF 03-1 due to additional proposed guidance. This delay does not suspend the
requirement to recognize other-than-temporary impairments as required by
existing authoritative literature. The Company currently has investments where
the current market value is less than the amortized cost. See Note 2 for further
discussion and the impact on the Company's financial position and results of
operations.

In December 2003, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 03-3, "Accounting for Certain Loans or Debt
Securities Acquired in a Transfer." This SOP addresses accounting for
differences between contractual cash flows and cash flows expected to be
collected from an investor's initial investment in loans or debt securities
(loans) acquired in a transfer if those differences are attributable, at least
in part, to credit quality. It includes such loans acquired in purchase business
combinations and applies to all non-governmental entities, including
non-for-profit organizations. This SOP does not apply to loans originated by the
entity. This SOP is effective for loans acquired in fiscal years beginning on or
before December 2004, and within the scope of Practice Bulletin 6, paragraphs 7
and 8 of this SOP, as they apply to decreases in cash flows expected to be
collected, should it be applied prospectively for fiscal years beginning after
December 15, 2004. The Company adopted this SOP as of January 1, 2005 with no
material impact on its financial position or results of operations.

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

                                   (Continued)

                                                                             11.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In December 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46(R), "Consolidation of Variable Interest Entities," (FIN
46-R). FIN 46-R requires that subsidiaries and investments defined as variable
interest entities be consolidated by the enterprise that will absorb the
majority of the entities' expected losses if they occur, receive a majority of
the variable interest entities' residual returns if they occur, or both. The
Company's adoption of FIN 46-R had no impact on its financial position or
results of operations.

NEWLY ISSUED BUT NOT YET EFFECTIVE STANDARDS: FAS 123(R), "Share Based Payment"
is concerned with an entities expensing of stock options as an ordinary expense.
It becomes effective for the Company beginning July 1, 2005. To the extent the
Company makes future grants of stock options, compensation expense will increase
by the estimated fair value of options granted.

RECLASSIFICATIONS: Some items in the prior consolidated financial statements
have been reclassified to conform to current presentation.


NOTE 2 - SECURITIES

The fair value of securities available for sale at year-end is as follows.

<TABLE>
<CAPTION>
                                             Amortized        Unrealized         Unrealized             Fair
                                               Cost              Gains             Losses               Value
                                               ----              -----             ------               -----
<S>                                           <C>                   <C>               <C>              <C>
     2004:
     U.S. Government agencies           $     7,969,658     $        1,760    $       (83,084)   $     7,888,334
     Mortgage backed securities              10,726,691                246           (162,205)        10,564,732
     State and municipal securities           3,719,837             21,794            (36,212)         3,705,419
                                        ---------------     --------------    ---------------    ---------------

                                        $    22,416,186     $       23,800    $      (281,501)   $    22,158,485
                                        ===============     ==============    ===============    ===============

     2003:
     U.S. Government agencies           $     7,233,740     $        2,309    $       (21,697)   $     7,214,352
     Mortgage backed securities              15,913,390              3,459           (146,251)        15,770,598
     State and municipal securities           3,233,173             37,847             (8,732)         3,262,288
                                        ---------------     --------------    ---------------    ---------------

                                        $    26,380,303     $       43,615    $      (176,680)   $    26,247,238
                                        ===============     ==============    ===============    ===============
</TABLE>

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

                                   (Continued)

                                                                             12.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 2 - SECURITIES (Continued)

Contractual maturities of securities at year-end 2004 were as follows.
Securities not due at a single maturity date are shown separately.

                                                               Fair
                                                               Value
                                                               -----

         Due in one year or less                         $     4,378,776
         Due after one year through five years                 7,540,582
         Due after five years through ten years                5,859,585
         Due after ten years                                   4,379,542
                                                         ---------------
                                                         $    22,158,485
                                                         ===============

Proceeds from sales of securities were $4,549,769 and $16,544,478 for 2004 and
2003. Gross gains of $75,314 and $189,303 were recognized on those sales in 2004
and 2003.

Securities with fair value of $2,239,188 and $2,779,238 at December 31, 2004 and
2003 were pledged to secure public deposits.

Securities with unrealized losses at year end 2004 and 2003 not recognized in
income are as follows.

<TABLE>
<CAPTION>

2004                                Less Than 12 Months           12 Months or More                     Total
                                    -------------------           -----------------                     -----
                                    Fair      Unrealized         Fair         Unrealized          Fair        Unrealized
Description of Securities           Value        Loss            Value           Loss             Value          Loss
-------------------------           -----        ----            -----           ----             -----          ----
<S>                             <C>           <C>            <C>             <C>              <C>             <C>
U.S. Government agencies        $  6,893,112  $   (83,084)   $         --    $          --    $  6,893,112    $   (83,084)
Mortgage backed securities         3,698,290      (38,274)      6,186,198         (123,931)      9,884,488       (162,205)
State and municipal securities     1,643,626      (36,212)             --               --       1,643,626        (36,212)
                                ------------  -----------    ------------    -------------    ------------    -----------


Total temporarily impaired      $ 12,235,028  $  (157,570)   $  6,186,198    $    (123,932)   $ 18,421,226    $  (281,501)
                                ============  ===========    ============    =============    ============    ===========

2003                                Less Than 12 Months           12 Months or More                     Total
                                    -------------------           -----------------                     -----
                                    Fair      Unrealized         Fair         Unrealized          Fair        Unrealized
Description of Securities           Value        Loss            Value           Loss             Value          Loss
-------------------------           -----        ----            -----           ----             -----          ----

U.S. Government agencies        $  4,212,666  $   (21,697)   $         --    $          --    $  4,212,666    $   (21,697)
Mortgage backed securities        13,597,687     (137,634)        862,186           (8,617)     14,459,873       (146,251)
State and municipal securities       668,091       (8,732)             --               --         668,091         (8,732)
                                ------------  -----------    ------------    -------------    ------------    -----------

Total temporarily impaired      $ 18,478,444   $ (168,063)   $    862,186    $      (8,617)   $ 19,340,630    $  (176,680)
                                ============  ============   ============    =============    ============    ===========
</TABLE>

Unrealized losses on securities have not been recognized into income because the
issuers' bonds are of high credit quality (rated AA or higher), management has
the intent and ability to hold for the foreseeable future, and the decline in
fair value is largely due to increases in market interest rates.

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

                                   (Continued)

                                                                             13.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are as follows.
                                                      December 31,
                                                      ------------
                                                  2004            2003
                                                  ----            ----
         1-4 family residential
           mortgage loans                    $  36,788,081    $  40,000,488
         Other real estate loans                 9,478,699        9,001,410
         Automobile loans                       22,909,570       14,786,276
         Mobile home loans                         100,087       12,288,737
         Other                                   5,400,041        3,765,064
                                             -------------    -------------
                                                74,676,478       79,841,975
         Net deferred loan origination
           costs                                   123,666        2,055,131
         Allowance for loan losses                (706,855)      (1,014,448)
                                             -------------    -------------

              Total                          $  74,093,289    $  80,882,658
                                             =============    =============


In October 2004, the Company sold $11,506,000, carrying value, of its mobile
home loan portfolio for $7,196,000 in cash. A loss of $4,435,000 and a recourse
obligation of $125,000 was recognized in this transaction. At December 31, 2004,
the recourse obiligation is $125,000 and is disclosed on the balance sheet as an
other liability.

Activity in the allowance for loan losses is as follows.

                                                 Years Ended December 31,
                                                 ------------------------
                                                 2004                2003
                                                 ----                ----

         Beginning balance                   $   1,014,448       $   1,110,813
         Provision for loan losses                 590,000             915,000
         Charge-offs                              (931,549)         (1,058,423)
         Recoveries                                 33,956              47,058
                                             -------------       -------------

         Ending balance                      $     706,855       $   1,014,448
                                             =============       =============

Impaired loans for the years ended December 31, 2004 and 2003 were not material.

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

                                   (Continued)

                                                                             14.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

                                                         At December 31,
                                                         ---------------
                                                        2004           2003
                                                        ----           ----

         Accruing loans past due 90 days or more   $    753,393     $  1,491,755
         Nonaccruing loans                              578,901          340,006
                                                   ------------     ------------

         Total nonperforming loans                 $  1,332,294     $  1,831,761
                                                   ============     ============

In the normal course of business, the Company has made loans to certain
directors, executive officers and their associates. Loan activity relating to
these individuals for the year ended December 31, 2004 is as follows.

         Beginning balance                         $  1,222,895
         New loans                                      374,593
         Repayments                                    (376,615)
                                                   ------------

         Ending balance                            $  1,220,873
                                                   ============

NOTE 4 - PREMISES AND EQUIPMENT

Office properties and equipment consisted of the following.
                                                       December 31,
                                                       ------------
                                                  2004               2003
                                                  ----               ----

         Land                                $    1,041,609    $     1,041,609
         Buildings and improvements               3,425,633          3,418,953
         Furniture and equipment                  1,452,031          1,434,842
         Automobile                                  24,611             24,611
                                             --------------     --------------
              Total cost                          5,943,884          5,920,015
         Accumulated depreciation                (2,706,750)        (2,445,855)
                                             --------------     --------------

                                             $    3,237,134     $    3,474,160
                                             ==============     ==============

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

                                   (Continued)

                                                                             15.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 5 - DEPOSITS

Interest-bearing deposits consisted of the following.
                                                       December 31,
                                                       ------------
                                                  2004              2003
                                                  ----              ----

         Savings accounts                    $   26,977,646     $   29,069,793
         Money market and NOW accounts           19,892,029         19,259,562
         Certificates of deposit                 52,187,453         54,912,366
                                             --------------     --------------

                                             $   99,057,128     $  103,241,721
                                             ==============     ==============

Certificates of deposit of greater than $100,000 were $12,748,309 and
$12,932,162 at December 31, 2004 and 2003. The balances over $100,000 are not
federally insured.

Maturities of certificates of deposits are as follows.
                                               December 31,
                                                   2004

                  2005                        $    27,923,053
                  2006                             16,083,203
                  2007                              4,745,134
                  2008                              1,962,013
                  2009                              1,126,593
                  Thereafter                          347,457
                                              ---------------

                                              $    52,187,453
                                              ===============

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

                                   (Continued)

                                                                             16.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 6 - FEDERAL HOME LOAN BANK (FHLB) BORROWINGS

At December 31, 2004 and 2003, the Company had no FHLB borrowings. At December
31, 2004, the Company had letters of credit from the FHLB totaling $10,500,000,
for which $14,175,000 of eligible 1-4 family residential mortgage loans and
$665,700 of FHLB stock were pledged to the FHLB to secure these letters of
credit. The letters of credit are pledged by the Company to secure public
deposits.


NOTE 7 - COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS

Some financial instruments are used to meet customer-financing needs, including
commitments to make loans. These involve, to varying degrees, credit and
interest-rate risks more than the amount reported in the consolidated balance
sheet.

Commitments to extend credit were as follows.

                                                     December 31,
                                                     ------------
                                             2004                   2003
                                             ----                   ----

         Fixed rate                     $      108,500         $      149,600
         Variable rate                       1,168,476              2,198,193
                                        --------------         --------------
                                        $    1,276,976         $    2,347,793
                                        ==============         ==============

         Range of interest rates on
           commitments                  3.55% to 12.00%        3.75% to 12.00%

Commitments to make loans are agreements to lend to a customer as long as there
is no violation of any condition established in the commitment, and generally
have fixed expiration dates. Exposure to credit loss if the other party does not
perform is represented by the contractual amount of these items. Collateral or
other security is normally not obtained for these financial instruments before
their use, and many of the commitments are expected to expire without being
used.

At December 31, 2004 and 2003, the Company had $2,465,093 and $6,084,420 in
demand deposits due from the Federal Home Loan Bank of Cincinnati. The Company
also had $7,000,000 in time deposits due from Oak Hill Financial, Inc. at
December 31, 2004.

The Company is, from time to time, involved in various lawsuits and claims that
arise in the normal course of business. In the opinion of management, any
liability that may result from these lawsuits and claims will not materially
affect the financial position or results of operations of the Company.

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

                                   (Continued)

                                                                             17.

<PAGE>
                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 8 - EMPLOYEE BENEFITS

RETIREMENT PLAN: The Company sponsors a 401(k) profit sharing plan for eligible
employees. Under the plan, employees who are at least 21 1/2 years of age and
have completed six months of service are eligible to participate. The Company
matches each employee's contribution at a rate of 100% of employees'
contributions up to 5% of gross compensation. Participants become 100% vested as
to the Company's contributions after three years of service. Contributions and
expense for the years ended December 31, 2004 and 2003 totaled $46,545 and
$39,259.

EMPLOYEE STOCK OWNERSHIP PLAN: Employees participate in an Employee Stock
Ownership Plan (ESOP). On December 29, 2000, the ESOP borrowed $620,660 from the
Company to purchase 62,066 shares of common stock at $10 per share. The Company
makes discretionary contributions to the ESOP, and the ESOP uses funds it
receives to repay the loan. Cash dividends paid on unallocated shares are used
to reduce the accrued interest and principal payable amount of the ESOP's loan
payable to the Company. ESOP shares are allocated to participants based on
relative compensation and expense is recorded. Participants receive the shares
at the end of employment.

Contributions to the ESOP during 2004 and 2003 were $90,373 and $90,373. Expense
for 2004 and 2003 was $147,639 and $133,686.

Shares held by the ESOP at December 31, 2004 and 2003 were as follows.

                                                          December 31,
                                                          ------------
                                                     2004               2003
                                                     ----               ----

         Allocated to participants                      31,022            24,815
         Unearned                                       31,044            37,251
                                               ---------------    --------------

         Total ESOP shares                              62,066            62,066
                                               ===============    ==============

         Fair value of unearned shares         $       729,534    $    1,024,210
                                               ===============    ==============

DEFERRED COMPENSATION PLAN: The Bank makes payments to retired directors under a
plan approved by the Board of Directors. Outside directors who currently serve
on the Board are also eligible for payments under deferred fee and director
emeritus retirement plans approved by the Board of Directors upon retirement.
The present value of payments expected to be provided are accrued during the
service period of the covered individuals. Expenses related to the plans
amounted to $45,912 and $41,412 for the years ended December 31, 2004 and 2003.
In addition, during 2004, the Company paid cash of $293,281 to directors for the
termination of the deferred compensation plan as a condition of the Agreement
and Plan of Merger with Oak Hill Financial, Inc. Of this amount, $175,259 was
expensed in 2004 with the remainder having been accrued previously.

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

                                   (Continued)

                                                                             18.

<PAGE>
                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 8 - EMPLOYEE BENEFITS  (Continued)

STOCK-BASED INCENTIVE PLAN: On July 5, 2001, the shareholders approved the
Lawrence Financial Holdings, Inc. 2001 Stock-Based Incentive Plan (the "Plan").
The Plan authorized the granting of up to 77,582 shares of common stock as
options and 31,033 shares of common stock as restricted stock awards. On
December 31, 2001, the Board of Directors granted options to purchase 58,187
shares of common stock at an exercise price equal to the market value (as
defined in the Plan) to certain employees, officers and directors of the
Company. One-fifth of the options awarded were exercisable immediately and the
remainder becomes exercisable on each of the four anniversaries of the date of
grant. The option period expires 10 years from the date of grant.

Following is a summary of stock option plan activity during 2004 and 2003.

<TABLE>
<CAPTION>
                                                        2004                         2003
                                             ---------------------------  ----------------------------
                                                               Weighted                     Weighted
                                                                Average                      Average
                                                               Exercise                     Exercise
                                               Shares            Price       Shares           Price
                                               ------            -----       ------           -----
<S>                                               <C>            <C>          <C>             <C>
         Outstanding at beginning of year         58,187       $  14.45        58,187       $  14.45
         Granted                                      --             --            --             --
                                             -----------                  -----------

         Outstanding at end of year               58,187       $  14.45        58,187       $  14.45
                                             ===========                  ===========

         Options exercisable at year-end          46,553       $  14.45        34,916       $  14.45

         Remaining shares available
           for grant as options                   19,395                       19,395
</TABLE>

At December 31, 2004, the 58,187 options outstanding had a weighted average
remaining contractual life of 7 years.

Restricted stock awards are used as a means of providing directors and certain
key employees of the Company with an ownership interest in the Company in a
manner designed to compensate such directors and key employees for services to
the Company.

On December 31, 2001, the Board of Directors awarded 23,283 shares of restricted
stock to outside directors and certain officers of the Company. No shares had
been previously awarded. One-fifth of such shares are earned and nonforfeitable
on each of the first four anniversaries of the date of the award; the first
fifth became exercisable on the award date. 18,628 shares have vested at
December 31, 2004. In the event of the death or disability of a participant or a
change in control of the Company, however, the participant's shares will be

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

                                   (Continued)

                                                                             19.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 8 - EMPLOYEE BENEFITS  (Continued)

deemed earned and nonforfeitable upon such date. At December 31, 2004, there
were 7,750 shares reserved for future awards. Compensation expense related to
restricted stock awards is based upon the cost of the shares, which approximates
fair value at the date of grant. The compensation expense totaled $67,264 and
$67,264 for the years ended December 31, 2004 and 2003, respectively.

In the fourth quarter of 2004, the Company expensed and paid cash of $812,719
for the termination of employment contracts for the Chief Executive Officer and
Chief Financial Officer. These payments were a condition of the Agreement and
Plan of Merger with Oak Hill Financial, Inc.

NOTE 9 - INCOME TAXES

An analysis of the provision for income tax is as follows.

                                                       December 31,
                                                       -----------
                                                   2004             2003
                                                   ----             ----

    Current                                    $   (310,327)    $     89,026
    Deferred                                     (1,532,128)          43,375
                                               ------------     ------------

                                               $ (1,842,455)    $    132,401
                                               ============     ============

The sources of gross deferred tax assets and liabilities are as follows.

                                                         December 31,
                                                         -----------
                                                     2004            2003
                                                     ----            ----
    Deferred tax assets
        Allowance for loan losses              $    240,331     $    344,912
        Deferred compensation                       125,033          145,808
        Accrued ESOP                                 12,422            9,112
        Donation carryforward                         2,027               --
        Net unrealized loss on securities
          available for sale                         87,620           45,242
        Other                                        42,497               --
        Net operating loss carryforward           1,599,004               --
        Tax credit carryforwards                     38,070           38,070

    Deferred tax liabilities
        FHLB stock dividends                       (145,580)        (136,536)
        Deferred loan fees/cost                     (14,027)         (15,916)
        Depreciation                                (35,167)         (52,968)
                                               ------------     ------------
           Net deferred tax asset              $  1,952,230     $    377,724
                                               ============     ============

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

                                   (Continued)

                                                                             20.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 9 - INCOME TAXES (Continued)

Total federal income tax expense differs from the expected amounts computed by
applying the statutory federal tax rate of 34% to income before taxes. The
reasons for this difference are as follows.

                                                Years Ended December 31,
                                    --------------------------------------------
                                             2004                  2003
                                    --------------------   ---------------------
                                        Amount      Rate     Amount       Rate
                                        ------      ----     ------       ----
 Tax expense (benefit)at
    statutory rate                  $(1,797,453)    34.0%  $  207,261     34.0%
 Net earnings of insurance
   contracts                            (29,981)    (0.6)     (52,124)    (8.5)
 Tax-exempt interest income             (44,719)    (0.8)     (41,829)    (6.9)
 Other                                   29,698      0.6       19,093      3.1
                                    -----------  -------   ----------   ------

     Tax expense (benefit)
        at effective rate           $(1,842,455)    34.8%  $  132,401     21.7%
                                    ===========  =======   ==========   ======

Retained earnings at December 31, 2004 and 2003 include $1,493,442 for both
years for which no provision for federal income taxes has been made. If this
portion of retained earnings is used in the future for any purpose other than to
absorb bad debts, the amount used will be added to future taxable income. The
unrecorded deferred tax liability on the above amount at December 31, 2004 and
2003 was $507,770 for both years.

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

                                   (Continued)

                                                                             21.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 10 - REGULATORY CAPITAL REQUIREMENTS

Banks and bank holding companies are subject to regulatory capital requirements
administered by federal banking agencies. Capital adequacy guidelines and,
additionally for banks, prompt corrective action regulations involve
quantitative measures of assets, liabilities, and certain off-balance-sheet
items calculated under regulatory accounting practices. Capital amounts and
classifications are also subject to qualitative judgments by regulators. Failure
to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized, although these terms are not
used to represent overall financial condition. If adequately capitalized,
regulatory approval is required to accept brokered deposits. If
undercapitalized, capital distributions are limited, as is asset growth and
expansion, and capital restoration plans are required. At year-end 2004 and
2003, the most recent regulatory notifications categorized the Bank as well
capitalized under the regulatory framework for prompt corrective action. There
are no conditions or events since that notification that management believes
have changed the institution's category.

The Bank's actual and required capital amounts and ratios are presented below at
year-end.

<TABLE>
<CAPTION>
                                                                                                    Minimum
                                                                                                 Required to be
                                                                Minimum Required            Well Capitalized Under
                                                                   for Capital                 Prompt Corrective
                                           Actual               Adequacy Purposes              Action Regulations
(dollars in thousands)              Amount        Ratio       Amount          Ratio           Amount        Ratio
                                    ------        -----       ------          -----           ------        -----
<S>                                <C>            <C>         <C>              <C>          <C>             <C>
December 31, 2004:
-----------------
Total capital (to risk-
  weighted assets)                 $ 10,346       12.01%      $  6,892         8.0%         $   8,614       10.0%
Tier 1 (core) capital (to
  risk-weighted assets)            $  9,657       11.21%      $  3,446         4.0%         $   5,169        6.0%
Tier 1 (core) capital (to
  adjusted total assets)           $  9,657        8.09%      $  4,775         4.0%         $   5,968        5.0%

December 31, 2003:
-----------------
Total capital (to risk-
  weighted assets)                 $ 13,521       16.39%      $  6,600         8.0%         $   8,250       10.0%
Tier 1 (core) capital (to
  risk-weighted assets)            $ 12,803       15.52%      $  3,300         4.0%         $   4,950        6.0%
Tier 1 (core) capital (to
  adjusted total assets)           $ 12,803       10.18%      $  5,031         4.0%         $   6,289        5.0%
</TABLE>
--------------------------------------------------------------------------------

                                   (Continued)

                                                                             22.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 10 - REGULATORY CAPITAL REQUIREMENTS (Continued)

The Qualified Thrift Lender test requires at least 65% of assets be maintained
in housing-related finance and other specified areas. If this test is not met,
limits are placed on growth, branching, new investments, FHLB advances and
dividends, or the Bank must convert to a commercial bank charter. Management
believes that this test is met.

When the Bank converted from a mutual to a stock institution, a "liquidation
account" was established at $8,336,785, which was net worth reported in the
conversion prospectus. Eligible depositors who have maintained their accounts,
less annual reductions to the extent they have reduced their deposits, would
receive a distribution from this account if the Company liquidated. Dividends
may not reduce shareholders' equity below the required liquidation account
balance.

Office of Thrift Supervision ("OTS") regulations limit capital distributions by
savings associations. Generally, capital distributions are limited to the
current year to date undistributed net income and prior two years' undistributed
net income, as long as the institution remains well capitalized after the
proposed distribution. At year-end 2004, no income is available to pay dividends
to the holding company without prior approval from the OTS. At December 31,
2004, the Bank must obtain regulatory approval for future cash dividends.


NOTE 11 - FAIR VALUES OF FINANCIAL INSTRUMENTS

Estimated fair values and the related carrying values of the Company's financial
instruments at yearend are as follows.

<TABLE>
<CAPTION>
                                                         2004                                2003
                                                         ----                                ----
                                              Carrying             Fair            Carrying            Fair
                                               Value               Value             Value             Value
                                               -----               -----             -----             -----
<S>                                           <C>                <C>               <C>              <C>
    Financial assets
       Cash and cash equivalents            $  8,374,981       $  8,375,000      $ 10,643,229      $10,643,000
       Interest bearing time deposit
         with other financial institutions     7,000,000          7,000,000                --               --
       Securities available for sale          22,158,485         22,158,000        26,247,238       26,247,000
       Loans, net                             74,093,289         74,348,340        80,882,658       82,289,000
       Federal Home Loan Bank
         stock                                   665,700            666,000           639,100          639,000
       Accrued interest receivable               501,609            502,000           566,309          566,000

    Financial liabilities
       Deposits                             (107,947,115)      (108,283,000)     (110,995,628)    (111,860,000)
       Accrued interest payable                  (10,366)           (10,000)          (16,260)         (16,000)
</TABLE>
--------------------------------------------------------------------------------

                                   (Continued)

                                                                             23.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 11 - FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)

For purposes of the above disclosures of estimated fair values, certain
assumptions were used. The carrying value for cash and cash equivalents, accrued
interest receivable, Federal Home Loan Bank stock, interest-earning time deposit
with other financial institution, and accrued interest payable are considered to
approximate fair value. The estimated fair value for securities available for
sale is based on quoted market values for the individual securities or for
equivalent securities. The estimated fair value for loans is based on estimates
of the difference in interest rates the Company would charge the borrowers for
similar such loans with similar maturities made at December 31, 2004 and 2003,
applied for an estimated time period until the loan is assumed to reprice or to
be paid. The estimated fair value for demand deposits, savings deposits and the
variable-rate line of credit from Federal Home Loan Bank is based on their
carrying value. The estimated fair value for time deposits and fixed-rate
advances from Federal Home Loan Bank is based on estimates of the rate the Bank
would pay on such deposits or borrowings at December 31, 2004 and 2003, applied
for the time period until maturity. The estimated fair value for other financial
instruments and off-balance-sheet loan commitments approximate cost at December
31, 2004 and 2003 and are not considered significant to this presentation. While
these estimates of fair value are based on management's judgment of the most
appropriate factors, there is no assurance that, were the Company to have
disposed of such items at December 31, 2004 and 2003, the estimated fair values
would necessarily have been realized at that date, since market values may
differ depending on various circumstances. The estimates of fair values at
December 31, 2004 and 2003 should not necessarily be considered to apply at
subsequent dates. In addition, other assets and liabilities of the Company that
are not defined as financial instruments are not included in the above
disclosures, such as premises and equipment and life insurance contracts. Also,
nonfinancial instruments typically not recognized in the financial statements
nevertheless may have value but are not included in the above disclosures. These
include, among other items, the estimated earnings power of core deposit
accounts, the trained work force, customer goodwill and similar items.

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

                                   (Continued)

                                                                             24.

<PAGE>

                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 12 - CONDENSED PARENT COMPANY FINANCIAL INFORMATION

Presented below are condensed financial statements for the parent company,
Lawrence Financial Holdings, Inc.

<TABLE>
<CAPTION>
                                   CONDENSED BALANCE SHEETS
                                  December 31, 2004 and 2003
                                                                     2004              2003
                                                                     ----              ----
<S>                                                                <C>              <C>
     Assets
         Cash and cash equivalents                            $       619,602   $      896,936
         Investment in subsidiary                                   9,487,323       12,714,031
         Loan receivable from ESOP                                    346,976          399,311
         Deferred tax asset                                           178,870           39,746
                                                              ---------------   --------------

                Total assets                                  $    10,632,771   $   14,050,024
                                                              ===============   ==============
     Liabilities
         Accrued expenses and other liabilities               $        84,145   $       24,772

     Shareholders' equity                                          10,548,626       14,025,252
                                                              ---------------   --------------
                Total liabilities and shareholders' equity    $    10,632,771   $   14,050,024
                                                              ===============   ==============



                                CONDENSED STATEMENTS OF INCOME
                            Years ended December 31, 2004 and 2003

                                                                      2004             2003
                                                                      ----             ----

     Interest income                                          $        45,869   $       48,845
     Dividends from subsidiary bank                                   150,000          800,000
                                                              ---------------   --------------
     Income before income taxes and equity in
       undistributed earnings of subsidiary bank                      195,869          848,845

     Undistrubuted losses and distributions
         in excess of earnings of subsidiary bank                  (3,322,707)        (307,191)
                                                              ---------------   --------------
     Total income (loss)                                           (3,126,838)         541,654

     Non-interest expense                                             457,176          103,490
                                                              ---------------   --------------
     Income (loss) before income taxes                             (3,584,014)         438,164
     Income tax expense (benefit)                                    (139,844)          39,026
                                                              ----------------  --------------

     Net income (loss)                                        $    (3,444,170)  $      477,190
                                                              ================  ==============
</TABLE>
--------------------------------------------------------------------------------

                                   (Continued)

                                                                             25.

<PAGE>


                        LAWRENCE FINANCIAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2004 and 2003

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

NOTE 12 - CONDENSED PARENT COMPANY FINANCIAL INFORMATION (Continued)

                       CONDENSED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2004 and 2003

<TABLE>
<CAPTION>
                                                                     2004                2003
                                                                     ----                ----
<S>                                                                 <C>                 <C>
Cash flows from operating activities
     Net income                                               $    (3,444,170)   $       477,190
     Adjustments to reconcile net income to net cash from
       operating activities
         Equity in losses (earnings) of subsidiary bank             3,172,707           (492,809)
         Dividend received                                            150,000            800,000
         Restrictive stock award expense                               67,264             67,264
         Net change in accrued expenses and other liabilities         (96,046)           528,488
                                                              ----------------   ---------------
              Net cash from operating activities                     (150,245)         1,380,133

Cash flows from investing activities
         Proceeds from loan principal repayments                       52,335             47,888
                                                              ---------------    ---------------
              Net cash from investing activities                       52,335             47,888

Cash flows from financing activities
     Cash dividend paid                                              (179,424)          (181,662)
     Purchase of treasury stock                                            --         (1,045,088)
                                                              ---------------    ---------------
              Net cash from financing activities                     (179,424)        (1,226,750)

     Net change in cash and cash equivalents                         (277,334)           201,271

Cash and cash equivalents at beginning of period                      896,936            695,665
                                                              ---------------    ---------------


Cash and cash equivalents at end of period                    $       619,602    $       896,936
                                                              ===============    ===============
</TABLE>

The extent to which the Company may pay cash dividends to shareholders will
depend on the cash currently available at the Company, as well as the Bank's
ability to pay dividends to the Company (see Note 10).


NOTE 13 - AGREEMENT AND PLAN OF MERGER

On October 12, 2004, the Company entered into an Agreement and Plan of Merger
with Oak Hill Financial, Inc. ("Oak Hill Financial") pursuant to which the
Company will merge with and into Oak Hill Financial and each share of the
Company's common stock will be exchanged for either $23.75 in cash or shares of
Oak Hill Financial common stock.

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

                                   (Continued)

                                                                             26.